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Keith Shetterly

Keith Shetterly Owner

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Yeah, I Said It.

Yeah, I said it:  GM’s Internet lead response measurements are wrong-headed.  The age of pushing dealers to a better 24x7 response time is over, and the results are misleading.  And they are unfortunately too often focusing dealers, and therefore precious resources, AWAY from car sales.  And here’s why. 

First, the requirement:  To be measured as “passing”, a dealer has to have an average response time—across 24x7—of under ONE hour and 95% of the dealer’s leads must be answered in under 5 hours (and NOT by an autoresponder).  It’s that second time measurement that makes no sense at all, and here's why . . .

Second, the "Lead Response Math":  Say a dealer gets 100 leads.  Then that means, no matter what effort they make on response time, NO MORE THAN FIVE leads can ever go over five hours.  That's very, very few mistakes allowed, and it can be very hard to achieve even for dealers with average response times of under 1 hour.

Third, why this doesn’t make sense:  For a dealer who is open 9am-9pm Mon-Sat, then leads can come in randomly during closed hours (9pm-9am Mon-Fri AND/OR any time on Sunday) and be missed.  Even rotating your Internet Dept. through “Sunday duty” doesn’t stop the risk for “midnight leads”, as remember you only have FIVE per 100 that can have a response time over five hours.  That means that EVERY NIGHT someone has to watch leads until 12:30am and someone (else, I hope) has to get up no later than 5:00am (4.5 hours later) to check until you open.  Otherwise, just one night with no one watching and five leads might come in at once . . . or a couple of nights the Watchman (or woman) falls asleep . . . 

Fourth, what dealers have done:  They’ve hired, in most cases, an off-site BDC of folks who just respond with silly “We’ll contact you when we’re open!” emails.  Because the RESPONSE TIME is what GM measures, not the quality or relevance.  And who can say this isn’t enough relevance, anyway, considering that these leads do NOT necessarily represent actual people online BUT ARE RELEASED INTO THE LEAD FLOW for many other reasons.  When this all started with GM, they were batching leads at night, but I can’t say that’s specifically what’s happening now.  By the way, I’ve personally been coached by more than one GM SFE coordinator to get one of these “midnight lead” services to keep the response time down . . . hooookayyyyy, so even the people pushing this realize it is silly!  Can you say “Emperor’s New Clothes”?  (for those who know that old fable). 

Fifth, what the SHOPPERS have done:  They have moved away from the Internet lead.  Fewer leads come from the web, and everybody knows it.  Customers are coming in without leads, though many do call before getting into their car.   They’re just educated now on what effects come from giving up their contact info, even to an OEM:  eMails and phone calls TO them, INTERRUPTING them, from MULTIPLE dealerships, etc.  Better to just view inventory and pick up the phone.  And more than a few just come on in. 

SO, because NO MORE THAN FIVE leads can go over five hours on a 24x7 clock, GM and their lackeys have a nation of dealerships distracted by nightly response time and less focused on daily sales--dealers focused THE MOST, in fact, on the response time of the few folks shopping at 3am (IF that’s really going on, which is debatable) rather than those shopping during work hours.  Don’t you think a lead dropped to a dealer during a shopper's work day is most valuable?  They have a job, they have an income, they have interest, and they probably WILL buy a car if they can. 

GM’s 24x7 measurement of lead response time doesn't clearly result in sales, though they try mightily to make that case.  Any Internet closing rate is a function of total advertising, inventory, and Internet sales skill, not just response time, even for those closing as high as 10%:  “Jim Smith” might come in and buy, but he may in fact have never responded to the email you sent or the call you made from his lead!  He was just in-market, filled out a form online, totally ignored your efforts to contact, and came in because he heard about 0% from his TELEVISION.  And maybe you’re the only game in town for his type of vehicle, anyway.  Jim Smith never bought from a lead or your contact:  However, he’s counted as an “Internet Sale” by GM just the same. 

True sales measurement is how is a STORE doing.  Not response time to what is, via Internet leads, at MOST, 20% of your sales contacts.  (What’s going on with your phone and/or lot visits the other 80% of the time is pretty important!).  And GM driving any store, from those successful to those not-so-good, towards these leads is not heading them towards sales but instead off a cliff of distraction.  Especially at 3am.

Unfortunately, GM’s “lead response math” seems to have too little to do with sales and more to do with what can easily be measured.  Well, just because something CAN be measured doesn’t mean it is the ONLY thing to look at. 

If you can take your eyes (and precious sales resources) off your "3am Clock", how are your SALES doing?


by Keith Shetterly,
Copyright 2011 All Rights Reserved

Marc McGurren
Keith, as a GM dealer I winced at the the idea of what they were doing and ultimately was not a fan of such a process. And to be honest - I still don't agree with the way they are measuring their dealers. BUT - Everything I have seen from GM is that closing rates have gone up b/c of this focus. I think GM thinks it is b/c of the response times - I think it is b/c GM is forcing dealers to pay attention one way or another. Regardless - closing rates are up across the board for GM dealers. Do I like or agree with 95/5 rule. Nope. Heck - our District Manager sent out an email a few months ago congratulating a dealer with a 8 minute response time and how well they were doing (2.4% closing ratio BTW) - yet he didn't even mention our dealership with an 18% closing ratio since we had a 34 minute response time!!!! So is their focus off - yes. Have they seen results b/c of their tilted focus - YES. So I agree and disagree all in the same sentence. GM is trying to get dealers to pay attention and this is one of the ways they are trying. I personally think it needs to change on how they grade their dealers as an "internet dealer" - but in the meantime we work with what we have and make the best of it.
Keith Shetterly
I contacted 25 GM dealers yesterday and today who meet the standard. 23 of them are using a "night lead service" to meet the standard. 12 of them actually use the lead service 24x7 to do the first reply and have their Internet Dept. work the lead after. So, it's imperfect, and to me wrong-headed. The dealerships are "working the pay plan" (even though there's no SFE money on it at present, there is prestige). Sales will go UP if they remove the 24x7 levy and bring it to 30min (or even less) response time during open hours. That's what, I think, needs to happen for true sales success. And sorry your district mgr. made that mistake! And hats off to you for your high closing rate. Thanks!
Keith Shetterly
I would add this point, though: I think "Sunday leads" during the day, though the dealership may be closed, are important enough to warrant regular coverage and measurement. Essentially, I suggest that GM just move to measuring leads 9am-9pm x 7 days.
Patrick Downes
Oh GM... such shortsightedness and bluster that I naively hoped we were past by now! As Marc says you're either converting or you're not, there's just too many variables to make it 5 late and you're out Keith, your #5 is what keeps me up at night... thanks for exposing this sham of a mockery of a.....
Brian Pasch
Keith, great post...and maybe the GM dealers in DrivingSales can draft an alternative that can be presented to GM.

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