At least that’s what the automotive industry believes, according to the numbers. We looked deep into the heart of this approach and have found interesting statistics and major inefficiencies in the current dealer process. Too many leads are being completely wasted — even in the shining star of the automotive industry.
The national average time to follow up with a social media lead is 37 hours. Even waiting 30 minutes to follow up is decreasing conversion rate by 100X — much less that national average of 37 hours — which, decreases chances of conversion by 1,000%.
Harvard Business Review article and study, “The Short Life of Online Sales Leads,” showed that of 2,241 U.S. companies:
• 37% responded within an hour
• 16% responded within 1-24 hours
• 24% took more than 24 hours
• 23% never responded at all
With the auto industry leading the way with responding at a much higher rate, 25% of dealerships still were not responding to a direct sales inquiry from their website at all. So, how do dealers follow up faster, longer and more effectively with their leads? Most of the time the problem is not necessarily generating more leads, but instead how can we squeeze the most juice (ROI) out of the leads we do have? Studies show we must follow up faster, longer and more consistently.
The current process in the auto industry goes something like this:
Someone in house or outsourced creates social media leads by building ads. Those leads are then funneled to the sales team or BDC via an underperforming CRM. The customer is then contacted 37 hours later.
Five minutes is the window of response, and text messages have a 98% open rate and are 21 times more likely to enter the sales cycle. Speed of contact is everything. Convenience is Speed’s twin brother. But companies are spending huge amounts of money generating leads, while the lead capturing and nurturing methods are falling way behind.
Lead generation is vital but when paired with a process to truly nurture these leads, selling cars becomes extremely predictable. In this digital world, predictability is foundational for growth. For instance, if you know that you can sell one car with every 40 leads you get, the math become very simple:
40 leads X cost of leads = cost per sold car.
This makes your vendor decisions very easy. “Do these numbers work for your dealer model or not?” Predictability becomes scalability. We can all agree that’s the goal. Scale the wins and eliminate the losses.
With great teamwork-focused dealerships, selling cars continues to be a numbers game. The only difference is they can now dominate the game.