87 Car Dealers That Suck At Lead Conversions & How You Can Crush Them!

Transparency

In an era where transparency is the cornerstone of any successful digital marketing campaign, the opaque tactics used by car dealers to convert Internet leads into appointments astonish me.

Mystery Shop 100 Dealers

In order to better understand of our industries lead conversion culture, my team and I mystery shopped 100 randomly selected dealerships from across the country and compared the results.

Best Price

We went to their websites and asked for their “best price” on a vehicle that we selected from their inventory. Our goal was to look at their processes through the lens of their consumers, here’s what we found:

Managed Chat

100% of the dealers with managed chat tried to extract our contact info without giving us their best price. This is ironic because the main reason people use chat is to remain anonymous. Instead of respecting our wishes, they deployed a third party that has no more information than we had (the dealers website) to be their first point of contact.

Every managed chat that we engaged used predictable, scripted or manipulative tactics to persuade us to give them our contact info.

For Example:

“May I have your contact information so I can get back to you if we get disconnected”.

“Can I have your phone number and email address so I can have someone get back to you with our best price.”

Reasonable questions, but the reality is they couldn’t give us the dealers best price and they were only there to get our contact information which is anything but transparent.  

If we refused, but kept pressing for their best price we received replies like this:

“Well, the price listed on the vehicle is $32,900.00 which is well below market value.”

We could see the list price; we wanted their “best price”. Telling a customer the advertised price of a vehicle that they’re looking is condescending and a waste of time.

This question was my favourite:

“I don’t have access to that information. Would you like to make an appointment to negotiate with a salesperson?”

Asking someone if they’d like to make an appointment to negotiate with a salesperson is equivalent to a dentist asking a patient seeking a cleaning if they’d like a root canal.

The Benefits Of Managed Chat

I clearly understand the benefits of managed chat. Chats often occur after business hours and many sales consultants claim to be “too busy” or they’re reluctant to engage chats for fear of missing an UP.

For many dealers managed chat is profitable because they do convert a percentage of their leads. But, I can’t help but wonder how many people are turned off by chat and bounce to a competitors website to get the information they need to make a decision.

71% Got Back To Us Within 24 Hours Without Giving Us Their Best Price

While a small percentage responded with in an hour the majority took several hours to reply. 12% responded within 48 hours and 17% didn’t respond.

68% Sent A Computer-Generated Template Without Giving Us Their Best Price

At one point I was a fan of response templates, after all we can’t be available 24/7 and often times salespeople claim to be too busy to provide the immediate gratification that online shoppers expect.

After receiving several of them within a short period of time I changed my mind, as it became obvious that we were receiving automated templates. Most of them were strikingly similar, poorly edited and impersonal.

Dealers need to realize that online shoppers are smart and well informed. Many of them will shotgun requests for information and by the 2nd or 3rd template they receive will know it’s an automated, fill in the blanks response that does nothing to build rapport, establish a relationship or answer their questions.

61% Tried To Set An Appointment Without Giving Us Their Best Price

The days of dealers controlling the information or conversation are gone. Trying to convert a lead into an appointment solely for the benefit of the dealer is one of the fastest ways to lose a customer.

58% asked irrelevant questions without giving us their best price

While I firmly believe that “Selling Is Asking, Not Telling” and clearly understand the power of asking questions, asking them to take control of a conversation is repugnant.

This is an actual excerpt from an email template we received:

 “In order to help you make an intelligent decision, I need to ask you some questions:

Will you be paying cash or financing? Do you have a trade? Would you like to make an appointment to test drive the Elantra so you can see if it meets your needs?”

Intelligent Decision?

Is this dealer suggesting that people can’t make an “intelligent decision” without the help of a salesperson?

I’m all about consultative selling but couldn’t help but take offense to this. In addition, these types of questions perpetuate the myth that people can get a better price by paying cash and create suspicion of price manipulation if there is a trade.

AutoTrader.com

AutoTrader.com released a study in 2016 that said 71% of people buy the vehicle they select online. If a person knows what they want and you happen to have it, make it easy for them to buy it, no questions asked.

