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CURB THE CHURN: How to Identify & Retain Your Best Salespeople

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by David Metter, Co-Founder and President, AutoHook powered by Urban Science

Dealership employee turnover rates are notorious for being amongst the highest out of all retail sectors. Unfortunately, dealers have been forced to absorb the spiraling costs associated with a lack in salesperson retention, which only appears to be getting worse. NADA’s latest Workforce Study reported salesperson turnover rates are at a record high of 74% - up 7% from last year.

What we don’t often talk about is the broader implications high employee turnover can have both on dealers and on the industry as a whole. Consequences of losing good salespeople can transcend beyond an individual dealership level, as any significant reduction in customer retention or customer loyalty has the potential to damage the reputation of an entire brand.

Dealers aren’t shy about communicating the adverse effects high churn has on their business, both in their operational processes and when it comes down to their bottom line. Wards Auto says, “The impact is significant, causing decreased sales and profits, and diminished customer loyalty,” which we know can be detrimental to the health of any business.

MAXDigital recently surveyed nearly 400 dealers in the U.S. and found 78% struggle with issues related to high staff turnover. The root of the problem is two-fold in that good salespeople aren’t just hard to keep, they’re hard to find in the first place. Ninety percent of dealers surveyed said “Hiring good salespeople is hard,” and finding candidates with previous sales experience let alone automotive sales experience is even harder.

 *Source: 2018 MAXDigital Dealership Process and Salesperson Turnover Survey    
  
  
   
   
   
   
   
   
   
   
   
   
   
 

*Source: 2018 MAXDigital Dealership Process and Salesperson Turnover Survey

Over time, chronic retention problems add up and can cost dealers hundreds of thousands if not millions of dollars a year. A study by Driving Sales and Hireology determined the average cost of recruiting, training, and lost productivity for each salesperson is $45,000 (and that was back in 2016). In my last blog, we defined the value of a good salesperson over the course of one year to be more than $325,000 in pure gross profit. Add that to the cost of recruiting and training and dealers are losing out on over $365,000 per salesperson, per year.

The need for dealers to be able to identify their best salespeople in order to retain them is more critical now than ever before.

Why? Because people still heavily rely on face-to-face, personal interaction - especially when it comes to making big purchase decisions. The larger the purchase, the more inclined customers are to buy from someone they trust. Despite the abundance of online vehicle research tools at their disposal at any given micro-moment, relationships will always take precedence. And people naturally gravitate towards both consistency and what is familiar to them. They’re also much more likely to buy a second and a third car from the same person they already know and trust.

So how do we solve this industry-wide employee retention problem? There are three components that we know make up the formula for properly assessing your salespeople in order to help curb the churn:

1.     Know What You’re Losing

When it comes to evaluating the true performance of your salespeople, having the ability to view CRM data through a scientific lens is essential. CRM companies do what they do very well, but they only show one dimension of a highly multidimensional story – the wins. But what about the leads your salespeople touched that defected? Without that defection data, it becomes near impossible to properly identify the best performers on your team based on the opportunities they’re working.

In order to see who the real winners and losers are representing your dealership, you need a way to visually compare the number of leads each person sold each month in addition to the ones they lost and who they lost them to. Only then can you see who is really the most effective or ineffective because you have the complete story. You can make much better decisions on who or what needs to change based on a real visual of what you’re losing.

2.     Leverage the Right Technology – Rooted in Science

What we’ve never seen before at the dealership level, is science taking a leading role in how we evaluate our sales staff. If science-based technologies can tell you the people that consistently prove to be growing in a positive direction, or reducing their defection rates over time, then science can play a role in helping dealers implement compensation plans that serve and reward only their best people.

Keep in mind, it’s important to give newer technologies or data-driven solutions time to build, learn and improve. The more sales and defection data we can collect over time, the more accurate and actionable the tools that leverage this data will be at identifying your best (and worst) employees.

3.     Play to Your Strengths

I’ve been in this business for 27 years. If there is one thing I know without a shadow of a doubt, it’s that the chances of a salesperson closing a sale are greatest when the customer is physically in front of them. So, in addition to leveraging the right technology to evaluate your staff, leverage technology that will support what we know to be the greatest strength of any person that knows how to sell a car… get the customer in the showroom.

If the goal is to improve your lead follow-up process and eliminate inefficiencies in the way you operate (which by the way is always the goal) then it’s absolutely vital to have the tools in place that can pinpoint both the strengths and the weaknesses of your team. When it comes to retention, dealers are much more likely to foster an environment of happy employees if they play into their peoples’ strengths instead of wasting money, time and energy attempting to fix what they’ll never be good at. As stated in the national bestseller, StrengthsFinder 2.0, “People have several times more potential for growth when they invest energy in developing their strengths instead of correcting their deficiencies.”  

The takeaway here is to place a heavier focus on solutions that are proven to get people physically in the door, where you have a much higher chance of getting them behind the wheel for a test drive, building a personal relationship, selling them a car, and retaining their business. Test drive incentives are one tactic we know works. Pair that with a bulletproof lead follow-up process and what you’re left with is a prescription for lowering defections tied to your salespeople, higher close rates, and better-rewarded, happier employees.

In summary, everyone wants to retain salespeople and everyone wants to retain the right salespeople for their respective business. So many dealership compensation plans are set up to benefit the underperformers – which is completely counterintuitive to reducing turnover. Until now, it’s been impossible for dealers to adequately compensate their all-stars and overperformers because they’ve had no way to identify them. Moving forward, dealers can take this information and adjust their compensation plans to retain the right salespeople and make the necessary changes to get rid of the rest. After all, it would only make sense to reward the people that are rewarding you.

