(Another helpful excerpt from our free 2015 Car Dealer Mystery Shop Study of more than 400 dealers.)

Why Does Lead Response Matter?

Lately, much has been written about the drop in the number of electronic sales leads dealers receive – not coincidentally, of course, most often by those wishing to sell more of their own brand of marketing to these same dealers – and while the decline is not steep, it is genuine. E-leads to dealers have declined relative to the number of online automotive shoppers over the past few years. Though, our experience shows the driving force of this downturn – and what dealers should do about it – is greatly misunderstood.

What’s the Real Cause?

We’ve heard numerous arguments over the last twelve to eighteen months that “consumers are smarter;” that they’re “wary of sharing their information online.” If either of these were a primary cause of the decline, then we suspect other industries’ lead-generation efforts would suffer, as well. More specifically, if consumers were suddenly skittish about sharing their email addresses and phone numbers when shopping for vehicles, how would this correlate with the rise in lead-driven services like TrueCar; or the desire of a company like AutoNation to spend $100 million to build a complete online car buying service for consumers?

We have a different thought. Previous studies that detailed the motivations of those who submitted online requests for information showed overwhelmingly – often at or above 90% of those intending to purchase – that these consumers did so to receive pricing information.

On the surface, then, it’s no wonder e-leads are down. Given that the primary reason for submitting an online request was to gain pricing information, the almost staggering availability of transaction or near-transaction prices online should (we suspect) remove the need for consumers to share personal information to simply gain an e-price.

Certainly, it would be a bit naïve to point to the increased availability of transaction pricing online and claim this as the sole reason consumers are less likely to part with their information when shopping for a vehicle. In our experience, dealers have a little something to do with this, as well.

The convenience of online shopping is a reality for everything from airline tickets to shoes; and purchasing items online is most often a better experience than buying in person for nearly every product one can imagine… except automobiles. For reasons too plentiful to detail here, online car shopping – where a connection with a dealership is required – does not bring with it the same ease and convenience one experiences when dealing with an Amazon or a Zappos.

(We know; we mystery shopped over 400 dealers for this study.)

Plainly stated, connecting with a dealership prior to visiting a physical store is still a painful undertaking for some consumers. Dealership personnel (even today) seem ill-equipped to answer phones or respond to e-leads in a manner that is both satisfying for the consumer and drives incremental business for the dealer. While it’s not related to this study, it’s important to note that we listened to more than one thousand calls in 2014 between consumers and dealership salespeople, and the results for the overwhelming majority of those calls (likely more than seven of every ten) fell into three categories:

  1. The salesperson provided so much information that the consumer never needed to visit the dealership.
  2. The salesperson was so evasive and (often) unfriendly that the consumer never wanted to visit the dealership.
  3. The salesperson asked the prospect so many questions that the call felt more like an interrogation than an attempt to purchase.

(While calls of the first type provide a satisfying result for the consumer, they do little to help the respective dealership sell cars. Likewise, calls of the second two types do little to help the dealership sell cars, AND they are wholly dissatisfying to consumers.)

Between the vast amounts of information provided online (most is even available on dealers’ own websites) and the overall lack of process in America’s dealerships that we discovered during our study, it’s no wonder online consumer requests are declining. If consumers can get the information they seek online – and if the dealership isn’t going to do a good job of following up with them anyway – why should they provide any information in advance of a dealership visit? There’s no consumer WIIFM (What’s In It For Me?). There’s no reason to subject themselves to the spam, or the almost useless “why buy from us?” or “we want to earn your business” emails the typical dealer still sends today.

What Should a Dealer Do About the Decline?

Of all the nonsensical advice dealers receive about how to manage with fewer e-leads, the “e-leads are down – move on to phones” and the “stop buying leads – Millennials don’t use email,” are two of the most naive. While the dealership data we’ve examined shows that e-leads are declining and conventional wisdom dictates that Millennials don’t use email at the rate of their parents, the fact remains that abandoning any supplier in the e-lead channel that delivers an adequate return on investment merely grants an advantage to your competitors who choose to cast a wide net.

Our short answer to the question “What Should a Dealer Do About the Decline?” is simply this: Everything you can.

Beyond ensuring that they’re generating as many leads as possible from their website, and buying all of the “fiscally responsible” e-leads they can, dealers should ensure their processes are solid and their lead responses are sound. Moreover, they should remember the goal of each step in the internet sales process. Simply put:

  • The primary goal for a dealer website should be to drive a conversion (phone, chat or e-lead).
  • Once an e-lead is received, the primary goal should be to create a reconnection with the prospect (preferably via the phone).
  • Once a reconnection is made, the primary goal should be to set an appointment. (Obviously, if the lead arrived via phone or chat, the dealership process would start here.)
  • Once an appointment has been set, the primary goal should be to ensure the prospect will show.
  • Once the prospect shows for their appointment, the primary goal should be to sell the vehicle.

While these goals seem almost too simple, it’s important to note that the dealers in our study who performed best, performed without complexity. Their processes were sound, though uncomplicated. Moreover, it was clear in the verbiage they chose (whether in their emails or voicemails) that they didn’t try to overthink any aspect of the attempt to reconnect with the prospect. They didn’t try to sell the vehicle over an email or voicemail, and they remained professional in their overall messaging.

Finally, for the dealerships that performed best in the study, it was clear that regardless of whether lead counts were up or down, lead response mattered.

(Follow this link to download the free white paper from our 2015 Mystery Shop Study.)

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Comment by steven chessin on July 23, 2015 at 3:33pm

Steve - Customers today have SO MANY dealers and cars to choose from that when they make contact   --- they are looking for the slightest reason to reject you and proceed to the next one on their list.

As a BDC director that also does inventory marketing I am painfully aware of the cost and effort required to create each and every lead. Salesmen (and others)  may think the marketing process is automatic and leads grow like weeds but the truth is that each car produces only a few leads per month and none can be wasted.

I have to account for which marketing efforts are working by sales numbers. If there is a lower than expected conversion FROM the leads that becomes the possible culprit. If a store is being diligent --- looking at each conversion step's performance - the weak link will be soon be determined. 

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