Automotive Digital Marketing ProCom

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The Death of the BeBack (Fight)!

Mathematically and certainly, the BeBack Fight is dead.  JD Power shows us in the graph below that the average dealerships visited by vehicle shoppers dropped from 4.1 in 2005 to 1.3 in 2010.  Don’t expect 2012 to raise that number.

Why does this “kill” the BeBack fight?  First, logically, it at least kills it as we’ve known it.  If a person left the dealership in 2005, statistically we knew they were prone to leave and we fought to get them back.  This number tells us that we were one of four dealerships visited in 2005, so we were right to fight.  We were competing.

Yes, what you’re thinking right now remains correct:  We should still contact customers to get them back, of course.  However, the shopper’s  choice of who to come back to is not our biggest issue any longer--to begin seeing why that is the case, start here with the aforementioned JD Power data graph (thanks for the graphic to a friend of mine):

NOW, clearly, the big fight is to be the ONE dealership they visit. To be the first dealership, actually!  Because shoppers, of course, can’t visit a partial dealership, so they must visit 1, 2, 3, and so on.  And mathematically, in order to average 1.3 that means that at least 70 out of 100 shoppers (that’s 70%!) visit only ONE dealership during their shopping.  If we account for rounding down from 1.34 to 1.3, for 100 shoppers that still means that at least 65% of the shoppers visited only ONE dealership during their shopping.  And, if you believe that the maximum number of dealerships normally shopped is no more than five, then the math shows that 91 out of 100 (or 91%!) shoppers visit only one dealership!

Why is this happening?  Because the customers are, of course, shopping ONLINE now and (84% here and 90%+ according to some OEMS), and so they don’t need to visit until they are ready to buy!  Really, on a customer visit nowadays the sale is in our hands more than ever and is, really, ours to lose.

So, to help, what makes them come to you first?  Some of that is their habits:  Are you making your customers habitual for service and repeats?  (“Habitual” will be the subject of a later article).  The rest is your advertising, your website, your online presence—essentially, your digital lot—and your work with leads, equity, and the like.  Everything you learn here and in workshops, conferences, battle plans, etc. is VERY VALUABLE on this issue.  It is all gold.

However, there's also platinum--and diamonds!--to be had for being the first dealership visited, as well!  And we need all the help we can get with that.  Including the most powerful sales-enabling tools we can muster.

And that leads me, in this article, to Big Data.  Would you like to know who in your customer base and aged leads are shopping for vehicles?  What their targets are for vehicle type and price range?  How to help them come to your dealership first?  Or what households in your area to best target?  So that you are at position ONE in the “1.3” and get the most sales?

THAT is the promise, really the result, of Big Data for Dealerships for sales: Because being #1 isn’t just a "thing" now.

It’s the ONLY thing.

(P.S.  How can Big Data specifically help you with this?  More to come on that!)

By Keith Shetterly, keithshetterly@gmail.com
www.keithshetterly.com

Views: 1254

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Comment by Doug Davis on October 2, 2012 at 1:20pm

I'm fascinated by the whole Big Data thing but uncertain to it's limitations.  Obviously, it can track your movements throughout the research phase. It can determine when you stop shopping which would make you believe that you purchased or found out that you couldn't.

I'm convinced that people, after they have completed their research, set out to buy a car.  They have decided what they want and will purchase it at the first dealership or at the next.

From personal experience, dealerships don't want to hear this.  They like to look at their logs and see that they accomplished a 30% closing ratio.  Ignorance is bliss.

Comment by Keith Shetterly on October 2, 2012 at 11:30am

To Doug's point, yes, exactly.

To Tom's point, not that JD Power is infallible, but the actual visit to dealerships . . . well, the average is 1.3.  Online, I've heard everything from 5 dealers and 2 auto shopping sites to 3 dealers and 4 auto shopping sites.  I'm not sure if that answers your point, but that's what I meant.  Thanks!

Comment by Doug Davis on October 2, 2012 at 10:12am

4.  You better have someone that can close them when they come in the door.  If not, they                       are off to dealer #2, where they will buy.

Comment by Philip Moore on October 2, 2012 at 9:51am

Tom,

Everyone shops multiple dealerships.  But shopping multiple dealerships doesn't mean visiting multiple dealerships.  There will always be some folks who are comfortable doing things the way they always have, but the world is moving in a new direction.  An increasing number of people expect to manipulate digital content to streamline their consumption experience.  Consider DVR, VOD, RSS, iGoogle, etc.  People don't have to look up a program in the TV Guide and program a VCR to record at a specific time.  Now you just sit down at your computer or your TV and tell the machine what you want to watch right now.  The machine goes out and gets it for you.  The car shopping equivalent is CarWoo.  The consumer tells the machine what they want and the machine goes out and finds dealers who have what the consumer wants.  This sounds crazy, but a few years ago I thought using my credit card # online was crazy too.