 

If Your CRM Could Talk…How to Expose Your “True” Top Salespeople

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| by David Metter

One of the only remaining constants in the car business is an overwhelming surplus of opinions. Unfortunately for Dealers, it’s almost impossible to silence the constant stream of opinion being pitched in their direction at all times – unless, of course, they choose to operate based on what they know. The beautiful thing about science is that it turns the volume of opinion down so much we can no longer hear its intrusive racket. What we’ve come to find is that the opinions within so many facets of a dealership’s sales process can be overpowered and replaced by science, ultimately resulting in Dealers selling more cars, operating more efficiently and employing better salespeople for a longer period of time. 

Before we had the type of data we have now, we could look at all the opportunities in our CRM, whether they were Internet leads, phone calls or ups on the showroom floor, and do sales match on those opportunities using registration data. The problem with that however, is that registration data is 45 days old and CRM data can be one-dimensional. Meaning, we could see how many opportunities we lost and what they ended up buying, but we had no insight as to where they bought or which salesperson touched the opportunity before they walked out and bought from a competitor…until now.

What’s been fascinating to watch develop over the last couple of years is the ability we now have to look at data in different ways than we’ve ever have before – and one of those ways is at the salesperson level. In the past, salespeople have been judged solely by how many sales they closed out of the opportunities they had in the CRM. So essentially, we could see their closing ratio under a one-dimensional view. But we couldn’t see what they were losing. Today on the other hand, due to innovations in what we can do with a Dealer’s CRM data, we get a much more accurate, three-dimensional view of how our salespeople are truly performing based on the complete picture.

We know not just how many cars each of our people sold, but how many leads they touched that walked out and bought from a competing dealership. And we know if those defections bought from a dealer within the same brand or a competitive brand. We can also dig even deeper into the quality of the leads they’re working to gauge the true performance of your lead providers. Couple that with the performance of your salespeople, and that’s when data viewed through a scientific lens becomes incredibly powerful and prescriptive. That’s when you can start making improvements and executing more efficiently based on what you know, rather than opinion.

When a great salesperson’s defections are almost pacing what they sold, Dealers can see right away when one of their “best” salespeople is actually losing way more than they’re winning, or burning through opportunities. By layering in this defection data on top of the sales data, you can see the true success and failure of each individual player on your team. CRM data is so important, but it’s not three-dimensional in the sense that you can’t see lost opportunities or defections on top of closed sales. Having this information gives you the actual true effectiveness of each one of your salespeople.

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Additionally, if one salesperson has significantly fewer opportunities but closes more sales than they lose, that all plays into the overall methodology of how effective they are. It’s just like in baseball when you have a 300 hitter, but he only gets 100 at-bats. He’s not getting regular daily playing time – but this guy is a 300 hitter! So, he should be getting more opportunities up at the plate. Same thing applies to salespeople that deserve to get more opportunities based on their true performance.

 

We can also track their performance or “batting average” over time to see if it improves or declines. Or, you can test to see if an individual’s batting average changes based on the number of opportunities assigned to them. Whether it does or it doesn’t, the important thing is we now have the necessary information to diagnose where our blind spots are along with a science-based prescription on how to operate more efficiently. Oh – and the best part? Dealers can rest easy knowing they can make decisions and take immediate action based on fact alone.

10 Most Memorable Quotes from the J.D. Power Automotive Marketing Roundtable

The 11th Annual J.D. Power Automotive Marketing Roundtable

AutoHook was honored to attend the 2016 J.D. Power Automotive Marketing routable at the Bellagio, Las Vegas. From Tuesday, October 25th - Thursday, October 27th, we had the privilege of networking with some of the most brilliant leaders in our industry. Things can get a little chaotic between fast-paced sessions and panel discussions, meetings, parties, and catching up with all our friends, clients, and partners.

We've taken the liberty to bring you the 10 very best, most memorable quotes of 2016 - straight from the mouths of automotive's smartest minds themselves. 

1. “Don’t start with the big data, start with the business needs first. Identify them and then work backwards. I hear too much of let’s get big data let’s get DMPs in the room, but we need to start with the business needs first.” 

- Dean Evans | Chief Marketing Officer, Hyundai Motor America

2. “If there’s ever any hope of attributing all these touch points along the shopping journey, you’ve got to have some place where all the data rolls up and you can analyze it as one set.”

- Erik Lukas | Retail Digital Operations Manager, Subaru of America

3. “There’s no silver bullet when it comes to KPIs. Big Data has become a muse for creativity.” 

- Trace Przybylowicz | Autos Lead: Industry Relations, Facebook

4. “The challenge for tier 3 in this big data game is getting some team spirit going where dealers will actually share with the OE and the OE will share with the dealers, and then you’ve got really powerful stuff you can use. Then you can really start to understand who your consumer is and what their actions are.”

Kelly McNearney | Senior Automotive Retail Strategist, Google

5. “A discussion that seems to be both prevalent and imminent is around DMPs. Data management platforms are almost replacing that ‘big data’ term.” 

- David Metter | President, AutoHook powered by Urban Science

6. “A DMP can really give you a full view of who your customer is and how to personalize that experience – that’s the holy grail – making sure your marketing investments are put in the right place.” 

Jenny Watson | Digital & Performance Marketing Expert

7. “Because everyone is online shopping at the dealer’s site, the dealers have a wealth, almost a paralyzing wealth of information. Using that to understand and to empower their marketing - online marketing efforts in particular - can make them much more efficient and vastly more powerful in what they do.”

Jason Knight | COO & Co-Founder, Lotlinx

8. “Unfortunately too many businesses today do focus just on the transaction and not the experience. We assume people don’t want to be there so we treat them that way. The truth is, people don’t come back if it’s not a great experience. If it’s just a transaction, how is that a great experience?”

Beau Boeckmann | President, Galpin Motors

9. “With big data comes big challenges in verifying consumer data. We need free from fraud, viewable consumer content and data.” 

