High traffic with low conversions? Is this a franchise-related problem?

[Alex Snyder]

First off, I would like to thank Jeff for giving me the
opportunity to be a guest author on Dealer Refresh.

As an eleven-brand franchised dealer, I get to work with
many different business ideologies.  From Korea to Germany the ideological differences can be just as extreme as the geographic distances between these OEMs. These ideologies are also displayed by their customers. To make things more convoluted is the regional demographic differences within the United States. It is true that some areas favor specific brands to other ones. In plain terms, each brand has its own personality.
Over the past 5 years I have watched Internet traffic patterns shift all over the various brands we carry. Our dealer site has grown exponentially in traffic, but our lead conversion rate has remained relatively the same. I attribute this to a major decrease in VW, Audi, and Scion leads while brands like Toyota, BMW, and Honda have jumped up quite a bit. Volkswagen, Audi, and Scion are said to have the highest Internet-using clients of all the brands we carry. Why are these customers no longer submitting inquiries? I can see these customers are still browsing our website, and for a long period of time.

I came up with the idea that these customers have realized that there are not too many advantages to using the Internet department when purchasing a car. I’m not speaking about my dealership, but the industry in general. The most savvy Internet customers have already gone through the “traditional Internet-lead process” for one or two cars, and may have figured out ways to side-step the Internet department.  With the vast amount of information available, is there a need to go through the Internet department if they are just going to work with someone else on the showroom floor? Have these people developed the belief that the Internet department is not going to provide any better price than can be negotiated on the floor?

How do we pull the most savvy Internet customers back to the lead pool? Do we want to?

I have an opinion, but I would like to hear from the community first.

 

[bhoecht]

Some interesting observations you make there Alex...

1) Are consumers on the Internet because they only want to do research and to find efficient ways to inquire of your dealership?
2) Do they get a good experience via the third party lead providers as they inquire + receive their follow up emails and phone calls?
3) Do Internet customers really want to come in to the showroom as a next step to submitting a lead?

I believe your article indicates real world recognition that the more comfortable the consumer with the Internet, the less they participate in the current Internet lead model. If that is true, where is this going?

I've paid attention to the seminars that focus on how to respond, technologies and processes to make a BDC or ISM efficient and that is all good infrastructure to have. I do. I think it is a lot of hard work, but with some cost-effective and creative effort on marketing your dealership online, that good , profitable results can be achieved.

If 80+% of consumers are on the Internet, they are basing their decisions at least somewhat on what they find there. What does your dealership's brand look like online? Would you buy from you if you experienced that brand online?

But what if the end of the road for an online consumer was not an inquiry?

What if true eCommerce in the form of consumer-facing desking + F&I existed for dealers to provide to their consumers?

What if admission to such a dealer system was free except for a validated email address?

What if the ISM, BDC infrastructure kicked in to assist with unsold consumer account follow up?

Would that sell more cars?

Would that bring consumers to those dealerships with such a system over those that do not have it?

Would having "The Only Complete Online Buying Experience" for your brand in your market be worth advertising?

Those of you who read this blog regularly know me, my company and what I do... but I like Jeff too much to turn his blog in to a commercial.

 

[Steve Williams]

"I came up with the idea that these customers have realized that there are not too many advantages to using the Internet department when purchasing a car." - Alex Snyder

Alex, First off, nice post! I enjoyed the read!

I would say that your above statement hit the proverbial nail on the head. The lines that once separated the internet experience from the experience that a consumer has at any number of showrooms in todays progressive dealerships has blurred to be almost indistinguishable.

What I mean by this is that I think we (the internet folks at the stores) have grown complacent and have not grown with the consumer and maintained or developed unique value propositions to keep the customers submitting leads to our stores.

What now separates the "internet experience" from the regular old car buying experience in general?

I could go on and on, but you get the idea...

Right or wrong, just my opinion.

Steve Williams

 

[JoE Drosen]

Alex,

I can attest to the fact (from my own experience) that lead volume generated from brand to brand varies and has seen huge swings (like 300 leads per month down to 50 for a VW dealership that I work with.)

