November 2015, Auto Dealer Today - Feature
Phone calls to dealerships are on the rise. They currently outpace Internet leads 4–1, according to ADP Digital. A reason for this is the marked increase in the use of smartphones with click-to-call functionality, coupled with the simple fact that consumers are no longer willing to trudge from dealership to dealership and instead do most, if not all, of their research online.
This fact is underlined by the mega spend of $6 billion on digital marketing alone by OEMs and franchised dealers last year. Interestingly, according to eMarketer, 35% (more than $2 billion!) of that was spent targeting shoppers who use mobile devices.
This signifies that OEMs and dealers are increasingly expecting car shoppers to use their smartphones during the research process, which may ultimately lead to a call to a dealership — in fact, research says 61% of mobile searches result in a phone call. This trend will reward dealers who take their ringing phones seriously.
Lighting Up the Switchboard
Unfortunately, a recent study we undertook in partnership with IHS Automotive showed that most dealerships aren’t making call management an operational priority. Using data from more than 500 dealerships, analysts found that 84% of consumers who purchase a car within 90 days of calling a dealership end up buying it from a different store than the one they originally called! This alarming statistic indicates that hundreds of sales opportunities are being mismanaged and lost.
Additional research shows that the average dealership (across all brands and markets) is converting fewer than eight in every 100 inbound sales calls into showroom appointments. Depending on the size of the dealership, this can mean a loss of between $30,000 and $60,000 per month in gross revenue.
So why don’t dealers take these calls seriously?
Based on conversations we’ve had with hundreds of dealers, I can tell you that most fall into one of two common responses:
- “We’ve always been bad on the phone.” Long before the Internet and the fax machine, when sales managers were calculating payments on 10-key calculators, there was the telephone. Accepting poor call-management practices as “normal” is probably attributable to the fact that phones have been ringing with prospective vehicle buyers looking for information as far back as they can remember.
In the past, consumers were much less informed, so they expected less and were happy to schedule appointments. The Internet changed this significantly, but call management at most dealerships has remained the same.
- “We have no way to measure our performance on the phones.” Unlike the digital sales channel where almost everything is tracked and measured (page views, VDP views, time on site, lead submissions, etc.), and traditional showroom sales where walk-ins are seen and accounted for, the phone lead is the only major sales channel that goes largely unmeasured.
Ask almost any sales manager what the objective of an inbound sales call is and they will tell you it’s to set an appointment. But they won’t be able to tell you how many sales opportunities came via inbound calls last month or how many were converted into showroom appointments.
If they could, they would likely conclude that they were experiencing unacceptable levels of lost opportunities. For example, our own research into the monthly call management results of hundreds of dealerships shows that, for every 100 qualified sales calls a dealer receives, the average dealer typically only converts seven or eight into showroom appointments.
It’s not that the dismally low call-to-appointment ratios are accepted by the dealership executives we speak to. Most of them are simply unaware of how bad it is.
It’s time to stop making excuses and start improving your call-to-appointment ratio. The top-performing dealers we work with consistently secure 20 or more appointments for every 100 inbound calls. It’s not magic, and it’s not the result of the perfect script. Track your calls and demand better results — for you, your sales team and, most importantly, your customers.
David Greene is the executive vice president of sales for CallSource Automotive. [email protected]