- Mark Pearlstein | Chief Revenue Officer, DoubleVerify

10. “55% of advertisers consider themselves beginners in mobile advertising – that’s alarming.”

Christian Fuller | Chief Relationship Officer, Search Optics

 Pictured (left to right): Dean Evans, Kelly McNearney, Erik Lukas, Jenny Watson

Pictured (left to right): Dean Evans, Kelly McNearney, Erik Lukas, Jenny Watson

 Pictured: Christian Fuller

Pictured: Christian Fuller

 Pictured: Beau Boeckmann

Pictured: Beau Boeckmann

 Pictured (left to right): Joe Gumm, Bert Boeckmann, Beau Boeckmann, and Bridget Fitzpatrick

Pictured (left to right): Joe Gumm, Bert Boeckmann, Beau Boeckmann, and Bridget Fitzpatrick

 Pictured (left to right): Jeremy Anspach, Trace Przybylowicz, Myles Rose, Miran Maric

Pictured (left to right): Jeremy Anspach, Trace Przybylowicz, Myles Rose, Miran Maric

 Pictured (left to right): Andy Jacobson, Kamakshi Sivaramakrishnan, and Mark Pearlstein

Pictured (left to right): Andy Jacobson, Kamakshi Sivaramakrishnan, and Mark Pearlstein

 Pictured (left to right): Dean Evans, Kelly McNearney, Erik Lukas, Jenny Watson, & David Metter

Pictured (left to right): Dean Evans, Kelly McNearney, Erik Lukas, Jenny Watson, & David Metter

 Pictured (left to right): Jenny Watson and David Metter

Pictured (left to right): Jenny Watson and David Metter

More Data More Problems: 3 Big Data Problems & How to Solve Them

by David Metter

“Just because it can be counted, doesn’t mean it counts,” said Tom O’Regan, CEO of Madison Logic in a recent IAB study. “As you rise up the scale of performance measurement tactics, you find the increasing convergence of both attribution and value.” These are incredibly wise words to live by. There are dozens of performance metrics that we’re capable of tracking. But just because we can, doesn’t mean we should.

We are deep inside the epicenter of the information age. With all this big data comes an overwhelming opportunity to derive knowledge and take action. Nothing, (not even money) is more powerful than knowledge. We have all this information literally at our fingertips, yet automotive marketers still struggle to validate which solutions delivered the highest ROI or led to a sale. Having this knowledge (and knowing what to do with it) will make everything we do moving forward make a lot more sense.

As technologies become smarter, more integrated, and more systematic, automotive marketers face three big data obstacles:

  1. Access to accurate, useful data
  2. Access to faster, more timely data
  3.  The ability to turn big data insights into beneficial, executable actions

Let’s dive into each problem and how we can diminish these issues as we plan for 2017. 

Useful Data: 

First, you need to know what to look for. It’s not just about obtaining more and more data. It’s what we can to do with the knowledge we extract from the data that ultimately matters. So many advertisers still fail to acknowledge that there is life beyond the click. The number of clicks a campaign generated or the number of unique users it sent to your website is a microscopic fraction of the full picture, and frankly, it's an irrelevant metric.

In today’s world, clicks just don’t hold their weight. Clicks don’t prove conversion and clicks don’t move inventory. Furthermore, you could have the highest rate of website traffic in your market, but if your conversion rates are low, that “traffic” is just a number – which at the end of the day, means nothing.

Going into a new year, when you’re considering which technologies and vendors to work into your budget start with the ones that can prove they can consistently deliver the following:

  • A high conversion rate with proof of lead exclusivity
  • An incremental increase in showroom visits
  • (And most importantly) An incremental increase in sales

Access to this type of data is the most beneficial, as it gives dealers the freedom to stop guessing and start knowing what works – and like I said before, nothing is more powerful than knowledge.

Ask the right questions upfront so you can better determine if a vendor and their data will be of use to you. Start with the following:

  • At what rate do their solutions convert?
  • What is their showroom visit rate?
  • How do these rates compare to industry averages?
  • What is their method of tracking sales?
  • Can they link a vehicle sold to a specific user or campaign?

If they don’t have the validation stats to prove these things to you, they are not worth your time or money.

No-nonsense data tells you how many showroom visitors purchased (either from you or a competitor) and what specifically drove them in. It can tell you if your buyers are repeat, loyal customers or if they’re new to your brand. Did they visit your store but end up purchasing somewhere else? What brand did they buy and why? These are the types of questions legitimate reporting should be able to answer.

Faster Data:

IBM’s recent whitepaper, From Data to Insights to Opportunities, points out the clouded view of actionable data due to systems not communicating with each other. “Different platforms in different departments can’t talk to each other, so reporting is slowed. And it’s difficult to take proactive steps when your view of the total customer experience is a little blurry.”

The goal is to spend less time compiling data and more time using it to uncover new growth opportunities. Aim for a single, unified and cohesive structure when it comes to analytics and reporting. Ask vendors if they allow other solutions to integrate with their dashboards or APIs? The more people you can get working together towards a common goal, the better your chances become of achieving that goal. It’s the “two heads are better than one” approach. An industry-wide holistic viewpoint must be adopted for all parties to benefit from both faster and more comprehensive data models.

Also, choose to only work with the players that have near real-time reporting capabilities. With each day that passes after a purchase is made, that sales data becomes less and less valuable. What good are insights that remain unseen? The faster we can access sales data, the more we can do with it to extend our finite budgets.

Actionable Data: 

Integrated, cross-channel and cross-device attribution reporting is essential to following the consumer’s buying path. These capabilities illuminate trends in the purchase cycle and allow dealers to make more lucrative decisions with their ad dollars. Behavior across mobile, desktop, and online and offline channels all need to be considered to get a complete, accurate view of the attribution path.