13% gave us their best price, but it took 2 emails and up to 1 hour to get it

Only 13 of the dealers out of 100 gave us their best price. The question is do they have a competitive advantage or are they setting themselves up to get shopped? While I’m certain that some hard-core negotiators will ask a competitor to beat your price, most people would be so frustrated with their online experience that they would gravitate towards the dealer that gave them what they asked for.

1 Rock Star sent us a personalized video giving us their “best price” within 10 minutes

The most engaging, transparent and customer centric response we received came from an Internet Marketing Manager at a Chrysler Dealership. He sent us a video that was imbedded into an email where he gave us his “best price” and an invitation to visit the dealership to test drive the vehicle.

87% of the dealers we contacted would not give us their best price online. Is it any wonder that the national conversion to sale rate is only 2.2%?

The Lead Conversion Secret

Last year Google studied their users online experiences with car dealership and they found that 50% of them were unhappy for the following reasons.

1.     Dealer was too slow to respond

2.     Dealer was too pushy

3.     Dealer did not respond directly to the question

Sound Familiar?

Of the people that were dissatisfied with their online experience Google said:

  • 20% said they would never consider that BRAND again.
  • That number jumps to 50% for Millennials.

Google Said People Perceive Internet Inquiries As Conversations

Conversations that must be replied to in “real time”; the same way we get information from search engines. People asking questions online don’t want to provide their contact information in a chat box or on a form and then wait for someone to get back to them.

Micro-moments

People no longer plan to allocate X amount of time to conduct a search, they search in micro-moments. Micro-moments are brief searches that can occur anytime, any place and on any device.

To win the micro-moments dealers must be there to answer questions directly in real time. If we don’t we run the risk of being forgotten or crushed by a competitor who is available to serve people in the micro-moment.

Fragmented Information

Plus, the information the automotive industry provides is fragmented between OEM websites, dealer websites, social media platforms and VDP pages like AutoTrader and CarGurus, each of which provides a different user experience.

Channel Agnostic

Meanwhile people are becoming “channel agnostic”, which means they move from Website to Website and from a device to device and expect seamless continuity.

It appears that most car dealers’ conversion techniques are not aligned with their customers needs.

How To Crush Your Competitors Lead Conversion Process

It’s time to give people the information they want, when they want it. It’s time to deliver intuitive, compelling and seamless experiences that are all about the person doing the search and of equal value on whatever device they’re using.

  1. Internet Best Price Strategy: Develop an Internet “Best Price” Strategy and make sure your team is able to deliver it on request. The results of our mystery shop indicate that the likelihood of your price being shopped is minimal. Most of your competitors are clinging to their old school ways and refusing to give people their best price online. Stand out from the crowd, give people what they want, when they want it and make it easy for them to spend their money at your dealership.
  2. Co-managed Chat: If you’re committed to Chat use co-managed chat. If your salespeople would use it, hire and train special teams that will. The dealerships that are ready and available in the micro-moment will win the sale every time!
  3. Concierge Service: Stop trying to drag people into your dealership before they are ready by offering a Concierge Service. Give them the choice of coming to your dealership or bringing the vehicle to them at their convenience.
  4. Build Value In Your Appointment Process; Create An Appointment Experience: Some people don’t show up for appointments because they don’t take their appointments seriously. They don’t take them seriously because we don’t. Let your customers know the amount of effort and care that you put into your appointment process. If you put value in appointments your customers will too.
  • Have the car cleaned, warmed up or cooled down and parked in a special appointment area.
  • Hang a sign of the rear view mirror with the customers’ name and appointment time on it.
  • Tell them you’ll have their favorite beverage (Star Bucks, Tim Horton’s, Dunkin Donuts Coffee) waiting for them when they arrive.
  • Have a sales manager (voice of authority) call every appointment to confirm and reiterate the effort you put into preparing for their appointment.
  1. Video: Use video to respond to leads and to communicate throughout the entire transaction (video walk arounds, demo drives, follow up and referrals). If 71% of people decide what they’re going to buy before they visit a dealership, it’s time to start building relationships online and video will do that.
  • Have you ever sent a text or email that was misinterpreted by the recipient? Video eliminates those types of miscommunications. Dr. James McQuivey of Forester said 1 minute of video is equivalent to 1.8 million words.
  • Video it stands out from your competition.
  • Shooting a video with a smart phone is 10 times faster than writing an email.
  • We use a technology that imbeds videos directly into an email or text without having to upload it to YouTube. It’s fast, easy and effective. When a person receives a video email or text from us they will see a 3 second GIF of the first few frames of our video, which encourages them to watch it.
  • Video converts more effectively because it builds trust with online shoppers.
  • Video dramatically increases referral rates.

