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It's 2019. What is a good Web Lead Close Rate? [Insert "yeah but our leads are different" here]

Discussion in 'CRM, ILM, Chat, Desking, Emails, Phone, SMS' started by Dan Sayer, Apr 24, 2019.

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  1. Jason@nabthat

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    Great topic.

    I am a big believer in "deconstructionism" and this has led me to believe that leads = sales. The more exclusive the lead is the higher the closing rate, i.e. dealer website leads. In the deconstruction model of a car sale, two pieces of the "sale" are left on the table - The Consumer and The Vehicle. The Vehicle is somewhat of a commodity (especially new), but the customer is the key to any potential sale. Therefore, and in my opinion, Leads (customer information) that can be acquired with as much exclusivity will have the highest closing rate. Dealers should be focused on generating as many "exclusive" leads as possible and then focus on processes; Appointment Sets, Show and Closing Rate.

    Here is what we see from our dealers:

    Dealer Website Closing Rate: 15%-22%
    3rd Party New Vehicle Leads: 3%-7%

    Appointments Set (Dealer Website): 60%-70%
    Appointments Set (3rd Party Leads): 30%-40%

    Shows (Dealer Website): 40%-60%
    Shows (3rd Party Leads): 20%-30%
     
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  3. craigh

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    What is the definition of "Closing rate" here?
     
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  4. Jason@nabthat

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  5. Dan Sayer

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    Assuming "Lead" is any ADF/XML import with a Name and one valid contact path (phone and/or email), correct?
     
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    @Dan Sayer@Dan Sayer

    Correct
     
  7. Dan Sayer

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    To emphasize the variation in "Bad" lead interpretation here is a perfect example.

    Yesterday, a friend of mine, who is a BDC director for a large group in a major metro, called me. He was calling to request some OEM data from me but I took the opportunity to pick his brain. Great guy, and doing a great job, but is fairly new to his role. (and if he reads this, feel free to correct me if any of my recalled facts are incorrect) He said they currently have a 16.5% close rate on 1100 leads with 91 sold this month. *insert question here* He is touching every single lead initially to make sure the first response is quality. He was concerned about his 23% Bad Duplicate (VinSolutions term) number wondering if that was too high. My point to him was that is a metric you can't really control or manipulate so chalk Bad-Duplicate leads up to the price of doing business (but they indicate a pretty low funnel shopper). That leaves 847 leads left. My next question was how many Bad-Other leads were there. He didn't have that number upfront so I just asked him how many leads are Bad in total? He said 50%. So that would mean 27% of his gross leads are being marked as Bad-Other. When asked what defines a Bad Other for them the answer was fairly typical "no intent to buy, didn't respond, etc". The first two are the ones that concern me. "No intent to buy", to me, is the digital equivalent of a lot-up that says "just looking" or "just driving through". You have to know what to say in order to offset that objection. To me those are Lost Leads if you can't overcome it. The "didn't respond" to me is also not a Bad lead, it becomes a Lost Lead which would allow me to still add them to my email marketing list for future opportunity, including fixed ops. In our group, I have a 10% Bad-Other limit. Most stores in the group are at the 4%-8% range now. Prior to my return they were in the 20-30% range.

    So, back to the math, he has 1100 gross leads with 91 sold and a reported 16.5% close rate. 253 are Bad-Duplicate and 297 are being marked as Bad-Other. If they were at a 10% Bad-Other rate (legit bad contact info, spam, service, etc) that would give them 737 "Good" leads. 91 sold from 737 leads is 12.2% (still pretty great for his area).

    This story really highlights the point of this forum post; what is everyone's definition of a bad lead? Not for the sake of comparison of the Lead Close rate but for the sake of confirming our industry's loose standards of reporting.

    What is your definition of a Bad lead?
     
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  8. joe.pistell

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  9. Dan Sayer

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    Yeah, @jon.berna@jon.berna what is the average "Bad" lead percentage you see from your roll-ups? Also, @joe.pistell@joe.pistell do you have a definition of what you consider a Bad lead? Am I being too strict in my definition?
     
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  10. Dan Sayer

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    Or, someone from Retail weigh in?
     
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  11. joe.pistell

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    Driven Data's Lead Quality Review on 5 Classified Marketplaces.
    • Good %
    • Contacted %
    • Appt Set %
    • Show %
    • Conversion %
    • Avg Gross
    • Avg Gross per Lead
    A very interesting study. You can see leads flow into the store and fall off
    http://content.drivendataconsulting.com/3rd-party-classified

    Dig deep! You'll see how many leads that DONT make appts, yet buy anyways :-) It's a BIG number!
     
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