Urban Science recently analyzed its lead management data and, according to these recent articles in the Sacramento Bee and by CBS Detroit, is offering several rosy projections for auto dealers in 2012:

• A projected Seasonal Annual Adjusted Rate (SAAR) for vehicle sales of 13.95 million; and according to this report by Automotive News, J.D. Power & Associates estimates annual sales will surpass 14 million.
• Internet lead volume will increase by as much as 10-20%, with the average dealer getting 85 leads per brand per month, up from 75 leads in 2011.
• Much of that growth will come from third party web sites, like KBB.com, Cars.com, Edmunds.com and other sites
• An estimated 30% of OEM retail sales originate from Internet leads.

That’s the good news, but here are the challenges involved:

• More than 30% of customers submit a request to at least two dealers, increasing competition for dealers
• 30% of dealers still don’t quote prices online to buyers, which could be costing them business

Increased competition means that dealers have to respond to leads not only quickly, but with a quality message. According to Urban Science's best practices for lead management, dealers should include the following critical elements in their online customer responses: responding quickly, quoting a price, providing alternative vehicles in a similar price range, confirming that the vehicle requested is available in a range of offerings and that the dealer offers the customer next steps – such as coming in for a test drive.

I would add these four best practices to that list:

1) Persistent follow up. Not everybody who submits leads buys within 30 days. Continue to follow up over at least 90 days and have a long-term follow-up plan in place. If your lead volume overwhelms your follow-up capacity, consider a technology solution that focuses on lead re-engagement.

2) Manage lead volume. No more than 80-100 leads per month for an experienced salesperson. If your current sales staff is overwhelmed, consider a technology such as an Automated Virtual Assistant that can engage with thousands of leads every month and has been proven to raise closing rates from the average 6-12% up to 28%.

3) Management involvement & accountability: The more the GM is involved in the process, the more successful it will be. Every week the GM should review the metrics with the Internet department. How many leads did we get? How many are open? How many calls have been made? How many appointments set? Accountability breeds responsibility.

4) Manager confirmed appointments. Customers feel special if they are contacted by the manager and offered a warm welcome, increasing their likelihood of showing.

How is your Internet department preparing for the increased lead volume? What best practices are you implementing to stay competitive?

As we head to this year’s NADA Convention & Expo in Las Vegas, we always try to get a pulse on what the hot topics are for our customers. We have heard from many Internet Sales Managers who say that overall, they are optimistic that sales will continue to increase in 2012.

Yet we also hear they are still challenged with many of the same issues they were dealing with last year, including: staffing issues, increased Internet lead volumes, how to effectively use social media to bring customers down funnel, how to turn more leads into shows, how to get management buy-in and tracking ROI of lead sources. Finding the best solutions to help solve all of these challenges can be an overwhelming task, especially when presented with all the choices at NADA.

At AutoUSA, we have spent the last year listening and responding to our customers’ needs. We have continued to improve our web-based technology to deliver the best Internet leads and we have developed an exciting new product to increase social media ROI. We also partnered with two companies that offer innovative products to help Internet departments increase sales while lowering cost-per-sale (CPS). The response to our new product line has been very positive and we are pleased to be able to offer demonstrations to Internet sales managers at NADA.

Internet Sales Managers, we want to hear from you! What are YOUR hot topics and what do you hope to learn at NADA? Comment here or stop by  Booth #1415 at NADA to learn more about our Internet sales solutions, as well as to share what your “hot topics” are and how you hope to solve them. And don’t forget to ask about our NADA Special!

Approximately 80% of dealerships have a social media program, with some dealers reporting great success. Others, not so much. Some dealership Facebook Pages have thousands of fans and are very active, while some have only a few fans and employees and post irregularly. Some dealers get plenty of feedback from their fans, and some dealers continually post in a vacuum.

But even if your Page has thousands of active fans, do you know how many of them are in the market for a vehicle?

Running a successful social media program takes a lot of time and effort, and can get pretty expensive. If your dealership is using Facebook ads to acquire fans, each fan will cost you anywhere from $1.07 (according to a 2011 whitepaper by social marketing and analytics firm Webtrends), to $9.56 (according to another 2011 study published by SocialCode). Facebook itself suggests setting a bid range of $7-$10 per click in order to reach a targeted audience. But keep in mind that’s just to get a visitor, with no guarantee they’re going to “Like” your Page or are in the market to buy anything.

