Responding to Digital Leads
Part III: Process and People?
In Part I of this series, I discussed a recent 20-Group exercise where I submitted online inquiries to dealers in two different industries and reviewed the quality of the responses received. Part II of the series detailed some of the major problems that were uncovered during this process. Here in Part III, I’ll cover the first two types of responses to a digital lead.
I’ve now quizzed over 100 dealers on their personal feelings on the use of auto-responders (as experienced when they shop online). Oddly enough, while roughly 60% of dealers don’t like receiving these responses, about 75% of the dealers I have digitally shopped employ them. Of those that use auto-responders, onlyu about 10% of dealers have customized the messages.
While I haven’t rigorously tested these, here are a few questions to ask yourself. If you answer “no” to any of them, then I’d recommend that you set up and use an auto-responder.
- Do we consistently follow up on leads within one hour of receipt (received between 6:00 AM and 10:00 PM)?
- Do we follow up on leads on days when the dealership is closed (weekends/holidays/etc.)?
- Are we the only dealership in our marketplace, the only “game” in town?
Not every website provider includes the ability to customize the outgoing message, but if your provider does, take advantage of that capability. Here is a list of content you might include in each response:
- Thank the customer for choosing your dealership.
- Set expectations for when your customer will receive a personal response.
- Provide a little history about your dealership. If there is something unique or special about your operation, be sure to point it out.
- Highlight your Google Review status if it’s higher than 4.0, pointing out how customers appreciate doing business with you. (If your dealership has a ranking of 1.4 stars on Google then we need to have a separate discussion).
- Provide links to help the customer, such as:
- Online finance application
- Towing services (especially helpful when you are closed)
- Include a map and directions to the store, or a link to an online map.
- List alternate contact information.
- Phone number
- Fax number
- Key personnel and their email addresses
- Include your hours of operation.
I’m sure you get the idea. Each dealership has a personality. Make your auto-response a reflection of who you are and what you are about. If there is one thing I wouldn’t include in the auto response, it’s a copy of the original lead that was submitted to the dealership.
Over the years I’ve seen a multitude of different ways to distribute leads:
- Fully automatic/round robin
- Manual distribution (hopefully based on the product knowledge of the sales associate, instead of who the sales manager isn’t mad at on that day)
- BDC (Business Development Center) appointment setting
- The non-response response. This is when the dealership never even responds to the customer lead. (This one is my least favorite, but a lot of dealers employ this method.)
Since I haven’t said anything controversial in this article yet, I’ll go ahead and get that out of the way. I believe 75%+ of your sales staff are NEVER going to do a good job of following up on digital leads. The skill set required to work with a customer face-to-face on the showroom is different than the skills required to build a relationship through email. Think about how younger generations now communicate: through text and emojis, 140/280 characters at a time. Couple that with the fact that most dealerships have conducted zero hours of digital lead training with their sales staff, and you have a recipe for failure.
If you are unwilling to change your process, if you are going to continue to equally distribute your incoming leads among all the sales staff, if you aren’t going to set expectations and then train the sales personnel to a set standard, if you aren’t going to monitor what sales associates are sending the dealership’s customers in their email responses, then be willing to accept that:
- Your closing ratio on digital leads is going to be less than 50% of a high-performing dealership that focuses on the incoming leads.
- You are going to need to spend more money on advertising to generate additional leads.
- A large percentage of customers are going to have a poor first impression of your dealership.
- Your competitors are going to sell those vehicles.
Maybe I struck a nerve. Hopefully you catch my drift.
We’ve finally made it to the first real email to the customer; now we must make a very important decision. Do we want this to be good deal for the customer and a profitable deal for the dealership, or do we want it to be a bad deal for the customer and a low-margin deal for the dealership? Low-margin deals aren’t going to cover the expenses of a world class dealership, premium employees, ongoing training, computerized diagnostic tools, etc. While the customer will save some money on this deal, in the long run low-margin deals don’t benefit anyone.
While I do work with some dealers who operate on the low-margin/high-volume model, it’s not always the easiest way to operate a business. These dealerships can have higher staff turnover and reduced customer loyalty. Due to high inventory levels and increased flooring expenses, these dealers also have significantly more exposure should the market make a reversal (2008 should still be fresh in your memory).
If you decided to go the profitable deal/happy customer route, the very last thing we are going to discuss with the customer is the price of the vehicle. The first thing we are going to talk about is anything except the machine the customer showed interest in.
I’d also like to point out that there is no reason why you can’t treat an internet lead just like you treat a customer who walks onto your showroom. Most of you have a 5-,9-,10-,13-step sales process. There is no reason why you can’t use that same sales process with your online leads. When a customer walks onto the showroom the sales staff are trained well in advance (or they should be) to slow the process down. Why should an internet lead be any different?
Customers enjoy dealing with people they like (and/or) someone they know, so our goal should always be to start off by building a relationship. If we are lucky, the lead from the customer included some common ground we can build on. If it didn’t, an alternative starting point could be to build some value in the company. I’ll give you a couple of examples.
Sample lead from Billy Smith to Kansas Agriculture Farm & Implement Company (KAFIC).
“Dear KAFIC, I recently purchased an additional 200 acres of property just outside of Kansas City. I plan to grow some hay on this new addition. My current tractor isn’t large enough to mow the new fields, and so I’d like to get a price on a new 150HP tractor with a mowing attachment…”
Sample Response 1 – Relationship building
Thanks in advance for taking the time to reach out to KAFIC. Congratulations on your acquisition of the new property. I’ve lived in Kansas for the last 18 years and have a 15-acre parcel where I raise a few steer and sheep. Eventually, I’d love to be able to purchase some additional land, so I can expand my operation.
I see from your inquiry that you are located just off County Road # 123, by chance do you know Mr. and Mrs. Clarence? …………”
Sample Response 2 – Building value in the business
Thanks in advance for taking the time to reach out to KAFIC. I see you are interested in a price on a new 150HP tractor. I’ll be happy to get you that information, but first I’d like to know a little more information about your operation. Can you tell me which implements you will be using with the new tractor? Are any of them going to require a PTO, or is everything towed?
I’m not sure if you have had the chance yet to visit KAFIC, but I’d like to tell you a little about our company. We’ve been in business for the last 64 years, and we are still family owned and operated. We are located on 14 acres of property, to the west of I-29, and we are your local Ford and Case/IH dealership. We just started receiving the new smooth-shiftTM series of tractors, and you wouldn’t believe how much nicer they are to drive. Would you be able to find time in your schedule to come by to take a test drive?”
As you can see from the examples, the focus is on either building the relationship with the customer or building up the value of doing business with KAFIC. Once we focus on this key step, margins and customer satisfaction will both improve.
If the customer is adamant about receiving a price, then you can always provide a range, but don’t back yourself into a corner. Be sure to qualify why you are giving a range of prices (different brands, different features, etc.).
In Part IV of this series, I’ll outline other components of the first email to the customer, and I will let you know how you can receive Spader’s “Email Response Checklist.” If you are interested in a real-time discussion of these topics, then be sure to follow these articles on Spader’s LinkedIn site, where I’ll respond to your questions.
Thanks for your time.
Mark J. Sheffield