AMENDED: Dennis Gailbraith has debunked the "1.3" Myth along with JD Power, and hat's off to them all. I first got this information as sourced from "JD Power" in 2012 in a webinar. It was amazing information, and TOTALLY INCORRECT. Forget the article below, and just go read the rebuttle at http://www.dealereprocess.com/1-point-3-dealer-myth-destroyed/. My apologies for accepting as fact incorrect information. I was not alone, but regardless it did affect my and others' thinking and actions, and for that I am sorry. Thanks!
Mathematically and certainly, the BeBack Fight is dead. JD Power shows us in the graph below that the average dealerships visited by vehicle shoppers dropped from 4.1 in 2005 to 1.3 in 2010. Don’t expect 2012 to raise that number.
Why does this “kill” the BeBack fight? First, logically, it at least kills it as we’ve known it. If a person left the dealership in 2005, statistically we knew they were prone to leave and we fought to get them back. This number tells us that we were one of four dealerships visited in 2005, so we were right to fight. We were competing.
Yes, what you’re thinking right now remains correct: We should still contact customers to get them back, of course. However, the shopper’s choice of who to come back to is not our biggest issue any longer--to begin seeing why that is the case, start here with the aforementioned JD Power data graph (thanks for the graphic to a friend of mine):
NOW, clearly, the big fight is to be the ONE dealership they visit. To be the first dealership, actually! Because shoppers, of course, can’t visit a partial dealership, so they must visit 1, 2, 3, and so on. And mathematically, in order to average 1.3 that means that at least 70 out of 100 shoppers (that’s 70%!) visit only ONE dealership during their shopping. If we account for rounding down from 1.34 to 1.3, for 100 shoppers that still means that at least 65% of the shoppers visited only ONE dealership during their shopping. And, if you believe that the maximum number of dealerships normally shopped is no more than five, then the math shows that 91 out of 100 (or 91%!) shoppers visit only one dealership!
Why is this happening? Because the customers are, of course, shopping ONLINE now (84% here and 90%+ according to some OEMS), and so they don’t need to visit until they are ready to buy! Really, on a customer visit nowadays the sale is in our hands more than ever and is, really, ours to lose.
So, to help, what makes them come to you first? Some of that is their habits: Are you making your customers habitual for service and repeats? (“Habitual” will be the subject of a later article). The rest is your advertising, your website, your online presence—essentially, your digital lot—and your work with leads, equity, and the like. Everything you learn here and in workshops, conferences, battle plans, etc. is VERY VALUABLE on this issue. It is all gold.
However, there's also platinum--and diamonds!--to be had for being the first dealership visited, as well! And we need all the help we can get with that. Including the most powerful sales-enabling tools we can muster.
And that leads me, in this article, to Big Data. Would you like to know who in your customer base and aged leads are shopping for vehicles? What their targets are for vehicle type and price range? How to help them come to your dealership first? Or what households in your area to best target? So that you are as position ONE in the “1.3” and get the most sales?
THAT is the promise, really the result, of Big Data for Dealerships for sales: Because being #1 isn’t just a "thing" now.
It’s the ONLY thing.
(P.S. How can Big Data specifically help you with this? More to come on that!)
By Keith Shetterly,
Copyright 2012 All Rights Reserved