The right people to ask would be the CFO and VP of sales at Checkered Flag. I'm not sure why it went away. I can only recall each General Manager making store/brand-specific arguments as to why they needed more money. It led me to hypothesize it was too much to manage.
Traditionally, the closing rates on internet leads have been stated as 7%. That's been the number for nearly 2 decades. "7 out of 100 leads will buy a car from you" is what we've been told.
Now, let's look at learnings that have not been as publicized over the past 4 years, but we are fortunate to have [USER=4107]@jon.berna[/USER] at Driven Data to help us out with (using CRM & DMS data):
- 70% of internet leads are responded to
- 16% of internet leads communicate after the initial form submission
- 5% are closed
Out of 100 leads, 70 get an email or phone call from the dealer that is logged in the CRM, 16 of the customers attributed to internet leads show an email response, phone call connection, or meeting in the CRM, and 5 out of the 100 show as sold. That's pure data.
Now, let's look at what probably happens:
Out of 100 leads, 30 are deemed not worthy of a call or email immediately due to some sort of fictitious data entry by the customer (noemail@gmail.com). Another 30 are eventually marked lost because they're nonresponsive. So now we are down to 40 leads that are actually worked. And this is where we hear about internet departments doing 12%+ closing ratios because they'll sell 5 of those 40. It is still 5 out of 100 leads being sold. Does this logic make sense?
As for the 16% conversations, here's another way to look at it: 20 to 30% of the internet leads we talk to are closing. It stands to reason the best way to move the needle is to have more conversations.
