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Sunday, December 10, 2006

Improve Your Auto Dealership Response to Email Leads

While speaking with auto dealers across the country, I frequently have discussions about the quality of email leads. Many dealers don't like to "waste" time on email leads, because the more serious buyers will pick up the phone and call. While this may be true, email leads should not be ignored. In fact, they should be treated as equally important, because given the right set of tools, a dealer can reduce the time spent responding to customers and become more efficient overall.

Before I get into what tools will help improve response to email leads, I need to point out some very powerful information I ran across from Dealix. The original report can be seen here, but here's the pertinent information. In their study from last year, it was reported that a huge percentage of customers who submit an email inquiry on a dealer website eventually purchase their vehicle from a different dealer. What is a "huge percentage" you ask? Out of roughly 1.16 million leads researched in this study, 56% (644,957) actually converted to a sale. Of those 644,957 sales, an astonishing 92% were sold at another dealership other than the one who got the initial lead. That's right, 9 out of every 10 leads you get are probably going to the store down the street to buy their car. How can you improve the closing ratio at your dealership? First you need to understand why they're going to your competition. According to the study, the biggest reason (other than the customer deciding on a different vehicle model) was the response from the dealership. In fact, 20.4% went to another dealership because the first dealer had poor response to their inquiry, with poor defined as "slow" or not answering the customers questions.

Seems like a simple enough problem to correct, right? So why is it that the problems have gotten worse over the last couple years? Something as simple as answering the shopper's questions dropped from 38.2% in 2004 to 25.9% last year. So only 1 in 4 dealer responses actually answers the customer's questions? That seems like a good place to start improving. I understand that as a dealer your ultimate goal is to get the customer on the lot, because that's where the selling takes place. It's my belief that customers will form a better opinion of the dealer if they're straight-forward and show that they're not trying to beat around the bush. Simply answering their questions will increase the appointment show ratio, which will in turn increase the closing ratio at the sales level. One way to help make a good impression in email responses is by using templates. Basically templates will give you a professional look rather than just a couple lines of text, and they will also have most of the information filled in already so you don't have to sit and type a response from scratch.

The biggest factor (that a dealer can control) in improving your email responses is the time it takes for a response. Imagine a customer walks on your lot and asks you about a Chevy truck parked right up front. Now imagine your salesman looks at the customer and doesn't say a word. The customer would probably go to your competitor, unless they appreciate being ignored. What do you think the customer's response would be if you called them at home 7 hours later? Well this is essentially what's going on with email responses at most dealerships. The average response time for a customer inquiry was 6.5 hours last year. When the customer takes a few minutes out of their day to write to a dealer and inquire about a vehicle for sale, treat this like they've just walked on your lot. The more successful dealerships I've worked with have policies in place such as responding to all emails within an hour. With the back-end of our dealer websites, we've added a tool that will help our dealers do even better. A dealer can set up cell phone text messages for their website leads. When a customer submits an inquiry through the dealer's site, the sales manager, owner, or whoever you set up will be notified instantly by text message that a new lead has arrived. Imagine what that says to a customer when you call them to answer their questions and they're still on your website. You've got them when they're hot, and before they start looking at vehicles on your competitor's lot. Our dealers who use this functionality tell me that most conversations start out with "wow, that was fast".

Improving the quality of your email responses and how fast you actually respond are the two most important things that are within your control that will increase sales at your dealership. They are both practices you can put into place immediately, which means your profits will increase almost immediately as well.

1 comment:

Anonymous said...


Good topic. In fact, I enjoy reading all your topics because you and Ray seem to know your subject as practitioners, both in online marketing and in selling cars.

My brother has a one hundred car lot
in a small town in rural Canada, and he says he does great business over the phone. But he doesn't 'do' email. Judging by the poor grammar and the spelling mistakes in his infrequent emails to me I have a suspicion why he doesn't 'do' email.

He's a great communicator, verbally. Is it common that auto salesmen have the 'gift of the gab' but are self-conscious when it comes to the written word?

Judging by the unjustified dearth of comments on your blog, this seems to be a common affliction of car dealers.

Keep up the informative posts. I'm going to add your blog to my blogroll.