d automakers announced plans to conduct independent engineering tests of Takata's inflators. They also took steps to expand the recalls -- even though Takata said it isn't necessary.
Their actions made clear that they object to Takata's adversarial approach with U.S. regulators. And Takata has done itself no favors by failing to find the cause of the defects -- and by doling out information slowly to the media.
In Japan, Takata's top executives have avoided public appearances, adding to the growing perception of an out-of-touch company losing control of events.
On Tuesday, Dec. 2, Takata bluntly informed the National Highway Traffic Safety Administration that it would resist the agency's demands for a nationwide recall of its driver-side airbags. And that's when the roof caved in.
Taking the reins
Within 24 hours, customers, regulators and rival suppliers announced plans to take the following steps:
• NHTSA Deputy Administrator David Friedman vowed to hold hearings to force Takata to declare that its inflator is defective -- which would trigger a nationwide recall -- despite Takata's insistence that he does not have the authority.
• Autoliv, Takata's biggest rival, said it will produce some replacement inflators for Honda, even though Takata is adding two production lines at its plant in Monclova, Mexico.
• Honda Motor Co., Takata's biggest customer, will issue a nationwide recall to fix its driver-side airbags, despite Takata's insistence that it isn't necessary.
• Toyota said it would hire an independent engineering firm to test Takata's inflators, even though Takata has pledged to quadruple its daily test rate.
Five deaths worldwide have been linked to Takata's inflators, which can explode and send shrapnel at drivers and passengers.
To be sure, Takata has carefully avoided public disagreements with its customers. In an e-mailed statement on Friday, Dec. 5, company spokesman Alby Berman said Takata would cooperate with Autoliv and other suppliers as they ramp up to produce replacement inflators.
He added that Takata welcomed Toyota's call for independent tests. "Takata has always cooperated with its customers and will continue to do so," Berman said.
But there's a growing reluctance among automakers to leave it up to Takata to identify and fix the root cause of its defective inflators.
Last week, Honda, Chrysler, Mazda, Subaru and Ford each confirmed they would cooperate with Toyota's test initiative -- an indication that the automakers no longer trust Takata to identify the cause of the inflator malfunctions, says industry consultant Scott Upham.
"That was pretty damning," said Upham, principal of Valient Market Research, a consulting firm in Rochester, N.Y. "Takata's customers have given it a vote of no confidence."
Takata's ultimate fate rests in the hands of two key players: Honda and NHTSA.
While NHTSA's regulatory powers make the agency the key player in the short run, Takata's long-term prospects rest in large part with its biggest customer, Honda.
According to Valient, Takata produces as many as half of Honda's inflators worldwide. Honda has begun to ease its dependence on Takata.
Honda's decision last week to expand its regional recalls of driver-side inflators nationwide will add an estimated 3.2 million vehicles to its active recall list, which now totals 6 million.
Takata can't possibly provide enough inflators quickly. The supplier's Monclova plant produces 300,000 replacement inflators per month, and the addition of two production lines will boost monthly production to 450,000 units.
At that rate, it would take at least two years to produce enough inflators for recalled Hondas and other makes.
On Wednesday, Dec. 3, Rick Schostek, executive vice president of Honda North America, told Congress that Honda had asked Daicel and Autoliv if they could produce additional inflators -- a development that Autoliv followed later that day with an announcement that it would do so.
Autoliv has not indicated how many replacement inflators it would produce for Honda or anyone else. But Steve Fredin, Autoliv's group vice president of sales and engineering, hints that he is thinking big.
And in an interview with Automotive News on Friday, Dec. 5, he confirmed plans for a major effort. "We are ramping up to produce millions of inflators," he said. "We are stepping up. We are talking to any and all automakers that are affected."
He added that new production lines can't be left idle after the crisis abates.
Unwilling to budge
Despite any concerns that Takata may have about Honda, its biggest short-term headache is NHTSA. During congressional testimony last week, Friedman said he is hiring an outside expert to evaluate the chemistry of Takata's inflator propellant.
"We are not simply trusting Takata," Friedman said. "We are in conversations with other airbag suppliers, and we are bringing in outside expertise on this propellant. We cannot simply trust the information Takata gives us."
Friedman also reiterated his desire to force Takata to declare that a defect in its driver-side airbag exists. Under U.S. law, automakers -- not suppliers -- issue recalls. But if a supplier acknowledges a defect, that would force automakers to respond with recalls.
