You must have the team ready to do the job and know what success looks like and how they will be measured. Quantity of leads is never a successful plan.

You must have the team ready to do the job and know what success looks like and how they will be measured. Quantity of leads is never a successful plan.

When it comes to building sales numbers and winning long-term, loyal customers, for most dealers, it all starts with the lead. Whether it was a potential car buyer browsing your website or calling to ask questions, these customers are often the best opportunity for sales, both short and long term. However, that lead has to be converted to a sale, or it doesn’t do the dealership much good.

That brings up the age-old question of which aspect to focus on first: increasing the number of leads coming in or improving the conversion rate? Our experts agree that having a higher lead volume is not useful if your dealership isn’t closing them.

“Dealers should do everything they can do to increase their conversion rate,” notes Mike McFall, president of the Activator Division of Boca Raton, Fla.-based Black Book. “The key will be to always focus on converting. Dealers with poor conversion rates are not going to benefit by having a higher number of leads.”

Charlotte, N.C.-based Phone Ninja’s vice president of Internet sale training, Elise Kephart, agrees, noting, “There is no point in spending more money on leads if their conversion rate currently is low. Change your patterns and close ratio first — before you pile on more.”

“Without good conversion tactics, buying more leads lowers your return on investment (ROI),” Shane Born, COO of Davenport, Iowa-based ProMax Unlimited explains. “I recently attended a Kevin Frye workshop that discussed a more accurate way to determine ROI on leads. … If you were to buy 100 leads and sell three cars, how much did it cost you to work the other 97 leads?”

“I would always start with improving the conversion rate, as this makes the department more efficient and effective,” says Jeremy Anspach, the co-founder and CEO of PureCars, based in Charleston, S.C. “Once implemented, then I would layer on my lead sources; but remember that only 1% of online shoppers submit leads, so it’s critical to have a good team trained on the top highlights of the vehicle and other common questions like ‘What’s your best price?’ to be able to maximize conversion.”

Improving conversion rates doesn’t necessarily mean holding steady with your incoming numbers, however. As Greg Wells notes, “It may actually mean reducing your leads. Once you have a sound process in place and a trained staff, then it’s time to be working on increasing lead volume.”

Wells, who is the president of AllCall, based in Danville, Ky., adds that improving conversion rates is all about improving the quality of the response and the speed at which it’s given, as well as taking the time to look up any previous interactions that customer might have had with your dealership. “A timely, personalized response is necessary,” he says. “Also look at your customers’ history before you respond. If they’ve purchased from you before, or use your service department, ‘Welcome to BDC Motors’ doesn’t work. It should be ‘Welcome Back!’”

The CEO of Audubon, N.J.-based Dealer Synergy, Sean Bradley, cautions that leads or conversions shouldn’t be focused on to the exclusion of the other. Conversions are critical, he notes, but you can’t convert leads you don’t have. “There is a cause-and-effect rule here. The more people they call, the more people they connect with in conversation. The more conversations, the more appointments, the more showings, which leads to more sales.”

Experts agree that providing valuable information such as the features that accompany higher trim levels will help keep Web visitors hooked and present your site as an information resource.

Experts agree that providing valuable information such as the features that accompany higher trim levels will help keep Web visitors hooked and present your site as an information resource. 

The Right Process

When it comes to generating and converting leads, having a detailed process is crucial to the success of the dealership. “It all comes down to having the right process,” says Raul Vazquez, CEO of Tampa, Fla.-based Focus. “First, you establish very specific goals. Second, you put a process in place to support those goals that’s highly focused on working leads effectively. Finally, you commit to the process, monitor it and measure the results to make sure it’s working.”

“The biggest ‘missing link’ for most dealers is the process, tracking and benchmarks that are utilized once a lead is submitted,” notes Paul Potratz, COO of Schenectady, N.Y.-based Potratz Advertising. “This is where sales are lost and money is wasted. So in tandem with a great strategy to drive conversion and leads, you must have the team ready to do the job and know what success looks like and how they will be measured. Quantity of leads is never a successful plan.”

The right process can vary, since every dealership has its own needs, culture and customer demographics. But one tactic that can be successful across the board is more transparency.
“Many dealers still miss the mark when it comes to transparency,” McFall notes. “And this is important because car shoppers want more transparency, particularly when it comes to credit and financing. A recent Harris Interactive survey of more than 1,000 qualified car shoppers showed that 91% of respondents said dealerships that are open about financing details have a better opportunity of getting their business. Additionally, 76% of consumers would like to obtain an estimated credit score if they don’t have to give up personal information.”

Transparency extends to other parts of the dealership as well. Customers are more likely to submit their information on your website, for example, if they feel you are giving them the information they want. “You can think of the car-buying process as a funnel: at the top, shoppers are heavily into discovery and research; in the middle, they’re doing a lot of comparisons and evaluations; At the bottom, they’re in true shopping mode,” says Dean Evans, CEO of LotLinx Inc. in San Francisco. “Remember, a car shopper will conduct 84 distinct car searches during a 45-day shopping period. Dealers need to figure out how to connect with those shoppers at every stage of the funnel — but especially with those shoppers at the bottom of the funnel.”

Anspach notes that giving potential car buyers the information they need right up front, before they even become a full-fledged lead, is essential to set your dealership apart. “Remember that consumers don’t read Web pages, they scan them,” he notes. “So don’t depend on alphabetical laundry lists of features and options to communicate the value in your vehicles. Be sure you are educating your website traffic on all the value features that make up your vehicle’s price. And do so using images, as the human brain processes a graphical image significantly faster than text. The average consumer does not understand differences in trim level, for example, and this can put high-content vehicles at a disadvantage.”

Setting Your Dealership Up for Success

In addition to having your process and information transparent and open, making sure your dealership isn’t setting itself up for failure before it even begins is another huge part of increasing both leads and conversions. Bob Chika, CEO of Royal Oak, Mich.-based Auto Loan Options, notes that something as simple as having a dedicated finance phone line can be the difference between winning customers and losing them.

“Invest in a separate phone line with some type of auto finance-related name so consumers who recently applied for an auto loan will see something other than a dealership name on their caller ID,” he says. “When verifying leads returned to us from a dealership as invalid, we are constantly told by consumers that they did not answer their phone — or told the caller it was a wrong number — because they didn’t want a Ford, they wanted a Honda, or vice versa. A dedicated phone line with the proper caller ID will eliminate this concern and allow much better tracking and callbacks.”

Potratz went so far as to break it down into the steps dealers should be taking. “1. Revamp the website to drive conversions with calls to action that matter to car shoppers. 2. Develop relevant content for the website with A/B tested landing pages. 3. Utilize retargeting and interest targeting with logical sales funnel tactics to drive leads. 4. Continue producing relevant content every month. 5. Utilize paid search, social media, email and word of mouth to drive more traffic to the content. 6. Don’t focus on selling the vehicle or service by price, but focus on being a resource with content that addresses shopping process, questions and frustrations the car shopper has to figure and sort out. I am not saying not to do sales events — you should also do sales events — but a content strategy will create the ultimate lead machine.”

No dealership can convert leads they don’t have, but increasing lead volume isn’t always the answer. Growing your sales, and earning more loyal, long-term customers, depends on having a solid process in place that invites car buyers to trust you with their business. Your sales team can’t spring into action until your BDC team has converted that lead into an appointment, which means emphasizing that part of your business is just as crucial as any other to your staff and customers alike.

Toni McQuilken is a freelance writer with expertise in auto retail, F&I and agency operations. [email protected]m