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

[Richard Valenta (blog)]

Alex,

Like I said in the post, it is anecdotal evidence but it did happen.

However, when looking at conversion ratios, there is another thing to point out.

Most visitors go to sites specifically to look at inventory, we can all agree on that. Inventory displays have changed considerably over the past few years. Specifically, many vendors have added multiple calls to action in the form of buttons on the inventory details pages.

In fact, we, TK Carsites, used to do this as well until our research showed that we actually had higher conversions by just having a Request a Quote Form open, ready to go, when the visitor lands on the vehicle details page. Now we do that on all of our inventory pages and are making the move to correct this on our Virtual Inventory as well.

 

[Gerald]

Alex- I think you are right on target. I have noticed a drop in our appt set/lead ratio, though our closing ratio has stayed nearly the same. What I have been suspecting for some time is savvy customers get a quote, and come in to work the guy on the floor for a better deal. This is for a couple of reasons (in my humble opinion).

1. They have purchased already from a store with an Internet department, but no Internet sales professionals (cradle to grave).
2. They have purchased from a store that gave them a quote and they ended up starting negotiations at MSRP &/or with outlandish payments ($5500 down, only $845/month for 36 month lease on a $28000 Solara, for example).
3. They have purchased from a store with an Internet department and ISPs, but their perception was there was no appreciable difference in their buying experience, so they resort to the guy on the floor, who they think they might be able to take advantage of.

A recent thread was discussing whether we should have ISPs or hand them off, and many thought dedicated ISPs are passe'. Perhaps they are, but I still think their impact on a dealers' business is directly realted to the culture of the store and how they embrace the Internet customer.

 

[Joe Pistell]

First off... Kudos to Jeff K. & the group, take a step back and look at this thread. Truley thoughtful and experienced insights made by what has to be the upper 2% of our Industries most accomplished professionals.

Alex's thread has shed a light on a consumer that finds little value in the "request for quote" email model.

Is this the beginning of the end of the RFQ process?
Are we seeing 2nd generation 'net shoppers leap frogging the RFQ process?
Will a vendor/manuf'er invent a new "hook" that will motivate/satisfy 'net shoppers?

If there is an answer out there, Alex will be hot on it's trail. I will be very interested in Alex's ideas going forward.

Great work Alex!

Thnx,
Joe

 

[Alex Snyder (blog)]

Be careful Joe - you're going to make Jeff and me blush

Thanks for the kind words, and yes, I am constantly thinking about what is next. When I get a better idea of how to handle this one, which I don't think can be done by remanufacturing something on just a website, I'll post it here.

 

[Michelle - Honda]

Many sides to this discussion...what are internet customers looking for? Is it a good deal? Great service? Ease of buying? Selection? For years the car business has had a bad stigma attached to it. It often tops the list of peoples top ten things I hate to do. Why? Why is it the only industry in the world people get mad over paying profit for? Why does it take so long to buy one? Why can't I get a straight answer on pricing? I don't think our lead traffic is down because markets are changing...thats like saying I can't sell a car because it is hot outside. When you buy something online, you want to know if that company has it and how much it is. If 12 companies have it and they are all the same price, who do you buy from? I would think it would come down to the good old fashion customer service, a quick response, no bull company. People buy cars from people they know, like, and trust. Right? Ignore them and they will never buy from you..not on the floor, not on the net. Don't price something and they will never buy from you...not on the floor, not on the net. Like everything else in our lives today, people are short on time. Waste it on the net and I doubt they will come to your showroom. Back to the Joe Verde training....take a look in the mirror, you will see the only one who can make you successful. If the guy down the street does it bad, it is up to us to make it that much better.

 

[Alex Snyder (blog)]

Michelle,

Of course, you are correct. What if you are a dealer who seems to be doing things right? Internet sales are way above the national average (statistically speaking) and your business is growing. However, you are seeing lead traffic drop, while site traffic is up, on the more Internet-savvy brands? Is this a reflection on yourself? Mr. Verde is correct on many levels, but there are realistic factors that even Joe cannot account for; nor Ziggler or any of the others.

I'm proposing the idea that we, as an industry, have turned the more tenured Internet shoppers off. The things we were practicing two, three, four years ago may or may not be practiced today. You're absolutely correct; the customer has a long memory.

I think you and I are on the same page, but you're hitting home harder. I'm not going to say that we are perfect, and I don't think I am alone in this statement. Our customers have been expecting perfection forever, and we have not been able to deliver on that day in and day out since the inception of the "consumer Internet." We have evolved, but did we lose the original Internet shoppers in our toddler days? Or have the more Internet savvy shoppers found other ways to get the information they need without contacting the dealer?

 

[bhoecht]

Alex,

Several others have touched upon it... Internet shoppers are just that... they are shopping on the Internet... then they hit dealer's websites and are instructed to call or email.

When they get responses, then they encounter various processes designed to get them in to the showroom.

"Is this as good as vehicle shopping on the Internet is going to get?"