So what’s a better—and less expensive—way to drive in-market customers to your Facebook Page?

Add an Inventory Page: If you’re not posting inventory on your Facebook Page, you’re not providing in-market customers with what they want to see. Yet cluttering up your main Wall with inventory postings may drive more casual visitors away, eliminating the opportunity to bring them down funnel. Creating a separate tab specifically for a new and used inventory page is an ideal solution.

Drive Traffic from Craigslist: Many dealers report that the leads they get from Craigslist are very high quality and generate significant revenue. The problem is, Craigslist can be tricky to navigate. Overposting or adding too many photos may result in your postings being flagged, or in your IP address being banned from posting on Craigslist altogether. Strategically posting several items per day is one way to prevent this, but why stop there? Rather than drive these customers to your web site, why not drive them to your Facebook Page where they can view all your inventory and interact with you? You may even net a new fan.

Use the Second Largest Search Engine: Video is increasingly effective at driving leads and generating sales. By posting inventory videos on YouTube, you can immediately boost your SEO rankings and drive potential customers to your web site. But in addition, you should optimize your YouTube channel to drive viewers to your Facebook Page. Again, for many first-time visitors Facebook offers a less “pressured” environment in which to browse inventory than a dealership’s web site. It’s very easy to upload YouTube videos onto your Facebook inventory page, which will not only attract new in-market visitors but will further engage your existing fans and keep content fresh on a daily basis.

Fortunately for dealers, many companies are now providing products that help to automate the more time-consuming aspects of posting inventory and videos on Facebook, YouTube and Craigslist. This allows the dealership to focus on what they do best: building relationships and selling vehicles.

For automotive retail workers, the holidays are one of the busiest times of the year. The week between Christmas and New Year’s can represent a third or more of the business for the entire month of December. And during this week, the number of online leads that a dealer receives can sometimes exceed the number of visitors on the showroom floor.

This presents a nice-to-have dilemma: it can be challenging enough to service all the showroom customers, let alone the online customers. But failing to do so results in lost sales. So how do you prevent online leads from falling through the cracks during this busy time?

Planning for an increased lead volume is the key to effectively handling both showroom and online customers. Here are a few tips:

1. Smart Scheduling

Most online customers like to shop at the same time as showroom customers—in the latter half of the day or evening. Therefore, it’s critical to have enough staff scheduled in the mornings to handle all those leads that came in the night before. If your Internet department typically splits staff between morning and afternoon shifts, try scheduling the majority of staff in the morning. The goal is to contact online customers in the morning so they will be showroom customers that afternoon; as well as to have the majority of leads handled by the time all the showroom customers arrive.

Cory Mosley of Mosley Automotive Training, a sales training and consulting firm, recommends outsourcing leads from the past 90 days to a call center. For dealers with staffing challenges, this is a good option as the call center can identify in-market buyers who want to take advantage of year-end savings and offers. Mosley also recommends utilizing showroom sales professionals, if needed, to handle leads under the supervision of an Internet or BDC manager.

Another option is to hire a virtual assistant to contact the online leads, schedule calls with salespeople and keep them engaged until they schedule an appointment with a salesperson.

2) Team Empowerment

Bethany Johnson is the Internet Manager at RBM of Atlanta North in Alpharetta, GA. She makes a point to empower her team, making sure they have the technology they need, the training on the specials and inventory, and the authority to give an empowered response to all Internet leads.

For Cory Mosley, getting a team ready to prepare and handle a large volume of leads is psychologically akin to going from a yellow alert to orange, or even red. He suggests setting more frequent (though brief) review meetings.  Additionally, Mosley recommends having pre-packaged specials and special work tracks set up specifically to close that business, helping to speed the process.

3) Incentives

Holidays are a hectic time of year, which is why most people wait until after Christmas to purchase a vehicle. Also many consumers believe this is the best time to get the best deal.  Getting customers to come in earlier in the month requires both incentives and reassuring the customer they will still get the best deal.

At the beginning of each month, Bethany Johnson of RBM creates a “call to action” plan that includes incentives with expiration dates. For the month of December, the expiration dates are before Christmas (though they do honor the request if someone comes in after the expiration date).  Still, the incentives yield a significant amount of activity; particularly for the complimentary iPads and complimentary maintenance programs.

