Talking with car dealers in the field, industry analyst and forecaster Steve Greenfield has noted a tendency he’d like to see change: retailers spending tens of thousands of dollars a month on advertising while too much potential revenue vanishes as they struggle to keep up with online customer leads.

“It’s the old adage of, ‘Half my marketing is wasted, but I don’t know which half,’” said Greenfield, who previously held various senior management roles at AutoTrader.com.

“It can be overwhelming for them” to follow up on all of the leads that filter in through their websites, said the founder and CEO of Automotive Ventures. “Dealers tend to glance across the top and try to follow up with every lead. After seven days, they move onto the next batch.”

Some dealer groups, though, have systems in place that help them respond to prospective buyers within minutes, and they’re translating those connections into lots of revenue, according to a recent study of online car buyer leads by Pied Piper.

The company, which helps businesses improve sales and service of retail networks, recently ranked 15 national dealer groups for their responsiveness to leads from their websites. It’s ranked major auto brands’ responsiveness since 2011, but this was the first year Pied Piper ranked national dealer groups.

The top three dealer groups outscored the highest scoring auto brand, and 12 of the 15 had higher average scores than the overall auto industry average.

Topping the list is Napleton Automotive Group, followed by Penske Automotive Group and Berkshire Hathaway Automotive.

Promptly following up with online leads is too valuable a task to relegate to the back seat, Pied Piper’s results show, because dealers that do so, on average, sell 50% more vehicles to the same number of shoppers as dealers who fail to respond, the firm said.

“There are plenty pieces of the car business that are hard to quantify,” said Pied Piper President and CEO Fran O’Hagan, “With web response, it’s really easy to see the relationship between behaviors and sales. Dealerships that are brilliant at this part business, they respond within 15, 20 minutes with an email and also a phone call.”

Pied Piper submitted mystery-shopper inquiries through 1,631 dealership websites, providing a customer name, email address and local phone number, then noted whether and how the dealerships responded over the following 24 hours.

Scores ranging from zero to 100 were tallied using 20 measurements. Scores higher than 80 result from quick email and phone responses, sometimes also accompanied by text messages. Scores of less than 40 resulted from failure to respond personally to online leads.

Napleton scored 74, with 63% of its dealerships scoring higher than 80. Penske scored 70, and Berkshire Hathaway 67. The dealer group average score was 59. That compares to the top auto brand score of 67 by Infiniti and a brand industry average of 55.

None of the top three groups or the three that scored just below them, returned messages seeking comment about their approaches. O’Hagan explained that the groups are “super-competitive” with each other and are likely reluctant to share any success secrets.

“We work with a bunch of different industries, and if you compare others to the automotive industry, the car guys are always leading the way, so they figure things out first. So nobody has needed to be convinced it’s important to take care of web customers.”

Online business has been all the more important since the advent of the smartphone with the introduction of the first iPhone in 2007 because people are now much more likely to shop on their devices while they’re out and about, O’Hagan said.

But there are multiple challenges in consistently strong online lead response rates, and many dealers don’t even realize where the breakdowns happen or that they happen in the first place, he explained.

Top obstacles include:

• Some dealers may frown upon salespeople sitting at computers while customers walk around the showroom, so they discourage the very online responses they need in the tech age.
• Many dealerships rely on automated responses instead of personalized ones.
• Digital response systems can be unreliable for various reasons:
• Email providers can place some email senders on a blacklist, so the dealer doesn’t see their emails.
• Most OEMs intercept leads and return them to the dealer, but that process can be delayed, sometimes for hours.
• Some shoppers may miss an email or phone response but could be reached via text or vice versa.

“All potential breakages tend to be invisible, and the only person who’s aware of them is the customer,” O’Hagan said.

The ideal response method is a quick email plus a phone call, he advised, and “you can reach 96% of them.”

Overall, the most effective dealers have built-in accountability, O’Hagan said.

“It comes from the top-down. It is just impossible to be perfect with this part of the business every hour of every day of every week and every month unless someone up top is relentless. ‘I want the data. I’m going to keep paying attention to it – I’m not going to get complacent.’”

For dealers to maximize online leads, they must invest in support staff in order to augment salespeople’s efforts, as sales staff must keep on top of eight different sales avenues, including online leads, and therefore don’t have enough time to fully leverage internet-generated business on their own, says Sean V. Bradley, CSP, a speaker and trainer at Dealer Synergy.

Bradley recommends that dealerships have four appointments-setters to work with salespeople to achieve a conservative 10% closed sales from fresh monthly online leads and at least 5% closed sales from leads carried over from recent months, known as a dealership’s “residual flow factor.”

Otherwise, “you hit a point of diminishing return,” he says. “Dealers are just taking a sip of this and a sip of that, and there are a bunch of opened containers on the counter. Maximizing all this opportunity is way more cost-effective.”

Due diligence aside, Greenfield sees the need for an even deeper data dive so that dealers get the most out of their ad spends, something that today’s rapidly advancing technology could afford.

“A lot of people are window-shopping for cars, but the real shoppers who are engaged and making buying decisions soon are hard to discern,” he said.

“There’s an opportunity for some sort of artificial intelligence by which those leads are followed up on. If we figured that out, the dealer could focus on only paying for higher-quality leads, and that would allow them over time to reduce their advertising spend.”

LEARN MORE: Is Your Old-School Lead Follow Process Hurting Sales?