"Are 3rd party services like CarsDirect and ZAG going to disintermediate car dealers?"

As you observe, consumers are realizing that the bloom is off the rose of Internet lead submissions in terms of receiving a better buying experience.

So if the Internet lead submission strategy with exceptional followup efforts, processes and Internet Managers will not be long term solution, what is?

The owner of this blog suggested my company's service may be one answer. We have a hybrid approach. We have a consumer-facing Desking + F+I system for a dealer to add on to their website. It is a hybrid approach since consumers have to verify their email address in order to get in (so you get the selling opportunity regardless as to whether they buy direct or not).

It hasn't disrupted website lead volume one iota, so it is therefore capturing the consumers who weren't submitting leads before. Dealer experience is also that the unsold consumers respond better to dealership follow up efforts. Lift comes from unsolds who buy + those who buy direct (and yes, some have).

But this isn't an infomercial. My company's hybrid eCommerce solution for a dealer is only one idea. If the lead model is declining in its effectiveness, what else will be effective? What is it that the consumers really want?

Build your car, name your price?
Trade appraisals?
eBay listings?
Live Chat?

I believe that today's Internet sites are little more than advertising billboards since all "selling" occurs in the dealership... which is NOT what consumers want. I think that is your "WHY" Alex.

So what do we think can be done about it?

 

[Alex Snyder (blog)]

Brian,

It sounds like you're trying to sell me something. As for your question of "So what do we think can be done about it?" your solution certainly falls in one part of the equation: newer technologies. Other factors apply as well, such as the age old one: customer service. The only thing a dealer can do is differentiate himself from his competitors. If perception is king, then the first two factors crown the best perceived dealer (as always). Of course marketing and processes also play in, but the exact formula is too elusive to put on paper right now. Technologies are constantly changing and, in my opinion, we are still in what I like to call the "CSI Revolution". This is changing processes for the better.

The "CSI Revolution", as I define it, is the manufacturers' decision to have customers rate their purchase experiences and base incentives off of those responses. It is driving the industry to raise the bar on customer service, and may one day rate us higher than lawyers in public perception.

I come from a family of car people. My grandfather started Checkered Flag in 1964, and my uncle is next in line to take over the business. Over lunch the other day, my uncle told me when he first got into the business it was "like riding a slow bike: it was easy to keep a constant pace and if something broke it was easy to fix yourself. Today is like driving a car. You have to drive defensively and when (not if) something breaks you need help to fix it." His analogy speaks to the pace of the industry right now and sheds some light as to why some dealers are having difficulties embracing the technological changes amidst a "CSI Revolution".

In a nutshell, your question cannot be answered specifically. I believe it will come down to a combination of technology and customer service with a good marketing campaign to reel them in. However, I can't say whether this is a short term or long term solution. All we can do is stay on our toes and remain cognisant of the continuing changes.

 

[Former Dealer]

I just happened to stumble upon this site and have been reading all of the posts! I was a dealer/GM for 12 years and just recently switched careers so I wouldn't miss seeing my 2 young boys grow up!

My dealership was a relatively small import store. The last month I was there, we sold 62 vehicles. I was a tracking fool! If it happened in my store, I wanted to track it. My ISM, Sales people, and Sales manager told me that we had 6 "internet deals" for the month. What I didn't tell them was that my Finance Manager was interviewing the customer also. Her findings were that 29 vehicles were sold because of the internet!!! (21 from AutoTrader.com, 6 from Cars.com, 2 from Dealix). 2 Years ago when I took over that store I cancelled all print and radio, signed with ATC and Cars.com, and increased sales 42%!

My point is this...EVERY CUSTOMER IS AN INTERNET CUSTOMER! I have felt for the last 2 years that this was the case. E-mails and phone calls were down! Using the internet for consumers is just second nature. They don't need to call if they work or live within a reasonable distance of your store. I always felt the most important statistic you could get from ATC or Cars.com, were how many maps were viewed, or how many ads were printed.

Dealerships don't need "Internet Departments" any more. Dealers and GM's need to know that half of their sales are probably internet driven. ISM's, E-Commerce managers, and BDC directors, are constantly trying to justify their jobs by measuring e-mails and calls. If you are still measuring your internet success on those 2 factors...WAKE UP!!!

I certainly hope I haven't offended anyone! If I have I apologize. I really enjoy these posts and will keep reading. I do feel that on other threads there is a lot of bashing of 3rd party vendors. Some are warranted and others are not. However, the newspapers are the ones who have been raping us for years!

 

[Alex Snyder (blog)]

Former Dealer,

You say you're a tracking monster, but did you know you can take tracking even further? When someone does something on the Internet an IP address is attached to that thing they left behind. Even if you're just browsing a website, your IP address can be found.

I did a little tracking of you because of your statement that dealers don't need "Internet Departments" anymore, newspapers raping us, and watching the map views.....plus a couple of other things. It just all sounded so suspicious.

So "Former Dealer" whose name I will leave out....I know you work for AUTOTRADER.com.....I don't think I need to say anymore.