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Jared Hamilton
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Phil DuPree

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What Percentage of Your Store’s Sales is Generated by Internet Leads?

As a follow up to my recent blog on Internet Lead ROI, I would like to discuss another important metric for dealerships to track: the percentage of a store’s sales that can be attributed to Internet leads. Just like Internet lead ROI is not a simple formula that everyone can agree on, the percentage of sales that can be attributed to the Internet is not easy to measure.


In a recent survey we asked 184 dealership personnel this question: What percentage of your store’s overall sales is generated by the Internet department? Fully half (50%) of the respondents reported they were in the 20-40% range. Only 15% of respondents reported less than 20%, while 35% of respondents reported their dealerships attributed more than 40% of their sales to Internet leads.


Why such a disparity? I’m guessing that not every dealership answers the following question in the same way:


How do you define an Internet customer?


Since roughly 90% of your customers use the Internet before coming into the dealership, you could argue that 90% of sales are coming from the Internet, and that many of those customers don’t e-mail beforehand—they just call or walk in. But the opposite can also be true. One dealer group I know of, Homer Skelton dealerships in Tennessee, recently created a promotion for their new Payment ProSM feature on their website. The dealer group ran a radio campaign and produced a television commercial promoting that customers could pre-qualify for “real payments” without giving their social security number or date of birth. When the traditional ads ran, Homer Skelton saw a huge spike in visits to their website, which then turned into pre-qualified website leads. So are these Internet leads, or should they be attributed to the traditional ad campaign?


Although it may be difficult to arrive at an industry standard for what the definition of an Internet sale is, your dealership should have its own definition. Just as important as a standard measurement is tracking the performance over time so you can identify growth opportunities.


Best Practices for Improving Closing Percentages


The most effective way to increase the percentage of sales attributed to Internet leads is to improve the closing percentages of your current Internet lead volume.


From the same survey I mentioned above, we filtered responses from the highest-performing dealerships based on the metrics they shared. The most successful Internet departments claimed the following best practices were critical in order to make an Internet department successful:

  1. Quality & Speed of Lead Response (72%)
  2. Website search visibility (66%)
  3. Management Buy-In and Support (61%) and Staff Training & Accountability (61%) tied for third.


Other choices and responses included: quality of leads (58%); quality of staff (42%); tracking & measurement of leads and ROI (33%); online reputation (33%); quality of online merchandising (33%); written policies and procedures that are closely adhered to (22%); lead mix (17%); social media involvement (14%); and number of leads per person (14%).


Dealers continue to stress how critical it is to have a process in place to prevent salespeople from closing out their own leads. It’s too easy for them to say “this lead is bad,” or “that lead isn’t valid,” and simply close out those leads, which results in a higher reported closing percentage—albeit a false one. It’s no different than if 100 customers walk through the door and 10% of those customers are lot drops, and then you calculate the closing percentage of 90 customers instead of 100.


At most dealerships, a valid lead is one that comes in with good contact information; but I have heard some salespeople say a valid lead is one that returns their attempt to contact within three days. How many customers return a single call or e-mail? Most of the time, it takes repeated attempts to get through to a customer.


So I bring up many questions here, and I’m looking forward to everybody’s responses. I think it’s important to discuss metrics so that eventually, an industry standard or benchmarks can be established, to which all dealerships can compare themselves.


More results from our survey will be shared in our upcoming workshop, the “Five Things in Common Successful Internet Departments Share,” at the Digital Dealer Conference & Exposition in Las Vegas. These and other best practices will be discussed by our panelists, each representing a dealership with high performing Internet departments.

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