Knowing which solutions are working for your dealership is the key to correcting all your big data problems. Use attribution data to build predictive models that identify trends or patterns in purchase behavior. Pragmatic data can tell you which vehicles to keep in stock, how many of each model, and in which colors. It can tell you how to better allocate every dollar so you can rest assured your money is being spent in the right places.

Remember that useful automotive data is largely derived from the two most important KPIs: conversions and sales. The focus of your reporting should include data that shows a complete attribution path from an advertising source to a sale.

The Marketer’s Guide to Cross-Channel Attribution states, “When organizations are able to measure marketing’s impact on the metrics that truly matter to the business, then and only then are they in a position to make confident decisions about future marketing investments. And that’s just the tip of the iceberg.”

These roadblocks need to be obliterated in order to reverse the rate in which we’re inundated with useless, irrelevant information. The time has come where we’re capable of maximizing revenue across all marketing initiatives. It’s time to show big data who’s boss! If we work together, we can close gaps in communication and better track consumer actions throughout the purchase cycle for the benefit of all.

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Heading to Vegas for the #JDPowerAMR? Be sure to catch the Big Data problem-solving Panel, We’ve Got the Data! Now What? Moderated by David Metter, featuring digital marketing experts from Hyundai, Subaru, Google, AutoNation & more! Panel starts Wednesday, October 26th @ 11:25 AM (Breakout Room #2)

 

 

Part IV: The Naked Truth Exposed [EXECUTIVE EDITION] Big Data & Attribution

Big Data & Attribution…Who Has It & How Do We Get It?

by David Metter

There’s good news and bad news on this topic…but mostly good. The bad news is AutoHook’s panel of marketing experts had so many dealer-submitted issues to solve they didn’t have time to address data and attribution at Digital Dealer 21 (as this subject could take 50 minutes alone). The good news is I now have the opportunity to step in and shine my headlights upon the industry-wide struggle I’m most passionate about. This final piece of our Naked Truth Exposed series will represent the most momentous road block dealers face today: proving without a doubt the one source that led to a sale.

First, let me fill you in on a quick story about a guy named Dayn Riegel. Dayn is the eCommerce Director of Loganville Ford and he was AutoHook’s winner of our all expenses paid trip to DD21. Why would we invest so much money in a person we had never met? Because he asked the right question. In our nation-wide poll conducted over the spring and summer of 2016, Dayn submitted the following inquiry:

“The best marketing in the world can’t save a dealership from itself – it’s own greed, ineptitude or lack of drive…lack of willingness to succeed, and I don’t mean just talk about it, do something about it. So, my question is: With all the hype around SEO, SEM, PPC, Bing, etc., who is taking all the big data and marketing know-it-all and applying it? Exactly. Nobody really, truly is. Why not?”

Thank you Dayn for giving me the opportunity to take on this challenge. This question is the reason I do what I do, as I experienced the same problems during my time as CMO at MileOne Automotive. I know firsthand, one of the most common pain points for dealers exists in the gaps (or the disconnects in communication) that form when two vendors don’t properly work together. As competition rises in the digital space, and as more and more companies enter the game, these lapses in digital communication will only continue to grow - creating more cracks in our already distressed methods of attributing a sale to a single source.

During my time at MileOne, I was fortunate enough to have the resources, contacts, a great team, and insight to do something about this problem. One of our biggest strengths, and arguably the reason we had such a competitive edge was in our ability to see the unique advantages of two different vendors, and bring them together in a way that benefitted our needs. We quickly learned that combining the exclusive technologies of two (or even three) vendors made it easier for us to sell more cars. More importantly, we had the power to track the latter half of a specific customer’s buying process, which eventually led to the creation of AutoHook’s award-winning sales attribution engine.

People in general have a tendency to overcomplicate common sense concepts. But this isn’t rocket science. If you need green paint, you take some blue paint and some yellow paint and simply mix them together.

So how do we paint the automotive marketing landscape green? I can tell you since I’ve been on the other side (the vendor side) I’ve seen a need for these types of alliances to happen now more than ever. It’s monumental to think of how much we can accomplish if we open up our strengths to others to generate a mutual benefit. What I’m suggesting, is we need to change the focus from beating our competitors, to working in conjunction with competitors to accomplish a goal that guarantees success for all parties - and not just for vendors, but for dealers and OEMs as well.

As Dayn referenced, there is an undertone of greed throughout both dealer and vendor communities. Everyone wants to make more money. Everyone wants to be #1. Everyone wants to keep proprietary technology a secret. But let’s take a step back. Let me spell this out in the simplest way I possibly can. In order to solve the ambiguity that shadows big data and accurate attribution in our industry, we have to do one thing: change our mentality.

Here’s how. What if instead of keeping secrets, we shared knowledge and worked together? What if we connected the automotive universe and created one cohesive, more efficient railroad system? Wouldn’t this drastically reduce disconnects in our data and reporting? Right now, we are on the precipice of change. No one can argue that there is strength in numbers. We need to unite, rather than surround our solutions with egotistical walls, in order to reap the benefits of the bigger picture.

Going back to Dayn’s question of, “Who is taking all the big data and marketing know-it-all and applying it?” The answer is, WE ARE. AutoHook, powered by Urban Science has the fastest, most reliable sales attribution path data in the industry - 99.7% to be exact, and 95% of that data is updated daily. No one can compete with that! Furthermore, we know how to apply this data to prove our solutions directly led to a sale. So not only do we have the data and know what to do with it, but we’re willing to SHARE our AutoHook rail system and API technology with the entire industry…FOR FREE.

