Monday, February 28, 2005

Ford Direct Case Study - Selling Vehicles Direct

Via Marketing Serpa

How can you get millions of consumers to fill out an online registration form revealing their interest in buying a specific car or truck?
Consider FordDirect's 2004 stats:
o 3.5 million monthly visitorso 1.5 million new vehicle referrals per year, plus an additional number of used vehicle referralso 210,000 new and used vehicles sold as a resulto 9% of Ford-brand vehicle annual sales from site referrals
We interviewed Steve St. Andre, President & COO, to discover how they did it. Turns out, it's all about relentless testing.
Lesson #1. Set an aggressive site improvement schedule
Although the site's just four years old, it's already launched its eighth major upgrade (and countless minor ones) to improve conversions. "Everything is in fast cycle time. We roll code daily."
Lesson #2. Relentlessly test, tweak, and measure design six ways
FordDirect's Web design team has a knee-jerk assumption that whatever they design will probably be slightly ... wrong. St. Andre says, "We may roll code 18-20 times. We know we can optimize the experience. You're not going to get it right the first time."
So, FordDirect's Web design culture is about testing, tweaking, testing again, and again, and again. Nothing is set in stone. Nothing ever is assumed to be as good as it gets. The team relies on six types of usability tools:
Tool A. Benchmarking"We're looking at what other sites are doing across industries. We get ideas we can take on lead generation." (Worth noting, St. Andre doesn't limit this to just automotive or mass consumer sites.)
Tool B. HeuristicsFordDirect's development team includes usability experts who view proposed plans and mock-ups prior to extensive code being written.
Tool C. Daily user groupsFordDirect runs ongoing usability studies in Austin, Texas, with different consumers coming into the lab each day. "It's in close proximity to our development software firm. We roll so much code, we have to have a continuous flow of user groups for ongoing development."
St. Andre notes, "Everything goes in front of user groups prior to launching actively. We don't launch unless we see how all concepts work. You learn so many things, you get it as close to right as possible."
Tool D. Quarterly national user groupsEvery three to six months the team runs regional user groups in locations such as San Diego and Denver. They ask these consumers to review the entire site and process rather than just the most recent site tweaks. "We try to test different age groups and demographics."
Tool E. Clickstream analysis "We do flow analysis of every portion of the site to see where they are dropping off, and where there are bottlenecks in the system."
Tool F. Conversion analysisFordDirect's dealer customers give an enormous amount of feedback about the quality of the leads they receive. A decent percentage (perhaps as high as five percent) better wind up marching into the showroom and purchasing, or the investment in generating leads is wasted. No matter how usable a site is, and how much consumers love it, if they don't buy in the end, why bother?
Lesson #3. Offer navigation paths for different consumer goals
All of this testing has revealed a critical factor about the marketplace -- most site traffic breaks into two different types of shoppers, and it's not young versus old or trucks versus cars.
The two categories are education-seekers who want to delve into loads of details on their choices versus price-seekers who want a quick quote from a local dealer, the faster the better.
"You have to break everything into these two groups when you look at the data, and then develop specific paths to accommodate each of them," notes St Andre. Plus, the team rarely looks at overall site visitor data. Averages mean little when the two groups have such differing habits.
Lesson #4. It's not remotely important to be a destination site
Because the site's ultimate customers are the 3,900 dealerships who fund it, dealers set the site's goals -- which are to generate leads for sales, sales, and yet more sales. So there's no corporate ego play about being a branded destination site.
Instead, FordDirect has become a built-in part of 28 different destination sites from AutoTrader.com to MSN. "It's more expensive to purchase eyeballs and bring them to you than it is to take your content and put it where the consumers already are. If they're more comfortable shopping in MSN autos, let's leave them there."
The design team takes the integration far beyond the old-fashioned template landing page with both sites' logos that so many "powered by" partnerships used a few years back. Instead, the design tries as much as possible "to exist within that path or flow" of the destination site the visitor is already on. Which in turn means the FordDirect.com home page is far less important than you might think it to be, because so few "visitors" ever see it. Designing the entries and pathways on partner sites takes priority.
St. Andre has two business tips for other marketers considering partnerships:
Tip A. Get a 30-day "out clause" in every contract. Don't be locked in for a year or more. If something stops working you need to be able to focus your energies on the things that do.
Tip B. Track results in detail, and share them openly with the other site. "We have very stringent quality standards and that allows us to go back to the site with closed loop reports and work collaboratively with them to improve the process. A lot of sites are very receptive to learning their traffic converted X leads and let's say we're getting 15 sales from that group, and our target is 16-18 sales."
FordDirect even tells partner sites which of the initial links or banners on their sites that drive the traffic to the registration form is working best. So if you have multiple directors sending traffic, you'll get a conversion report for each.
Lesson #5. Test the daylights out of your registration form
"We've extensively studied the registration forms, and learned a couple of things," says St. Andre.
"We added 800 numbers and run it through VoIP tech to track consumers calling in. We thought it would be insubstantial. We saw an incremental 80% gain. It was additive." So 80% more people overall responded when they had a phone-in option. "It was eye opening."
When the team tracked who called versus submitted a form, they discovered the percent of callers remained fairly consistent across all age groups and demographics, except for one factor. Consumers researching a used car were more likely to call. "There's a level of urgency, they found the right model so they'd better lock it in right now."
Another key learning: "You simply cannot force consumers into the registration process prior to their comfort level.
"A lot of industries are driving traffic to forms, you have to fill this out. We've taken that out.
"Now we say let's match the consumer's excitement level, and figure out what to do if they're not ready to fill out the form yet to contact a dealer. Maybe they want a brochure emailed to them, maybe they need multiple opportunities to come back and interact with the Web site until they are ready to transact. You have to be in the place they are in and not push them down the path."
If you're a registration form design junkie, keep watching FordDirect's forms over the next three-four months because St. Andre says the team is planning intensive testing.
Useful links related to this article:
CPC Logic - the search marketing firm FordDirect uses for paid campaigns:http://www.cpclogic.com/
FordDirecthttp://www.forddirect.com
Renault's Urban Concept Car