Other incentive ideas include pop-up coupons on your web site or gift certificates offered on third-party automotive shopping sites. For consumers who are undecided as to which dealer they want to submit a lead to, cash is always a powerful differentiator.

Following these tips will help prevent online leads from falling through the cracks, which will in turn increase overall sales volume. What tips do you have for handling increased lead volume this time of year?

As the end of the year approaches, it’s a good time to take stock of how successful your dealership’s Internet marketing plan is and how you want to attack the market in 2012. So what should you be looking for when evaluating your Internet success?

When it comes to Internet leads, it’s important to map out several key metrics over a 90-day, six-month and one-year term. That way, you’ll be able to see if any recent trends have developed that may affect your 2012 plan. Looking at all of your providers through the same lens, if you will, will quickly highlight those who stand out from the rest – for better or worse – and what you may need to do to generate more sales.

Start with Total Billable Leads Received: Track the number of leads from all Internet lead sources, including your web site, OEM, and Independent providers. Be sure the total is adjusted for any duplicate or returned leads.

Contact Made: No matter how thorough your process, there are some customers who just won’t respond to your calls and emails. That said, if your percentage is below 65%, it’s a good idea to take a look at the response time for personalized responses (not auto-responders). Is it less than thirty minutes? Do the responses invite a response from the customer? If one lead provider stands out with a lower contact rate, first ask if your salespeople have a bias towards leads from that provider. “Cherry picking” Internet leads actually leads to lower contact percentages, not higher.

Appointments Set: If the appointment set percentage is lower than 20% of total leads, evaluate the process. Are your Internet Sales Managers (ISMs) trained to answer the customers’ questions and ask key questions in return, including asking for the appointment? Is your pricing competitive with the market? It’s good to shop your competition from time to time to evaluate your pricing.

Total Visits: Including appointment shows and walk-in visits from Internet customers, the minimum visit rate that dealerships should expect from Internet leads is 15%, but some dealerships easily and consistently double that rate every month. Do you offer compelling reasons and incentives to come in? Are your managers’ confirming appointments the day before?

Total Sales: A reasonable expectation for show to close percentage is at least 50%. Dig into this – if you find a salesperson closes 90% of his or her visits, they’re probably not logging every visit and you’re missing opportunities.

Cost Per Sale (CPS): Many Internet sales departments focus on the close rate and don’t go beyond that. But while one lead source may provide a high closing rate, it may also result in a much higher CPS (for example, leads from an SEM campaign). The higher the CPS, the less profit the dealership is making.

To calculate CPS for any campaign:  Take the total amount spent on the campaign (e.g. $2,500 per month) and divide it by the number of cars sold (e.g. ten = $250 CPS). You can even go one step further and deduct the CPS from the average profit per deal for that campaign/source – sometimes, a $300 CPS can “cost” more than a $400 CPS.

While it’s not all-encompassing, this process should help you identify the best sources to maximize your dealership’s profitability in 2012. And it may even identify where you can grab a few extra sales even before the New Year. If you’re looking for more ideas of how to optimize your Internet operations, download the incredibly helpful Kain Automotive free “2011 Automotive Internet study” from their web site.

As we come out of an inventory shortage and lenders are providing more loans, a question arises – of what to do with all the leads received in the last six months for cars that didn’t turn into sales for one reason or another. In many cases, Internet salespeople will have stopped communicating with these potential buyers in favor of “fresh” leads. Are the “old” leads even worth the effort?

Nearly 60% of people who submitted Internet leads are still in the market for up to six months after the dealership initially communicated with them, according to AutoFerret.com. That means many consumers who inquired about models that were in short supply three months ago may still be interested in buying. However, this fact may not change the behavior of your Internet team, and it certainly doesn’t magically create more time in the day for follow-up.

The key is to leverage technology to re-activate “cold” Internet leads and bring engaged customers to the surface. Focusing on an e-mail marketing campaign is one of the most effective methods you can use to do this. Start by developing a series of e-mails that re-introduce your dealership, answer a series of “why” questions and offer incentive to come in. Then remember the adage, “persistence pays.”

Re-introduce your dealership. In your initial e-mail, remind the customer that they inquired about a certain model or make several months ago, and reiterate whatever communication you had. Then share the news that you’ve got they want and include links to specific inventory items on your web site.

