5 ways to improve your automotive website analytics

by Nicholas von Hahn

You’d be hard pressed to find an automotive manufacturer in the digital age that doesn’t have an exhaustive list of Key Performance Indicators (KPIs) to measure the effectiveness of their digital platforms. However, it is the ubiquity of such KPIs—fuelled by companies’ desires to become ‘data driven’ and by the abundance of data across many digital touchpoints—that is now dampening their effectiveness to assist decision making.?

In response, stakeholders are creating subsets of metrics—effectively ‘Key, Key’ Performance Indicators—so as to narrow down an ever growing list of what is being measured into what are the most relevant?to report on business performance. However, not all metrics can, nor should be considered KPIs. While it is possible to report every single detailed type of onsite interaction, it is likely more valuable for decision makers to gain an understanding of engagement patterns through a KPI reflecting overall weighted engagement with the website holistically.?

Over many years, Sophus3 has helped our clients identify the right KPIs to measure the different elements that are contributing to their objectives in the automotive marketplace. We use a combination of our breadth of technical competency, backed up by our own automotive expertise and understanding of the consumer car buying journey. Whilst the development of a robust digital measurement framework must be informed by the context of the specific business, the process of setting good KPIs explored in this short post is nonetheless applicable to nearly all industries.?

1. Know what you are measuring

At their core, KPIs should provide a clear overview of a business’s performance to all of the relevant stakeholders within that business. As such, the measures they express need to be closely linked to the business strategy and answer relevant business questions such as “Which elements of my website provide the most value?”, or “What are the biggest pain-points our customers face in their purchasing journey?”. Objectives need to be clearly stated, and agreed across departments, in order to clearly measure success and identify learning opportunities.

Automotive brands which are still developing their digital maturity will often focus on ‘out of the box’ metrics and adopt these as their core KPIs. While these have the benefit of being easily measurable over time, even as the digital platform evolves, they can be ineffective indicators of performance.?

One such example of a commonly used KPI is ‘Bounce Rate’ - the percentage of visitors who leave a site after visiting just a single page. Whilst bounce rates as a metric may provide useful insights in specific contexts, considering it as a general KPI to drive decision making may be counterproductive. For instance, if you were to take a decreasing bounce rate as a measure of ‘good’ performance, the actions associated with improving this KPI may actually be counterproductive. Optimising against this outcome might cause you to avoid activities such as embarking on a marketing campaign focussed on reaching new customer segments where resulting visits are likely to have higher bounce rates.

2. Set 'smart' KPIs

Instead of relying on such ‘out of the box’ metrics, it may be better to consider using the SMART methodology when deciding on indicators of performance. SMART stands for Specific, Measurable, Attainable, Relevant, and Time-bound, and provides a simple framework for ensuring that KPIs are clearly-defined and focussed on relevant business outcomes.?

An example of a SMART KPI would be to “increase year-on-year completed configurations by 10% over the next quarter”. (The configurator on an automotive web site is an interface where the visitor can ‘build’ and visualise the car of their choice by adding and removing features and equipment to meet their preferences.)

In this case the KPI is Specific as it targets a particular aspect of an OEM's website performance with an integrated benchmark of success. It is easily Measurable as the completion of a configuration can be set as an event within an analytics platform such as Google or Adobe Analytics.?

It is also Attainable in that the organisation can directly influence configuration activity, for example by creating digital campaigns to drive traffic to the configurator page. The KPI’s Relevance refers to alignment with an organisation’s overall business objectives, in this case because configurator activity has previously been shown to impact conversion to sales. Finally, being Time-bound means that a defined time frame exists to measure this metric’s success. The latter is important as it avoids the birth of ‘zombie’ metrics which continue to be generated without providing any further utility.

3. Apply KPIs to real life

While it is tempting to keep your KPIs relegated for use only when producing quarterly or yearly reports, it is critical that they are also incorporated into your daily decision making. Whether you reach your targets, or not, within a defined period will not come as a surprise if there is regular monitoring that identifies where your business is performing well and where you need to intervene to achieve your goals.

Each time you make a major business decision you should also give some thought as to how this decision will impact KPIs in both the short- and long-term.?

4. Involve all stakeholders

Given that the performance measured by your KPIs doesn’t exist in a vacuum, it is key that all relevant stakeholders are, if not directly involved, informed prior to the final KPI selection. By involving members across your organisation in the process of setting KPIs, the outcomes of the actions made to reach business goals are aligned whilst also promoting a culture of accountability and collaboration.

5. Remember Goodhart’s Law?

At the end of the day KPIs are just that, indicators of performance. If they are set correctly, improvement in your KPIs should be indicative of the improvement of your business.

Goodhart’s law states that when a measure becomes a target, it ceases to be a good measure. What this means in practice is that you must resist ‘gaming’ the process by focusing activity on improving the score the metric achieves whilst losing sight of the underlying health of the business that it is intended to measure.

Let’s return to our example of achieving a 10% year-on-year increase in completed configurations. This business goal might be reached in a number of ways, but simply reaching it does not mean much if it was done in a way solely to satisfy the KPI measurement without regard for the ‘spirit’ of the measure. For example, in and of itself the ‘completion’ of a configuration is an arguably arbitrary point set within the configuration journey. This KPI could perhaps be reached by removing stages or features within the configurator so as to bring the completion point much closer to the starting point. While this would likely increase the number of completed configurations it would not be an action meaningfully contributing to the business performance.?

Conclusion?

Effectively set KPIs are a powerful tool for measuring the performance of a business or organisation. Unfortunately, no one-size-fits-all version of this tool exists; it must be tailored to the specific needs of your organisation. While the process of setting good KPIs is straightforward in theory, implementation and adherence on an organisational-scale is elusive. At Sophus3, we’ve been supporting automotive clients in their digital measurement and strategy since 2001 and have in that time developed an industry leading understanding of both analytics best-practices and common pitfalls across brands. If you’d like to connect with our team and engage further on the topic of effectively setting digital KPIs, or any inquiry as it relates to digital analytics, please do not hesitate to reach out to us at sophus3.com.?

Nicholas von Hahn is the Head of Analytics at Sophus3. He began his career in Web-Analytics in North America as a Digital Insights Consultant working with several retail and technology Fortune 500 companies. Since moving to Europe, his focus has shifted to the automotive industry where he now works with OEMs to promote data-driven decision making and build robust digital analytics and tracking frameworks.