We all know that a higher quality score leads to better ad positions and lower Google Ad prices. But did you know there’s a hack that you can use to get to $0.0 CPC AND most importantly drive more quality leads to your dealership with your CSQ?
I’ll share this secret with you, but first a disclaimer: 1) it involves some sophisticated math, and 2) it involves raw, unadulterated common sense. Here we go:
You’ll first need to obtain some important numbers from your AdWords account, website analytics, your dealerships’ Internet Leads Source report, your current CPC, and total monthly PPC budget (be sure this number includes any display, retargeting, and pre-roll).
Finding your Quality Score:
Your current Quality Score and its component scores can be seen with 4 Quality Score status columns: Qual. Score, Landing page experience, Ad relevance, and Expected clickthrough rate (CTR).
Finding your Organic, Direct, and Paid Visitor counts (monthly):
Hopefully by now your dealership has linked your Google AdWords Search Console to your website. Having done that you’ll be able to use Search Console to identify your Organic versus Paid monthly visitor counts. Of course use your own numbers. For purposes of an example in this article we’ll use the following numbers, which in fact from a percentage standpoint is typical for dealerships across the country:
Monthly Unique & Direct: 9,000 – 90%
Monthly Paid: (1,000) – 10%
Finding your website lead Lead-to-Sales Percentage
You’ll need at least manager access to your ILM (Internet Lead Management tool). Once in there you’ll want to navigate to your internet source report. Modify the date settings for this report to be for the past 90 days. After doing that look for the source that is from your website vendor i.e. Dealer Website, or website_vendor_name, etc. There will be a column typically for sold percentage, that’s the number that you’re looking for. For purposes of this example we’ll use the industry standard 10%.
I’ve put together a simple example spreadsheet of the hack to get to $0.0 CPC. Here’s an example of the hack/formula, I’ll explain the calculus below.
So, here’s the calculus explained in detail. You can also, download the spreadsheet here to enter your own values. The best practice to get to a $0 CPC is to do this exercise with your Dealer Principal or General Manager as they are uniquely qualified to provide the CSQ answer.
The first four elements Current CPC, monthly budget, Quality Score, and Lead-to-Sale (LTS) % are numbers that I’m sure you’re intimately familiar with and you know where to get. Enter those values in the spreadsheet.
The next four are simple calculations from the previous four. For example “Estimated Cost Per Unit Sold” is derived by simply dividing the monthly SEM spend by the actual number of sales at most that might be attributed to leads generated by the campaign.
The “Differential in Gross after removing SEM spend” is the amount of gross you would have if your dealership did not have the sales (Estimated Sales from SEM with Current LTS%) from your SEM campaign.
The Estimated Personnel Oversight is the cost per hour (including facilities, insurance, etc BUT not including opportunity costs) of the time that dealership personnel i.e. E-Comm director devotes to vendor and adwords account review monthly.
The CSQ or Common Sense Question (reminder, this question is best answered by a DP or GM – you know, the person most likely paying you to read this article), is derived by asking this question: “does it make any business sense to spend $7,000 in net dollars to drive $2,133 in gross dollars?”
In 9 out of 10 cases, when the CSQ is answered by a DP/GP the answer will be an emphatic NO. Thereby causing the cancellation of all SEM spend and driving your $CPC cost to $0. You’re welcome!
Oh, that one out of 10, where the CSQ answer is yes, that answer is from the GM headed to the vendors Dealer Summit event with airfare, hotel, and meals “compted” by the SEM vendor. Not much you can do there other than enjoy the ride and your $3 average CPC. Hey look on the bright side, if your DP/GM says yes to the CSQ think of all of the other things you can get him to say yes to. He probably won’t even care that you didn’t bring this article to his attention.