Focus Specifically on Long-Term Follow Up and Sell More Cars
One of the first things I learned many years ago when I was an Internet Director managing BDCs for large car dealership groups was about the importance of prospect follow up with respect to consumer buying timeframes.
Starting from when the consumer first contacts the dealership, I was taught that online car shoppers break down into three timeframe categories:
- Few Day Shoppers - they know which car they want and are deciding which dealership to buy from “in a few days”
- Few Week Shoppers - they have their choice narrowed down to 2-3 vehicles and are looking for the best value
- Few Month Shoppers - these are consumers just beginning their search, often considering as many as 6-7 makes, not really sure what to buy yet.
Many dealers choose to only focus on contacting and following up with their Internet leads for a week, maybe 2 weeks at the most - with heavy concentration on making contact in the first 3 days. However, only a small percentage of shoppers buy a car within the first few days after submitting a request. The majority of shoppers buy at least 2-3 weeks out.
Many dealers choose to only focus on following up with their leads for a week, maybe 2 weeks at the most.
The few day shopper definitely has the highest closing ratio of all of the categories and provides for immediate gratification, but the few day shopper is only a small percentage of total shoppers. Focusing solely on the few day shopper leaves too many deals and too much profit on the table.
In order to truly maximize your dealerships’ Internet Sales effectiveness, your team needs to be selling cars to buyers in each of those buying timeframe categories. Staying in contact with the few-week and few-month buyers is time-consuming and difficult, but crucial in delivering value to the dealership that keeps a BDC profitable, even in lean months. To achieve a 15%+ overall online closing ratio vs. leads for the month, here’s how your sales timeframes should be breaking down:
- Few day shoppers - comprise roughly 40% of your total monthly online sales
- Few Week shoppers - comprise roughly 35% of your total monthly online sales
- Few Month shoppers - comprise roughly 25% of your total monthly online sales
If a dealership is going to have the most successful online sales month possible in May, they need to still be consistently reaching out to customers who first inquired about their next vehicle in December, January, February and March. If the follow up is being done properly, those shoppers who haven’t already bought are much more likely to buy from the dealership still contacting them, since the other dealers stopped marketing to them after 2 weeks, tops…
Sales Should Be Generated from Few-Day, Few-Week AND Few-month shoppers
The shoppers who bought already or opted out would filter themselves out so that you’re left with a group of mostly unsold shoppers in your active database, mixed with some leads who have never been reached and therefore have never had their status updated.
In order to sell 15 cars for every 100 leads they receive, a dealership would need to sell:
- Few day shoppers - 6 cars
- Few Week shoppers - 5 cars
- Few Month shoppers – 4 cars
A dealership only focusing on the few day shoppers could leave 60% of all potential buyers unsold and could mean the difference between the department being profitable or losing money for the month. Even focusing only on those shoppers who were a few weeks out or sooner STILL leaves 25% of potential buyers on the table.
What is your dealership doing to ensure effective, accurate long-term follow up so that you are not leaving sales on the table and losing them to your competitors?
- This study by Google in 2013, “Digital Drives Automotive Shopping,” provides some great insight into some of the ways dealerships can better understand shoppers’ online habits.
- This press release about the results of a study by R.L. Polk and commissioned by AutoTrader in 2013 has some interesting insights into the Internet making car shopping more efficient for consumers.
- “How to Increase Your Closing Ratio” - by Ronald E. Karr, Karr & Associates - http://businessknowhow.com