The Sad State Of The Automotive Industries Lead Conversion Process

I wish I could say we were surprised by the results of our research, but having mystery shopped dealers for the last 5 years the results were typical.

The Bad News

The bad news for dealers that refuse to evolve is that their antiquated, dealer centric lead conversion process is going to relegate them to “also ran’s” as the Internet, consumers and their competitors evolve.

The Good News

Dealerships that look at their sales processes through the lens of their customers and evolve to meet their needs by developing and implementing truly customer centric experiences will crush their competition.

 

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Comment by steven chessin on November 14, 2016 at 1:44am

James - This is my favorite point that you made :

when you do something - trying to look thru the eyes of a retail car shopper, be honest....would you know how that even feels? I don't. I know too much now (to my own detriment in this area) 

Comment by J. Michael Zak on November 10, 2016 at 2:19pm

Jim two things come to mind, 1st great research and article with lots of reminders and valuable tactics to put a dealership ahead of the majority of the dealers.  2nd, scary results however after listening to several recorded sales conversations from dealers through out the country I am not surprised just disappointed.

However I do have a question, you mentioned the 2.2% the national conversion to sale rate.  What is that based upon?  It seams awfully low.  Is that internet sales only regardless of new or used vehicles?

Comment by jeff sterns on November 10, 2016 at 11:34am

Hi Jim, great article. I sold cars for 27 years so I have to admit that I personally would never know how to change my DNA or reprogram my brain to that of a car shopper that never sold cars. Now as a 5 year vendor to the industry with hundreds of personal dealer contacts and many daily conversations, even if I'd never sold cars before ...again I'd personally have difficulty looking through the eyes of a consumer with no industry knowledge. I've never been one in my adult life so, I can't know what that must feel like. Excitement, fear, what I'd want, etc.

Everything that I ever did as a dealer (that I tried to do as I thought a shopper would want) seemed to not help business (or even their satisfaction for that matter. Let's face it....shoppers like kids will take desert before dinner on a preference ;) )

Since I am now in the chat space (and got into it as an evolution of using many in my store ...and then one that worked...) I feel the need to chime in on a couple comments that seem overly general. Like leasing...it's neither good nor bad...it's all subject to the alternative (heavy miles, trading every 2 years? Keep it forever otherwise?). Chat is neither good nor bad. Done wrong (as you describe above) is not best in my opinion.

This is ironic because the main reason people use chat is to remain anonymous.

I agree that this is the main reason. This is why we see requirement of contact info as an opener as a bad practice. That said, same as at a social function...we have found that a warm conversation can lead to a shopper unoffended and happy to leave contact info for the proper person to contact them. Positioned as a receptionist, this can be acceptable. Shoppers don't get offended when the phone receptionist doesn't know a specific but connects the shopper. We've case studied many times and in our case, perhaps counter to the industry or your general research, do not increase bounce.

Every managed chat that we engaged used predictable, scripted or manipulative tactics to persuade us to give them our contact info.

For Example:

“May I have your contact information so I can get back to you if we get disconnected”.

Jim, you have our 100% agreement here. A trick like asking for info in case of a disconnect or to send a transcript only confuses the shopper when the store calls ("I never asked to be contacted") and burns out the human capital inside of the store... calling or emailing a certain number of people who never raised their hand to be contacted. Great point and not a good practice in my opinion.

“I don’t have access to that information. Would you like to make an appointment to negotiate with a salesperson?”