Include inventory alternatives. Follow up the first e-mail with another e-mail that includes inventory alternatives. Include links to inventory that may be less expensive, pre-owned, or more fuel-efficient. Half of all consumers who submit Internet leads end up buying a different make or model than planned. Ask the recipient what their favorite option is, or if they like this one or that one? Why or why not? The goal is to engage the customer.

Provide Incentive. Give the customer a reason to come into your showroom. It could be a deal on trade-ins, cash-back award or other type of incentive.

Hire More Help: Working Internet leads takes time, and if your staff is too busy to be persistent, you may want to consider hiring someone temporary to work the older leads. Help is also available in automated form, with virtual sales assistants like AVA. These virtual assistants are designed to work in conjunction with a sales team to re-engage customers, determine whether prospects are still in the market, update contact information, set appointments and hand off sales appointments to staff.

Has your dealership conducted an e-mail marketing campaign to re-engage Internet leads? What are the results?

Imagine the following scenario: a customer (let’s call her Sally) walks into your showroom on a busy Saturday. The salesperson who is supposed to greet her takes one look and wrinkles his nose. “She’s not going to buy today,” he grumbles, and ignores her. Sally walks up to the salesperson and asks, “Can I get a price on a certain car?” The salesperson responds by offering to show her the model she’s interested in. Sally asks again, “Actually, can I just get the price? I’m probably not going to buy today but I want to know who can give me the best deal.” The salesperson rolls his eyes and walks away.

How long do you think that salesperson would last? Do you think Sally would return to buy a car from him? Probably not.

Yet this is exactly how some salespeople treat online customers.

When leads come in from either the dealer’s own web site or a third party lead provider, many salespeople “cherry pick” based on how quickly they think the leads will close. Or, it takes them several hours to respond, and then they evade the question of price and try to set an appointment. Do you think these salespeople sell many cars? Probably not.

The fact is, leads are people too. Just because that person is not on your lot does not mean it’s okay to ignore them. Just because they want several dealerships to give them a price does not mean they’re going to buy from the salesperson who quotes the lowest price. It’s important to treat online customers with as much attentiveness as you would a walk-in customer. The same best practices apply, with slightly different twists:

• Treat All Leads the Same. Seasoned sales veterans know you can’t judge a book by its cover. So how can you know by looking at a lead if someone will buy or not?

 • Respond Quickly. Every lead should receive some form of response within a few minutes, and no more than 30 minutes.

• Greet Them Warmly. Thank them for giving you the opportunity to help them, then answer their questions, including price! If you don’t quote a price, right away you are eroding trust. The customer who wants a price is probably going to engage with the first salesperson who gives them one.

• Suggest Alternatives. If the customer is asking about a certain model, provide them with alternatives in that price range, as well as pre-owned options. According to AutoNation, half the people who submitted new car leads ended up buying used.

• Be Persistent. If unable to connect, the salesperson should follow up with at least five phone calls and nine e-mails over 90 days. Remember, the average selling time from an original inquiry is more than 30 days.

• Confirm Appointments. You’d be surprised how many salespeople fail to follow this critical best practice.

When leads come into the CRM, try to visualize each one as a person sitting in front of you. Whether a lead or a walk-in, the goal should be to establish rapport, give prompt service and treat the customer with respect.

# # #

Few topics are hotter today than mobile apps for auto dealers, and whether you like them, hate them or feel indifferent, it looks like mobile apps are here to stay. According to a recent study by the Pew Research Center, 85% of adults in the U.S. own a cell phone with the percentage owning a smartphone growing rapidly. In recent months a number of vendors in the auto industry have launched mobile apps aimed at dealers who want to connect with these mobile customers. Is there real value to a dealer in an app?

The idea is that once a customer has their local dealership’s app installed, they can use their smartphone to contact the dealership, schedule service, make payments, get quotes on vehicles and more. If it’s only transactional in nature, though, an app has limited value to the customer. If the dealer can offer extended value, it offers the potential to build rapport and create a long term relationship with their customers.

In fact, many dealerships have a slew of customers – converted and unsold alike – sitting in their CRM. Want to get your brand message out through an app to the most existing and potential customers? Here are some ideas on how:

ŸOld leads. Go through your CRM and identify all the leads that were being worked, but closed without a sale in the last six months. Then create an e-mail campaign promoting the consumer benefits of your dealership’s new mobile app.

