This remains a critical sales channel, and dealers must still measure and manage it aggressively. BY DAVID GREENE
Last year, OEMs and franchised dealers spent a whopping $6 billion combined on digital marketing. Your dealership likely contributed a significant amount to that total. According to eMarketer, 60 percent of the ad spend was for direct response tactics, with the remainder focused on brand-building. Interestingly, 35 percent (more than $2 billion) targeted shoppers who use mobile devices, a reflection of the dramatic increase in the use of smartphones during the car shopping process.
More interesting developments: There was a huge drop in submissions of traditional sales lead forms and an increase in inbound sales calls. According to ADP, call leads are outstripping e-mail leads at dealerships by 4 to 1.
This fundamental shift in car shopping behavior rewards those dealerships that effectively manage the growing number of sales leads originating from shoppers who use the “click-to-call” function. Alarmingly, however, a recent study of more than 540 dealerships showed that most aren’t doing this.
In fact, that study (by CallSource, in conjunction with IHS Automotive) of participating dealerships’ call management data found 84 percent of consumers who bought a car within 90 days of phoning a dealer end up buying from a different dealership than the one originally called! To me, this indicates a large number of sales opportunities are being mismanaged and lost.
Additional research shows the average dealership (across all brands and markets) is converting fewer than eight of every 100 inbound sales calls into showroom appointments. Basic math shows that a dealership is losing $30,000 to $60,000 of gross revenue, depending on that dealership’s size.
Those dealerships that have prioritized call management are able to literally “see” their inbound phone lead opportunities, because the tools they’ve put in place measure both quantity and quality of leads. More importantly, these dealers are measuring the outcomes of all those one-to-one communications.
Why Dealers Aren’t Taking Phone Leads Seriously
Based on conversations my company has had with hundreds of dealers, there appear to be two primary reasons they ignore this sales channel:
1) Contentment with the status quo. Dealers often tell us, “Well, we’ve always been bad on the phone.” Of course, you wouldn’t catch these same dealers admitting, “Well, we’ve always been bad at selling cars.”
Accepting poor call management practices as “normal” is likely attributable to the simple reality that phones have always been in dealerships. Way before the Internet and the fax machine, when sales managers were calculating payments on 10-key calculators, phones were a fixture. They always seemed to be ringing with calls from prospective buyers looking for information.
However, in the past dealerships enjoyed an advantage in that the consumer was much less informed. While connectivity has changed all that, unfortunately the call management process at most dealerships has stayed the same.
The late 1990s brought huge disruptions to virtually every retail experience and a dramatic shift in power from buyer to seller. This was a completely new reality for the retail automotive industry. Although many dealers initially ignored online car shopping, a few embraced the alternative experience as a game-changer. Of course, online shopping today is mainstream, and any dealer who is not familiar with key digital marketing stats like live site visits, time spent on-site, vehicle detail page views, etc. should be pretty embarrassed.
2) Lack of measurement. The second reason dealers tend not to focus on their inbound phone leads is, they lack performance metrics. While almost everything is tracked and measured in digital sales, and walk-ins can be counted and recorded with traditional showroom sales, phone leads are the only major sales channel that have gone largely unmeasured.
Ask almost any sales manager about the objective of an inbound sales call, and he will reply, “To set an appointment.” However, if a dealer had the performance reports to know how many sales opportunities were coming in via inbound calls each month and how few were converted into showroom appointments, he likely would find that performance unacceptable.
Improving Call-To-Appointment Ratios
Consistently securing at least 20 appointments for every inbound calls doesn’t start with some magic phone script. Rather, in assessing my dealership clients, five key activities and traits stand out:
Making call management a priority. Dealers who refuse to accept the “reality” that their people have always been bad on the phone, and treat inbound phone leads as the last and most critical step in a very expensive marketing process, will succeed. They recognize that call management excellence drives significant improvements in net productivity and advertising ROI, not to mention create a competitive advantage that supports brand-building.
Using a structured call process. Whether inbound phone leads flow through a BDC, the sales floor or via another process, top-performing dealers have a process in place addressing the call’s opening moments, building a value proposition during that call and successful completion of the call. Of course, they also will operate with measurable goals and benchmarks.
Measuring phone leads.
It’s critical to have transparency into how many phone leads are received, what type of lead each was (for sales, service or parts), who managed the opportunity, and of course, the result. A dealership needs to use tools that provide objective measures of each type of lead and the outcome, based on analysis of each call.
Insisting on accountability. In a typical dealership, it is difficult to assign responsibility for a phone lead to a specific sales team member. Most dealerships don’t have a call handler-identification system in place and don’t use any management oversight other than the occasional spot check of a recorded inbound sales call. Given the volume of phone leads the average dealership receives, the responsibility to “inspect what you expect” quickly gets lost and becomes difficult to effectively manage.
Operating with consistency. Finally, almost all salespeople have the capacity to be highly effective with phone leads. Occasionally, they are just that. However, without structure and support to reinforce good call management behaviors, it’s easy for them to drift into simply answering the phone.
To achieve consistency, a dealership needs to determine the conversational strategy it believes will produce the best experience for the caller and the best outcome for the business. For some dealerships, this may be a tightly scripted conversation; at others, it may be an unscripted flow with broader objectives like “provide a positive greeting” and “engage with the caller’s interests.” Either way, without an agreed-upon strategy, a salesperson will often slide into reactive mode and simply answer the caller’s questions without proactively trying to influence his or her perception of the dealership, and without motivating the caller to come meet in person.
Is My Point Made?
So … back to that $6 billion your industry is spending just on digital marketing to persuade consumers to buy cars. A big chunk of that investment goes to mobile marketing. Isn’t it time to take your inbound phone leads more seriously?