Increase Your Closing Ratio by 20%

Time-honored strategies can still have a profound impact in the Digital Age.

July 2015, Auto Dealer Today - Feature

by Mark Stringfellow

Time-honored strategies can still have a profound impact in the Digital Age.
Time-honored strategies can still have a profound impact in the Digital Age.

Lately it seems that every article you read about the automotive industry details “transaction-ready” buyers with new companies springing up promising these shoppers an experience handled entirely online, from financing to delivery. These new players are even casting aside the idea of a test drive. They say it’s an antiquated practice buyers no longer have any interest in and could even create an impediment to the sale. They are arguing that modern car buyers want the entire process done online. Oh, and, by the way, they want it to take less than an hour.

I don’t debate that shoppers are coming to showrooms more prepared than they were even a year ago. Recent statistics show car buyers are spending an average of 18 to 20 hours researching vehicle information and inventory online before they even set foot on a dealership floor. But I truly believe what these consumers want and are pushing for is not an entirely digitized road to the sale, but rather a more efficient and streamlined vehicle transaction process.

The question surrounding this new type of buyer isn’t “How can we cut out the dealership experience entirely,” but rather, “How can we best accelerate the sales process?” It’s a question dealers and OEMs worldwide are devoting large amounts of resources to as they struggle to figure it out, but I believe the answer is actually quite simple: manager involvement and, yes, test drives.

Get the Manager Involved

I know it sounds simplistic, but the dealers I work with who have incorporated manager introductions into the sales process are seeing a 20% bump in closing ratios. On a typical walk-in, a deal with no introduction closed at 17%. It closed at 29% with a test drive (more on that below) and, if a manager introduction was made, the numbers jumped to a whopping 38% close ratio.

Those numbers are even higher with appointments. An appointment has an average closing ratio of 44%, which jumps to 58% when the customer takes a test drive. And when a manager is involved, these visits close at 62%!

The message is clear: By taking a few minutes to get managers involved in the process, you can increase your sales ratios by more than 20%.  Want to see these numbers go even higher? We’ve found that involving a manager early in the sales process increases these ratios by a few more percentage points.

Test Drives are Not Dead

All this talk about transaction-ready consumers has led some dealerships to assume the test drive is no longer necessary, but nothing could be further than the truth. If your gross is low, it’s because your test drives are not happening, period.

Without a test drive, people are not touching and experiencing the vehicle, and in turn they do not perceive value. If they don’t perceive value, the negotiations take longer. It becomes more likely than not the customer will walk away from your dealership or there will be no gross. A dealership’s best way to build value for the vehicles they are selling is the test drive, and it is also the one thing no shopper will never be able to do online.

The numbers don’t lie: We have found that test drives increase closing ratios dramatically, by more than 10% with new guests and almost 15% with appointments.

It’s true that today’s buyers want a quicker process. But the dealerships winning the sales, referrals and loyalties of those consumers are finding that speeding up and streamlining the process actually comes from better educating consumers on the value of the vehicle they are interested in purchasing, as well as the value the dealership brings to the table.

Consumers who understand both of those things, on average, spend less time on negotiations and are often are better F&I candidates as well. The entire process becomes easier, less stressful and more satisfying for everyone involved. And that is what consumers are really searching for: a car-buying experience that is relaxed and easy, ending with them driving away in a vehicle for which they believe they paid a fair price.

Knowing you can increase your close ratios by as much as 20%, it’s time to stop looking for ways to cut people out of the process. Get back to the basics and focus on delivering an enjoyable customer experience.

Mark Stringfellow is vice president of sales at The Next Up and a 14-year veteran of the automotive software sales, consulting and management industry.


  1. 1. Brent Abdulla [ July 25, 2015 @ 12:32PM ]

    A manager meeting a customer early in the process, if not at the meet and greet can set the tone for a wonderful experience. This lends credibility to the sales person, the process, and the dealer's reputation in the marketplace. I have always wondered why most dealerships have their highest paid front end people sitting behind a desk and not talking with their greatest asset, the customer. That is how most managers ended up sales managers, is by being good communicators and having relationships with their customer base. Sales people love it! Customers love it! It's a behavioral change that will take time, discipline and most importantly action! Just do it!

  2. 2. Donna Mylott [ July 26, 2015 @ 03:51PM ]

    I concur 100%! I like the way Steve Stauning says it in Creating an Appointment Druven Culture. Every person with Manager in their title should become deeply involved once the customer has set an appointment. The day of the Desk Manager is gone so come on you guys remember how we used to love that customer interaction? Well it is still fun so there are numerous advantages to this process. Thanks for sharing.

  3. 3. Fred Kestler [ March 31, 2016 @ 10:31AM ]

    Hi Mark, I love your article on closing ratios. I just want to know when you say introduce the manager to the sales process how does work like... when, where and how do the salespeople do that. I'm so glad to see that someone else doesn't believe that people can be cut out of the buying process.

  4. 4. jim frank [ September 16, 2018 @ 02:54PM ]

    Good stuff. So you go in to consult with a Dealer. How do you implement these changes. What is your training process to make sure that they implement your reccomendations. That is really the biggest challenge, as you know. otherwise it is consulting fees down the toilet.


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