In the car-buying process, there is a gaping chasm between the consumer’s expectation and their experience. The best practice Internet dealer does everything possible to narrow the gap.
The data is clear: the customer wants a good price, communicated transparently and right away. They want to see that they have multiple vehicle choices. They want to receive outstanding personal service from beginning to end. Their car-buying experience will be emotional no matter what; best-practice dealers ensure it’s an emotional high.
The dealership that consistently delivers on these requirements—lead after lead, prospect after prospect—will delight their customers, increase sales velocity, increase unit sales and grow profit. And by doing so over time, the dealer increasingly builds what’s called a “virtuous cycle”: improved customer satisfaction driving increased referrals and loyal-customer returns, which further increases unit sales. This will help grow profit even more.
Every dealer can successfully implement the best practices that deliver such customer car-buying experiences. But few do because it takes hard work. There are key building blocks that have to be accomplished in a particular sequence. Step three can’t be done before Step 1 and each step builds on the previous one. But with discipline, hard work, top-down commitment and the courage to be persistent, you will get there. It’s like an exercise program—it’s not easy, but the committed succeed.
Here are the steps to internet sales success:
1.Make sure you have the right Internet team. At the end of the day, the people (especially the Internet team leader) are key.
2. Commit yourself to competitive pricing practices. Update your pricing regularly, frequently reconfirming their competitiveness. Leverage benchmarking tools, such as TrueCar for new and vAuto for used, to compare your vehicle pricing to your local market. Competitive pricing drives sales velocity, and sales velocity drives profit. If your average days in inventory is 20 days at average $1,500 gross margin per vehicle, that’s a lot better than 60 days at $2,500. You’re selling 3X the units = $4,500 vs. $2,500. A key axiom: you succeed by maximizing profit, not gross margin per car.
3. Adopt a tool that delivers a multi-vehicle price quote (with vehicle details and up-to-date incentive information) that can be sent automatically within 10 minutes every time. The customer will be blown away by your 10-minute and information-packed quote so much that they’ll be on the phone to you before the other guys have even responded with their “Yeah, we have it: $22,500” message.
4. Create an organizational structure, staffing and compensation plan that ensures you make follow-up phone calls in 10 minutes, leveraging the vehicle information in the quote to hold a thoughtfully scripted, appointment-setting conversation.
5. Implement an ongoing sales rep follow-up process that continues for 10-14 days. Make sure to ensure strict commitment to the follow-up protocols you have established.
6. After the human follow-up phase is over, ensure you have in place best-practice email marketing follow-up, with the content designed and managed by e-mail marketing professionals (to ensure spam compliance, etc.). Ensure your team is alert to the customer responses from such campaigns, as these are your hottest leads.
If you have implemented these steps with care and precision, you should begin to observe your closing rate go up significantly. As it does, you will have the opportunity to do something counterintuitive: keep sales growing by driving down your close rate!
Here’s what I mean: Your high close rate performance (say, 15%) indicates that you have mastered the fundamentals of Internet sales management. You are starting to approach best practice. Since you can turn so many of your existing leads into sales, it is now profitable to expand your lead sourcing activities:
- You can buy third party leads from a wider radius (add zips).
- You can increase your search engine optimization and search engine marketing initiatives.
- You can add “sell copy” and multi-photos to your used car feeds.
- You can better leverage Craigslist.
All these things will drive more leads to you—and many may be “lower quality” than the leads that you started with. But these leads are additive. If you can continue to deliver the best-practice prospect management disciplines noted above, you will have a lower close rate on the new leads, driving down your overall close rate, but you will sell more cars and further grow your profit. Which leads us to the second key axiom of a best practice internet dealership: you succeed by maximizing profit, not close rate.
Remember the two key axioms for the best practice Internet dealer:
- You succeed by maximizing profit, not gross margin per vehicle.
- You succeed by maximizing profit, not internet close rate.
Happy selling! Internet sales best practice awaits you.