A bit like a Smart...

Renault will display an upmarket urban concept vehicle at the Geneva Show. Codenamed Z17, it's based on the idea that cars carry an average of 1.4 passengers, but that customers find the idea of just two seats to be a constraint.
So the Z17 has three. Two in front, as normal, and one behind the front passenger. To minimise overall length, Renault has put the luggage compartment immediately behind the driver.
Renault will release more information early in March, but we'll be surprised if this includes any news of a UK version. Hat-eating may even take place. The smaller the car, the higher the sales have to be to justify building it, and Renault couldn't make the numbers add up for a (comparatively simple) right-hand drive conversion of the Twingo city car. A mirror-image Z17, with all that that would entail, therefore seems exceptionally unlikely.
Auto Dealers Increase Online Spending

Auto Dealers Ramp Up Online Ad Spend› › › ClickZ News
By Rob McGann February 11, 2005
Online advertising in the automotive sector increased 51.5 percent to $1.2 billion in 2004 and will continue to show strong increases as online video ads become more prevalent in coming years, according to a new study by Borrell Associates.
The study projects that auto advertising online, while accounting for only 4 percent of the overall $30 billion ad spend by the automotive sector in 2004, will grow to nearly $2 billion in 2006, approximately 6.4 percent of all automobile advertising that year.
"We expect that as Internet marketers move to include more online video in their advertisements that the automotive sector will continue to grow in the next three to five years, even as other online verticals slow down or level off," said Gordon Borrell, president and chief executive of Borrell Associates.
Part of the ramp up is based on impressive performance statistics. According to J.D. Power & Associates, Web sites generated 22 percent of all new cars sales in 2004. Although ads in other media, such as print, TV, and radio, may have also contributed to those sales, the fact the Internet (usually e-mail sent through the company's Web site) was the point of contact for the sale caught the attention of a number of dealers, Borrell noted.
Of the three auto ad segments, dealerships increased their online ad spend the most in 2004, nearly doubling their interactive budgets. Manufacturers, meanwhile, increased their online marketing expenditures 38.8 percent. The slowest segment of the three was dealer associations, which increased their online advertising efforts 20.2 percent to a relatively tiny $58.3 million in 2004. That number is more striking when one considers dealer associations account for 25 percent of all automotive advertising spend but only 5 percent of all online advertising in the sector. Borrell projects that figure will grow by an additional 26 percent in 2005.
Although online spending increased across the board in the automotive sector, the industry's ad expenditures in traditional ad formats, such as broadcast television commercials, print ads in auto industry magazines and newspapers, and radio spots, declined slightly in automotive advertising share.
"It's not that the other advertising media are ineffective at generating sales, so much as the media mix is being thought out again and adjusted," Borrell said. "What the proper mix will be is something that will require a few years to determine, but I wouldn't be surprised to see shifts as large as 10 or 15 percent in coming years."
Borrell Associates is not the only research organization to identify the fault lines of growth within the automotive sector. In an advertising report issued in January, cars.com found that 65 percent of local dealerships reported changing the way they advertise online, spending more on contracts with third-party providers to drive traffic to their sites and generate sales.
Internet Shoppers Increasingly Satisfied with Usefulness of Manufacturer Sites