Comment by Tom 1TeamSynergy Wiegand on October 2, 2012 at 9:11am

Keith, am I in denial, has my head been in the sand?  Just this past Sunday's family dinner (of around 18) there was discussion of car shopping by 4 separate parties and all shopped, or were shopping multiple dealerships.  Is a double blind experiment in order by J.D. Power?  This data is so unexpected it is either unbelievable or I spent far too much time on the beach with my head in the sand lately!

Comment by Tom Gorham on September 24, 2012 at 4:00pm

Doug, I'm with you on this.  For me, there are three key elements  The first two are crucial because you can't sell a car if you can't get them in.

1. Onine pricing - you better be competitive, or as Phillip Moore said, explain why you're higher.
2. Online marketing - you must be in front of the customer in a good way... great reviews, great word-of-mouth, great marketing venues.
3. Reality meets or exceeds the impressions you have created online.  Whatever expectations you created in the consumer must be realized when they enter your store.

The last one is crucial as well.  The customer will buy and you will create advocates who will give you referrals and repeat business.

Comment by Philip Moore on September 24, 2012 at 8:49am

In the "old days", customers visited the dealership to get a price, then went somewhere else to shop the price, and perhaps returned.

Today, the prices are available before the customer comes to the store.  So the lesson here is monitor your online pricing to be competitive, and if you're higher on a unit, explain online why you're higher.  The limited search criteria available in the major portals means that you, as a dealer, have to explain why your unit is worth \$850 more than the cheapest make/model/year/mileage that is returned in the same search.  Perhaps you can even itemize, e.g., this unit has a \$1600 Nav system, \$550 stereo upgrade, \$2300 custom wheels, etc.  Make the customer aware of all the value in the unit so they don't simply dismiss it.  If you fail to demonstrate the value, you won't be the first/only dealer they visit.

Comment by Big Tom LaPointe on September 23, 2012 at 9:40pm

When i was a newby on the lot in the late 90's, I had a sales manager who was fully convinced of two things: 1) the internet was a fad that would only last 5 years, and 2) "THEY AIN'T COMING BACK!". With his 50% success rate, I won't follow him to the dog track or blackjack table, but I never forgot his point.

Of course Keith teases us with his future content, but but this poignant data just strengthens the point that you have to make every effort to differentiate yourself from the clutter and engage buyers online early and often with the use of well-trained BDC staffs and round-the-clock internet chat options.

To me, IT IS CURIOUS that in an era that sees brand loyalty lower than in years past, is  someone shopping for a car would not even LOOK at cars in person before making their choice. That would also point to the importance of bringing your 'A' game to off-site marketing events and auto shows.

Comment by Doug Davis on September 23, 2012 at 9:07am

your point about not expecting customers to come back is solid.  If you aren't making progress at the end of 2 weeks after your first appointment with a customer, good luck.  You most likely won't see them again.  My condolences to the dealer.

I often wonder how much that market has changed.  Because of the level of competition, they put a lot of pressure on the customer.  Triple TO was the rule of the day, at every store.  If a customer went through that, they're not coming back.  Most stores really trained their salespeople.  A one to three week highly structured course was standard.  They didn't hand someone a bunch of brochures and say, "read these and go sell some cars".

When a customer comes in, used or new, it means they are already close to buying. They already liked what they saw online, be it price, customer reviews, etc. If reality meets up with their online experience, you're done.  Great customer service, great upfront attitude, and good price will clinch the deal 90% of the time.

Tom, we are on the same page. I put dealerships into three categories; Market Leaders, Average Performers and Sub Par Dealers.  The vast majority fall into the last two categories.  Market leaders know how to market their cars and have good processes.  Not only will they get more leads, they will close a much higher percentage of them. They close a huge percentage of their appointments.

Keith's chart deals with averages, "Best of the Worst" or "Worst of the Best".  There is a disparity in how well the Market Leaders perform against the Average and Sub Par dealers.  How do these averages relate when Market Leaders are realizing 50, 60, and even 70% of their business through their internet departments?

Comment by Jason Mickelson on September 22, 2012 at 10:44pm

The graphic displaying leads and online usage is interesting.  I find it fascinating how internet usage is drastically increasing and yet the number of leads submitted has remained consistent.

We were looking at the trends of be-backs in our office 6 months ago and we found an interesting trend with our dealership clients.  Customers who left without buying a vehicle on their first visit and who did not return within 2 weeks, only closed at a 3% rate over the next several months.  This was not for lack of effort.  These customers were convinced that the dealer was not capable of assisting them with their vehicle needs for one reason or another.

Doug, your point about not expecting customers to come back is solid.  If you aren't making progress at the end of 2 weeks after your first appointment with a customer, good luck.  You most likely won't see them again.  My condolences to the dealer.

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