This is a short story about 10 leads from online automotive shoppers at a Toyota Dealership near you (wink). It’s a story with real events that have happened over the course of time at multiple dealerships throughout the country but brought together here in this story as a summation of what happens nearly every day at dealerships throughout the county. The leads, names, and data are fictitious to protect the innocent, industrious, and the less informed.
It’s a story inspired by one of my favorite adages in the car business; “it’s not about selling more cars, it’s about spilling fewer opportunities.” I first heard that adage nearly two decades ago when I, as a young CRM-tool sales manager walked into a GSM’s office on a Monday morning for a follow-up sales call. I found him (we’ll call him George) in his office with a stack of about 20 deal jackets to his left and in-front of him 3 pages of showroom and phone traffic logs that he was highlighting and writing detailed notes upon. After the usual hello and good morning pleasantries he asked me to give him a couple of minutes while he finished writing notes on various line items on the reports.
I sat quietly – assuming that he was making follow-up notes for his managers and sales people. When he was done, he moved the notes to the top of the deal jacket stack, slid them to the other side of the desk and said: “thanks, okay Ron where are we with our deal?”
I responded; “We’re ready when you are, I have the updated agreement here in my folder, but before we get there, can I ask what specifically you’re doing with those notes on those traffic logs?”
George, looking over at the stack with the slight hint of frustration on his brow turned to me and offered this gem: We sold a good number of cars last week and over the weekend, and we need to do better this week… “but it’s never about selling more cars, it’s about spilling fewer opportunities Ron.”
BAM! That hit me like a Yogi Berra grand-slam truism! He explained in detail about his frustration with all of the opportunity, the good quality opportunities that he saw slipping through his teams’ hands on a regular basis. He later showed me that the notes that he was writing on the showroom and phone logs weren’t for his managers or salespeople. He explained to me that they were for him. FOR HIM! Every Monday morning he would sit with his GM (also owner of the store), explain what and why he thought the deal or opportunity was missed and then explain how HE was going to fix it with either better processes, more accountability or more training. He took full ownership for all of those missed opportunities and gave full credit to all the made opportunities to his sales staff. I later learned that “weekly upline” review was his idea and not his owners.’
Today George owns 6 successful and profitable dealerships, and still, his mantra is: “it’s never about selling more cars, it’s about spilling fewer opportunities.”
So with that nugget etched in our mind, let’s talk about the 10 leads in the title of this blog. Once upon a time at a dealership far far away (near the one you drive to most days) there were dozens of leads and of those 10 were new leads that showed up in the dealerships iLM tool interested in new Toyota Camry’s.
We’re going to focus on 4 of those 10 Camry leads specifically because the other 6 had a variation of the all too familiar unreachable phone number of 555-1212. Complicating matters, while the BDC dutifully invested quality time and effort on their 1, 2, 3, 5, & 7 day follow-up emails, those 6 leads never responded to the dealerships email outreach. As such we’ll term them the “non-responders.”
The other 4 leads did in fact respond in varying ways and we’ll explore their outcomes in detail. Those 4 leads we’ll call Tom, Dick, Harry, and Sue.
Tom:
Responded to the BDC initial emails after the third attempt. In one of Tom’s email’s he indicated that he was interested in the 2017 Toyota Camry SE and he even referenced a stock number on the dealers’ VDP. Two days and two subsequent emails later, Tom indicated that he purchased a Camry from the competing dealership and thanked the BDC rep for their “helpfulness” and follow-up.
Dick:
Dick engaged with the BDC rep early… and often. Dick always responded with detailed price information from at least two of the other competing dealers. He also “no showed” for an appointment on a Wednesday night at 8pm. The next day his email response included a photo from another dealers’ window-sticker asking if he can buy that car from this dealership for $2,000 less than the asking price on the window-sticker. Dick never confirmed whether or not he had a trade-in and continues to stall and not respond to setting another appointment at the dealership. He hasn’t responded to the BDC’s last email and phone attempts in over 2 weeks.
Harry:
Bought a new Camry from our dealership after 4 email exchanges, two phone calls and an appointment. Everyone’s elated with the sale of course but no one was more elated than the Internet Manager who pointed out that he was able to connect that lead and sale all the way back to the “last click” from a Google Paid Search Ad Unit! “Full attribution,” he said. Expressing his satisfaction with his SEM vendor’s ability to help drive “in market” quality leads and buyers to their dealership. He described it as a “win-win-win.” In one of Harry’s earlier emails he asked if our dealership had a “Camry with Ruby Pearl Flare” exterior and an “Almond Fabric” interior (we’ll visit this question later). Equally interesting was the fact that Harry traded in a 2014 Hyundai Sonata from the dealership directly across the street. (you know, location had nothing to do with it of course, had to be that paid search ad… I mean come on, the analytics say so).
Sue:
Is engaged with the BDC rep. She’s responded to multiple emails and submitted an online trade appraisal for her 2009 VW Passat. She’s explained that she would be happy to schedule a test drive appointment in 10 days when she returns from her vacation in Hawaii. She and the BDC rep have been able to establish great rapport and they’ve exchanged what Sue described as “really helpful” emails because the BDC rep lived in Hawaii for 5 years and had lot’s of good restaurant and beach recommendations for Sue.
- You’re the GM, how do you score all of this?
• Do you call it a 10% lead to sale close rate?
• Do you call it a 25% engagement to close rate?
• A 100% appointment to close rate, or 25% Appointment Rate?
