The Lead Conversion Gap

Generating leads from dealer websites and third-party retailers is no longer a “new” facet of automotive retail, and dealers now have nearly limitless opportunities to find more customers and expand their marketing territories. But some still struggle to convert those leads to appointments and sales, and even the most forward-thinking, Internet-savvy dealers and managers have seen foolproof marketing campaigns and investments fail to produce a proportional uptick in revenue.

To find out why, ADM polled some of the nation’s leading lead-generation and -conversion experts. We asked which aspect of converting Internet leads to appointments and sales dealers struggle with most — and why — and the consensus was clear: In too many operations, the processes dealers rely on to close Internet customers are failing them.

In a Word: Consistency

“The most fundamental step in the conversion process is reaching and engaging the customer in a professional, consistent manner,” says Charlie Crowder, marketing director of BlueSky Marketing in San Ramon, Calif. “Depending on how a lead is originated, customers may not always understand the next steps associated with their online finance/purchase request and are hesitant to respond to a dealer or even take their call. Bridging that ‘application gap’ that exists between consumer application and dealer contact requires the right technology, hard work and a commitment to the process from dealer staff.”

Shane Born, COO of Davenport, Iowa-based ProMax Unlimited, agrees. “I’ve seen most dealers struggle when it comes to adopting their vision into a process of daily executable tasks.” Why? “In a word: consistency. In order to continually improve, you must have a process that is consistently followed. This requires consistent training and constant accountability. It’s not enough to simply tell people what to do. … They need to believe in the process, the system and the future results that will follow.”

Born says motivating staff to make the process stick is the responsibility of the management team. In most operations, managers are also responsible for setting the standards for communication with customers. Todd Smith notes that completing this step presents a challenge particular to the Digital Age.

“Every online shopper is different, meaning they have different wants, needs and personalities. Therefore, it is difficult to write a single phone script or email template that will cater to every shopper and their hot buttons,” says Smith, the CEO of ActivEngage in Orlando, Fla. “Based on the discussions I have had with dealers, they struggle to create dynamic scripts and email templates that will cater to any particular buyer persona. They also struggle to train their teams to deliver the script in a manner that piques additional interest from the shopper and builds trust with the dealership.”

“Most dealers try to set the appointment. I believe they need to sell the appointment,” says Sean V. Bradley, CEO of Audubon, N.J.-based Dealer Synergy. “They need to identify a prospect’s wants, wishes and expectations, then meet them. Only then do they have a shot to exceed their expectations. … Dealers need to clearly articulate what is different and better about their organizations. Price is only relevant in the absence of value.”

At Auto Loan Options in Royal Oak, Mich., CEO Bob Chika has dedicated his business to generating finance leads via online credit applications. He also operates a business development center (BDC) that processes leads and sets appointments for dealer clients nationwide. One challenge he often encounters are “specific vehicle requests,” in which an applicant fills out an application with a particular vehicle in mind.

“If the dealership handles that initial phone call incorrectly, the consumer most likely will not convert into an appointment,” he says, suggesting that the focus of those calls should be on loan amount, proof of income and residence and appointment times. “Even when the consumer is interested in a vehicle that is not financeable, they still may need multiple dealerships or lenders to underscore this fact before considering other vehicles, so it is important to give the dealership personnel the opportunity to convey this to the consumer face-to-face.”

“For special finance leads, the initial phone call is the most crucial, and 85% of dealers are making it incorrectly,” says Tim Parker, president and founder of DealerLink Inc. in Charlotte, N.C. “Park your ego at the curb and identify yourself as representing a generic company that is not the name of the store. ‘Hi, my name is so-and-so, and I am calling from the auto credit center/pre-approval center/car loan center.’”

Chika’s representatives follow a similar path to the appointment, and he believes getting the customer into the dealership is the best way to spur useful discussions about topics such as finance company-friendly inventory, payment-to-income ratios and favorable equity positions.

“These types of conversations are just too difficult to explain over the phone,” he says. “But they are attainable face-to-face, and they give the dealership an opportunity to really build trust and educate the consumer.”

Back to the BDC

Raul Vazquez agrees that having a proper process in place is paramount to successfully converting leads — no matter the source.

“We provide TV leads rather than Internet leads, and the challenges are the same: If dealers do not make enough calls to customers, they won’t get the appointments they need to meet their goals,” says Vazquez, CEO of Focus, a Tampa, Fla.-based marketing firm. “Not having a good BDC process is where the problem starts.”

“Most dealers have BDCs designed to set appointments, but BDC representatives often lack the product knowledge and ability to answer questions in a way that sets their store’s inventory apart from the competition,” says Jeremy Anspach, co-founder and CEO of PureCars, which has offices in Charleston, S.C., Atlanta and Milwaukee. “The most progressive dealers use technology that will give the BDC team or the sales team answering a call all the key values, options and reconditioning attributes of a vehicle, along with other valuable information in a matter of seconds. This gives the rep the ability to answer a question and explain why this vehicle is better than others.”

Anspach notes that the heavily researched and well-informed car buyer remains a vexing proposition to many dealers. Rather than provide the information the customer is requesting, they try to change their behavior by attempting to corral them into the store.

“In other industries, when consumers call a merchant and ask specific questions, they get specific answers from qualified people. By setting your vehicle apart and providing a very professional experience, you will see that appointments are much easier to set and stick.” Anspach applies the same theory to email leads, which he believes represent an opportunity for dealers to stand out from the competition. “We see a ton of dealers losing opportunities by not responding immediately with valuable information. Too many dealerships send first-response emails that are generic and that lack the relevant information necessary to help that customer remember you and your specific vehicle.”

At Potratz Advertising in Schenectady, N.Y., COO Paul Potratz suggests tracking leads on an individual basis to identify strengths and weaknesses and improve responses — and the larger conversion process — storewide, particularly for dealers who struggle to convert a high volume of leads.

“The majority of dealers who are actually tracking leads coming into the dealership track all leads as a whole,” Potratz says. “When lead conversion is evaluated by each individual, it allows you to see where every person needs additional training and coaching. Tom might have fewer actual shown appointments, which could be due to his receiving too many leads, so his fast response time takes away from follow-up time. Steve might have a better show rate since he has stronger wordtracks or spends more time on follow-up.”

Greg Wells sets benchmarks and tracks BDC metrics for dealer clients nationwide. Although he is a firm believer in rock-solid dealership processes, he says dealers must acknowledge that car buyers have a process of their own.

“In order to be relevant, Internet salespeople and BDC representatives need to determine where the customer is in the shopping/buying process, then offer the next logical step,” says Wells, president of AllCall in Danville, Ky. “Early on, it may be just supplying information, pricing, options, etc. For some, it may be evaluating their trade or getting pre-approved. When you ask for the appointment and the customer still has a long list of things to do, you’re irrelevant and the customer doesn’t perceive value.”

Whomever the customer and whatever information they provide, Digital Air Strike’s Alexi Venneri reminds dealers that, to hook car buyers and stay ahead of the competition, dealers must start the conversion process within minutes of receiving an Internet lead.

“Our studies have shown that Internet shoppers who receive a response within 10 minutes are three times more likely to visit the dealership,” says Venneri, the company’s co-founder and CEO. “Responding to a customer right away is crucial to enhancing a dealer’s reputation while converting more leads to appointments and, ultimately, sales.”