AJ - Fantastic post :thumbup: - there is a lot we can talk about. First, let's reverse engineer some stuff here. I know a lot of this won't help you with the current problem at hand, but hopefully it will give you a process for tackling future issues.
First: Figure out where the timeframe ends on consumer interest from the day they submit a new Internet lead to your stores is. To put it simply: are you seeing purchases happen from people who submitted a lead 90 days ago? 6 months ago? How far back before it begins to dwindle?
We'll call that the *Interest Timeframe*
Second: Figure out how many leads per month you're averaging. I would look at this over a 12 month period. How many leads did you receive over the last 12 months and then divide that number by 12 to get an average (I know, simple math, but I just want to make sure everyone is following along).
Include phone calls if needed....if you have those stats.
We'll call that the *Average Leads per Month*
Third: Figure out your closing ratio. Simply take the number of sales you've counted with "Internet something" as the source (every dealership counts this differently) and divide that by the number of leads you've received. Again, do this for a full 12 month period.
Include phone calls if needed....if you have those stats.
We'll call that the *Lead Closing Ratio*
The word track thus far: Hey boss, over the last 12 months we have sold [INSERT INTERNET SALES #] off of an average of [AVERAGE LEADS PER MONTH] per month. That equates to an average closing ratio of [LEAD CLOSING RATIO]. The national average is around 10% with best practice dealers reaching as high as 20% just on the leads alone.
I don't know exactly what it is when you factor in phone calls. It appears that our customers continue to have interest in buying a car up to [INTEREST TIMEFRAME] days after submitting their initial Internet lead.
Because we know what our customers' interest timeframe is we can assume we do not have to put a lot of effort into Internet leads that are older than [INTEREST TIMEFRAME] days. That means we will need to staff to sufficiently handle at least [AVERAGE LEADS PER MONTH] plus residuals from leads that didn't buy that came in over the last [INTEREST TIMEFRAME] days. That is roughly [SALES GOAL / CLOSING RATIO] leads. I have heard that the average Internet manager can fully optimize a workload of roughly 100 new Internet leads per month. I just thought you should have those stats before we discuss budgets.
Fourth: Figure out where you want to be. How many sales do you want? With that number in your head you can use the *Lead Closing Ratio* to figure out what you're going to need to get there. If you take the number of sales you want and divide it by the *Lead Closing Ratio* you'll get the number of leads you need to get to that sales figure....
technically speaking.
We'll call that the *Projected Leads Needed*
Continued word track: So boss, you've got the exact numbers I can account for. Now, let's talk about some projected numbers to help aid you in your decision. Please keep in mind that this next stat is scientific and not reality; it is purely a technicality that does not factor pay incentives or quality of personnel. I want us to get to [INSERT SALES GOAL #] per month. If we figure our current closing ratio is [LEAD CLOSING RATIO] then we will need [PROJECTED LEADS NEEDED] per month in order to get there- technically speaking. We will also need at least [INTEREST TIMEFRAME] before we can expect to see our sales goal number. Just imagine what we could get to with an improved closing ratio. We're going to need quality people who are completely dedicated to attaining this goal.
By the way, I heard from someone who has over 6 years experience in building his own dedicated BDC (some guy named Alex Snyder) who said he saw the right BDC pay was roughly the same as the average pay for sales agents. He also said he found the best way to incentivize his BDC was based on the number of outbound phone calls each one made per hour. He said that 8-12 calls outbound calls per hour produced a good number of appointments and still allowed time for his BDC to adequately handle inbound calls and Internet leads. He mentioned that some guy named Jerry Thibeau helped him figure that incentive plan out
Example numbers in word track below....