CDK's purchase of Auto/Mate may create a major disruption in the dealer management system (DMS) industry. Here is our take. DOWNLOAD
As I was talking strategy with a good friend of mine who is a GM of two rooftops we got into a discussion about which strategy is most effective in the automotive internet sales world i.e. coordinators vs. floor sales people making the calls.
We all know that the hardest part in the Internet Dept. is getting people on the phone. As you know you have what is called connection percentage or ratios that prove that less that 20% of the calls that are made on a daily basis actually result in getting the customer on the phone. The day-to-day mission turns into e-mails and phone calls and some really progressive departments have implemented video e-mail.
As I discussed into detail with the GM it really takes a dedicated person to be on the floor taking ups and having the opportunity to have Internet leads sent to him/her. What happens unless this person is very dedicated is that he/she makes 10 phone calls in the morning if you're lucky and then an up walks through the door. Now doing fact finding with the customer, caring the customer up, building value, presentation/demonstration, silent trade appraisal and my favorite working numbers, F&i then a through delivery and hours have passed by. Equally relevant, while all this is going on Internet leads aren't waiting for him to get finished they're coming in while all this is happening and by the time the sales person gets back in front of the computer after taking lunch when the deal was complete his/her response time is around three hours!! Now I haven't even mentioned the follow up month to date that should be going on during this time.
My friend's response was the cost of having coordinators which I understand affects the bottom line. What is interesting to me is that we'll spend $150K on advertising for the month now when the sales person sells that customer we don't split the deal or put an additional pack on the deal to help recoup the cost of advertising. And even better yet we all know the customers that we don't sell that most of these customers are never logged into the CRM or they leave without a T.O. and if they are logged the notes read "showroom up" not detailed notes of why we couldn't put the deal together.
Having people who's job is to pound the phones all day with a experienced director there for a T.O. and/or to work numbers for the customer that want's the "best price" is the most effective strategy I have seen unless the sales people that get leads aren't allowed to take ups. I would rather have 5 coordinators making a total of 500 calls a day versus 5 sales people barely making 100 calls per day. The numbers don't lie the more calls you make the more people you're going to get on the phone, the more people you get on the phone the more appointments you're going to make, the more appointments you make the more people are going to show, the more people that show the more cars you're going to sell!! Appointments sell cars....
This is Internet sales 101 however, unless there is leadership in place that understands the dynamics of a E-Commerce Dept. there will be a struggle between the owners and those that understand the basics of Internet Sales. What's even more funny is when I asked how many appointments his sales people set per day he was angry and tells me that they don't set enough appointments and that's why they aren't selling more cars. Duh, how can they set more appointments they're selling cars, waiting for an up and making 10-20 calls a day. Sounds like a oxymoron to me.
Good luck and good selling!!