Obviously poor wording. Of course what we don't know is if this is a stupid chat provider script, a rogue operator or an in-store employee managing the chat (bringing those well regarded phone skills to the chat :) ). I for one always felt wonderful (SARCASM ALERT) after listening to my staffs recorded inbound sales phone calls!

I clearly understand the benefits of managed chat. Chats often occur after business hours and many sales consultants claim to be “too busy” or they’re reluctant to engage chats for fear of missing an UP.

For many dealers managed chat is profitable because they do convert a percentage of their leads. But, I can’t help but wonder how many people are turned off by chat and bounce to a competitors website to get the information they need to make a decision.

Jim, I assure you that managed chat done right is better than tying up sales staff. Remember the average chat is 8 minutes...lead or not. In our world, 40% of every chat is for parts and service. Some sales payplan spun people in stores get their moods down after a few of those chats at 8 minutes a whack! Further, remember that the only time (in my opinion) that internal staff should chat at all is if the dealer is happy with the recorded phone ups because this skillset is what will convey to chat (but you'll still need to continually inspect for spelling, grammar, typing in caps, etc). In my own store, me letting go of my ego and allowing a good managed provider take over the chatting from my staff literally doubled the retails sourced to chat (of course part of that was the overnight bump that you'd earlier mentioned). Further, taking my staff off of 100 chats per month at 8 min each allowed us to dig further back in CRM and make more calls. It was a synergistic boost.

I'd mentioned prior about bounce. You know, you'd laugh at how many shoppers click the banner icon (placed next to the phone number) to ask for the dealership's phone number! Bounce from crappy chat? I'd bet on it. Same as bounce off the asphalt from any crappy practice! Of course you're right.

I hope that this came across as intended and that is that I saw some terrible chat practices mentioned and we are against all that you seem to be against! I was hoping to not have a dealer not lose out on the tremendous shopper support ("I bought my car 2 weeks ago and need help with...." or "Can you show me the credit app page?" or "I'm looking for a job" or "What is the service manager's name?") or the added website shoppers that can be shepherded to the showroom and Gosh-willing into a vehicle or service dept job if it's done right and handled right by the store once the message is forwarded to a hand raiser. Some will assuredly bounce from crappy chat and some will bounce from this often expected communication channel not being present.

Shoppers will communicate thru the site ( a form, chat) or phone or social medial or how they like. All must be covered.

Adapted from what I used to tell guarded card shoppers in my showroom (stolen from a sales trainer, of course :)..."please allow me to apologize for the experience you had with the other chat provider"

A final warning: when you do something- trying to look thru the eyes of a retail car shopper, be honest....would you know how that even feels? I don't. I know too much now (to my own detriment in this area)

Comment by Joe Webb on November 10, 2016 at 10:20am

You've highlighted some very clear principles that dealers should have already adapted to, but sadly, not near enough have. Understanding a customer's needs at every single touchpoint they have with your dealership, your people, your website, your inventory, and your information is key to delivering a great customer experience, before during and after the sale. Well done.

Comment by Roger Sowers on November 10, 2016 at 10:03am

So how do we make money with this "best price" paradigm? Internet "best prices" are generally losers to the sales department.

Best price seems like a way to become so successful that you go out of business. Good news we sold 500 units this month. Better news we only lost 50k this month. Last month we lost 75k so we really made 25k? Sounds like what the airline industry accomplished. 

Comment by steven chessin on November 8, 2016 at 10:50pm

Thank you - I thought I was alone in hating the standard practices. You have done a great job of pointing-out flaws. Most of the stores you surveyed are probably part of major groups, The reps are merely following specific doctrines dictated by sales managers using old-school, hard-sell, heavy-handed auto sales techniques. 

You are very right about video -- I have always found the results to be superior to text formats --- and I am familiar with the technology you are using  --  although - it is a lead management tool not lead generation - so more is needed. And while I used to be the #1 proponent of nicely shot and edited video I am now seeing that live streaming video has the strongest "concierge" strength when used properly. Several years ago Lincoln tried but lacked the necessary insights about what customers wanted to see and hear. And one more thing  --- the road to the digital sale seems to be the same for so many without the slightest question that it might not be "best practices".   

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