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Have any of you have seen a study that establishes what percentage of 
internet inquiries actually buy the same vehicle they inquired about?

My guess is that it is much lower than most people think, under 40% and would be similar to incoming calls.  Do any of you have any thoughts and also any substantial data or studies to validate the actually results.

Also thanks for all of you that became inspired enough to watch and comment on my "You Can't Handle the Truth" Video.

Grant Cardone

Tags: appointments, call, conversions, incoming, internet, inventory, sales

Views: 591

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Ha! Thanks Tom! :)

Hey Grant, here is the best I have found. Like Ralph said, many reports claim hard facts but there is so many things that can impact a case study like this. One being how data is recorded, and dealers willing to give it out. Remember if they have a high percentage of customers that inquired about one vehicle, but bought another, that leaves them open to bait and switch charges.

The best and I think the only way to truly get the closest somewhat accurate study would be for all the lead providers to hook up with RL Polk and cross reference the data. This I think is the most accurate way to get a lot of good information. Report below

Dealer-Related Issues Affect Car Buying Decisions
Sales performance can make or break a potential purchase

September 29, 2008

• More automotive news ...

Car makers spend millions of dollars to get you to visit a dealer to see their product, but dealership turn-off is among the top reasons many consumers walk off the lot without buying a new car.

In fact, the J.D. Power and Associates 2008 Escaped Shopper Study finds that the majority of vehicles are rejected only after a new-vehicle shopper has visited a dealership.

The study, which analyzes the reasons that consumers consider a model but ultimately purchase a different make or model, finds that 80 percent of vehicles are rejected after a new-vehicle shopper has visited a dealership.

Three dealer-related issues are among the top reasons for not purchasing a vehicle: another dealer has better service; limited availability of the specific vehicle shoppers are looking for on dealer lots; and lack of professionalism among personnel at the dealership.

"Given today's challenging automotive market, both sales and service experiences at the dealership are particularly critical in the decision-making process of shoppers," said Tom Gauer, senior director of automotive retail research at J.D. Power and Associates. "Sales personnel can play a key role in improving close rates by viewing customer visits as an opportunity to demonstrate a vehicle's value and by successfully matching shoppers with the new vehicle that best suits their needs."

The study also finds that an increasing number of shoppers have considered buying an Asian brand -- 63 percent in 2008, up from 60 percent in 2007. Conversely, the proportion of shoppers who considered buying a domestic brand has decreased - dropping to 55 percent in 2008 from 58 percent in 2007.

Shoppers who cross-shop among Asian and domestic brands are more likely to purchase an Asian brand and most often cite retained value, reliability and gas mileage as primary reasons for their choice. In contrast, those customers who purchase a domestic brand instead of an Asian brand most commonly cite a desire to "buy American" as their primary reason for purchase, followed by rebates and incentives offered, and vehicle price.

"As shoppers move away from larger-vehicle segments in growing numbers, domestic manufacturers -- more so than Asian and European manufacturers -- must focus on rapidly aligning their U.S. product portfolios with this shift in consumer preferences," said Gauer.

The percentage of shoppers who cite gas mileage as a reason for rejecting a vehicle has increased in 2008 -- to nearly 20 percent this year from almost 17 percent in 2007. Unsatisfactory gas mileage is the third-most-common reason to reject a vehicle, with particularly high rates of rejection in the large, midsize and compact utility vehicle segments.

Close to 40 percent of all new-vehicle shoppers cite price as the most influential reason for not buying a vehicle. Additionally, nearly one-half of shoppers 40 years of age and younger reject vehicles based on price- or finance-related issues. In contrast, only one in three shoppers who are 60 years of age or older reject vehicles for the same reasons.

"Interestingly, nearly 40 percent of all shoppers who reject a vehicle because of price say they can afford the vehicle, but don't believe the vehicle is worth the price," said Gauer. "This presents an opportunity for dealership personnel to focus on demonstrating the different features contributing to the vehicle's total value to these shoppers, which can eventually lead to increases in close rates."

The 2008 Escaped Shopper Study is based on responses from 29,903 new-vehicle buyers surveyed between May and July 2008.

Read more:
You are right on Grant. 35% as a Metric for our 7 rooftops and 10 franchises
No matter what the number is, ultimately a salesperson's abilities will have a bearing on that number. A good salesperson will find a way to switch the customer when needed. At Phone-up Ninjas my staff will listen to over a thousand inbound and outbound calls per month. When a salesperson takes the time to inquire about other vehicles and they do it in a manner which gives the customer a reason to do so, they will often find flexibility with customers.

Here are just a couple of examples:

"Is it specifically that vehicle you're looking for or would you be open to other vehicles in that price range, especially if I had something really nice and could save you some money?"

"If I had a really nice (voice inflection) BMW or Lexus, would you also consider looking at one of those in addition to the 2007 Acura TL you called in on?"

"If I could save you some money, would you be open to a second or third color choice?"

Now if a salesperson is not willing to explore other opportunities, well then the switch rate is not going to be very high.

A higher switch rate is something you earn!

Jerry Thibeau
Phone-up Ninjas
While we don't have real evidence of the number of "alternate" choices to the unit of first inquiry that are purchased, we at CallRevu can tell you that nationally the dealer's actual phone process indicates a belief that the vast majority are only interested in that unit, and need every detail to be provided- including no profit pricing! As always the most profitable dealers we are engaged with follow the best practice of "opening the bucket" to alternatives in the first exchange, e-lead or phone call


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