Imagine that, an open API that gives all automotive entities the power to finally attribute vehicle sales to a single campaign. What? Why? How can we do this? First of all, we know for a fact we have access to the most reliable and timely sales data from Urban Science. We also know that achieving accurate attribution is trifold.

First, the solution needs to execute. Second, it needs to be validated with performance reports that show concrete evidence of incremental sales and lift in conversion. This requires vendors to surpass irrelevant vanity metrics such as clicks, impressions, and site traffic. Is there any paid search company out there that can prove to a dealership that one of their search campaign clicks resulted in a sold vehicle? The answer, just as Dayn suggested, is absolutely not!

The third piece of our bulletproof attribution model is that it’s personalized and unique to each customer, further eliminating breakdowns in sales data. By assigning a unique code to every user, we can track all post-interaction behavior. How many people walked into your showroom as a direct result of our solution? Did they end up purchasing or not? What model did they purchase? Are they new to your brand? And what led them to your store?

What if the solution to this problem afflicting dealerships, OEMs, and vendors could be as simple as breaking down the walls that separate and limit us? What if we stopped nickel and diming dealers for every integration they request? The ideal solution for obtaining actionable data must be suited for omnichannel use, meaning available to all publishers and vendors across all types of media outlets, hence the concept of an open, free API.

My friends, this is the beginning of an era. This is how we provide the world with access to big data and the reporting needed to turn it into a story worth sharing. This is how our industry becomes more efficient, more streamlined, and more powerful. If we can patch the holes of automotive’s digital rail system, every vendor and dealership can finally validate the true ROI of their marketing investments.

Stay tuned for more to come on how AutoHook will be providing free API access to all.

If you missed part I, II, or III of our Naked Truth Exposed series, check them out below:

Part III: The Naked Truth Exposed [Online Buying]

Online Buying...Should We Do It?

by the AutoHook Marketing Team

This particular blog will cover arguably the most controversial topic inundating dealer forums like DealerRefresh and other automotive digital communities. This is the question of the moment, and perhaps the largest generator of both debate and uncertainty creeping up our industry’s horizon.

After AutoHook’s nation-wide survey conducted over the last three months, the top five digital marketing topics dealers currently struggle with were exposed:

  1. [Social]: Does Social sell cars?
  2. [Video]: Video, video, video…tell me more.
  3. [Paid Search, Retargeting & Budgeting]: What should we expect?
  4. [Online Buying]: Should we do it?
  5. [Data & Marketing Attribution]: Who has it and how do we get it?

The first three topics are covered in parts I & II of The Naked Truth Exposed Series. Check them out below:

THE QUESTION OF THE MOMENT: Should I make my vehicles available to buy directly on my website? Is it necessary if I already have a successful brick and mortar store?

So, what did AutoHook’s Naked Truth defenders have to say about online buying at Digital Dealer 21? First, let’s reintroduce our expert panelists and reveal what they shared on this undecided topic.

Alex Jefferson (eCommerce Director, Proctor Dealerships)

“Where online buying is going I don’t necessarily know, but I do know that it did personally have an adverse effect on us when we integrated with the tool.”

The challenge with online buying is there are two very different perspectives on the topic: the consumer’s perspective, and the dealer’s perspective. Proctor Dealerships recently tested an integrated online buying model on their websites over a one-year time period. The tool gave customers the ability to formulate payments, value their trade-in, and complete most of the purchase process online - the overall goal, of course being to save the time consumers spend physically at the dealership. However, what Alex and his team found is that “people are lazy.” They don’t want to take the time (even in the comfort of their home) to navigate through this integrated, lengthy form.

Alex’s advice? What works best for his stores is integrating separate “get your price” buttons, trade-in tools, and finance or credit apps on their sites. It’s three separate forms, but they are quick and easy to fill out. This process also works better for non-tech-savvy customers, and it has been highly effective for Proctor stores specifically. A single buy online method may be too long and too time-consuming for a lot of people, and it can also negatively affect your conversion rates. As a rule of thumb, it's always best to keep online forms as short and straightforward as possible. The easier it is to complete, the higher your conversion rates will be. Alex tells our Naked Truth audience:

“I will tell you after a year of testing it, our lead volume went down by about 30-40%.”

On the contrary, DD21 interview between Chief Editor of DealerRefresh, Jeff Kershner, and CEO of Drive Motors, Aaron Krane disclosed opposing evidence.

DealerRefresh: What is the feedback like from dealership personnel at dealerships offering consumers this option?
Aaron Krane: Dealership staff love that customers who use online checkout will not only sell themselves but also upsell themselves, while the store is closed. That means orders through Drive Motors convert to a sale at over 10-times the rate of leads, and have a higher PVR than many stores’ averages. Moreover, in the words of one dealership, online checkout customers are “ecstatic.”

Kelly McNearney (Senior Automotive Retail Strategist, Google)

 “All I care about is online video.” 

Kelly allowed fellow panelists, Scott Empringham and Alex Jefferson to answer the bulk of this question. However, she made sure to emphasize the role video plays when it comes to showcasing your inventory digitally, as it can nurture the online buying process.

If (or when) buying online becomes mainstream, inventory-specific video will undoubtedly play a role in increasing “buy it now” conversion. Why? Because if customers can virtually touch, feel, see, experience, learn about, and test drive the vehicle in consideration, it’s possible they’ll obtain enough information on its specs and benefits to click that change-driving “buy it now” button.

During her 2-Minute Interview, live at #DD21 with Flash Point’s Scott Empringham, Kelly McNearney shared Google’s #1 tip to help dealers sell more cars, trucks, and SUVs right now. “If I was opening up a dealership today, the first thing I would do is start making YouTube videos, walkarounds, test drives, and features to show people the inventory on my lot.”

Customers aren’t visiting as many dealers as they used to. Google shows consumers visit 1-2 stores before making a purchase. People know what they want before walking into a dealership. New, inventory-focused video merchandising technologies will only further support that fact.

