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J. D. Power and Associates: On the Road to Fixing RFQ
Posted by Amit Aggarwal at 2/26/2008 12:00 AM CST

Last December I posted an entry The Trouble with RFQs highlighting some fundamental problems with the new-vehicle lead submission process. One of the central issues is that new-vehicle shoppers have figured out the process isn’t worth giving up their personal information: they are too often ignored, harassed (i.e. placed on email lists), or pushed to come in to the dealership (which many are trying to avoid in the first place).

While there is no simple solution to addressing this issue, a major component is the amount of information requested of shoppers. kbb.com requires more information than most: name, email, address, phone, contact preference, purchase timeframe, model, and trim. Toyota.com is more frugal in its RFQ requirements: name, email, zip, and model. Dealer sites can also run the gamut, but my quick scan showed that they generally opt for less information.

Neither approach is inherently good or bad: instead, sites must gauge the tradeoff between lead quality and quantity. Requiring more information presumably results in higher quality leads and can help the salesperson better address the customer’s needs, but will also scare away others. Less required information should generate higher usage by reducing the barriers in the shopper’s mind, but may also lead more non-shoppers to participate.

Instead, it comes back to trust. Can the shopper trust the site, the dealer, and the process? And what can sites do to create a little bit more trust in the shopper’s mind? Here are some ideas:

Internet users are conditioned to be wary of emails lists and spam. If you offer a “Sign me up for your mailing lists” option, default to “no” so that shoppers can opt in. Defaulting to “yes” may be viewed by some as predatory.
No one charges for RFQ submission. Calling it a “Free Price Quote” is disingenuous at best.
Explain in plain English what’s going to happen when someone submits a quote request, how quickly they should expect a response (easier for dealers to do this), etc. Here’s an example from Subaru.
Avoid an overly complex process. Nissan puts users through a five-step RFQ process, whereas most require one to two clicks at most.
Don’t scare the prospect. Check out Mitsubishi’s disclaimer: “By providing my phone number I hereby consent to allow MMNA and/or its authorized Mitsubishi Motors Dealerships to contact me by telephone in conjunction with Mitsubishi Motor products, services or promotions.” How many of us are going to give away our contact details after reading this?
Offer Live Help. Among OEM sites, Chrysler, Dodge, Jeep, and Mazda allow shoppers to interact (chat, Web talk, phone) directly with a real live person.
RFQ is still a salvageable process, but as an industry we need to adjust the process to reflect reality – that privacy concerns and a distrust of the process are stunting the growth of online lead submissions. I’d be interested in any of your ideas or feedback.

Tags: (RFQ), Current, Do, For, How, Improve, Internet, Lead, Process?, Quote, More…Request, We, on, the

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For a 2 year period starting in August 2005 I supervised a team of well over 20 people responding to an avaerage of 5,000 Internet leads per month at a Chevrolet dealership. Many of those leads were RFQ's or some variation on a quote request. I watched and studied our process of providing a quote on the requested vehicle that the consumer had either selected from our inventory or had configured online, and then the Internet Sales Specialist would also fill in a grid showing 3 alternatives that the consumer might find interesting. The entire process was very mechanical and repetitious, and although the process worked, and would become more personal once a phone call was connected with the consumer or the consumer would resp0ond by email, the initial part of the process... Completing the quote request, is something that i always felt, and still feel should be automated using software that the dealer manages. What the customer initially asks for is a price quote, and as long as we are willing to deliver those price quotes, and accept the consumer's personal contact information in exchange for the Requested Quote on a vehicle, then we should promptly deliver that promised price quote before using the contact information tendered to connect a salesperson with that consumer. Again, the real problem is not attitude or even willingness on the part of the dealer... The real problem is the sheer mechanical and repetitious work of preparing price quotes for the consumer, and checking for alternatives that the dealership has available to offer as well. This part of the process can and should be made more streamlined and automated with the proper software installed by the dealer for their Internet Sales Manager to implement and utilize. Not only will the customer get what they asked for, it will be more accurate and served up in a far more prompt and consistent manner than the manual response processes we use today.

As most people on this community site know, I am a huge believer in the need to extend eCommerce capabilities to car buyers and let them use dealer web sites to begin and proceed as far along as they wish with an actual online buying process... HOWEVER, as I have been involved with the deployment and beta testing of Buy Online dealer web sites I have seen the metrics which indicate that many people still want to use the Request For Quote (RFQ) online lead generating process, so regardless of how many people use Buy Online, we will still be getting quote requests, and we will benefit from the ability to automate our reponse process at least from a perspective of the actual price quote and disclosure information.
This is the RFQ Post that Amit refers to in his article that I used to start this discussion: The Trouble with RFQs
Posted by Amit Aggarwal at 12/6/2007 1:37 PM CST

It is easy to be seduced by the promise of Request for Quote (RFQ). In the ideal scenario, the vehicle shopper has clearly signaled an interest in purchasing a certain vehicle, making them a valuable in-market, lower-funnel target. In reality, lead quality varies and it can be difficult to separate good leads from bad, while managing leads can be expensive for both dealers and OEMs. Indeed, fundamental problems with the entire RFQ process limit its effectiveness.

Although more new-vehicle buyers are using the Internet in their shopping process, the online dealer submission rate has not grown, and has in fact remained flat since 2004. Only one-fifth of new-vehicle shoppers submit RFQs, according to the J.D. Power and Associates 2007 New Autoshopper.com Study (Figure 1). Currently, the value proposition for the other 78% translates to Give us your personal data, and we might get back to you.


