Why Customers Leave Without Buying A Car And What To Do About It

What's the most creative reason you've heard from a customer who is leaving your dealership lot without purchasing? Sure there are the typical, "have to check with my spouse," and "have to pick up my kids at their soccer game." Then there are the more atypical reasons: "I have a dentist appointment," or "My mother-in-law's in town." If it's one of the latter, warning bells should be ringing. Who would rather go to a dentist appointment or visit with their mother-in-law than buy a car?

 

According to AutoLoop Engage's call center statistics, only three percent of customers who leave without purchasing give the salesperson the real reason. Our agents have connected and engaged with thousands of unsold customers and here is why they're really leaving, according to our data:

 

1)    55 percent leave because of payments/price/trade-in issues

2)    26 percent leave because of inventory issues; your dealership didn't have the exact color or model they wanted

3)    16 percent left because they had a bad experience; either because of the salesperson or some other reason

4)    3 percent or less leave because of the actual reason they cited

 

Take a look at numbers one and three. More than 70 percent of customers that leave are doing so because of reasons that can easily be addressed. How? With a better turnover (TO) ratio. Here's another scary stat from our data: the average TO rate from salespeople to managers is 32 percent. That means only 32 percent of customers spoke with a manager before they left the dealership. I know this is hard to believe. That figure should be 80 to 90 percent. But we are getting this information straight from the customers' mouths. Our agents are trained to engage with customers, and because we are a third-party they tend to trust us and tell us things they don't tell dealership staff.

 

Managers can take care of price/payment and trade-in issues. They can often take care of inventory problems too. They are also the only ones who can fix a bad experience by assuring the customer that if they come back, they don't have to deal with the same salesperson or process, if that was the problem.

 

If your dealership has a high percentage of showroom ups that leave without buying, it may be due to the TO process. Reviewing that process with your sales and management team may be a good place to start. The higher the turnover ratio, the higher the closing ratio.

 

For the inevitable unsold customers, it's best to reach out within a time period of two to twenty-four hours, before they have time to buy from another dealership. Ideally the person to call and follow-up should be someone other than the salesperson; like a manager or a third-party who can engage with the customer (instead of trying to sell them all over again) and offer incentive and assurances that if they come back to the dealership, whatever issues they had will be resolved.

 

An effective TO process will result in higher closing ratios, and an effective follow-up process will result in more be-backs. What are your tips for more TOs? What has worked in your dealership?

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Comment by Bill Gasson on October 29, 2014 at 6:22am

32% very surprising ......

Comment by steven chessin on October 26, 2014 at 12:08am

Michael

Yes. You mention a very important stat - but - I need to mention the 'good news / bad news'. That stat means if they make it to the showroom they are inclined to be buyers because they did their shopping online. Good news. The bad news is that the losses up-funnel before the showroom are unacceptable. But don't worry about it. I am sure you've got top men working on that right now.  https://www.youtube.com/watch?v=yoy4_h7Pb3M

Seriously, this is where sales are lost and could  be found. Its just a question of realizing this and knowing what can be done about it. Look at your VDPs. They are universally less than half as good as they should / could be.

Comment by Michael Baker on October 25, 2014 at 10:45pm

In most Dealerships, tactfully holding accountability with experienced staff with Mgt seems too often challenging for some reason. The traditional TO floor for many many years was assembled with 5-6 consultants and 1 'closer' with other 'sales' teams.When a Sales manager is available, with Good interpersonal skills,100% TO w. the consultant remaining with customer, the mgr. conveys a "Sincere-Thank" You+. The STATs today reflect the average shopper visits 1.7 stores vs. 5-6 5+ years ago. An intro to a 'good' Mgr. will reduce the 1.7 Visits to ONE more often. :)   :) 

Comment by Brian Bennington on October 25, 2014 at 6:21pm

Great post Patrick!  Really refreshing to read about two important fundamental processes in selling that don't require a keyboard.  My experience working in a TO situation is limited, but it appears to me ego is a big reason it isn't utilized more.  For some reason, being caught on the front end of a TO is seen as demeaning and being "weak."  My only complaint about it was when another rep was called in for a bump and didm't make their share of the commission.  Luckily, I moved past that early on. 

When I could bring a sales manager in, I loved it, and developed several methods to reinforce it.  As an example, when I detected a little help would be necessary, I'd mention to my customers that "Your interest is so sincere, I wish I had Mr. Hugh Jorgan, our sales manager's knowledge to better answer your questions."  He's done blah, blah, blah, and he knows more about the "Belchfire LaStatus" than any human on earth.  (It wasn't quite like that but you get the picture.)

Anyway, I worked to get their desire level up to the point where they'd really wanted to meet him.  Periodically, a customer would blurt out, "Why don't you go get this guy so we can talk to him."  Believe me, not only did the sales managers all find it entertaining (a missing but much need component in selling), it was a perfect set-up for a "no split" sale.  (I loved managers.  A little regular well-thoughtout admiration and the beverage of their choice and I could get them to do damned near anything.)

As to prospect follow-up, you're right on the money, and a third party caller is exactly the way to go.  Of note, if the call begins to "go south" with them, they should immediately "disconnect."  That way, the rep will have another shot when he calls back to see if his customer "hung up" on the 3rd party caller or there was a problem on the line.  Different types of follow-up has been my bailiwick for the last 40 years, 20 for myself and 20 for my clients.         

Comment by steven chessin on October 24, 2014 at 6:03pm

Thanks. 

Glad to see you didn't forget to write about the 4th. "to reach out within a time period". (moment) Any dealer that completes the first four best-practices can reach-out to me for that "5th M", Its not in any book yet. Maybe I will call it "The 5th 'M'" !  Ha ha

Comment by Patrick Kelly on October 24, 2014 at 3:51pm

Well put Steven

Comment by steven chessin on October 23, 2014 at 7:27pm

"The 3Ms - Man - Money - Machine"

You have done a very nice job of putting some meat on that bone, There is a 4th "M". That would be MOMENT. Some need more time. But there is one more  far more important.

The 5th "M" is the Magic Bullet !

Patrick   --- when a customer fails to become a sale   ---  even after all 4 "M" have been exhausted   -- all that is left is what all the experts have always said did not exist. It didn't. Now it does. 

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