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Yeah, I said it:  GM’s Internet lead response measurements are wrong-headed.  The age of pushing dealers to a better 24x7 response time is over, and the results are misleading.  And they are unfortunately too often focusing dealers, and therefore precious resources, AWAY from car sales.  And here’s why. 

First, the requirement:  To be measured as “passing”, a dealer has to have an average response time—across 24x7—of under ONE hour and 95% of the dealer’s leads must be answered in under 5 hours (and NOT by an autoresponder).  It’s that second time measurement that makes no sense at all, and here's why . . .

Second, the "Lead Response Math":  Say a dealer gets 100 leads a month.  Then that means, no matter what effort they make on response time, NO MORE THAN FIVE leads can ever go over five hours.  That's very, very few mistakes allowed, and it can be very hard to achieve even for dealers with average response times of under 1 hour--because it means over a 3-month quarter that's 90 or so nights you have to cover, as in the following . . .

Third, why this doesn’t make sense:  For a dealer who is open 9am-9pm Mon-Sat, then leads can come in randomly during closed hours (9pm-9am Mon-Fri AND/OR any time on Sunday) and be missed.  Even rotating your Internet Dept. through “Sunday duty” doesn’t stop the risk for “midnight leads”, as remember you only have FIVE per 100 that can have a response time over five hours.  That means that EVERY NIGHT someone has to watch leads until 12:30am and someone (else, I hope) has to get up no later than 5:00am (4.5 hours later) to check until you open.  Otherwise, just one night with no one watching and five leads might come in at once . . . or a couple of nights the Watchman (or woman) falls asleep . . . 

Fourth, what dealers have done:  They’ve hired, in most cases, an off-site BDC of folks who just respond with silly “We’ll contact you when we’re open!” emails.  Because the RESPONSE TIME is what GM measures, not the quality or relevance.  And who can say this isn’t enough relevance, anyway, considering that these leads do NOT necessarily represent actual people online BUT ARE RELEASED INTO THE LEAD FLOW for many other reasons.  When this all started with GM, they were batching leads at night, but I can’t say that’s specifically what’s happening now.  By the way, I’ve personally been coached by more than one GM SFE coordinator to get one of these “midnight lead” services to keep the response time down . . . hooookayyyyy, so even the people pushing this realize it is silly!  Can you say “Emperor’s New Clothes”?  (for those who know that old fable). 

Fifth, what the SHOPPERS have done:  They have moved away from the Internet lead.  Fewer leads come from the web, and everybody knows it.  Customers are coming in without leads, though many do call before getting into their car.   They’re just educated now on what effects come from giving up their contact info, even to an OEM:  eMails and phone calls TO them, INTERRUPTING them, from MULTIPLE dealerships, etc.  Better to just view inventory and pick up the phone.  And more than a few just come on in. 

SO, because NO MORE THAN FIVE leads can go over five hours on a 24x7 clock, GM and their lackeys have a nation of dealerships distracted by nightly response time and less focused on daily sales--dealers focused THE MOST, in fact, on the response time of the few folks shopping at 3am (IF that’s really going on, which is debatable) rather than those shopping during work hours.  Don’t you think a lead dropped to a dealer during a shopper's work day is most valuable?  They have a job, they have an income, they have interest, and they probably WILL buy a car if they can. 

GM’s 24x7 measurement of lead response time doesn't clearly result in sales, though they try mightily to make that case.  Any Internet closing rate is a function of total advertising, inventory, and Internet sales skill, not just response time, even for those closing as high as 10%:  “Jim Smith” might come in and buy, but he may in fact have never responded to the email you sent or the call you made from his lead!  He was just in-market, filled out a form online, totally ignored your efforts to contact, and came in because he heard about 0% from his TELEVISION.  And maybe you’re the only game in town for his type of vehicle, anyway.  Jim Smith never bought from a lead or your contact:  However, he’s counted as an “Internet Sale” by GM just the same. 

True sales measurement is how is a STORE doing.  Not response time to what is, via Internet leads, at MOST, 20% of your sales contacts.  (What’s going on with your phone and/or lot visits the other 80% of the time is pretty important!).  And GM driving any store, from those successful to those not-so-good, towards these leads is not heading them towards sales but instead off a cliff of distraction.  Especially at 3am.

Unfortunately, GM’s “lead response math” seems to have too little to do with sales and more to do with what can easily be measured.  Well, just because something CAN be measured doesn’t mean it is the ONLY thing to look at. 

If you can take your eyes (and precious sales resources) off your "3am Clock", how are your SALES doing?


by Keith Shetterly,
Copyright 2011 All Rights Reserved

Views: 203


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Comment by Keith Shetterly on September 30, 2011 at 4:25am

Tom, we're not alone in "thinking it through".  I've spoken to, easily, a dozen Internet Managers/Directors across the country over the last two years, and all of them agree on this.  There's just no "1-800" line to call GM and explain it, and even the SFE coordinators have recommended off-site BDCs for "Thanks and catch you in the morning when we're open" responses (as I expressed in the article)--and so they understand that the focus is silly.


I've chased this problem as a manager, too, just as you describe and for just the same reasons:  I need my folks selling during their waking hours.


And don't get me started with the fact that all this is measured the same on a third party lead that GM provides as for a lead ACTUALLY submitted by a customer on or the dealer's GM website.  THAT is just not sales thinking at all.


Thanks for joining ADM, by the way, and welcome!



Comment by Tom Drommond on September 29, 2011 at 11:43pm

Wow, you've thought this through just like I have.  I've spent those sleepless nights, because as a manager, I can't task one of my salespeople to do it.  I need them sharp and alert during business hours.  GM has failed to separate urgent from important.  Leads at 2:00 am can seem urgent and important, however, in 10 years of curious tracking, they are some of the least likely leads to buy. For the last two years, I've been up at 2:00 am with them and I remember their my sleep.

So, IMHO, they are merely urgent at 2:00 am because GM says so. They become important at 8:00 am when we open for business.  We still haven't become Wal-Mart or 7-Eleven, which by the way, only used to be open from 7 am to 11 pm.  It's a slippery slope with no way off once you start.  

Frankly, it creeps some people out.  In the wee hours of the morning, you might expect an autoreply, but it's sort of freaky when someone writes a message that's as complete as GM 3 in the morning.  "How desperate are they for my business?" or "Oh no, they've already started bombarding me", has got to be going through their mind. 

You also nailed the footprints issue.  Because they are getting it from the OEM, the salesperson or CSR, the dealer's off-site BDC, an email campaign-a-day program and at least one personal email and one completed phone contact per day...all "until they buy or die"  Heck, I wouldn't leave any tracks either.  Better yet, I'll go register a yahoo account and forget the password before I close the screen.  I'm never coming back, I'm running my handy-dandy clean-up program and I'll smell you later...oh and thanks for the quote.  Don't get me started on those pop-up "chat with me" windows. I'm not looking for hot singles in my area or Viagra, either.

Keith, thanks for speaking out.





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