After analyzing sales data for the past 6 months, I have come to realize that my internet process was way too long. Here is what I found:
37% of internet sales came within 72 hours of getting the lead, 63% came within 7 days, and 81% of all internet sales were finalized within the first 14 days of first receiving the lead. Just 5% went over 30 days from inception to close.
I always knew that time was important, so we always try to be first to make contact with an incoming lead by phone. What I didn't realize was that my staff and I have been wasting multiple hours per day following up with leads older than 30 days. Our lead process will now be much more heavily front loaded, which should noticeably increase appointment and closing ratios.
I also researched incoming phone leads, and found the same exact pattern.
Why did I think a 90 day follow up process was necessary to begin with? When I refer to follow up, I don't mean a monthly automated newsletter...I mean phone calls and "people" emails.
This is a great post. I find it very interesting that that your success rate goes down after 14 days. I just finished working with a Ford Store and I saw their Ford Digital results. They were crushing it within the first 7 days of the lead coming in. They lost a tremendous amount of business with leads that were aged days 30-35 and even more with leads after day 100. I was always a 90 day process man until more recently when I noticed a shift in buying patterns and have moved towards a 150 day. It maybe your market, the quality of your response, or your product that gives you those results. Every time I go into a dealership that has no process and cherry picks the leads that are up to 10 days old, I change the process and their sales go up.
Well that certainly explains why your results are like that. The Ford dealer I was talking about is in a large Metro area in the New York market.
Thanks for posting this. Good information I think we all can use.
Don't stop hammering the 90 day leads, Keep it the same and find a way to hammer harder on your fresh leads up to 30 days. You may have to hire some help or outsource some your 90 day leads. But don't take away, add on. 2012 is going to be the biggest year in a long time , your going to need the help anyway!
Out source cost 250 mo. Lead Command Center
Not to be negative here, but help me understand your numbers,because I am just not buying this data. 81% of Internet leads were finalized in 14 days? Where is this data coming from? Your leads? How many leads are you getting total. I want to see all the numbers.
Let's say you got 500 leads and you sold 30 Internet leads and 25 of them were sold in the first 14 days. Then yes that would mean 81% of your SOLD leads closed in the first 14 days. What I want to know is, what happened to the other 470 leads?
What I would take away from this message, you probably do a good job initially, but your long term strategy could be flawed. There are a lot of different ways to analyze the data you have posted.
Over a 6 month time period, we received 3132 leads and sold 274 cars. I looked at every sold car to get my data, as you suggest. Of those unsold leads, my arguement is that there would be less if we spent more time on fresh leads and less time on 30 day old or older leads.
My former long term strategy looks something like this:
day 30: email + call/text
day 35: email+ call/text
day 45: email+call/text
day 50: email+call/text
day 60: email+call/text
day 75: email+ call/text
day 80: call/text
day 90: email+call/text
Some tasks are for the BDC salesperson, some are for the manager. We do these tasks regardless of whether we have heard back or contacted the customer. We also try to contact via Facebook throughout the process. I am going to move towards automated emails with more of an advertising message for leads past 30 days with no contact in order to free up more time for fresher leads. I think it will increase our closing ratio. I also will keep those leads active so that they continue to get emails monthly just to keep our brand in front of them, thereby making my internet follow up process "infinite" instead of 90 days or 150 days, etc...
Here is an email received by a lead last night. We received this lead on the 4th, and she bought a car on the 8th. Notice the response to the question "how long have you researched your purchase":
Thank you for letting us know that you acquired your vehicle. I am sorry we were unable to assist you with your purchase.
If you could please take a moment, however, to answer the following questionnaire – I would greatly appreciate any feedback you could give about our service and your decision process.
|1) How long had you been researching this purchase?|
|2) Did you end up buying the exact same vehicle elsewhere?|
|3) Where did you buy?|
|4) What was it that made you decide to buy from them?|
Local dealer matched xxxx price and trade value desired.
|5) Do you have any suggestions on what we could have done better?|
|You were the first caller, I appreciated your follow up. Sorry we couldn't do business with your dealership this time. Will keep you in mind in the future. Thanks.|
I would like to offer you some valuable savings from our award winning service department. We may not have had the right vehicle at the right time in this case, but we are committed to providing excellent maintenance and vehicle repair.
Again, thank you for the opportunity. I hope we can be of assistance in the future.
This is typical for a lead we were unable to close. The research time is longer, and by the time they submit the inquiry, they are closer to making a purchase than I had previously assumed.
You have an 8.7 percent close rate. What is going on with the twenty eight hundred and fifty three customers you did not sell. Unless you can tell me 81% of them bought elsewhere, I am not buying your theory. If only 5% of your sales are coming after 30 days, perhaps that is a sign that your process needs tweaking.
If you want to find a way to increase your overall close rate, find a way to close more of your Internet leads that came in from 30 days prior. There have been a lot of studies conducted and it's been proven that Internet leads take longer to close. Cobalt did one a while back and it was very comprehensive. Perhaps somebody can share the white paper with you.
My closing rate is determined only by customers my BDC sets appointments for. There are many more of these same leads that do not respond to our contact attempts who come in without that appointment and buy cars from us. I don't track those, because we kill the lead as "working with other salesperson" and don't mark them sold because I don't get paid for those.
You will also have extreme variance depending on lead source. Give me my own dealership's website lead. Give me an American Honda lead every time over a GM Hand raiser lead....someone who filled out a form saying they would love to have a new Corvette in order to get a free hat at the Monster truck show. That guy might buy a new GM vehicle in 6 months or a year, thereby skewing the numbers to a longer average close time.
The numbers always tell a story.
81% sounds fine. However, the biggest opportunity to increase profits is increasing the conversion percentage overall so the 2800 leads you did not close, still buy from you. It sounds like you have plenty of leads to keep everyone busy with following up on "hot" leads.
An automated followup system can do a big part of the work for you, especially one that is "trigger based."
If your 6 month closing ratio is about 8% I would have to look at your methods for attracting leads to determine why that ratio is not higher. Some of my clients have a ratio considerably higher than that but I wouldn't say their follow-up or sales people are any better...but the manner in which they attract the "ideal" customer, is great.
Does anyone here have a closing ratio in the 20% or more range for 6 months?