With more tax refund money coming into potential buyers hands, DealerSocket unveiled a five-step customer acquisition plan for independent and buy-here, pay-here dealers on Tuesday.
Backed by the company’s most recent internal data and a survey of dealerships nationwide, DealerSocket highlighted the plan covers what executives called “low-hanging-fruit strategies” that dealers can implement right away to attract and convert more leads.
“It’s tempting for Independent dealers working in the trenches every day to get ‘tunnel vision’ about their marketing efforts. If the numbers aren’t where they need to be, the automatic response is to just try harder,” said Matt Redden, chief marketing and sales officer at DealerSocket.
“Instincts and subjective observations are helpful, but dealers must also prioritize reliable, black-and-white data. It can reframe challenges and uncover solutions they may have never noticed otherwise,” Redden continued.
DealerSocket recommends implementing the following strategies for the quickest results in lead acquisition and conversion:
THE PROBLEM: Phone leads are underperforming.
With lower close rates, longer sales cycles and lower profit margins, phone-sourced leads provide tremendous opportunities of growth. Independent dealers take 37 percent longer to close phone leads whereas franchised dealers only take 18 percent longer. In addition, phone leads result in a mere 14 percent of independents’ sales. Perhaps most challenging of all, phone leads bring in about $307 less profit per sale than other lead sources.
THE SOLUTION: Focus on phone training and call management efficiencies.
DealerSocket estimated independent dealers can make an average of 2.86 outbound calls to each phone prospect, while focusing more time on floor leads (4.13 calls) and Internet leads (3.82 calls). As a result, phone leads have only a 5 percent close rate. Implementing phone sales training and call management technology can help narrow the competitive gap with franchised dealers.
THE PROBLEM: Traditional marketing no longer works.
Radio spots, TV ads, billboards and tent sales are mainstays of most dealerships’ marketing plans. But the ROI just isn’t there anymore. Conventional media now bring in an average total profit of $1,702 per vehicle, while digital marketing rakes in $2,514 per sale. In today’s increasingly digital world, dealers must relinquish preconceived ideas and embrace the media that work.
THE SOLUTION: Digital media results in more sales and costs less.
In many cases, DealerSocket said a lower price translates to lower performance. But executives insisted it’s just the opposite with digital marketing, which includes websites, social networks, email, smartphones, tablets and kiosks. According to DealerSocket data, it costs $150 of digital marketing to sell one car. Compare that to $1,581 of traditional media. If you stick with conventional methods, you’ll pay 10 times more than necessary.
THE PROBLEM: Third-party lead generation can be expensive.
Some dealers believe they must directly pay for more leads. They don’t think they can produce new prospects organically through resources already in place. While third-party lead generators can certainly work, the question boils down to cost effectiveness.
THE SOLUTION: Optimize your website for maximum visibility and efficiency.
DealerSocket determined about 35 percent of independent dealers’ leads arrive through their website, making it the No. 1 lead generator today. The company added it’s also one of the easiest to optimize for even more impressive results. Invest in organic search engine optimization and marketing so customers can find you. Also keep in mind that inventory pages are the most visited section of any dealer website. They should be well organized and fully searchable, while offering multiple calls to action so you can secure more leads.
THE PROBLEM: Digital efforts do not account for user demographics.
Many businesses — dealers included — build websites for themselves rather than their end user. Do you know who is visiting your site, what they prefer in a user experience, and how your content displays on each person’s device?
THE SOLUTION: Pay special attention to mobile and tablet users.
Independent dealer websites can receive about half of their traffic from mobile devices and another 10 percent from tablet users. So DealerSocket suggested that dealers must prioritize responsive Web design that optimizes the user experience, regardless of how the user accesses the Internet.
Also, the company recommended that operators get to know their online shopper base, which typically consists of 65 percent males and 35 percent females. While age ranges are distributed fairly evenly, the majority of online shoppers are between the ages of 25 and 44.
THE PROBLEM: Many leads aren’t yet ready to buy.
Try as you might to bring in new customers, you may find that the majority of your leads are earlier in the purchase process – making it seem that even your strongest closing efforts fall on deaf ears.
THE SOLUTION: Leverage a data mining solution to boost trade-ins and intercept customers when they’re most likely to purchase.
DealerSocket acknowledged that data mining tools have long been a staple of the franchised dealer industry with about half of dealers using the technology. The results are clear cut — 75 percent of deals generated from a data mining solution result in a trade-in. On the contrary, DealerSocket noted only one out of every 10 independent dealers take advantage of data mining, and the small number of trade-ins follow suit (about 19 percent of deals).
The company explained today’s market includes affordable solutions geared specifically toward independents. By leveraging data mining to identify and target customers for vehicle buy-back programs, dealers can accomplish two desirable goals:
— Aid inventory acquisition efforts by purchasing quality vehicles from past customers.
— Increase sales as customers replace their old vehicle with a new one.
For more data-driven recommendations, operators can download DealerSocket’s free Independent Dealership Action Report here.