Despite growing pressure from federal regulators, Takata appears unwilling to budge from its stance that a nationwide recall isn't necessary.
On Friday, Berman reiterated that automakers should focus their recalls on areas -- such as Florida, Hawaii, Puerto Rico and the U.S. Virgin Islands -- that have hot, humid climates.
Jason Vines, a North Carolina-based crisis management consultant, said his experience with Japanese companies has shown him that managers can be averse to confronting crises head-on.
Vines, who once ran public relations at Ford, Nissan and Chrysler, said he had seen the potential paralysis that can hobble a Japanese company during the Bridgestone-Firestone tire recall at Ford and Toyota's sudden-acceleration crisis.
Said Vines: "I love the Japanese people. I worked for Nissan. But it's a common theme for them to put their heads in the ground and hope it goes away."
into the world of dealer chat services.
We were pleasantly surprised at the number and kind of services available to dealers today, as well as the price elasticity that makes a reasoned study challenging but rewarding.
Our journey starts below.
CHAT: A conversation is communication between multiple people. It is a social skill that is not difficult for most individuals. Conversations are the ideal form of communication in some respects, since they allow people with different views on a topic to learn from each other. A speech, on the other hand, is an oral presentation by one person directed at a group.
For a successful conversation, the partners must achieve a workable balance of contributions. A successful conversation includes mutually interesting connections between the speakers or things that the speakers know. For this to happen, those engaging in conversation must find a topic on which they both can relate to in some sense. Those engaging in conversation naturally tend to relate the other speaker's statements to themselves. They may insert aspects of their lives into their replies, to relate to the other person's opinions or points of conversation.
Conversation analysis is a branch of sociology which studies the structure and organization of human interaction, with a more specific focus on conversational interaction.
The field is almost endless, so we narrowed it down to five: http://www.carchat24.com, and some of the "oldest" live chat support providers: http://www.sitelive.com/ and http://www.outsell.com/site/.Two other services that would be important to review are: http://www.activengage.com/ and http://www.contactatonce.com/.
SiteLive's Approach: Minimal Chat Activity to provide a live quote form-type service that causes them to utilize as little resources as possible. (Offers Free Trial; Requires a long term contract)
SiteLive is a discount live chat support provider, and if someone is just looking at it as an expense it may seem like the best value. However, as in most things, "you get what you pay for." So, we were not surprised to learn they apparently do not offer 24/7 coverage, nor do they appear to use proactive greetings often, and, finally, they do not appear to provide actual "support".
Thus, we were struck that employing Site Live would be like having a part-time live quote form on your site.
Using Site Live, or any other provider that doesn't actually provide "support," can have a negative effect when site visitors' expectation of support are not being met.(Recall our definition of "chat" above)
Thus, the leads a dealer receives may, in turn, be minimal or under-mined in a sense (no pun intended), and we were struck again how these "savings" may be at the expense of potentially upsetting site visitor's that just wanted basic information, or a simple question(s) answered; (again, the whole purpose of a prospect's notion of the word: "chat.")
OutSell's Approach: Minimal Chat Activity to provide a live quote form-type service that causes them to use as little resources as possible. (No Free Trial; Requires a long term contract)
OutSell does a good job of getting visitors attention via gif-icons that employ motion - they move, shake, etc. They use proactive greetings depending on the type of support plan you ultimately contract with them to provide.
They appear to do a better job of interacting with clients than some price-point services, but, arguably, do not provide the higher level of support available through some others (see below).
They are more focused on some of their other (BDC-type) solutions, at the apparent expense of their core business (i.e. Live Chat).
They do not appear to provide 24/7 coverage, use proactive greeting 100% of the time, and like most of the service providers out there, are somewhat weaker when it comes to providing complete support.
That said, they offer different plans; the one that they appear to contract with dealers most often is flat fee based, with (key) the lack of apparent incentives to increase chat volume, or generate more leads.
They appear to be heading more towards the type business model Site Live (see above) uses, once again, that does not use the proactive chat 100% to increase chat volume in order, we suppose, to lower their resources needed per account.
ActivEngage's Approach: Maximizes Chat Activity to provide a live quote form-type service that causes better results (No Free Trial; No long term contract is required).
Summary: They offer services from $299 to $2000 per month based on the package that is selected. Their Set Up Fees are based on the package that is selected and the level of customization that the dealership requires. Again, they have no long term contract requirement. Although they appear to be one the more expensive services, with an interesting 9AM to 9PM coverage pattern, we were struck how ActivEngage appears to do a lot of things right.
