Professional Community for Car Dealers, Marketing, Advertising and Sales Leaders
Greetings all! I just started a BDC here at the first of the year and would like some current input on what the industry standards are now. YTD we have had:
Int leads 826 incoming 330 apts set 214 apts shown 105 sold
Phone 270 incoming 104 apts set 89 apts shown 27 sold
Chat 82 incoming 41 apts set 28 apts shown 13 sold
Total 1178 leads 475 apts set 331 shown 145 sold
What current standards should I be comparing these to?
Richard! Thanks for reaching out on the here to the community!
A "base line" we like to use is the 4x60 rule. Depending on your location, pricing, how many leads you are purchasing vs organic, and competition in your local market area these might be slightly different, but basically for every 100 leads, 60 appts should be set. Of those 60 set, 60% (36) will show, and of that 36 that show 60% (13) will purchase. This will give you a 13% closing ratio. We have dealers well into the high teens low 20% consistently, but this gives a great baseline to measure yourself against.
What I see based on your numbers it looks like you can work your way up to a higher appointment rate as you are at a 40% total appt to lead. Your show rate is great at 69%, but given a low appt rate and high show rate, your team might be getting to far down the sales process funnel and not selling the appointment and experience the dealership offers. Lastly, your close rate is a tad low at 43% with your weakest link in phones, which typically phones have one of the higher closing rates.
The good news is you still land in the 12+% total closing ratio. Without knowing all the variables and just looking at the sheer numbers, focus on getting more appointments, and then pinning down why your show to close rate is low. This could possibly be the BDC promising too much, or not enough and when the customer shows up, they are disappointed. Possibly improvement on the BDC to sales handoff experience, or a kink in the floor in how they are handling the customer and sales process.
Good news - you are the right track. Even better news, get that up to 15-18% and you will be selling even more cars!!!! Hope that helps and please let me know if you have any other questions!
Thanks Marc! We have a company hosting are website and doing digital marketing. The only pay leads we have are autotrader and cars.com. I agree on the observation of too much being done on the phone. My staff is new with no sales or phone experience so the phone #'s should come up. Our process here is to have the customer ask for a named sales manager with the appointment vehicle already up front for drive and inspection. Our dealership close rate is consitently 30% plus (at least as far as the CRM shows) of people in the door. We do about 35% of total sales with subprime lenders so that may be a factor in low phone up close percentage. Our demographic is rural farm community. We have 5 new franchises with approx 250 used cars in 3 separate locations. I just wanted an idea of what others are doing in terms of connect rate on internet and conversion rate overall.
Richard - The one figure missing from your numbers is the contact rate with your internet leads. I backed into your contact rate by applying the 4x60 rule Marc mentioned and it appears that you are probably a little ahead of the 60% contact percentage.
In a recent conversation with a CRM vendor they indicated that across their platform they see about a 72% contact rate with internet leads.
The 4x60 is by no means the be all and end all, but what I like about it is that you are able to identify your area or areas of opportunity by comparing your performance to that benchmark. If your contact rate is in line but your appointment set rate is hovering around 40% a need to train your BDC agents to focus on setting the appointment is indicated.
Of course the reverse also holds true...if your show rate is pushing 70% then perhaps the BDC agents are only setting appointments that they know will show which means that you might be leaving some opportunities on the table.
Your question does also illustrate one of the underlying flaws within our industry which is that since everyone counts internet leads and attributes sales differently it is very difficult to set an industry benchmark. Working with what you have tracked internally and benchmarking against that for trends in performance as well as applying the 4x60 rule should be sufficient for you to gauge performance and make the necessary adjustments.
Good luck out there!
Thanks for the replies! This helps me alot as we move forward. Through the first quarter our connect rate on internet leads is 74%, this includes all leads recieved through the end of march. If I look at the numbers for just January and Febuary the connect rate is 77%. So march #'s brought us down which supprises me as we had a lower lead count in march than we typically average. I was basing my standards on an 80% connect rate, 50% of those appointed with 60-65% of those showing. Bottom line was 25% of total leads hit the door with 50% of those purchasing. I was using this as a minimum standard as it would net out 12-13% of total leads closing. I figured with the higher close rate on phone ups we should be 15-18% total. As you guys have noticed our phone up performance is sub par so we'll see how it goes with continued focus and training. Again, thanks for the replies! Any suggestions are greatly appreciated as we are a fledgling department!
I guess while we're on the subject, what should I expect from phone ups? I would expect a higher appointment rate for the phone ups but whats the industry standard? On an example of 100 phone ups how many appointments should I expect to see and whats the typical show percentage?
Well looks like you are closing at 12.7% on internet leads which I think is amazing for a fresh out of the gate department. I agree with Edward about looking at contact rate. I use simple figures by establishing that you should connect with a minimum of 50% of your leads (413), bring in 50% (206) and you are at 214 with 52%, and deliver 50% (107) and you had 105. You are there. Now that we established that you hit those numbers you need to fine tune your processes and the skills of your people to take these 50% figures to 60 and maybe even 65%.
With respect to phone traffic you should automatically go for an appointment and set 50% or better in appointments. This is where sense of urgency is required and proper word tracks. You need to sit down and evaluate your marketing and where the opportunities are coming from and create a custom game plan that is catered to your department. If you need help with that we should talk because it will make a huge difference. You have a strong show ratio which is well over 60% but you deliver around 30% of the phone ups. This tells me there are a few things you need to heavily look at.
1. Are you bringing in a lot of subprime? We already know that 35% is subprime and that will automatically lower your numbers. You have to work twice as hard to sell the same amount of cars because it can be a science project. However, it is opportunities and they make money.
2. Are the calls more for new or used? If used, how is your marketing and pricing strategy?
3. Are your sales people well trained to handle those particular customers or guests as we call them at Dealer eTraining?
4. Are guest expectations being exceeded?
5. Is it time to start to marry the BDC and the sales department together through training meetings? You will be surprised at how you will improve your sold percentage by almost 10% using this practice alone.
With regards to chat, you are doing it right and hitting good numbers. While I like chat I found challenges with chat similar to what you experience but you are doing great with chat so keep it up.
Overall, you are doing a great job. Since you established your minimum potential it is time to tweak process and train your people more serious skills. If I can help you in any way just let me know.
Thanks Stan! As mentioned we are new, I had been out of the business for 5 years after a 20 year career so I wasnt sure what was going on currently. You guys have been alot of help! Our salespeople were in the middle of the applied concepts training when we started taking the phone ups in Feb. so the BDRs have been recieving similiar training in regards to incoming phone ups. The #'s I see posted here are similiar to what I was using so at least I'm confident we are working in the right direction. This next quarter is where I expect big results so again, thanks everyone for the input and bulletins as they happen!