J.D. Power and Associates Reports: Automotive Internet Shoppers Increasingly Satisfied with the Usefulness of Manufacturer Web SitesTuesday February 1, 9:32 am ET
HUMMER.com Ranks Highest Among Manufacturer Web Sites
WESTLAKE VILLAGE, Calif., Feb. 1 /PRNewswire/ -- Even though the expectations of Internet automotive shoppers continue to increase, they also continue to give record-high ratings to auto manufacturer Web sites, according to the J.D. Power and Associates 2005 Manufacturer Web Site Evaluation Study(SM) -- Wave 1 released today.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030603/JDLOGO)
The study measures Web site usefulness based on consumer ratings of three main components: relevance, navigation and appearance/presentation.
The study shows an average usefulness index rating of 799 for the industry -- up 11 points from the measurement taken just seven months ago. Despite rising expectations by consumers for manufacturer Web sites, the lowest-rated site in 2005 receives higher usefulness ratings than did the highest-rated site in 2001.
"There is much more to come, but the automotive industry does a fantastic job of keeping up with the needs and expectations of online shoppers," said Dennis Galbraith, senior director of automotive marketing solutions at J.D. Power and Associates. "While the cost effectiveness of television advertising continues to be challenged, manufacturer sites have proven to be a tremendous benefit to shoppers and an unprecedented promotional value for manufacturers."
HUMMER leads the industry with an index score of 828, based on a 1,000-point scale. Visitors to HUMMER.com rate it highly in ease of navigation and consistent aesthetic appeal throughout the site.
"HUMMER.com is loaded with vivid photos, videos, sketches and technical drawings that demonstrate far more than just the appearance of the vehicles," said Galbraith. "The site effectively demonstrates the capabilities of HUMMER vehicles and the benefits derived from their unique features."
More than one-half (54%) of all new-vehicle buyers visit at least one manufacturer's Web site before purchasing their vehicle. The information content provided by manufacturer sites continues to flourish, with the quantity of pictures and videos continuing to increase. Many sites offer tools to help shoppers find the vehicle to best meet their needs. Once bland, lists of vehicle options and features now frequently include pictures, videos and interactive demos explaining the function and benefits of these items.
"Manufacturers want shoppers to know how their vehicles will enhance the driver's quality of life," said Galbraith. "Many of today's vehicles transport and protect people and cargo in efficient and effective ways that did not exist in previous years. But much of that great engineering is wasted unless shoppers know that it is available and useful. Manufacturer Web sites can deliver volumes of information in ways that are fun and can make even complex safety features easier to understand."
The 2005 Manufacturer Web Site Evaluation Study -- Wave 1 is based on evaluations by more than 11,500 new-vehicle shoppers who indicated they would be in the market for a new vehicle within the next 24 months.
Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm's quality and satisfaction measurements are based on responses from millions of consumers annually. Media e-mail contact: michael.greywitt@jdpa.com or john.tews@jdpa.com
No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com
Multimedia Available: To view and download supplementary charts, photos, video, audio, text, and graphics please visit J.D. Power and Associates' Enhanced News Release at http://www.prnewswire.com/mnr/jdpower/21178/.