They always use proactive greeting. Their site appears to be very well written, and they have done a great job marketing themselves. Limiting factors include expense, including charges for weekend monitoring, and, no 24/7 coverage.
Their coverage is better than Site Live, but, we're told they may be "too quick" to go for customer information with their scripts, and do not provide true support. Almost all query questions are answered with a question that is intended to get information.
One area of possible concern is somewhat subjective in their use of obviously, perhaps intentionally "sexy-appearing" women icons and chat windows making it appear that you are chatting with the person in the image.
I know beautiful women are used in many advertisements, and have some benefit for click-through rates, but they could have done a much better job with their selections to be professional. For what it may be worth, it appeared as if some young guy with limited business sense picked out the pictures.
ContactAtOnce's Approach: Sell their live chat software to as many users as possible to create monthly reoccurring income. They offer back up support to try to be competitive with true full service providers at a $5.00 per chat charge.
ContactAtOnce offers great live chat software, and has a solid product for dealers wanting to install live chat software and take the chats themselves. Their back-up service is flawed because they charge a flat fee per chat, and don't use the proactive greeting when the dealer is offline to increase chat volume.
A flat fee per chat means there is little or no incentive for the chat service to get the lead because they get paid either way.
They also do not provide actual support, and act only as a live quote form provider. Also, it appeared to us that the charge for their software is somewhat high compared to what dealers could find if they researched other available options.
For example, the service below charges a little more than they do for their software, but includes support staff and parts and service leads 24/7, (i.e., not just the software). They also offer the software to dealers with them as a backup (just to be competitive), but don't recommend that dealer staff take chats unless they are properly trained and dedicated to just that position as they will not get the same results on chat as they would with a phone up (for example).
Moreover, we're struck how these communications need to be handled with a BDC type mentality, using proven scripts to capture data and set appointments (When was the last time you heard a dealer say they were able to implement phone or chat scripts and use them effectively 100% of the time?)
CarChat24's Approach: Appeared to us to provide the best true live chat support possible - one aimed at building rapport with site visitors.
It employs BDC style scripts to extract the maximum amount of information, and sets appointments for clients to visit the dealership. We were pleasantly surprised to learn they purposely over-staff to insure they are able to handle their chat volume effectively and provide the best quality support.
Their support pricing for singe point websites for 24/7 coverage (672 hours monthly) is $295.00, or, as they pointed out, 44 cents an hour. (Note: They said they will negotiate better rates for dealers/dealer groups with multiple websites, and in some cases even include support for some sites free!) For dealers with more than 3 websites they charge $195.00 per website per month, or approximately 29 cents an hour for complete website support coverage.
Their pricing for leads and appointments is a varied lot: $10 for an email lead; $20 for a phone lead, and $25.00 for a "VIP appointment."
Interestingly, they pointed out - for publication - that their internal metric for a dealer's average cost per lead is $15.23, which they point out is well below what they tell us is the "going rate" for quality leads, including leads generated by the dealers own website.
Service, Parts, and Query Leads - (A Query lead is where someone mentions that they have been recently dealing with someone at the dealership) are offered FREE of charge. (Obviously, these leads also create revenue as well as future marketing opportunities for the dealer).
Other Key CarChat24 advantages include:
24/7 Live Chat Support Coverage to insure no opportunities are missed (Again, to our knowledge this is not generally offered by any of the other companies mentioned above.)
They proactively greet 100% of the site visitors, increasing chat volume and leads by over 75% from the static live chat icons placed on the site.
They provide true live support where they answer visitor queries, and help them find the dealership website content, and improve current and prospective client customer satisfaction and loyalty. (We saw where they really provide support, and don't appear to run people around in circles trying to get info. They actually do the best they can to answer their questions straight away.)
As such, they're the low cost per hour true support provider. (Again, we have yet to find a provider that really offers true support as defined here other than them.)
Other Cost Benefits: No set up fee, and 100% Free 30 Day Trial.(note: No long term service contracts, support is on a month-to-month basis that only requires a 30 day notice to cancel.)
We were impressed how they've retained a remarkable 98% of their clients.
They also offer an Exclusive Automated Honor Lead Return System, where dealers can easily return duplicate leads, and leads with bad information for instant credit. (A link is provided in every email, and CRM transcript to receive credit.)
