I’ve been privileged to work on high-growth strategies for some of the world’s biggest car brands. My award-winning PPC strategies have helped me to support some of the most ambitious teams to reach their growth goals – and helped me achieve a status as regular speaker on PPC strategy at the UK’s best marketing conferences.
Yes, a boast, but the last one in the article – it’s only to emphasise the advice I’m about to give. You see, our companies mission is to help you learn, prosper & grow.
If there’s one thing you need to know for sure about the true cost of a customer, it’s this…
Sexy statistics can often be rotten. Don’t fall in love at first sight. ❤️
Cost Per Enquiry (CPE), or Cost Per Lead (CPL) is a great example of this.
- Cost Per Enquiry can be manipulated – it rarely tells the full story.
- Sometimes a low Cost Per Enquiry isn’t as positive as it may seem.
- No Cost Per Enquiry is a bad Cost Per Enquiry, on its own.
Imagine this scenario:
Your marketing executive reviews your marketing performance and informs you that his favorite marketing channel has a CPE of £25.50, but he’s just found that one of his least favourite marketing channels has a CPE of £345.50. Sounds bad, right?
He wants to transfer all marketing spend associated with the £345.50 CPE to the £25.50 CPE channel as soon as possible.
What happens if it’s later revealed?
- That the £345.50 CPE generates 3 monthly enquiries and converts 100%. Furthermore, has a profit of £900 per sale.
- The £25.50 CPE is converting only 12 monthly enquiries and converts at 34% with a sale profit of just £32 per sale.
Pretty clear where to put your money, huh? Not always obvious without good reporting.
Marketing is goal based thinking.
My job is to work with people who know their business models and to help them grow and accelerate by understanding the specifics of what metrics lead them to success.
If you want a ‘deep-dive’ here’s a really in depth article about how I taught my team to measure ROI.
Here are the most common questions I get asked about digital marketing metrics:
- What should my Cost Per Enquiry (CPE) be?
- What should my Cost Per Click (CPC) be?
- How many leads should I be getting a month?
- How do Increase I the quality of my leads?
Great questions, right?
Yeah, sure, great questions, right? …but forgive me if i’m not my usual excited and enthusiastic self.
None of these metrics matter, alone.
The questions above, when silo’ed out, as we so often see, are dangerous. Yes, I said dangerous.
‘Anchor-point’ statistics are often the result of rather poorly engineered ‘focus’ statistics created by classified websites and others who are motivated to present other classified competitors as ‘in poor form’.
You have to measure what matters.
Vehicles are sold in funnels. Funnels reveal the truth. Few business see the truth. Few that see the truth are motivated to improve the funnel. Few that are motivated; know how to improve the funnel.
What an opportunity! (It’s how I’ve kept my business thriving).
My advice here is simple: Improve each touch point significantly.
Write a strategy. Take is seriously. Get your team engaged and behind your vision. Many hands make work. Marketing doesn’t win, teams do.
Why CPE isn’t always reliable
We’ve sadly seen many dirty tactics to reduce CPE over the years.
- Increasing brand spend: targeting the cheapest possible customers by targeting people who would likely have clicked your organic listing when looking for your brand name.
- Adding extra website tracking: increasing what’s counted as an enquiry. ‘Unethical naming’ of low value metrics to show a false picture in your reporting.
- Only targeting low hanging fruit: Ignoring business and OEM targets and only running low cost adverts. Poor ROI understanding of a high Cost Per Enquiry.
- No competitor conquesting: Missing out on an average of 1000 website visitors a month!
You can nearly always reduce your CPE, but it’s not always beneficial.
Strategy not actions, please.
Focus on solving business challenges
Sometimes there’s a really good business case for spending more on a customer.
When considering Cost Per Enquiry as a success metric it’s important to learn how to unpack it’s related statistics on a case by case basis.
Good reasons to spend more on an enquiry:
- Hit OEM targets to receive a back end bonus.
- Drive more prospects to your physical stock which contains higher profit margins and extra stock turn value.
- Sell over-age stock quicker by channeling more buyers than usual.
- Support a specific location with more website visitors when it’s falling behind a target.
Report holistically, don’t focus on a single metric.
Measure ROI holistically.
- Use common sense. Does everything point towards a good ROI?
- Look holistically at all of the important metrics – don’t forget map clicks, how long people spend searching for a car on your website etc.
- Work backwards, what is that problem worth to you & what would you pay to solve it?
- More ROI Ninja Ways (Yeah, you heard us!).
I hope this article helped you in any small way. Did I miss something?
Let me know!
In the meantime, you might also like:
Check out The Armchair Show – because great people, doing great things are great to watch on the automotive industries hottest YouTube show!
Subscribe for magic*
Sign up for resources, articles and some well-good links! *POOF!