I would like to guess that this has something to do with new models being released or a loss of market share, but it is probably not the answer.

My personal opinion is not to look at this as a dooms day scenario, keep positive & the leads and sales will return. In the mean time, you may want to look at your website for solutions:

1. Does your website make it easy for the customer to find the information that they are looking for?

2. What do you do to build value in the vehicle that you're selling? Also what do you do to build trust with the customer (on a personal and dealership level)? And can you do better?

3. Do you give customers a reasons to submit a lead? (ie: free window tint with purchase through the internet department... or maybe offer a 1 hour purchase program - something that's only available through an online inquiry).

4. Does your site tell customers who is receiving their information and what is going to be done with it? I know that the name of the game is to sell cars, but customers may be afraid to request more information, as they will be followed up with (or bugged) until they buy or die. In the case of a secure credit app, what do you do to show that the site is secure? Do you show that your site is secured & can you add credibility by showing that you are member of BBB online... if you're not, you may want to join (it's pretty inexpensive).

5. Do you advertise your website OFFline? (think license plates, license frames, service loaners... maybe the front door of the dealership?)

I know that my answer didn't address your question of where all the leads went, but I hope that I have given you some ideas of what you can do with your current website to generate more leads, which in turn will generate more sales!

-JoE Drosen
National Sales Director, CarSpot
888-698-7768 x124

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www.carsgofaster.com

 

[Corey Salzano]

"Our dealer site has grown exponentially in traffic"

Was the traffic increase a result of improving or promoting the site?

I wouldn't expect a conversion increase unless the site was improved to convert better.

 

[umer.autojini]

Hmm.. "Our dealer site has grown exponentially in traffic, but our lead conversion rate has remained relatively the same." If the conversion rate is the same... then nothing has really changed. If you are getting more traffic and conversion rate is the same then you are getting more leads. To do any better at conversion you have to optimize for conversion like Corey said. But the honest truth is at max you will only convert 7% of your traffic... heck if you are doing 4-5% you are doing pretty good.

Could the drop in Audi,VW and Scion be linked to there websites not actually linking to your site but their mini sites. BTW Audi has a horrible website... doesn't work in Firefox and spits out java script errors in IE.... ERRR

Checkout the blog LunaMetrics on some nice conversion tips. AI Services for Enterprise Transformation | Bounteous

 

[Andrew Salamone]

I am far from an expert on the dealer side of the equation, but I have been squarely in this space since I started CarSpot back in 1995.

Back in the day, the neat thing about a customer using the internet to contact a dealership was that if a dealer was even online at the time, odds are there was a very unique sales person handling the internet side of the equation.

Such a person would typically be willing to interact via the customer's preferred method of contact, would answer any / all questions in a no pressure style, and would just generally buck the (right or wrong) stigma often associated with the car buying experience.

Over the years, dealerships learned that the internet was an extremely trackable means of communication. This in and of itself is not a bad thing and in fact should be a great thing.

However, as the focus began to shift away from relationships and over to "generating more leads" the problem began. I cannot tell you how many dealer sites have been rigged to "generate more leads" (i.e. some have pop up contact boxes constantly bombarding you until you finally fill one out).

Sure, that may "generate more leads" than not having such a feature, but if you are simultaneously scaring away a huge percentage of visitors--visitors that may no longer even consider your dealership as an option online or off-, is that a good thing?

I am not entirely certain of the answers here, but I think Alex is right with his analysis. To me, the crux of the solution revolves around getting back to a relationship-based approach. It need not be a salesperson-customer relationship so much as a dealership-customer relationship.

I also think that you do want to generate leads and track as best as possible, but not at the sake of ruining the relationship or tainting the overall experience.

This may mean fewer leads than possible, but happier customers overall and better results from the leads you do have as well as from customers that are customers despite not generating a lead.
--
Andrew Salamone
carsgofaster.com

 

[Alex Snyder (blog)]

Thank you all for your comments so far. Andrew has caught on to the bigger point I was trying to make by my example - I wasn't looking for advice on my own business model, although I always appreciate it!

