Best practice

Best Practice: Lead Management

15 years years ago, the average car buyer visited 5 dealers on the path to purchase, but by 2019, this had dropped to just  2.3 visits with 40+% visiting just one dealer.

Buyers today are time-poor and no longer physically go from dealer to dealer to do their research. Just as when they’re booking a holiday or buying a new TV, the majority of car buyers are doing their research online, and the dealership website, rather than the sales yard, is now the key asset for generating leads.

The 2022 Deloitte Dealership Benchmarks report states that dealership websites are now responsible for generating 77% of new vehicle leads, whether that is directly through the website itself or by prompting a customer to call or walk-in.

Lead Origin. Source: Deloitte Dealership Benchmarks 2022

How to convert leads to sales.

As you can see from the table above, the dealer website contributes 77% of leads on new vehicles and 22% of used leads.

In an era of same-day delivery and instant gratification, potential customers expect immediate responses, and if they don’t receive them, they’ll simply take their business elsewhere. The image below shows that the best sales staff respond to leads in 10 minutes or less.

Waiting a day, or even an hour is no longer an option if you want to convert your leads to sales. According to Inside Sales, the first 5 minutes following a customer enquiry is key.

Speed of Response impacts conversions. Source: Inside Sales

The quicker you can respond, the higher the likelihood of a conversion.  But why is that?

Because buyers are doing their research online.

In the old days, a lead would either call you or walk straight onto the yard and once they did so, you had their attention.

Now, however, buyers are submitting multiple leads at the same time: on average, for every email you receive, a buyer has submitted an enquiry to 3 other dealers as well. What this means is that you no longer have their attention as you once did – that belongs to whichever salesperson responds first. 

Of course, if you can be the one that responds first, you will essentially own their attention and can potentially stop the prospect from submitting other leads. 

Lead follow-up process.

The key to getting the best result from your leads is having a system and process in place that is underpinned by documentation. Below is an example of a response process that includes multiple contact attempts with the first 3 days.

  1. Auto response email that goes to all leads as soon as the lead is submitted. Include a link back to your stock.
  2. A phone call to the prospect within 10 minutes of their enquiry.
  3. Follow up with an email. Include a quick walkaround video of the vehicle (this can be shot on the salesperson’s phone) to build a personal connection between buyer and salesperson and builds trust and confidence.
  4. Phone call again later in the day.
  5. Call again at a different time the next day.
  6. Email or text the prospect saying that you have tried to call multiple times and will try again at a certain time the next day.
  7. Call again at said time.

This is a very simple lead-handling process but it is one that makes contact 7 times within the first 3 days.

Set yourself up for success.

When communicating with your prospect these four questions will help qualify the customer. The first question gets the customer to sell the vehicle to the salesperson, providing vital information on motivations. The following 3  help qualify the customer further. The four questions are:

  1. What made you enquire about this vehicle?
  2. When are you looking to buy?
  3. Do you have a trade-in?
  4. What is your budget?

With these 4 questions, you will be able to get out ahead of your competitors and give your salespeople additional lines of enquiry to pursue when they do their follow-up. Salespeople are like lightning: they look for the path of least resistance to a sale. These questions can also help identify vehicles that are better suited to the prospect and, more importantly, identify opportunities to upsell. 

Know your numbers.

The most important metric is the Closing Rate. How many leads does it take to generate one sale? Going beyond this, one thing that should be underpinning your process at every stage is the documentation: what happened, when, and by whom.

For an Owner, GM or DP, understanding what is happening to your prospects is key to improving results in the dealership. Every contact and stage needs to be documented and time-stamped. This will give insight into the dealership including:

  1. Closing rate by salesperson
  2. Number of contacts needed per appointment
  3. Number of appointments needed per sale
  4. Are leads being closed out too soon?
  5. If deals fall over, why? Is it price, product, finance, trade etc.

This will help refine the sales process and identify problems within the dealership.

Closing take away.

If there is only one takeaway from the above, it would be this –  be sure to follow up leads quickly and repeatedly to give yourself the best chance of converting them into sales.

If you’re struggling with your lead generation, get in touch with one of our team today and see if we can help.