Their instant cell phone text lead/appointment notifications allows sales personnel to respond immediately after the chat has ended.
They employ Ajax technology that allows them to see what visitors are typing before they send it. This allows them to start looking for answers before the question is sent, and provide a resulting superior customer service experience more often than not.
While no system is 100% fool- proof, theirs leaves little room to fall off track.
They use a knowledge base of over 1,000 well-crafted responses to communicate with site visitors, and proven BDC style scripts to extract info after they build rapport.
Their operators rarely have to type responses. This insures little/no typo's, and effective professional communication, as well as the correct implementation of their proven scripts.
They draw on tens of thousands of automotive chats, and have used the knowledge they've gained to create a chat system exclusively for dealer websites that, we're told, in side-by-side comparisons of same and like-sized dealers/dealer groups, produces the most leads and highest customer satisfaction.
We've learned how most chat service providers push for the shortest chat communication times (more work/less people). CarChat24 actually wants chats to be as long as possible in order to build rapport and improve visitor satisfaction.
They appear to manage their support operator teams just like a dealership runs an automotive sales team. Their operators pay is based on customer satisfaction, chat pick up time speed, and commission per lead/appointment generated. They train every day on product knowledge, and, we're told, are always looking for ways to improve their service. They update their knowledge base daily with manufacture's incentives and updated product information to insure they provide accurate data. They appear to measure everything imaginable, and constantly strive to improve their performance.
Importantly, they told us how they check the dealer's site every day, and report any site problems to their providers to ensure the dealer's are not losing business on their sites.
This company is owned and managed by "car guys" (and gals) that understand the business, bringing over 40 years combined experience. They explained how they are truly hands-on and active in all aspects of their business and only bring the best quality people into their company to interact with their clients and the dealers website visitors. Finally they explained how they've been very fortunate to have been successful in all of their automotive endeavors, and use their knowledge to improve their company daily.…
I wrote what turned out to be such a lengthy commentary and response, I wanted to share it with the ADM Community:
You have written a well thought out essay on a subject that is the source of much activity, anxiety and many millions of dollars being spent by both car companies and dealers. Each OEM has taken an approach with variances and features different from the other OEM's. In my opinion none of them have a perfect solution that addresses the issues you raise. However, if you take a look at, for example, what Ford Motor Company has done, which is quite a hybrid approach, you will see that there are no hard and fast dictates or negative repercussions for those dealers that decide to excel beyond what is being done for them by Ford's programs. The DealerConnection web site program is primarily an internally managed and maintained dealer website program which is automatically included with the entire Ford eTools suite at a very minimal cost for an entire package... Yet, each dealer is allowed to create their own web sites above and beyond what the DC sites provide. Lead Management tools can be the Ford supplied SalesPoint, the ancestor of which was one of the first lead management tools, CarPoint from Microsoft, but is now supplied by Reynolds and Reynolds... However, dealers are free to choose from multiple compliant supplier based tools using the Alternative Lead Management program which routes leads in the appropriate format to that supplier's CRM or lead management tool at the dealer's discretion...
Even the 14 month old Dealer Advertising Co-Op program allows the dealer to get OEM funded advertising expense reimbursement for both Search Advertising and Display Advertising, regardless of whether the ads point to the Ford supplied DealerConnection website, or the dealer's own independantly purchased website. The Co-Op guidelines discourage predatory practices such as bidding on other dealer's names and distressed merchandising that hurts the Ford or Lincoln mercury brands, such as "Getting Ready to Go Bankrupt" sales camapaigns.
Could the 12 year old Ford Digital marketing programs be improved? Of course they can... But, I am intimately familiar with over a dozen of the leading OEM programs and Ford's programs have many features that are more progressive and dealer friendly than other OEM's.
You make a strong point about the OEM's need to communicate directly with practitioners at the dealer level. Ford does this through a combination of ongoing forums, groups, blogs, and communities for ISM's, weekly eNewsletters from both IMN and Outsell that provide several channels for all Ford and Lincoln Mercury ISM's to interact and communicate directly with the Ford Digital marketing team in Dearborn... And, to support and compliment all the technology tools, channels and communication mediums there are 18 regionally based 100% Ford paid Digital Marketing Consultants that visit 18 different Ford dealerships in person every work day of the year (minus a couple weeks vacation and conferences that Ford send them to). My team at ADP Digital Marketing supplies the consultants for the Ford DMC program, but they are 100% dedicated to Ford and the dealers and ISM's in each of their assigned Ford Regions.