“People want to make decisions at home, on the couch.”

…And Kelly's right! When you think about it, people don’t want to feel pressure from a salesperson to make any life-altering decisions on the spot. A vehicle purchase is the second largest purchase consumers make after buying a home. There is a lot of emotion, stress, time, money, and energy that goes into their decision that dealers don’t always recognize or acknowledge.   

Scott Empringham (CEO/President, Flash Point Communications)

“I don’t think it’s a question of is it going to happen, it is happening. If you’ve got your fundamentals down, and that’s something you want to experiment with, I say go for it!”

Scott does caution if you haven’t first mastered the fundamentals (things like digital merchandising, relevant photos and videos, a high converting site, simple, high converting forms, etc.) jumping into online buying can be a waste.

Asbury Automotive Group for example, rolled out online buying across their stores, and other large progressive groups like AutoNation and Penske have done the same. Asbury is a Flash Point client with a huge digital marketing team, and they successfully participate in an online buying model today. However, the vast majority of Flash Point customers don’t necessarily have the resources Asbury and similar groups have to make this system work.

Brands like Honda, Toyota, Ford, Chevy – those are value-buy vehicles. People want and need to physically sit in the car to determine if it’s right for them. On the contrary, when it comes to aspirational brands like Maserati or Lamborghini, or someone who collects cars as a hobby, people would be more likely to buy these types of cars online. Obviously, Tesla has been doing it successfully for years.

At this time, the best answer experts can provide, when it comes to whether or not dealers need a buy it now button is…it depends. There are stores that have been successful with it, and there are stores that have not been successful with it. The key is to have your ducks in a row (or in other words, a website that converts at a high rate) before rolling out a nation-wide online buying program.

Bill Playford, VP & Partner of DealerKnows Consulting called out the topic in his June 2016 DealerRefresh article, Buy it NOW! The Button that Drives Change.

“I know this is giving some of you heart palpitations, but it’s once again that time to rethink the way we approach our customers. Not everyone will want to utilize a Buy It Now button. But, by not incorporating it into your process, you are disenfranchising a segment of your population who would click this and purchase almost 100% online.”

The key consideration with online buying, and with your dealer operations in general, is going above and beyond to make things convenient for your customers. Make your end model fast and easy. If you can manage one platform great! If not, do everything you can to make your process smoother on the customer's behalf. Build a loyal customer base now, because you never know - they could be buying their future car from you, right off your website.

A huge thank you goes out to DealerRefresh & Flash Point for capturing all the Naked Truth magic live on Facebook. Click here to watch the recording!

For additional resources or information from our panelists, visit DriveAutoHook.com/NakedTruth.

 

The Mobile Tipping Point

By David Metter

For those of you who have never heard of the phrase tipping point, there are a lot of variations in terms of a definition - depending on who’s asking. To physicists, the tipping point is when an object gains enough nuclear material to sustain a chain reaction at a constant rate. To computing geeks/experts, “The tipping point is the critical point in an evolving situation that leads to a new and irreversible development.” To a “car guy” it could be when a customer walks into your showroom five minutes before closing time on a Saturday. We have all had a few of those. According to TechTarget, marketers define the tipping point as “a threshold that, once reached, will result in additional sales.”

No matter how you look at it, the concept is so profound that it will forever define the current state of mobile marketing in both the physical and digital automotive worlds. One of the reasons mobile has caused such upheaval in our society is because both smartphones and tablets are so incredibly personal to each individual user. In fact, Tune dictates the smartphone as the single most personal device, ever. “Because of that, it is the everything device: the communicating, the gaming, the learning, the buying, the reading, the watching, the tracking, the remote controlling device.”

Consumers are now spending more time playing on these intelligent little microcomputers than they spend watching television. In a recent eBook from Tune Marketing, they provide insights into the international mobile economy, showing mobile usage trends to be nearly equivalent in most countries. Globally, in 2015 alone, 800 million people bought their first smartphone. It is predicted that by 2020, there will be 6.5 billion smartphone users. That’s 6.5 billion people to market to. It’s also 6.5 billion opportunities to make a connection, or 6.5 billion chances to get buried in mobile white noise – depending on how you look at it.

The mobile tipping point is not just starting to make its way through the airwaves. It has arrived, and I cannot stress that enough. These short but abundant interactions are what Google refers to as “Micro-Moments.” Mobile touch points in the consumer’s journey have become so powerful, that they will actually interrupt a person from following through with a given task. Google says 91% of smartphone users turn to their phones for ideas right in the middle of a task. Talk about a distracted generation!

Mobile has become a tipping point because it has the power to claim our attention at any given time and place. Mobile takes no mercy, and it doesn’t apologize for being rude when it interrupts your dinner, your date, your family time, or your purchase decisions.

The most important fact to remember is that while mobile usage is continuously increasing, the time consumers spend during each micro-moment is actually decreasing, meaning your chances of making an impact are smaller, and your window of opportunity is much shorter.

During this Sunday’s Super Bowl 50, Google leveraged Adometry TV Attribution technology and found 82% of game-driven ad searches were to no one’s surprise, conducted on a mobile device (a 12% increase since last year’s game). Furthermore, out of the ten brands that drove the highest search volumes, five of them were either OEMs or vehicle brands – so as an industry, we have to be doing something right!

There’s no denying it. Mobile has forever changed the way marketers interact and reach consumers. We’re all slaves to it. The swiping, the scrolling, the click-to-call-ing, the convenience. In so many ways the mobile experience dictates not only where our marketing should be, but also the entire advancement of communication as we know it. My friends, the mobile tipping point is here.  

Check out our Mobile eBook for more ways to master mobile in the year ahead. 