The online lead submission process for new vehicles is inherently different from that of other industries. The vehicle transaction cannot be completed online, so nearly all shoppers must visit a dealer. Consequently, the momentum of researching online is lost once the potential buyer contacts the dealer, because the dealer must learn from the shopper all the questions they already asked on RFQ via the Internet.

New-vehicle leads don’t generally create the emotional attachment to purchase a specific, unique vehicle. Shoppers who submit a new-vehicle lead often fill out a generic form with little more than requested make and model information. Since shoppers aren’t seeing actual photos online, there is less urgency to determine the availability of a vehicle that hasn’t been fully realized in their minds.

Used-vehicle leads, on the other hand, have a strategic advantage over new-vehicle leads: every used vehicle is unique. A shopper who submits a lead for a used vehicle is interested in a specific vehicle. Sellers usually post actual vehicle pictures that hopefully spark a real interest and possibly some emotional attachment. In 2007, in fact, 48% of used-vehicle AIUs found their vehicles online, up from 33% in 2004.(1) Having this connection also contributes to higher online close rates for used lead services—25% vs. 19% for new lead services.(2)

Improving the Online Lead System

The new-vehicle online lead system needs to improve if it is to grow. First, sales need to be better integrated. Don’t ask shoppers for information they’ve already submitted via RFQ—doing so is a waste of their time. Further, RFQ forms must move beyond the generic toward those that allow for specific information gathering. For instance, the Price Quote Request page from Dave Smith Motors (http://www.davesmithmotors.com/quote/) allows shoppers to specify a range of vehicle options, from colors to cab and bed preferences.

Second, make more easily available the information that shoppers are seeking. When a shopper submits an online lead, they are generally asking about availability and closer-to-transaction asking price on a specific vehicle. Although both are available online, not every shopper finds them. While many automotive sites accept RFQs, most independent and many manufacturer sites don’t show new-vehicle inventory. Dealer sites generally have both RFQ and inventory, but are visited by only one-third of AIUs, reducing their influence.

Finally, dealers themselves can take on more of the responsibility for generating their own leads (e.g. via Search Engine Optimization / Marketing) and reduce their reliance on third parties lead generation sites. By becoming masters of your own ‘lead domain,’ you can exert greater control over the entire process, benefitting both dealer and customer.

Online submissions and forms were first designed more than 10 years ago to address content deficiencies of Web sites. However, we now need to adapt to current-generation users. Shoppers will continue to filter services that go beyond the simple online submission by selecting those that provide more options and alternatives for communication. Meanwhile, the dealers whose RFQs ask for more online shopper data will have a strategic advantage over those who don’t.

(1) J.D. Power and Associates 2007 Used Autoshopper.com Study

(2) J.D. Power and Associates 2007 Dealer Satisfaction with Online Buying Services Study
There are many ways you can use online advertising to drive increased volumes of "self-generated" leads... Just remember this, learning how to become a good angler and eating fresh, wild-caught fish (your own leads) is a heck of a lot better than buying week-old farm raised and slaughtered fish (3rd party leads) at a Safeway Supermarket (lead provider)... IT may not be for everyone, but those of us who have done will never go back to being totally reliant on lead providers. Click on the image below to learn more:

Something I have discovered about quoting prices with Internet shoppers, is that when all the empirical research is done, the only lead response attribute that comes remotely close to making telephone contact in driving higher closing rates on Internet leads is sending a competitive price quote to the customer within 24 hours. Faster is better, and we still have the phone call as being critically important... But, all other response attributes studied, when matched back to RDR's within 90 days of a lead coming in, pale in comparison to sending price quotes to the consumer. The real question is not whether or not we need to send a "Request For Quote" what they asked for and were promised when they completed the lead form... THE REAL QUESTION IS HOW DO WE DO IT EFFICIENTLY! That's the dirty little secret that nobody wants to talk about... Preparing proper price quotes for customers, selecting alternative vehicle choices, pulling the numbers together and getting it all into the right spots in an email template can be a VERY daunting task when you come in on a Monday morning and see 24 new leads inside your CRM tool that are assigned to you!

In my opinion, the single greatest need for software development in the automotive Lead Management/CRM world right now is for streamlining and automating the mundane task of preparing a response to an RFQ lead... Every day we have ISS's and ISM's all over America repeating the same steps over and over that SHOULD be built into their lead management software as a "set up" using merge fields and whatever technology is available to take that repetitious brain damaging part of the job and simply make it easier...

At ADP, I am cheerleading and trying to convince people to take on this assignment, but it feels like rowing my Zodiac into the side of an Aircraft Carrier and expecting it to move. I have actually seen one of our competitors build something very sophisticated that accomplishes what we need as an industry, but right now it only works for Toyota dealers because it is all built out to the Toyota model number system. I would love to find a team of developers that would listen to this need and build the tool... Adam Simms is the owner of Sunnyvale Toyota and ran a VERY good Internet sales operation to begin with. He implemented the automated RFQ Lead Response system and their closing ratio went up by 4 percentage points... On 2,000 leads a month that came in as an 80 unit sales increase. Although he spent a ton of money building the system, he says it generated incremental sales whose profits covered all his costs within 4 months.

Now, THAT'S what I call a "Solution" to a problem using technology!

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