You will not see too much written or publicly announced by Ford about these Digital Initiatives because Ford considers them to be a competitive advantage, therefore they shun the limelight in regards to their leadership in these areas. But, given the clear and focused subject you brought up, I felt compelled to share just a few of many program information points that every Ford dealer has access to. Within the FMCDealer.com Ford dealer information and communications channel, there are complete details and tools available to every Ford and Lincoln Mercury dealer that are unmatched by the rest of the OEM's doing business in the USA. For example, Ford tracks every lead and reports the disposition of those leads to every Ford and Lincoln Mercury dealer... When ABC Ford receives a lead from Jjohn Doe, and John Doe subsequently buys a new Ford from XYZ Ford 15 miles away, the original lead receiving dealer, ABC Ford can see exactly where, when and what the customer purchased. As a Ford dealer or ISM you can use the Dealer Lead Reports to see if the leads you are receiving are bing sold by any particular competing dealer in lesser or greater numbers than other dealers, and if the customers are being switched into different models than what the original lead inquiry referenced. Again, I am not suggestion perfection, but the people who work for Ford's Digital Marketing team in Dearborn have been improving and refining their programs and dealer support for over ten years and continue to do so on a daily basis.
When Ford saw that many dealers were buying outside supplier web sites to get additional features, Ford Digital marketing worked together with FordDirect and selected ClickMotive to supply a comprehensive customization package, including powerful video marketing capabilities which at $395 to each dealer represents an outstanding value.
I would love to talk about the Ford and Lincoln Mercury Digital Advertising program for dealers (FLMDA) which is administrated by ADP Digital Marketing, but that would come off as too self-serving and the genuine purpose of my response is to simply say that although many OEM's have great programs in place, there is one OEM that truly exceeds all the others in breadth, scope and flexibility of their dealer website and digital marketing programs for dealers, and that OEM is the Ford Motor Company. Other OEM's have a long way to go in catching up to Ford in this area, and although the specific names will be kept confidential... Many OEM executives have confided in me that they would like to do "this or that" digital initiative, saying "like the way Ford has it set up..." truly a compliment to the digital marketing professionals in Dearborn, but one in which I wish more Ford and Lincoln Mercury dealers would appreciate.
Lastly, I enjoy working with all the OEM's and there is not enough space to talk about Honda's dealer web site certification program, which is excellent in several respects. Or, how about Mazda's newly created program to supply various OEM powered widgets and applications on a plug and play basis so that dealers can incorporate them into any, or multiple web sites... The Mazda program is sheer genius and other OEM's could learn a lot from their unique and first ever approach to supplying web based ASSETS instead and mandating a particular web site supplier. Personally, I think the new Mazda programs are the best solution yet to an OEM providing dealers with dealership website tools, without force feeding a particular supplier, while ensuring a positive consumer experience with accurate OEM brand and model information.
Feel free to check out Alex's originating article at the following URL:
From the Ford DealerConnection Public Website:
What is my DealerConnection website?
DealerConnection is the name given to Ford Motor Co. Dealer websites all Dealers are required to have. Consumers will find your DealerConnection website when searching for a Dealer on Ford-brand websites (like fordvehicles.com) or when searching online at sites such as Google and Yahoo. On average each month, 1.5 million customers conduct 4 million new vehicle searches and 3 million used vehicle searches on DealerConnection websites. With an average closing rate at 18 percent, your DealerConnection website is the best and highest source for closing referrals.
Will I have to pay for referrals generated by my DealerConnection site?
Nothing has changed. You will continue to be billed a monthly subscription fee for DealerConnection, as part of the e-Tools suite of products on your Parts and Accessories statement. There is no per-lead fee.
Where can I call with my questions?
Please note that there is a new DealerConnection Assistance Center with a new phone number. Please call Technical Support at 1-866-762-FORD if you need additional assistance or have more questions. The DealerConnection Assistance Center is staffed Monday-Friday, 9 a.m. to 7 p.m. eastern standard time.
Where can I get trained on how to update my site and use the Dealer Maintenance Tool?
To activate the key options and set your basic preferences, see the step-by-step Quick Start Guide. For in-depth training on additional features and functionality, please reference the user guide or the links under Training University.
What happens to the settings and personalized information on my old site when the new one launches?
FordDirect will try to carry over as much of your settings and personalized information from the old site to the new one. We encourage you to log-in to the test site before the new site goes live and confirm your settings are correct.