A Primer on Mobile Wallets and How Dealers Can Benefit From Them

By David Metter

If you have a smartphone, chances are you have Apple Wallet (formerly Passbook) or Google Wallet. These applications are mobile wallets that store, among other things, applications like Apple Pay that enable people to purchase things with their phones. Of course, it's very unlikely that anybody is going to purchase their vehicle by swiping their mobile device. For that reason, many dealers dismiss the notion that they need to know anything about mobile wallets.

However, mobile wallets are used for a lot more than just purchasing things. A mobile wallet is the digital equivalent to the physical wallets we carry in our pockets and purses. They can be used to store many things including drivers' licenses, social security cards, payment cards, login data for websites and loyalty cards. Mobile wallets are also used to store gift cards, coupons and authentication codes for boarding passes, public transport tickets, movie and sporting event tickets, and house and car keys.

For dealerships, the "keys" to getting your brand inside of a consumer's mobile wallet include loyalty cards, mobile advertising, coupons and special offers. The good news is, once you're in there you're likely to stay there, and your digital passcode can be easily updated so you can send customers push notifications offering them new coupons and specials.

Although mobile wallet usage is not yet mainstream, familiarity and usage have doubled since 2013, according to a recent study published by market research and consulting firm Chadwick Martin Bailey (CMB). Fifteen percent of respondents reported using a mobile wallet in the first half of 2015 and an additional 22 percent said they're likely to use it in the coming six months. If that's true, over one-third of consumers are now using their mobile wallets, at least on occasion.

This growing usage presents significant marketing opportunities for dealerships. Mobile wallets provide the perfect post-click destination for coupons, gift cards and incentives. Here are several ways that dealerships can leverage mobile wallets to ensure that your brand stays top-of-mind with consumers:

Digital Advertising

Early in 2015, Honda promoted its nationwide Honda Dream Garage Sales Event through a mobile wallet ad campaign that invited consumers to tap a banner ad and save the event to Apple’s Passbook (now Wallet) or Google Wallet. The mobile ads ran on ESPN.com, Allrecipes.com and the Washington Times. Once consumers stored the event, Honda sent reminders to them as the event date got closer. Individual dealerships could easily replicate this strategy.  

Normal mobile ad campaigns can be forgotten soon after they are over. Mobile wallet marketing campaigns can be instantly updated to stay relevant to your customers' needs. Once your dealership has a digital passcode or "pass" into a customer's wallet, it's easy to push out reminders for a new promotion, much like Starbucks does.

Social Media and Mobile Apps

According to research firm Forrester, smartphone owners spend 80 percent of their time in five apps: Facebook, Maps, YouTube, Pandora and Gmail. For dealerships that advertise on Facebook, the growing adoption of mobile wallets will almost certainly result in higher click-through and redemption rates of Facebook ads. Here's why:

When a consumer is sitting at home or at work and surfing Facebook, they may see your dealership's coupon or offer, but may decide not to redeem it because they don't anticipate an immediate need, or they may forget about it as they continue to read their friends' updates. That consumer may remember later on, but the thought of having to go back to find and retrieve the offer or coupon is sometimes just enough of a deterrent that it doesn't happen.

When a consumer is checking Facebook with their mobile device, storing coupons and offers is a snap: just click on the ad or offer, click on a button that says "Add" and their mobile wallet stores the coupon or offer for future use. This makes it easy to store and organize a nearly endless supply of coupons and offers.

According to Vibes, a mobile wallet-marketing firm, 70 percent of consumers will save an offer to a mobile wallet when presented with the option and these offers have a 64 percent higher conversion rate over static mobile web coupons.

Location Targeting/Geo-Fencing

When a consumer stores a coupon, offer or event in their mobile wallet, your dealership has the ability to "ping" that customer when they enter a pre-defined area near your store. So if they stored information about your sales event and then drive by your dealership on the day of the event, they will receive a notification reminding them about the event. Or, if a consumer has stored a service coupon your dealership can send them a push notification reminding them about the coupon when that customer is within a one-mile radius of your store.

Loyalty Cards

This summer Apple confirmed it is bringing loyalty programs to Apple Pay, starting with retailers like Kohl's, Walgreens, JCPenney and Dunkin' Donuts. Could auto manufacturers be far behind? The ability to link a stored loyalty card to a local dealership's coupon, combined with the ability to notify customers about new offers, may create the "perfect storm" of incentives that will drive customers to your store.

Last year about this time, 2015 was being hailed as the year of the "mobile tsunami."  I predict the next wave in 2016 will be the "mobile wallet tsunami." Innovative dealerships will be experimenting with digital advertising campaigns, social media ads and loyalty card programs. The goal is to get into the consumer's mobile wallet, which in effect gives your dealership permission to continue sending that consumer offers, coupons and gift card incentives.

A word of warning: this privilege should not be abused by sending out a continuous stream of push notifications and sales messaging. Instead, the mobile wallet should be viewed as a vehicle for building a long-term relationship with the customers that literally opened their wallet to let your dealership brand in.

Do More Firefighters At A Fire Cause More Fire Damage? Rethinking Attribution

When thinking about attribution, it would make everyone’s lives much simpler if there was a straight line between marketing, conversion and a sale. As car buyers increasingly visit more touchpoints in their car shopping journey, attribution becomes more challenging. 

There was an interesting analogy in a recent article on Business 2 Community that I felt nailed the challenges we face - and errors we make - when attributing a sale to a particular source. The article shared that data has proven the more firefighter at a fire, the more damage the fire caused. It was hypothesized to reduce fire damage the answer was to send fewer firefighters to fires. Of course, we all know that would probably not solve the problem, or reduce fire damage. After a deeper analysis factoring in other variables, it was found that the presence of more firefighter at fires was not, in fact, what increased fire damage. The reason more fire damage happens is because more firefighters are present at larger fires. 

