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The automotive industry pretty much resets at the beginning for each month. I’m sure you’ve all heard the term, “hero to zero.” Well, that’s rather how it is – you are judged on your sales for the previous month.
So, what do managers do when they get nervous in the middle of the month – perhaps sales volumes aren’t on track, or inventory is making them nervous? They start looking to the one place that has the most traffic and the most potential to bring in sales – their website!
It is surprising that even today, while most GMs and GSMs can tell you how much floor traffic they have from their brick & mortar showrooms, from my experience, I find that many cannot answer questions that are increasingly more important – (1) how much unique traffic are they getting from their digital showroom; (2) what is their conversion to lead rate; (3) what is their closing ratio.
I understand how many responsibilities a GM or GSM has in the operation (35 years’ experience myself), but today we must make an oath to know these 3 numbers at all times. Have your internet director email these to you every Monday and noodle on those analytics. Most every GM I have met is a solid business person and will evolve their business in the right direction -- if they simply have these 3 numbers.
I just read an article that stated a mind blowing statistic: apparently, the automotive industry is the lowest converting industry for ecommerce sites at 1.7%! How can this be when most other retail industries are converting at a 3-8% rate?
Imagine if, as a dealer, you were able to multiple your leads – on traffic you already have visiting your website – by 400%, you’d be interested then, right? If your conversion rate to leads is not 3%, I suggest spending some time researching available technologies that respectfully engage and fascinate your digital showroom clients via localized/personalized messaging; online retailing that provides the opportunity to engage from home with their own personal deal manager and auto picture technology that spoils and fascinates.
If other online retailing verticals can accomplish a 7–8% lead conversion rate, why can’t we? Today, I believe we can. We simply must think like an e-commerce site. Think like Zappos or Amazon, or any of the top 20 e-commerce sites in the world. They realize that the consumer is the boss – give them what they want and make the experience enjoyable and easy.
In most dealerships your phone is ringing off the hook. Perhaps the calls are sales calls. Or, just as likely, they are service or parts calls. You have it covered. You have tracking numbers on your digital showroom site (Website) assigned to each. You may even listen to those calls and take appropriate actions based on the conversations. But are you listening to the parts and service calls? There are services available that will listen for you and offer reporting.
Chances are good that some (lots) of those sales calls are ALSO service calls. Why? Because customers don’t care what number they call. They simply look at your website and call the first number that catches their eye! Tracking your website conversions based only on your Internet leads and sales calls (from a trackable number) is probably giving you an erroneous result – which, in turn is causing you to make decisions that may not be in the best interest of your store.
Do you want a simpler way of calculating digital showroom conversion? (If you don’t have a company listening to all calls). Take the entire quantity of your website leads and phone calls – no matter which phone number the customer called in on – and divide it by the unique number of visitors for your website. Use this math for 12 months while you evolve your digital showroom. Have your internet manager examine where the actual digital showroom (website) leads are coming from and track the rise/fall.
The fact is, dealership revenue isn’t produced by sales alone. You WILL get sales calls on your service and parts lines. Regardless of WHY the customer is calling, every last one of them represents revenue to your dealership. They all matter.
Evolving as a GM for the new digital business model is not hard, you really only need these 3 factors and then begin researching technologies that make sense to the consumer. Trial and error is necessary and expected. I guarantee that once you pay attention you will find renewed enthusiasm and see even more potential to take market share, among other benefits. Remember, stop thinking like a dealer for a moment and think like a customer. We have more than enough traffic!!! I guarantee that there will be low fruit for the picking.