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Lead Conversion, Part 2

July 2008, F&I and Showroom - Feature

by Denny Long

In Part 1 of this article, we discussed the importance of lead-conversion processes. We discussed the idea of working on individual components of the lead conversion process and provided five key points to help dealers identify problems, map out a process, and look for opportunities to change it.

We believe this process can help improve your sales, but we were asked for even more ideas, so here are three more:

6. Appointment setting

Typically, the appointment-setting component is your first contact with the consumer. As we mentioned in the previous article, the standard metric is 50 percent. This means 50 percent of the leads you generate will refuse the appointment and, in many cases, whatever money you spent on that lead will just go to waste.

To increase your current number, you need to know why those prospects do not want to visit your store. The best way to learn is to ask questions. You should add some more questions to your script about the reasons for refusal. If, for example, you find that the prospect doesn’t want the make of the new vehicles you sell, your script should be revised to talk about the wider selection of makes and models in your pre-owned inventory. After all, the majority of special finance customers purchase used vehicles. You probably have all kinds of used makes and models for sale. This process of working to improve results should be never-ending.

7. Quantity and quality of contact

The top reason we have found for low appointment rates is lack of contact with the consumer. What percentage of your leads are actually contacted? There’s a good chance the number is much lower than you think. As a matter of fact, this is one of the biggest problems most dealerships experience. Here are some interesting numbers: If you are setting appointments with 50 percent of your total leads, but only contacting 80 percent of them, your real contact-to-appointment ratio is 62.5 percent.

If you can get closer to a 100 percent contact rate, you will sell two or three additional vehicles for every 100 leads.

As always, you must “inspect what you expect” and track your contact rate. You paid good money for your leads, and your employees should be making every effort to contact them. We have found that many dealerships will leave a message on a prospect’s voicemail, then sit back and wait for the call to be returned. I call this “leaving the ball in the prospect’s court.” The ball should always be in your court. It’s OK to leave a compelling message on the first call, but you should never stop trying to actually speak with this potential customer.

You should also attempt to call at various times during the day. While analyzing one dealership’s lead-conversion process, we found a lead for which the salesperson called a prospect around noon for three days in a row, with no success. The salesperson gave up and changed the status of the lead to “Unable to Contact.” There’s a good chance this prospect is not home at noon and you’re never going to contact them then. As a matter of fact, if the salesperson had read the notes, he would have known that the prospect asked to be called in the evening. The salesperson made a decision to throw the dealer’s money out the window and wasted his own time.

8. Closing ratio

This component is at the opposite end of the spectrum from contact and appointment rate, but it’s just as important. Again, you must track where you are to help get where you want to go.

I believe my CEO, John Palmer, has the best method for increasing closing ratio. He calls it the “exit interview.” Create a form that is completed for every unsold customer. The form should show all possible reasons for why you were not able to sell that prospect a vehicle. This is a great tool for mapping the closing methods used, the lenders attempted, the vehicles shown and many other important points. I’m sure that your first thought is, “I don’t have time to fill out another form.” I promise you this: The extra vehicles you sell each month from the knowledge gained will make the time spent well worth it. This form should be used in your “Save a Deal” meeting that’s held each morning. (You do have these meetings, right?)

I’ve run out of room again and it seems as if there’s so much more work to do. Well, let’s get started by making some of the changes suggested, and there’s a good chance you’ll greatly increase sales. Good luck and good selling!

Denny Long is senior vice president at Dealer Marketing Services. E-mail him at dlong@special-finance.com.

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