There are many ways to describe the lead – engagement – close rates of those 10 leads. But let’s look at them through the lens of our GSM George who I mentioned early on in this post.
If you remember George’s adage: “It’s not about selling more cars, it’s about spilling fewer opportunities.” So, where are the spilled opportunities in these 10 leads? Let’s take a little bit of a deeper dive. Some might score this as 1 sold (Harry), and 1 strong opportunity (Sue).
Starting with Sue makes the most sense right? Fairly simple here, “bird in hand.” Make sure we stay in contact, make sure we land the appointment, ensure there’s a management confirmation call and let’s sell that car. The Sue opportunity is strong and let’s not spill it.
Dick… great opportunity for DTO… “Digital TO!” Have the GSM, or better yet the GM send Dick a simple email indicating our interest to meet and exceed his expectations and ask for a convenient time for Dick to come in to explore those expectations with one of the managers. Or any of the other half-dozen excellent BDC practices for this sort of engaged customer.
So, 1 deal for sure and maybe even 2 more! If we do that, we then have between a 20 and 30% close rate on these 10 leads right? Well maybe. Let’s revisit the non-responding 6 for a moment. Here’s what we know for a fact: 20% of all web traffic are “highly engaged” shoppers that ultimately engage with a dealership. That’s right 20% of the traffic on your website are highly engaged, motivated buyers that are going to engage with a dealership. Unfortunately, on average your/our dealership will convert only 10% of the 20% of your website’s highly engaged visitors.
Don’t believe me, here’s the math…
Monthly Number of Uniques Website Visitors (4000) x National Retail Auto Conversion Rate (2%) = 80 leads
Monthly Number of Uniques Website Visitors (4000) x Engaged Buyers (20%) = 800 / your 80 leads = 10%
(80 out of 800 engaged buyers that were on your website doesn’t look too good does it?)
So with that out of the way, what do we know about the 6 non-responders… at least 1 of them is an engaged Camry buyer also! We know a couple of them are motivated buyers so surely not all 6 simultaneously reconsidered another brand or against buying all together. The math says that at least two of them engaged with and purchased a vehicle from competing dealerships. Fairly simple deduction… of “spilled opportunities.” Now, for grins multiply our numbers by 10 and we now have 60 non-responders and at least 10… 10 “spilled opportunities”… every day!
This is the moment to put your “GSM George” hat on and take accountability for those 6 spilled opportunities. And guess what, there is an even larger number of visitors on your site today that are highly motivated, and haven’t completed a lead submission form, or hasn’t called or visited the dealership. As the GSM/GM/DP of this store now is the time to recognize that without a strong focus on getting more of the 20% of highly engaged people on your website to contact and get engaged with your sales team you’re going to be spinning your wheels with a 2% conversion rate and 15-20% sales rate for a long time. And just because those are the national averages, who told you that they have to be your averages? Unless this dealership in our story focuses on getting more people to convert, engage, and visit, they’ll always be trying to sell more… whilst spilling too many opportunities.
Before we close let’s go back to Harry, the lead that bought from our dealership. If you recall he had a specific question of a specific exterior / interior color combination –yet he was on our site. Not a general red/beige but a “Ruby Pearl Flare” exterior with an “Almond Fabric” interior. With that sort of detailed feature knowledge, we’d have to assume that he was aware of it and he didn’t see it in our inventory, otherwise why ask the question. Where then did he see that color combination availability? Oh on the OEM site most likely. Then again, probably on a third party or automotive review site. Maybe even a competitor’s site. So if all those visits to other sites (clicks) ultimately lead him to search for and ultimately find our site… tell me again how important that “last click” ad unit was? Harry in one simple question told us he’d been shopping multiple sites online. Doing what all automotive online shoppers do. Translation: he was going to find our site and our inventory online regardless of the existence of a PPC Ad Unit. All that Ad Unit did was cost us money by cannibalizing what was going to be an organic click with a Pay-Per-Click. But maybe some of us are too hung-up on our own correlative analytics not to notice their complete disconnect from causation, let’s assume that to be the case. How about this, the fact that he traded-in a 2yr old Hyundai from the dealership literally across the street should give our SEM cheerleader a bit of pause before attributing so much value to the “last click” from a Google search.
I bring up the Harry question because in my experience “spilling opportunities” happens not only with traffic and deals, but with wasted investments, wasted dealership revenues, and wasted time and energy focusing on the wrong metrics that ultimately do nothing more than contribute to and perpetuate “ spilled opportunities.”
This dealership (and most others I know) should do these 700 things… okay not 700, just 3:
1) Recognize and embrace the fact that there are more than enough motivated buyers online searching for your inventory. You don’t need to have online ad units in-front of them anymore than you need a pizza-sales-cardboard-sign twirler standing in-front of your showroom yelling “in this way!” Get a strong persistent SEO presence, strong reviews, and you’ll have more than enough opportunities. (We can prove it)
2) Recognize that not all website visitors are equal. Identify those highly engaged buyers that are on your website in real-time and engage them. Give them relevant, tangible, and valuable reasons to choose you over your competition. Not all of your visitors, just the highly engaged and motivated visitors.
3) Focus on your lead conversion and lead-sales-rate metrics. No other metrics matter, if you can’t control and grow those two numbers. You’re just wasting your time and money whilst making marketing vendors rich. I Repeat: CTR’s, BR’s, Sessions, VDP views, leads, are all not relevant if you continue to barely close 10% of the thousands of highly motivated buyers that visit your site willingly (organically) each month.
Why? Because… “It’s not about selling more cars, it’s about spilling fewer opportunities!”