Making money selling cars used to be somewhat easy: Find a good location, Stock it with Good Inventory, Decorate the lot, Let people know about you (branding – TV & Radio), Publish some cars in a local newspaper or auto magazine, and Hard push for the sales when people come in. … Things have changed.
So many things have changed and are constantly changing that it is hard to know what is working any more and What will work into the future. People talk about Websites, SEO, Facebook, YouTube, Special finance and all kinds of financing options, Warranties, Engagement, etc., etc. …
A couple of things seem to stand out as consistently effective, and they both revolve around your inventory. They are that good inventory and proper marketing of it sells cars – though the way to market it effectively has most definitely changed. Now instead of print, a more effective way has become expensive 3rd party inventory syndication sites. And yes they produce leads – some better than others. But it never seems to be enough.
One small independent near me with about 50 cars on the lot was getting over 250 leads per month from supposedly the best (initials AT). But all those leads could only generate 3 sales – about 1% conversion to sales. His PVR was only about $1000.00, so I doubt the pricing was high. The staff, consisting of just 1 sales person, seemed experienced, knowledgeable, likable, and appeared effective when people came on the lot.
Another independent with about 75 cars on the lot was getting over 400 leads from various inventory syndicators (about 250 from Craigslist) with similar results. Their PVR was about $2800 and their staff consisted of 3 experienced sales people.
Something was up. Something had to change. And they both made changes. The first one decided to change lead providers – this time the tried the #2 best know syndicator. The result was not positive.
The second one did not change the way they were getting their leads. They decided to just follow up better with the ones they were already getting. They answered the phone in a nice and helpful manner giving people a good experience. And they followed up with them a minimum of 8 times. And the result was a 400% increase in sales from their main lead source – Craigslist. They did that by adding staff who were not experience in a BDC.
This same 75 car dealer decided to take one more step. They knew that they were getting some nice traffic on their website; but they could only attribute one sale to it. They knew that engagement with a good experience worked for phone calls. So they decided to give their website visitors the same kind of engagement and good experience. So they instituted live web chat onto their website with a branded done for you live chat service. The result was a 22% increase in total sales in the full month after the live web chat was instituted.
What this is telling me is that engagement with a helpful attitude and providing a good experience are helpful in driving sales in this economic environment today.
There is one other thing I wanted to share with you today. A third dealer decided to extend engagement on their website. They wanted to be able to engage with people who have limited time and could not engage on their website for any extended period. They instituted a branded text chat on their website. And the result was 63 texting leads – SRY no closing rate available here. Likewise a small franchise (less that 100 cars / mo) instituted TextChat on their website. And, while this only resulted in 6 texting leads, those leads did produce 4 sales – a closing conversion rate of 66%. Experience tells us that 1 in 4 text chats results in sales. We attribute that to people who text being lower in the sales funnel (buying cycle). The interesting thing is that you can provide this sort of engagement on 3rd party inventory syndication sites by using keywords with a short code. After all, Texting is no longer a Fad. It is a real and popular and often times preferred form of communication.
People have a lot of choices out there these days. When buying a car, they want it their way. They do not want to be pushed into something. They do their research before they go onto a car lot. And if they don’t feel comfortable with the experience they get from you, they will just go to another dealer where they do feel comfortable. So, give them the best experience you can, give it to them their way, and sell more cars even during slow times of the year.