How do I access and log in to the Dealer Maintenance Tool?
Log in to dealermaint.dealerconnection.com. Your user name and password are the same as what you use to access fmcdealer.com.
Will dealers have the ability to customize the new DealerConnection platform?
At launch the DealerConnection platform will offer dealers the ability to select from multiple pre-configured templates that provide for a seamless consumer brand experience. The sites will also allow dealers to position their local brand by adding dealership photos, staff pictures and customized welcome text. In the first half of 2007, the DealerConnection sites will add the ability to further customize the home page, add dealer specific coupons and integrate more multi-media components. Dealers will not need to contract with any 3rd party vendor to access and update their DealerConnection website. FordDirect will communicate to all dealers as we continue to enhance the features on the DealerConnection platform.
Can Dealers replace their DealerConnection websites with a 3rd party solution?
The DealerConnection platform is the only Dealer Website solution supported by Ford Motor Company and FordDirect. Dealers may not replace their DealerConnection sites with a 3rd party solution. Today the DealerConnection sites receive millions of visitors each month via the brand sites and from search engines. The DealerConnection sites are an important part of the Ford Motor Company integrated marketing plan and will continue to increase in prominence as a valuable sales channel for all dealers. Leads generated from the DealerConnection platform deliver the highest close rate of any leads in the industry.
Is ChannelNet and its eRA product (eRetail Advantage) affiliated with DealerConnection in 2007?
ChannelNet is an independent provider of technology services that supported the DealerConnection platform in 2006. In 2007 FordDirect and ChannelNet will cease to have a commercial relationship to deliver any portion of the DealerConnection platform. The eRA product (eRetail Advantage) is a 3rd party website product offering from ChannelNet, much like Cobalt or DealerSkins. Ford Motor Company and FordDirect do not endorse any component of the eRA product. Dealers should carefully consider their options before enrolling in any dealer website program.
Do Dealers need to sign any additional documents to participate in the DealerConnection platform?
Dealers do not need to sign any paperwork to launch their new DealerConnection websites. We advise all dealers to carefully review any contracts they may be presented with regarding any 3rd party website provider.…
media programs if they should get rid of their 3rd Party Lead Suppliers. The question usually originates from a desire to reduce the dealership's overall expenses.
In most cases, before I get that question we have already converted many of the dealership's marketing and advertising budget dollars from offline media towards being used for online media... Which is how we funded their new "Automotive Digital Marketing Strategy". Usually, we have used 80% of what we took from offline media for the dealership's digital marketing and social media campaigns, with the remaining 20% allocated towards cost reduction, so the net result up to that point has been a reduction in overall marketing and advertising expenses.
Let me state right up front, and this is my opinion, not a fact, but a strongly held conviction on my part:
CAR DEALERS SHOULD NEVER COMPLETELY
SEVER A LEAD SUPPLIER RELATIONSHIP!
I have personally managed teams where our overall average "Close Rate" was consistently over an 11% "Leads 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, AutoUSA, iMotors (Reply!), Automotive.com, AutoLeadExchange, CustomerFunding, NewLeadsPlus from Cars.com and just about every other independant lead supplier willing to sell us leads at the time, in addition to the usual OEM sources... But, none of them seemed to be as much of a problem as the situation we had with 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 most Internet Sales Managers working in Car Dealerships would benefit from in reassessing what to do with any 3rd Party Lead Provider. 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 that Internet Sales Managers and Marketing Directors 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 simply by adjusting a few parameters instead of firing a lead supplier completely.
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 Lead Supplier in question's 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 (or columns) for each salesperson who has handled less than 100 leads over the past 24 months, or the length of time you had data available for that specific lead supplier.
5. Sort the remaining rows of Internet Sales Specialists by TOTAL NUMBER OF LEADS from the individual lead supplier that they handled over the time period the report is based on, descending from most volume of leads each salesperson handled to the least.
6. Save your Excel file, with that list on the first tab and then copy the tab, creating another worksheet tab within the same Excel file, name the first tab "ISSxLeads".
7. Rename the second Tab "ISSxSales" and sort the Internet Sales Specialists by Total Volume of UNITS SOLD from the supplier's Leads over the Data pulled time period.
8. Copy the second tab into a another worksheet tab (third tab) and title it "ISSxCloseRate".
9. In the third tab, sort the rows of Internet Sales Specialists by SALES CLOSE RATE, which is displayed as a Percentage equal to the number of Units Sold divided by the supplier's Leads assigned to them over the time period for the report.
