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From: Jared Hamilton
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Patrick Kelly

Patrick Kelly President/Partner

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Why Customers Leave Without Buying A Car And What To Do About It

What's the most creative reason you've heard from a customer who is leaving your dealership lot without purchasing? Sure there are the typical, "have to check with my spouse," and "have to pick up my kids at their soccer game." Then there are the more atypical reasons: "I have a dentist appointment," or "My mother-in-law's in town." If it's one of the latter, warning bells should be ringing. Who would rather go to a dentist appointment or visit with their mother-in-law than buy a car?

 

According to AutoLoop Engage's call center statistics, only three percent of customers who leave without purchasing give the salesperson the real reason. Our agents have connected and engaged with thousands of unsold customers and here is why they're really leaving, according to our data:

 

  1. 55 percent leave because of payments/price/trade-in issues
  2. 26 percent leave because of inventory issues; your dealership didn't have the exact color or model they wanted
  3. 16 percent left because they had a bad experience; either because of the salesperson or some other reason
  4. 3 percent or less leave because of the actual reason they cited

 

Take a look at numbers one and three. More than 70 percent of customers that leave are doing so because of reasons that can easily be addressed. How? With a better turnover (TO) ratio. Here's another scary stat from our data: the average TO rate from salespeople to managers is 32 percent. That means only 32 percent of customers spoke with a manager before they left the dealership. I know this is hard to believe. That figure should be 80 to 90 percent. But we are getting this information straight from the customers' mouths. Our agents are trained to engage with customers, and because we are a third-party they tend to trust us and tell us things they don't tell dealership staff.

 

Managers can take care of price/payment and trade-in issues. They can often take care of inventory problems too. They are also the only ones who can fix a bad experience by assuring the customer that if they come back, they don't have to deal with the same salesperson or process, if that was the problem.

 

If your dealership has a high percentage of showroom ups that leave without buying, it may be due to the TO process. Reviewing that process with your sales and management team may be a good place to start. The higher the turnover ratio, the higher the closing ratio.

 

For the inevitable unsold customers, it's best to reach out within a time period of two to twenty-four hours, before they have time to buy from another dealership. Ideally the person to call and follow-up should be someone other than the salesperson; like a manager or a third-party who can engage with the customer (instead of trying to sell them all over again) and offer incentive and assurances that if they come back to the dealership, whatever issues they had will be resolved.

 

An effective TO process will result in higher closing ratios, and an effective follow-up process will result in more be-backs. What are your tips for more TOs? What has worked in your dealership?

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Robert Karbaum
Wait, I am confused. If only "3 percent or less leave because of the actual reason they cited", isn't the remaining data null and void?
Patrick Kelly
Robert I don't believe its null and void. Knowing why your customers leave is important so you can prevent it from happening. Most of the other issues can be addressed by a manager
Robert Karbaum
Maybe I am confused then. The way I read it, if only 3% are truthful, then the other 97% are lying, therefore making the other data obsolete?
Grant Gooley
I agree Patrick that the follow up call should come from Management. It really shows that the dealership cares!
Patrick Kelly
Robert sorry if the blog didn't make it clear. The 'other' data from the 97% that left the dealership was collected by our call center agents who follow up with customers after they leave the showroom. They didn't tell the salesperson the real reason for leaving, but because customers feel comfortable talking to a third party, they tell us the 'real' reason they left, which as stated above is usually because of price/inventory or other reasons.

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