"I am not entirely certain of the answers here, but I think Alex is right with his analysis. To me, the crux of the solution revolves around getting back to a relationship-based approach. It need not be a salesperson-customer relationship so much as a dealership-customer relationship."

This thread was started to raise an awareness amongst the Dealer Refresh readers. I'm concerned about a trend that we, Checkered Flag, are seeing amidst our VW, Audi, and Scion customers. My concern is that we are doing something, as an industry, to make customers not want to submit inquiries. My concern may be a little premature, but I'm a firm believer in catching the problem before it escalates further.

Maybe this isn't a problem at all. Maybe the Internet, including our dealership sites, are becoming so resourceful that all questions are answered. Maybe the customer is more apt to just show up on the lot because everything was provided beforehand? I do have some numbers to back that up.

We survey every customer who walks out of the Finance office. It is a quick electronic survey the customer fills out while waiting for tags to be issued. In looking through the old surveys I've noticed less VW, Audi, and Scion customers are shopping our competitors (one of the survey questions). It trends around the same time period as when we stopped receiving as many leads on those brands. It also coincides with the increase in our site traffic. If more people are coming to our site, not shopping our competitors as much (translates to more gross), but not interacting with the Internet department, is this a bad thing?

Has the Internet conditioned us to not contact someone before purchasing? I've been using eBay since day one. In the early days I would not purchase anything without having some sort of communication with the seller beforehand. Today, I simply look at the feedback and pull the trigger. Of course, my eBay buying habits change depending on how much an item is, but I'm willing to spend a few hundred dollars without any communication with the seller. Amazon, computer hardware suppliers, car modification companies, B&H Photo Video...these are other places I've spent over $1,000 with, without picking up the phone or sending an email. Maybe I am like most of the other "experienced Internet shoppers" who have been conditioned to just pull the trigger with the posted information at hand.

 

[Jeff Kershner]

“My concern is that we are doing something, as an industry, to make customers not want to submit inquiries.”

That’s deep Alex. Could this be possible? Could this be happening because the consumer is truly looking for something different and they have quickly realized that it’s really no different then just walking into the showroom floor (for most dealers). You have touched on something here, especially when you look at the brands you have noticed this with.

So what do we do? And, does this prove that dealers will still sell cars no matter if they have an online presence or “Internet Sales Department” or not? Should dealers offer a unique online buying experience like Brian Hoecht over at ai-dealer is experimenting with?

Who says we have to change our approach and process in selling cars. Nothing has really been able to change this industry in over 50 years. Will my GM at the VW dealer where I started selling cars ultimately be right when he said "the internet will be nothing more then a “fad” for shopping and buying vehicles" ?

I don’t believe this to be true but it brings up questions.

 

[Joe Pistell]

Andrew,
Have you had chance to plot your poorly trending lead volume vs. % of a trend of repeat buyers?

It's a hunch, but I suspect IF you've been tracking repeat buyer penetrations stats, you may be looking at a undiscovered Internet windfall. If you've won 'em over once on the net, they'll assume you've got the right package and they're less likely to shop ya' the next time.

ALSO, there is the "Jet Blue" effect.
Personally, when it's time to fly, I ALWAYS hit JetBlue.com 1st, THEN, I goto the 3rd party sites if the JetBlue offer is "above market". TV's, leather, wide and deep seats... ahh..... If your customer shoped you hard, bought from you AND your group has bowled the customer over with a great experience, it only makes sense thay they're less likely to shop ya (again).

Ergo, Less requests for 'net quotes is a good thing.

Let's connect the dots for your department.
IF this is the case, then this is a huge victory for the mothership. If this is the case, then your group should consider Internet Exclusives for NEW clients. Establish an incentive earmarked for the new guy becuase once you win 'em over, he/she'll be back again and again.

How to present this to the shopper? Benchmark: http://www.royalcaribbean.com/gohome.do

DAMN THATS SMART, REAL SMART!
Tailor your message to the visitor.

Enjoyed your efforts here,
Hope this helps,
Joe