Received to Closed Sale" Ratio, yet certain 3rd Party Leads were being converted into sales at a far lower rate than our own marketing and advertising generated leads... The main problem I had at the time was leads we were receiving from Dealix, we also used AutoByTel at the time, but they were not as much a problem as Dealix.
Why? The volume of leads we were receiving from Dealix was high enough that the low closing ratios had a "Dilutive" impact on the overall department results. With over 300 Dealix leads coming in each month they were negatively impacting my department's overall numbers because the volume was high enough to drag down the average.
However, when I calculated results from Dealix leads from an ROI perspective, even though we were at 3.7% close rate on Dealix leads at the time, we were still netting a profit, so it was a very irritating situation for me and my team...
We were able to solve for this by isolating and then analyzing our results from Dealix leads, in a manner I believe you would benefit from in reassessing what to do with Autobytel. The analysis and reporting process I will detail is something that may or may not work in your store...
I will say right up front, this process is something I have seen work in many stores, but not in others, depending on how much the Internet Sales Specialists take the lead from beginning to end. In stores with BDC's, I find the following process to be less effective because of the greater consistency with which leads are handled.
Here's what I recommend you take a look at, because regardless of what you end up doing, for about 30 minutes of research you can find out whether or not you can sell a dozen more cars a month per store.
Here are the steps listed like a process work flow:
1. Pull each dealership's Lead Report for the past 24 months (or as far back as you have data) but filtered for ONLY the AutoByTel sourced Leads, sorted by Internet Sales Specialist. (Lead Source Report in BuzzTrack, WebControl and most CRM tools)
2. Export the report into a spreadsheet so it is easier to work the numbers...
3. Make sure you separate each salesperson into their own row or column.
4. Delete the rows for each salesperson who has handled less than 100 AutoByTel leads over the past 24 months, or the length of time you had data available.
5. Sort the remaining rows of Internet Sales Specialists by volume of AutoByTel leads handled over the time period, descending from most volume of leads handled to least.
6. Save that list and copy the tab into another worksheet in Excel, name the first tab "ISSxLeads".
7. Rename the second Tab "ISSxSales" and sort the Internet Sales Specialists by Total Volume of UNITS Sold from AutoByTel Leads over the Data pulled time period.
8. Copy the second tab into a another new worksheet and title it "ISSxCloseRate".
9. Sort the rows of Internet Sales Specialists by Close Rate as a Percentage of Units Sold divided by AutoByTel Leads assigned to them.
If the ISS that appears at the top of each worksheet's list is a different name, then you should reconsider your approach to ABT leads before firing them... Which, BTW, in my humble but experienced opinion, a dealership should never do... NEVER SEVER A THRID PARTY LEAD PROVIDER RELATIONSHIP COMPLETELY!
Let me repeat that statement and guidance; NEVER COMPLETELY SEVER A THIRD PARTY LEAD SUPPLIER RELATIONSHIP WITH YOUR DEALERSHIP!!!
If the lead provider is one of the majors, a legitimate company like AutoByTel, for example, it is almost always better to reduce the volume of leads you get from them by reducing the distance radius from the dealership, and then restricting the leads you are willing to buy to those models that you have historically done a better job of selling. Put ABT on a daily and monthly lead volume "cap" by tightening up the radius and models so that you are only getting leads from close to your dealership on models you do well with...
What we did with the process above was identify that there were two Internet Sales Specialists with over a 10% closing ratio on Dealix Sales Leads, while the rest of the team was at about 1%... After meeting with these two sales professionals, we learned they had a different process they used when handling Dealix sourced leads. We ended up routing all Dealix Leads to these two ISS's which meant that almost all the leads they got each month came from Dealix, with previous customers being the only exception. Within a single month, our store's close ratio on Dealix leads went from 3.7% to over 7.5% on right around 300 leads... OVER a 100% improvement in Lead-to-Sale Close Ratios!
If there were TWO management reporting and analysis processes that I could select as being the crucial methods I used to take Courtesy Chevrolet from an outstanding 60 to 75 Internet Sales each month to over 400 units sold each month, they would be:
1. "Intelligent Lead Routing" based on Optimizing the assignment of leads based on historical performance of each Internet Sales Specialist with leads from each source. BTW, I believe this process would work better if we could optimize lead routing based on lead characteristics, similar to the way lead scoring functions, but "scoring" each salesperson for likelihood of making the sale instead of scoring the lead!
2. Redirecting all unsold NEW VEHICLE LEADS to the Used Vehicle Sales Specialists when no appointment or activity is happening a week after the lead comes in... This ALONE was worth over 50 additional used vehicle sales each month when we were getting over 1,000 new vehicle leads each month with no response from the customers after a week.
The reason you should never totally "fire" a 3rd party lead provider is because you can always raise and lower the volume of leads you receive each month based on your needs and the market conditions. After you fire them, this ability to adjust lead volumes each month by management discretion is completely lost. I have used lead providers where I cap them at 1 new lead a day, or only leads within 5 miles from the dealership, reducing their volume down to 25 or 35 leads a month... And then, a miracle happens! The sales close rate skyrockets for that provider... Strange but true.
Rather than firing any 3rd party lead provider, restrict the parameters you will accept on leads sourced from them so that the leads received volume goes down and the quality, and sales close rate goes up.
That's my opinion, and this one I will take with me all the way, regardless of dissenting opinions from those that like to disagree with everything!…
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