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?