This article addresses the First Big Challenge: Digital Leakage.

ABSOLUTE Results’ reason for being is to develop, deliver and coach selling systems and solutions that help dealers solve some of their biggest retail challenges and, in that process, to help them sell more cars today and tomorrow.

Over the past 25 years, much has changed in the retail car business. One of the biggest changes has been the way customers interact with dealers.

Twenty-five years ago, consumers had to visit a dealer to get virtually any information. As a result, showroom walk-in traffic was plentiful and if a dealer wanted more traffic they just needed to place a bigger ad in the local newspaper.

Many top dealers also realised that their biggest ‘opportunity cost’ was Showroom Opportunity Leakage and many top dealers hired floor managers or developed a sales team model where salespeople were liners to greet customers, team leaders acted as closers to ensure volume and the all-powerful desk manager controlled gross profit.

A dealer’s ability to keep a close eye on the showroom floor made the difference between average profit and great profit.

Fifteen years ago, consumers began to get access to information online and they began to phone dealers for information prior to their visit. Perhaps too many had been frustrated visiting dealers, only to feel duped by flashy marketing, fine print, or lack of advertised units.

The industry began to get bad press from consumer advocacy groups like Consumer Reports in North America. Books like the ‘Lemon-Aid Guide to Car Shopping’ became popular tools for consumers and websites like Edmunds.com began to educate consumers on ‘how to buy car’.

As a result, dealers began to see their switchboard light up with calls from wary consumers. Dealer traffic shifted from 80 per cent walk-in traffic to 50 per cent walk-in and 50 per cent phone-in traffic.

Dealers began to invest in business development centres (BDC) and telephone training for their staff. The biggest opportunity cost for dealers became Telephone Opportunity Leakage.

Over the past decade and a half, online enquiries have now become the primary source of dealer opportunities. Research shows that consumers often spend 17 or more hours doing research online before contacting a dealer. When they do submit an online inquiry, they often reach out to multiple dealers but quality responses are spasmodic.

During a recent Absolute Results’ Sales Leadership training event at a premium brand dealer in New Jersey, the dealer verified the following monthly opportunity traffic stats for his dealership:

• 100 opportunities from walk-in traffic;
• 200 opportunities from sales calls; and
• 700 first-time digital leads.

Seventy per cent of this dealer’s new opportunity count was originating with an online enquiry. With average conversion rates of three per cent, Digital Opportunity Leakage is now the dealer’s biggest opportunity cost.

Too often, a dealer’s solution to digital leakage is to simply purchase more leads. This fuels what some vendors call the Digital Lead Addiction. Many dealers have seen dealership BDCs as the answer to the ever-growing number of digital leads and OEMs have invested heavily in supporting dealers in their BDC efforts.

Often, however, the expense and ongoing costs to set up a BDC are very substantial and the BDC becomes yet another department for the already overworked and overstressed dealer or sales manager to run.

Jeff Williams

More and more dealerships around the world are looking to technology as the ‘first responder’, followed by a phone call from one of their sales professionals or an outsourced BDC.

The same reality that dealers face now also trickles down to the sales floor. Sales professionals who come to work to wait for walk-in traffic and inbound sales calls are struggling to make a living. Even if they are able to convert a higher percentage of this traffic, they are still stuck trying to make a living with only 30 per cent of the dealer’s sales opportunities. Sales professionals too face the reality of our current digital age.

However, there is good news for dealers and their sales teams.

Each month, live agents at the Absolute Results Communications Centre, located in Surrey, British Columbia, make thousands of calls on behalf of dealers to their digital leads. During appointment-driven events, Absolute Results trainers have also made it a best practice to add digital leads to the in-dealership ‘boiler room’ call campaigns they lead with the sales team.

Both of these initiatives are showing the value of a quality telephone connection. Whether it’s Absolute Results’ call agents, Absolute Results’ trainers or trained sales professionals making the calls, customers respond to conversations based on ‘intelligent word tracts’ at an average rate of 15 to 25 per cent.

This means that as many as one in four prospects will make an appointment after an ‘Intelligent Telephone Conversation’ with a trained professional. This includes even customers who submitted an online enquiry more than 30 days previously.

The key is to pick up the phone and have an intelligent conversation. Dealers and their sales team need to do this every day.

Digital leakage affects every dealer, and dealers who invest in developing an appointment culture – whether powered by a BDC, an outside call centre or a trained team of sales professionals – will have the best chance of winning the business of today’s online shopper and winning the market share war.

Note: Absolute Results operates sales training in conjunction with customer recruiting drives and special sales events in Australia. The company is a sponsor of GoAutoNews Premium.

By John Mellor