Now comes the part where you have to study the numbers, ponder, study some more and think yet again... For example; if the ISS that appears at the top of the list for each of the three worksheet tab's is a different name, then you should reconsider your approach to those supplier's leads before firing the supplier... After all, why would any dealership be assigning the most number of leads to the salesperson who is NOT the top performer at converting those leads into sales?
If your response is something related to, or about being "Fair", need I remind you about WHO IS PAYING FOR THOSE LEADS? That's right, if you want to implement a sense of "Fair" then try this on for size... As a manager it is your responsibility to allocate the most appropriate resources available that are most likely to convert a business opportunity into sales and service department revenue. Fair is in the mind of the beholder, and if the $20 to purchase a lead is coming from my pocket, then I want you to assign the salesperson who is most likely to take that lead and generate some business... I simply do not give a rat's ass about who's turn it is or who got more leads than someone else... godammit, give the lead to someone who is going to sell a car!
Which, BTW, in my humble but experienced opinion, is why a dealership should AVOID COMPLETELY SEVERING THIRD PARTY LEAD PROVIDER RELATIONSHIPS!
Let me repeat that statement and guidance; NEVER COMPLETELY SEVER YOUR RELATIONSHIP WITH THIRD PARTY LEAD SUPPLIERS if the supplier is a legitimate business and has not engaged in deception, fraud or misrepresentation.
LESS IS MORE
Normally, I despise the cliche statement "Less is More" because it is the solace of choice for incompetent managers... But, if the lead provider in question is one of the majors, a legitimate company like AutoByTel, Dealix, AutoUSA, NewLeadsPlus, Reply! or AutoLeadExchange for example, it is almost always better to reduce the volume of leads you get from them by tightening up 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 an underperforming 3rd Party Lead Supplier 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...
MANAGEMENT ACTION PLAN
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 to 1.5% over an extended period of time... 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 each of them were assigned each month came from Dealix. Leads from other sources from these two Internet Sales Specialists' previous customers being the only consistent exception.
Within a two months, our dealership's Sales-to-Lead Received "Close Ratio" on Dealix sourced leads went from 3.7% to over 7.5% on approximately 300 leads each month... OVER a 100% improvement in Lead-to-Sale Close Ratios! The bottom line was that for the same money being spent, we went from 9 or 10 units sold per month to a consistent 20+ units sold per month to leads from the same source, at the same expense without any additional cost. The real kicker was that at first the Internet Sales Specialists who were no longer getting Dealix sourced leads were saying "Good Riddance", and after taking THEM off the Dealix lead routing, their individual sales went up as well!
"Wisdom I have learned at My Own Expense, while Compassion I have learned at the Expense of Others..."
If there were only TWO management reporting and analysis processes that I could select as being identified as the most important and crucial methods we used to take Courtesy Chevrolet from an outstanding Internet Sales Management performance of 60 to 75 Internet Sales each month to over 350 units sold each month during the 2005 to 2007 time period, they would be the following:
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. However, I believe this process would work better if we could optimize lead routing based on each individual lead's characteristics, similar to the way lead scoring functions, but instead of scoring the lead, "scoring" each salesperson for likelihood of making the sale to that specific lead!
2. Reassigning all unsold NEW VEHICLE LEADS to the Used Vehicle Internet Sales Specialists as if it were a brand new lead when no appointment or activity is happening a week after the lead comes in... This was worth over 50 sales a month to 1,000+ new vehicle leads with no response from the customers after a week of emails and phone calls.
Another reason Car Dealers should never "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 we cap them at 2 new leads a day, and restricting them to sending us only the leads they get from customers within 5 miles of the dealership. This effectively reduces their Leads supplied (an invoice) volume down to about 25 to 45 leads a month... And then, if you were getting over 100 leads previously, a sales miracle seems to happen. The sales close rate skyrockets for that Lead Supplier... Strange but true!
Rather than firing any 3rd party lead provider, restrict the parameters for the leads you are willing to accept from them so that the volume of leads received from that supplier 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 Steve Stauning, Layton Judd, or any of the other automotive digirati like them that like to disagree with everything I write!
INSPIRATION: This post was inspired by the ADM Forum question posted by Mike Warwick at http://www.automotivedigitalmarketing.com/forum/topics/is-anyone-having-succes-with
Director - Digital Marketing
ADP Dealer Services
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