This is the second in a series of blogs relating to lead management. I have been working in the Motor Industry for 20 years. In that time I have worked with a large number of manufacturers all of whom spent time and money trying to resolve the issue of Dealer follow-up of centrally provided leads. So why have we failed to resolve the issue?
There are a number of very good reasons;
Historic Lead Quality:
These days the vast majority of leads that are sent to Dealers are generated by the internet. Customers pro-actively input their information into a form requesting a test drive from a Dealer with no anticipated reward from the manufacturer other than the test drive itself. This was not always the case. The prize draw and incentivised test drive were the main lead generators for many years. The Dealers perception of these leads was often that they were not genuine enquiries.
This is not surprising, after a couple of calls to people who can’t remember filling in a form because they were drunk in the car park at the rugby at Twickenham when they were encouraged to fill it out by an attractive events girl, Dealers start to suspect that they are wasting their time. Equally, when prospects are offered a side of salmon if they take a 24-hour test drive in a vehicle, Dealers can be forgiven for thinking that it is not the vehicle itself that the prospect is interested in and it is a waste of valuable demonstrator and salesperson time to fulfil the test drive.
This is not to say that there is not a place for incentivised response and data gathering, clearly the building of a CRM database is hugely valuable. The important thing is how incentivised responses are qualified before being sent to the Dealer.
The problem is of course that once this mindset exists, it is all too easy to dismiss all leads in the same way, regardless of how they are gathered and what the true quality of those leads is.
What Constitutes a Hot Lead?
You will not be surprised to learn that there is a difference between what a manufacturer sees as a hot lead and what a salesperson does. In my experience a Dealer Principal and Sales Manager will side with the manufacturer in that someone expressing an interest in a specific vehicle for a test drive is well worth a follow-up. Unfortunately it is not the Dealer Principal or the Sales Manager that actually follow-up the leads, it tends to be the sales team and their view is very different.
Most Dealer sales teams are structured for and remunerated against immediate sales. The hottest leads and the vast majority of sales come from walk-ins, direct calls and repeat purchases so that is where the sales focus is for salespeople. They want to their name on top of the whiteboard in the Sales Managers’ office for this month and they don’t see the manufacturer leads as the way to achieve that.
My own view is that anyone expressing an interest in a test drive in one of your vehicles is a hot lead. It is the skill of the salesperson who then makes contact with the prospect in qualifying them, ensuring they understand their needs, making sure that they get them in a vehicle and identifying the most appropriate finance package. These are not easy skills, but that is how you change a general enquiry from a prospect into a sale.
There also needs to be an understanding that even the hottest manufacturer lead is not as hot as a walk-in, conversion rates will be lower, but there will be conversions, and who can afford to waste those opportunities?
Not only that, the nature of the way leads are generated through the internet these days means that it is essential that the leads are followed up quickly because if a prospect has requested a test drive in one of your vehicles there is a fair chance that they have also requested one from your competitors. It is extraordinary how important the first contact is in that scenario.
Dealer Perception and Culture
It is clear that there is a deeply ingrained culture at sales person level with regard to centrally provided leads. This is based in some part on outdated perceptions of lead quality, but also unrealistic expectations of manufacturer leads and a dealer structure which does not support this activity.
In conversations with Dealers perhaps the most telling quote I heard was “leads from the manufacturer are a tax on my time”
Our research tells us that Dealers do not pick and chose which leads to follow-up, looking at the information and only following up those that look good. They either have a process for following them up or they do not regardless of the quality of the lead itself.
It is clear from our tracking of Dealer calls that leads which get followed-up quickly and well do convert to appointment and sale. Yet still there is Dealer ambivalence.
Call Reluctance
We have previously blogged about call reluctance and it is clear that this is a growing issue. It is hard to believe that a salesperson would be nervous of contacting a prospect who has expressed an interest, yet it is clear that some are not comfortable with it. This may be down to a lack of prospecting training, or perhaps manufacturer leads being given to the most junior salesperson. Whatever the reason, understanding this issue and the measures necessary to counteract it are vital for any Sales Manager.
No Objective Measurement
The biggest problem for the manufacturer has always been the lack of an objective measure of what the Dealers are actually doing. Dealers are provided leads via a Lead Management System (LMS) that is not integral to the daily workings of the Dealer and often not linked in any way to the DMS. This means any updates to the LMS are an administrative burden for the Dealer with no obvious benefit.
This results in a number of scenarios;
- At best the Dealer is efficient and they will follow-up the lead and update the LMS quickly and accurately. Or
- The Dealer will follow-up the lead, but the update to the lead management system either won’t happen, will happen some time after the event, or will be inaccurate.
- Perhaps worse, I am aware of Dealers who have a manufacturer requirement to update a lead within 24 hour saying they have been actioned. This they do religiously, regardless of the fact that no call has been made to the lead. Or
- The Dealers neither pick-up the phone nor bother to update any systems
The manufacturer’s solution to this problem has been to employ contact centres to make calls to prospects to understand what has happened from a follow-up perspective. This is positioned by manufacturers as a comfort call, but it is clearly really a dealer audit. There are a number of problems with this process;
- It is expensive
- On average they will contact 50% to 60% of the prospects so it gives an incomplete picture
- Customers do not always provide definitive or correct feedback
- If there has been an issue with the follow-up is often too late to do anything about it
All of the above means that there has been no effective objective measure of lead follow-up by the Dealers.
Focus on Lead Quality not Follow-up Quality
Because there is no objective measure of lead follow-up manufacturers have tended to focus on the quality of lead they are providing rather than the Dealer follow-up itself, in the hope that better quality leads are more likely to be followed-up. Unfortunately the Dealer approach is well ingrained and it takes more than a few tweaks to the qualification process to change it.
The only way to properly objectively measure the Dealer activity with regard to lead follow-up is to track the calls themselves, which is why we invented TrackBack.
By Gareth Thomas | Commercial Director | 10ACT