ŸNew leads. Along with all the best practices responses that we usually advocate, sales people should include a link to the mobile app download. Internet customers, through their submission of a lead, have told you they appreciate convenience. Stress the convenience of the app, giving them access to your inventory on their mobile.

ŸService leads. We’ve written before how service departments should be marketing to unsold leads. Now you can market your mobile app to all your service customers, offering them exclusive specials or coupons, along with the ability to schedule an appointment through the app.

While it’s too early to quantify the return of dealer-specific apps, they offer a great value-add to a dealership’s established marketing message. When you choose one for your store, take a lesson from other successful app rollouts: pick one that offers real consumer benefits. Without that, your new app – and marketing opportunity – may be uninstalled quickly, giving you no lift at all. But if you get it right, you’ll expand your message’s reach, keep connected to your customers and convert more customers – unsold and sold – to return business in your sales and service departments.

Have you developed any marketing campaigns for mobile apps? What has worked and what hasn’t?

I’d say nearly every Sales Manager has come across the “cherry picker” salesperson – on the front line or in the Internet department. The one who’s smarter than the process and who only needs to see the customer, or the lead, to make a decision on whether it’s a sale or not. As a result, his or her performance lags behind the leaders and costs you sales. But when asked why his or her performance is in the tank, the answer is almost always to blame the quality of the customers.

We see closing rates for Internet leads vary greatly from dealer to dealer, from a few percentage points to as high as thirty percent. While the original source of the lead may have a slight impact on the closing percentage, it’s consistently the process and the person that play the greatest role in maximizing sales.

Before blaming the quality of the leads, dealers should ensure these ten best practices are being followed:

1. All leads are treated equally. Don’t cherry pick. Treat every lead as if it’s a person coming through the front door and follow a consistent contact process.

   

2. Study leads. You can learn a lot from the time of day a lead comes in and whether it’s sent from a work or personal e-mail. Check to see if the person’s name is in the database & if family members have purchased from your dealership. Read comments and questions to see what’s most important to that person.
3.  Immediate follow up. Every lead should be followed up within 30 minutes. We expect that as consumers in other industries, and the auto industry should be no different. Let the customer dictate how, whether phone or e-mail, and use that method as your initial contact attempt. Then follow up consistently. Up to 40% of customers don’t receive e-mails because of spam filters, so follow up phone calls are crucial.
4. Persistent follow up. Over the last 3 years, we’ve seen the buying cycle extend significantly, with customers spending more time in the research phase before moving on to purchase. Your dedication to follow-up over the long term – and that’s as long as it takes them to purchase – is key.
5. Include inventory alternatives. If a customer is interested in a specific vehicle, send an e-mail with alternative choices, including pre-owned vehicles. Very few customers actually purchased the same vehicle about which they inquired, with as many as 1/3 of the new car leads who purchased opting for a used car.
6. Management must be involved. If salespeople must go to the Internet Director or Sales Manager for every lead they want closed out of the system, they are likely to try a little harder before giving up. And, just like a floor turn, the change of person nets results in many cases.
7. Final e-mail for all closed leads. For every lead that is closed out, an automatic e-mail should be sent from either the Internet Director or GM’s e-mail address asking how that customer’s experience was with the dealership. The e-mail should contain a cell number so the customer can contact them directly. You’d be surprised how many customers call to say they were never contacted.
8. Hold accountability meetings. Whether it’s a daily “Save a Lead” meeting or a weekly GM review of key metrics with the Internet department, accountability applies positive pressure. How many leads did we get? How many calls have been made? How many appointments set? The same intensity of management for Internet leads as showroom and phone customers creates responsible Internet salespeople.
9. BDC “hot” handoff. If you use a BDC/appointment-setter model, ensure that every transfer from the BDC is “hot,” i.e. the lead includes specific information on what the customer wants. Nothing is more annoying to a customer than spending 15 minutes on the phone telling someone what they want, then showing up and the salesperson knows nothing.
10. Confirm appointments the day before and remind the customer of a reason to come in – whether that’s confirming availability of what they want or simply letting them know you’ll have the right car ready and waiting for them to test drive.

Dealers, do you have additional best practices to add to this list? 

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