How did we get here?
Today, we will dig into the current state of leads in the Automotive industry and take stock of historical norms and how they are fundamentally at odds with the modern car buyer. I will start with an unpopular opinion, over the past decade dealers have become lazy when it comes to acquiring new customers. We have enjoyed the fruits of a massive technology shift in the industry. Almost every dealer now has a website, uses social media, lists vehicles on various third-party websites, and leverages software to connect all these different tools. Everything at a dealership has become connected at scale except for the communication with customers.
Sure we have CRMs that index customer PII information and we can leave notes, but how many sales reps do this religiously? Regardless, CRMs are far from true communication and the industry has become so reliant on these systems that we refuse to adopt new technology unless it integrates perfectly with the dealership CRM and has perfect attribution. Now attribution is a whole nother topic we should discuss in the future. All I will say is this, how long has it been since this industry had anything close to perfect lead attribution? I digress. Since we have been so reliant on CRMs for the past decade, we have tried to take new technology and repurpose it to fit the construct of a CRM.
Here is an example, if you use a chat widget on your website, how many of you use bots to collect PII information or do you direct your BDC reps to do so as their sole objective? What have we done here? We have created more steps and more friction for a buyer to fill out a lead form, for the sole purpose of easily pushing said lead to the CRM. Why does the modern car buyer love live chat? I’ll give you a guess, it’s not because they love filling out forms just to move the conversation to phone or email. It’s so that they can get answers to questions quickly and without the commitment of having their contact information in the CRM itself. The CRM is why 92% of consumers give the highest satisfaction rating to live chat, not phone or email.
If you haven’t yet read the article in this series from Saturday, I suggest that you do that now here, as there is valuable context on the new role dealerships play in the car-buying journey.
Definition of a lead
Bear with me while I state the obvious to build a foundation for the rest of this article. We need to take a step back and define, at a basic level, what a lead is to a dealership. I am sure the majority of you reading this think the same thing I do when you hear the word ‘lead.’ You think of a prospect’s name, phone, and/or email in a neat box on your computer screen. I don’t blame you either. This is what a lead has been defined as for years, but is this definition appropriate in today’s landscape?
I would argue, no. We need to modernize our definition of a lead to the following, the opportunity to communicate directly with a prospective buyer at least one time. Notice a couple of things, we have the opportunity to communicate with the prospect, not the right, this puts the responsibility on each dealership to take advantage of said opportunity. Second, there is no reference to customer contact information or continuous follow-up.
As I mentioned in the article on Saturday, the modern car buyer needs to be wooed. In other words, dealerships need to earn the right to ask for contact information or to set a follow-up appointment. How do we suggest doing this? By providing an outstanding customer experience in your first interaction with the buyer - live chat, phone call, etc. - and building rapport. Remember, dealers are no longer winning business on their price point, they are winning business and gaining buyer attention by the customer experience they provide.
The ‘Bad Lead Trap’
Many of you are reading this article and the mention of live chat or text messaging causes you heartburn. I have heard all the excuses in the book from dealers, “there is always something more important happening right in front of me at the dealership,” or “texting and live chat are extremely time-consuming, my staff doesn’t have time for that.” I agree with both of these points, however, I want to illustrate that the traditional lead strategy of following up with lead forms via phone and email is costing your dealership more time and money than meeting the modern buyer in their preferred mode of communication.
Let’s unpack the following example, your dealership receives 250 leads a month from various channels and 100 of them are bad. We define a bad lead as a contact that was non-responsive after many attempts by your dealership. On average, over the course of weeks and months, the typical follow-up strategy of phone calls and emails will typically take ~10 minutes of total time when you add up the time it takes to dial and leave a message 10-15 times and send another 10 emails. Mind you, this is a conservative estimate, many dealers spend much more time than 10 minutes attempting to make that first contact.
100 bad leads X 10 minutes each = 1000 minutes per month
1000 minutes = 16 hours and 40 minutes
I must admit that I did not come up with this simple, yet elegant analogy on my own. Truth be told I cannot remember where I saw it, so if this is a product our your original work please let me know and I will update this article with a link to your own.
The truth is plain as day, over 16 hours wasted each month on bad leads; so, again I will ask, is live chat really more time-consuming than that. Remember this is only to make initial contact with the prospect, the calculation does not include the time spent conversing and building rapport which must take place on any mode of communication.
How should you prioritize leads?
After reviewing the ‘Bad Lead Trap’ above, the first suggestion in an effort to prioritize leads is historically taboo in any sales environment. Trash bad leads early. Stop spreading countless hours each month following up on leads that are never going to pan out. The number 1 reason that consumers report giving fake contact information on lead forms is to protect their privacy. In other words, the consumer journey they were on forced them into giving contact information to move forward in the process. I will refer back to chat widgets that’s sole objective is to collect contact information, it only makes the process more time-consuming and frustrating for the end consumer.
Another strategy to try with lead forms is to text the prospect back right away rather than calling; remember the preferred mode of communication for the modern car buyer is text-based messaging. One of OfferUp’s closest partners is managed chat provider Hammer Co. Last August I sat down with Jon McIntyre, then COO of the company, and he shared with me their new Universal Leads product wherein their managed chat agents immediately responded to dealership web leads via text rather than a phone call. The results? They found that prospects were 80% more likely to respond from a text message than a direct phone call. That is a massive improvement that has translated to a significant increase in sales for their dealers.
“Customers expect my sales team to be available instantly to chat or text message. It’s not realistic.”
Do we really treat web leads or phone calls any differently in terms of the immediacy we attempt to respond to them? Direct phone calls are the easiest example, if you don’t pick up the phone then you miss out on that leads, simple as that. As for web forms, it is industry standard to hold our sales teams accountable to answering those within 5 minutes of receipt. Further, how do we train our reps to respond to web leads? Give the prospect a phone call right away and follow up with an email whether you connected with them or not. Why do we keep defaulting back to phone calls? It is no longer 1999 when we answered every phone call to our mobile regardless of if we knew who was on the other end. Consumer preferences have evolved to live chat as the preferred method of communication, it is time our industry adapted with the times and met buyers where they are.
Furthermore, dialing phone calls and drafting emails are extremely time-consuming for salespeople. How long does it really take to respond to a text or a live chat? 10 seconds? 20 seconds at the most? And once they respond to a message your team is free to return to the task they were already working on. Use live chat and other forms of text-based messaging to your advantage. Consumers love it because it allows them easy access to information experts - your salespeople - while retaining some level of control in the conversation. Your salespeople have the opportunity to disqualify leads faster if your dealership doesn’t have a vehicle that fits the buyer’s needs rather than wasting weeks trying to connect via phone or email. Better yet, text-based messaging allows your team to offer a customer experience that is head and shoulders above your competition, build true rapport with customers and earn trust-based influence to win more sales in the future.
I will leave you with a final point to chew on, 93% of consumers say that online reviews influenced their purchase decisions. Customers don’t leave reviews based on how frequently your salespeople called them, they leave reviews based on the customer experience your team provided, good or bad.