Used Car Leads

[joe.pistell]

I just ran the numbers
Last 90 days at our 2 Lincoln, NE locations
69.8% of all leads either called or submitted a web lead - 31.2% walked in without a phone call or lead.

Last 90 days at our 2 Lincoln, NE locations
56.2% of solds either called or emails before stopping at dealership - 43.8% walked in and bought without a prior phone call or lead.

17.5% of walk-ins without prior contact purchased from us.
9.5% of phone or email contact purchased from us.


************* NOTE **************
I just thought of obvious issue with these number because a lot of customers are still in buying cycle in last 90 days. (Pending F&I, still shopping, deciding, etc.) I'll run these same numbers reaching back past the 90 or 120 days.

LEAD ANALYSIS p/100 leads
.....Email-call........Walkin
.....70..................30 <---Lead Mix
.....7....................8 <---# of sales created (Your Closing Rate)


SALES ANALYSIS p/100 sales
.....Email-call........Walkin
.....56..................44 <---Sales Sources


For every 100 sales, your store needs:
560 Emails/Phone calls*
165 Walkins**




*100 sales total, 56 are from email/calls. You have a 9.5% email/calls closing rate. You need 560 calls and emails to reach 56 sales.
**100 sales total, 44 are from walkins. You have a 17.5% walkin closing rate. You need 165 walkins to reach 44 sales.

 

[joe.pistell]

Chad,
There has been a lot of discussion on DealerRefresh on surveys to measure this. Your numbers are not typical of most of what I have experienced or read on here. If the 17.5% and 9.5% are closing ratios, I would be concerned.

Chad,


I'm with Doug on his concern on your teams closing ratios, more on that later. Uncle Joe Rule #44 applies here:

"The narrower your lead analysis gets, the wider your error rate will be. Beware making critical decisions keying on narrow data" ​

Chad, In the car biz, from my experiences, ANY lead sourcing info from your sales team that originates from a shopper discussion BEFORE the sales is made, IS JUNK.


If your team claims to have all of the data collection tools and processes in place, then you must audit it to see how much of this is "vapor-data".


You're in this industry, and watching the sales floor and phone processes are like watching paint dry, but, you gotta do it. Life is sloppy up on the sales floor. Reps and managers are rarely on the same page. A reps job is to win over the shopper via friendship and charm the sales manager too. Reps are paid to get cars over the curb and will beg, borrow or steal ANY technique to get that car burning gas. When it comes to your data, Reps will plug in any "required" data, much of it is false, just to keep the boss off his tail.


If your team decisions are based on "narrow data" from the pre-sales process, you must identify and flag any pre-sale data that originates from the sales team, then... go out there and watch it being collected in person and score it's quality.


A management team that has created a up logging system that records ALL incoming activity is very rare. If it is real, then the team must be HIGHLY disciplined. Everyone is trained and trained and trained again. Merchandising tools are around to assist this data collection, the system must REWARD reps and receptionists to record unfollowable lot ups like "I'm just looking", or phone ups like "what are your hours"?? IMO, your audit should begin with a focus on this class of shopper.


I am not chastising your management team or your staff, I am simply talking car dealer reality.


Here's why I think you're about to learn a very new lesson in our space. I agree with Doug that your closing ratios are very low. This is usually (but not always) a hallmark of a store lacking disciplines.


Again, this is based on what little data we have here, so this is not a full blown analysis. What this is is a discussion about how your data interacts with the organization and how dependent you two are on each other.

IMO, this comes from 2 possible areas. Bad data collection (Garbage IN, Garbage Out), or, potentially poor sales processes... or both. Conduct an audit and judge for yourself if the pre-sale data collection process is dependable.

Selling Cars is a TEAM SPORT.

 

[yagoparamo]

"The narrower your lead analysis gets, the wider your error rate will be. Beware making critical decisions keying on narrow data" ​

Quoting Joe quoting Doug,


That is the best way I have ever heard someone put the current analysis schema dealers use and why is so wrongful.

 

[ddavis]

I've never run the figures on what percentage of customers call or email before stopping in our showroom, it would be pretty interesting figure.

I believe that 90% of consumers begin their shopping on the internet. 65% will never call or email you prior to coming in your showroom.

Over the last 30 years, I have given a speech on the importance of sourcing hundreds of times. I can assure you, 99% of your sales staff, including managers, don't give a flying f#%k if it is done properly. That is why "drive by" is the most common source on most sales logs. This is also why, I elected to interview customers while they were waiting for F&I. I thought our internet department did a pretty good job sourcing. I found that most of the customers, that were sourced to our website, actually originated from Cars.com and AutoTrader.

Some things have never changed. By conducting an interview, I was able to set the stage for F&I, get sourcing information, and improve CSI by handling any issues the customer might have with our sales process (all things mostly ignored by the sales staff).

 

[joe.pistell]

Post sale interview, done at delivery is the cleanest picture of a buyers journey I've ever used. All high level questions. Shoppers get to choose multiple answers for one question

I've posted my entire post sale survey here and how I collected the data right here in the DR forums 1-3 years ago.