While reviewing month-end expense reports to determine whether a vendor’s service is producing sales, do you simply measure cost versus revenue? Too many dealers make this mistake. All dealers - whether they realize it or not - have multi-channel marketing strategies. Some more than others. But, the simple fact is that every dealership has varying combinations of marketing channels that include print, radio, TV, online, social media, and more. How many messages from these channels did it take to compel that lead to respond, or that customer to walk through your door? It could have been one, or it could have been many. I’m sure you do your best to source customers. However, simply attributing a sale from an online inventory service based on a call-tracking number might steer you to some erroneous conclusions. 

In all probability, that lead, conversion or walk-in customer was influenced in some way by one or more of your marketing channels.  The customer may not remember which touchpoints they visited that lead them into your dealership. However, even asking them will typically give you more insight as to what was their primary influence. 

I’d bet that your customer’s journey looked something like this: They passed your billboard every day on their way to work. While scrolling through Facebook, they saw your targeted ads. Perhaps a neighbor brought home a new car, and they saw your license plate frame or sticker on the back. Watching TV late at night, they viewed one of your TV ads.  They conducted some online research about a specific vehicle and viewed one of your listings. They visited your website and browsed your inventory, then left to read some online reviews about your dealership. Maybe they even posted on Facebook; asking friends, family and associates for advice on the vehicle they’ve chosen and any opinions about your dealership. They decided to give you a shot and made plans to come to your store that weekend. And then they show up. Where do you attribute the sale? Which marketing channel gets credit?

The reality is that all of your marketing channels are working together to drive business to your dealership. So, consider digging a little deeper when analyzing attribution and judging any particular service’s performance.  Save yourself from making a mistake that could do more harm than good and drive in more sales and profitability into the bargain.

8 Things Dealers Can Do To Increase Their Show Rates

When handling Internet leads, the lack of response by customers, the appointments that don’t show and the unrealistic expectations often frustrate internet managers and dealers. Show and closing rates in the low to mid-teens is not uncommon, compared to the total number of leads received.

I thought I would share some best practices from my observations working both in and with dealerships, that can be used to increase the number of customers contacted that actually visit the dealership.

1.    Respond promptly – One of the most common setups in Internet departments is to have Internet sales managers (ISM) also serve in sales positions. A typical pay plan will see an ISM compensated by sales commissions, so that is where there focus will be. Therefore, when a customer comes in for an appointment Internet leads get ignored until the ISM is done with their customer. Which, in the event of a sale, could mean that the leads coming into the CRM are ignored for hours. A quick lead response exponentially increases the chance of contacting and further interesting the customer.

2.    Provide Information – ISMs typically use templates to contact customers once a lead is received, which usually contain information about the dealership and its value proposition, along with an invitation to visit. However, far too often the first e-mail fails to contain the one thing that the customer is expecting – vehicle pricing. It’s important to consider the source of the lead when responding. In most cases, the conversion occurred because the customer was prompted to fill out a form to get the price. If you fail to give the price, customers can perceive your dealership as unhelpful and move on to your competition.

3.    Be agreeable – We all know that some customers tend to have unrealistic expectations when requesting pricing or payment information. It’s not uncommon to find ISMs engaging the customers with reasons NOT to buy. For example, a lead comes in with a customer wanting an unrealistic payment or price. Rather than inviting the customer in to work numbers, the ISM will explain that the requested price or payment isn’t possible. Always remember that sales are a numbers game. With the proper deal structure, a payment can be as low as any customer wants it.

4.    Be consultative – Many times the vehicle that the customer requested pricing for isn’t the one they end up purchasing. Always remember that customers are looking for information and assistance. Failing to provide information puts the salesperson in an adversarial position to the customer. It’s much easier to build rapport and get the customer into the dealership if the customer feels that you are sincerely trying to assist them in finding the right vehicle.

5.    Sell the appointment – When dealing with Internet leads, ISMs will all too often try to sell the car via email or the phone. The key to increasing show rates is to remember that the goal is to get the appointment, NOT to sell the car. Using sales skills and techniques focused on selling the appointment rather than working a deal can help increase appointments set and your show rate.

6.    Go above and beyond – When a customer requests information, always give them more than they asked for. If you are offering vehicle pricing, try including an example payment. If the customer requested information about a new vehicle, include several trim levels in your response. If they are interested in a used vehicle, you may try including some alternate vehicles in your response as well. By providing more information than requested, the customer will understand that you are truly trying to assist them and therefore more likely to choose to do business with you.

7.    Make them feel special/personalize – There’s a reason why many dealers are adopting video in their email responses. If a customer wants information about the condition of a used vehicle, it’s very simple to record a personal walkaround for the customer while mentioning their name. Personalized video responses are valuable for building rapport and help put a face with a name. It’s also much easier than taking 10 pictures of a vehicle and trying to email them to the customer.

8.    Consistent follow up – It’s very easy to understand why ISMs get frustrated trying to contact customers who submitted leads, but are then unresponsive. After days or weeks of emails and phone calls, many salespeople tend to give up on the customer and move on. Keep in mind that chances are the customer is being contacted by other dealers as well. And, those dealers have ISMs who are getting just as frustrated. By not giving up on the customer and continuing to follow up, you could well be the only dealership left doing so. This exponentially increases the chance that the customer responds and ultimately ends up in your showroom.

Regardless of whether your Internet department consists of commission based ISMs, or if it has a full-blown BDC, the right processes, personalized responses and attention paid to detail, rather than simply shooting off boring sterile templates, will show your customers that you are there to help. Consider adopting these techniques into your Internet lead process. I hope that you are able to contact more customers, make more appointments and see more of them show, resulting in more sales.