 

[csabatka1]

Here's why I think you're about to learn a very new lesson in our space. I agree with Doug that your closing ratios are very low. This is usually (but not always) a hallmark of a store lacking disciplines.

Closing rates in those figures above ARE going to be low because they are last 90 days. Some leads were just entering the sales process and were just hours or days old before I ran the numbers quickly. To get a more accurate closing % I have always argued going back a few months to determine closing rates because current 30 days and even previous 60 days customers could still be in the buying cycle process.

When presenting numbers to our GMs and owners I also include "Active" lead counts and "Lost" lead counts for sets of days (last 14, last 30, 30-60, etc.) and weeks back. I put a manual analysis on the Lost leads to see why they didn't buy from us. You can see the easy ones (bought elsewhere, pricing, selection, couldn't get financed) and enter those reasons as points for monthly discussion.

I know not every piece of data I include is 100% accurate, but we make it a point in training, plus with management that any piece of data is as close to 100% as possible. This is done for sold customers as they are waiting for F&I or for detail (if needed).

 

[ddavis]

Closing rates in those figures above ARE going to be low because they are last 90 days. Some leads were just entering the sales process and were just hours or days old before I ran the numbers quickly. To get a more accurate closing % I have always argued going back a few months to determine closing rates because current 30 days and even previous 60 days customers could still be in the buying cycle process.

I'm afraid that we are not on the same page. For simplicity, most dealers look at the number of leads they received, this month, and how many deals they closed, this month. Obviously, this isn't completely accurate but it is a number that we can use to compare.
As far as walkins, it is simply how many walkins that you had and how many you sold.

 

[csabatka1]

I'm afraid that we are not on the same page. For simplicity, most dealers look at the number of leads they received, this month, and how many deals they closed, this month. Obviously, this isn't completely accurate but it is a number that we can use to compare.
As far as walkins, it is simply how many walkins that you had and how many you sold.

As long as you use a consistent unit of measurement, you'll still notice trends and down times. But like you said could lead to inaccuracies.

I noticed one glaring problem area with this around Jan/Feb/March of 2012 for us and this was the main reason why I started calculating them differently. We had extremely warm weather and all-time record temps in Jan 2012 and had a HUGE increase in leads in Jan 2012. A majority of these leads then bought in Feb/March, but leads returned to their normal levels for those month. This made the close % inflate substantially for Feb and March.

 

[Matthew Danskin]

Quite the opposite for us with CarsForSale.com and it must largely have to do with region or your location. Around here it's cars.com and autotrader.com for 3rd party sites.

We had on average 450 vehicles listed on carsforsale.com. I recently did a ROI for digital sources and carsforsale.com had 3rd lowest cost per lead, but highest cost per sold (1 combined for entire year for 2 dealerships in Lincoln, NE)

We use cars.com and autotrader.com for our dealership. I use carsforsale.com and v12software to market our inventory personally. I you sell 1 car a year with a 450 car inventory, you are not using the site effectively. I would suggest letting 1 salesperson (not primary internet sales manager) manage the site, have their contact info on it and use it to market on craigslist. I would almost assume that whoever has control of it right now isn't using it. Rather than being a lot lizard, they can spend their time posting vehicles to craigslist or (once it is back) the wholesale network.

 

[Justin Cook]

What happens to a customer that went to cars.com then to Autotrader.com then to Craigs list than back to cars.com then to Carsforsale then to your website and called from there?

This brings up a great questions. For those who really have sourcing down, I am curious to know how you attribute credit for multiple sources/multiple visit website leads.

My experience is that the dealers who do a good job keeping track of sources usually use a “last source” attribution model that credits all past “touches” to the source of the last click. So if the last source is third party site like cars.com—they credit 100% credit for that lead. This type of model can make al lot of sense for 3[SUP]rd[/SUP] party sites, but it always underreports PPC and Organic effectiveness because many of those visitors come back later under direct traffic (credited as "direct") or through a branded search (credited as "branded" or "organic" depending on labeling) and fill out a form. Their first visit might have been sent via paid search under the keyword (*city Ford Dealer) but they came back 49 days later under a branded search in Google organic and filled out a vehicle listing form request for the car they wanted. Do you give partial credit to the original PPC campaign under a “first source” model (and keyword in last month’s PPC report) or full credit under the “last source” model?

Likewise, if you know that there is 80% overlap between third parties (80% visitors who bought a car used two 3[SUP]rd[/SUP] party listing sites), do you cancel one? Or do you beleive that both sources were “needed” for reinforcement to get the lead?

How about attribution by device (they visited you on the franchise website and then again on the mobile site where they called the mobile tracking number). Google will very soon have attribution by device in GA. If people really use “18.2” different sources (and I think that they probably do) we really need to think about how many other sources influenced them along the way. There of course is no correct answer here, I am just curious as to how you guys approach attribution modeling and why.