In a down market, Morrie’s Brooklyn Park Subaru experienced a considerable decline in lead volume from April to June of 2017. In addition to a large drop off in leads, their lost sales and defection rates were significantly higher than the national sales trends. They needed a solution to identify the source of all lost sales and a strategy to reduce the rate of defection to other dealers, while growing their market share in surrounding zip codes.
The Uncut Story Your CRM Can’t Tell You
You Can’t Win Without Knowing What You’re Losing
by David Metter
It’s hard to solve a problem you don’t know exists. Solutions become unreachable if you don’t know the root of the issue or the source it stemmed from in the first place. The same concept applies to the sales and BDC operations inside every existing dealership. Too often, we get caught up in the day-to-day routine and can only see what’s directly in front of our eyes. We lose sight of the big picture. We look to our CRM and DMS data to identify areas of success and failure. We then use that data to attempt to make decisions and changes to the way we operate. The problem, is that this data is one-sided, one-dimensional, and only one piece of a much larger picture.
It’s a lot like attempting to run a race with your eyes closed. Without the power of sight, you won’t know if your opponents are in front of you or gaining speed behind you. You won’t be able to see the finish line. What’s the point of running towards a goal you can’t see? In order to solve the problems within your sales operations, you need the power of sight, metaphorically. You need to be able to look at your entire market from a 360-degree vantage point so that you can identify sales trends along with the sources of your greatest opportunities and losses.
Sales and service data, believe it or not is the key to being able to see your market from an omnipotent perspective. It’s just a matter of where you get the data and how you use it. Ninety-day old sales metrics can be helpful, but in order to truly see what’s going on within your PMA, dealers need to know what sold and didn’t sell as of yesterday – not 90-days ago given the infinite variables that affect this industry on a daily basis. To most of us, data is just a collection of numbers, charts, and graphs that lack meaning. But what if you had the ability to detonate and mobilize data to make it work for you? That’s when data becomes valuable – when you can turn it into actions that result in more sold cars and less lost opportunities.
If you only draw conclusions based on your CRM’s sales and lead data, you can only quantify the effectiveness of your own sales. But it’s equally important to have the ability to identify defection trends to competing dealerships or brands in your market. How many of your customers purchased from somewhere else? Which dealers are you losing the most sales to? How many customers did you lose over a certain date range? Which competitors did you lose them to? How many units per day are you losing to a specific store? Can you pinpoint areas of lost sales tied to a specific salesperson or lead source?
When you have the ability to answer these types of questions, then and only then do you have what you need to take control of your marketing and sales processes. If you want to successfully grow your market share and cut your losses, you have to know exactly what you’re losing, where you’re losing, and who you’re losing to. The right data, will show you a clear snapshot of which models on your lot present the highest level of opportunity. It will show you which leads in your CRM have already purchased so you don’t waste time and money trying to reach people no longer in market for a car. The right data will determine if you are losing sales based on internal or external factors. It will show you the top 10 zip codes where you’re losing the most sales. It will show you by name which members of your sales and BDC staff have the highest closing rates, as well as who is allowing the most opportunities to fall through the cracks. It will empower you to make better decisions with staffing, training and employee responsibilities based on a more thorough analysis of your business.
From my years of experience as the General Manager of a dealership and as the CMO of a large dealer group, I am very aware of the fact that dealers are not data scientists, nor should they ever be expected to be. Your only job is to sell cars and to reduce the rate of lost sales to the competition. But you can’t stop losing sales if you don’t have the near-real time data to expose why you lost them in the first place. And it’s not only about having access to the fastest data or the best data – that’s only half the battle. It’s also about working with the people that know how to extract the most impactful, actionable pieces of that data and that possess the technology needed to execute a strategy that results in fewer losses and more incremental gains.
My session, “The Uncut Story Your CRM Can’t Tell You” at Digital Dealer 23, will provide dealers with never before seen visibility into their market conditions so that missed opportunities can be turned into closed sales.
Attend this session and learn how to:
- Define your greatest opportunities and losses tied to a specific lead or traffic source, salesperson, model, day, or zip code.
- Identify defection trends of competing stores or brands in your market to reduce lost sales.
- Continuously grow your market share by understanding what you’re losing.
- Identify defection trends even down to your individual salespeople that are in your showroom. Know more about what’s going on in your dealership and the dealerships around you.
The Digital Dealer 23 Conference & Expo will be held this Sept. 18-20th in Las Vegas, NV. Register now to start building your agenda by choosing from more than 100+ sessions!
***Article originally posted on DigitalDealer.com.
Winning Means Knowing What You’re Losing
3 Steps to Reduce Lost Sales
by David Metter
1. Use Data That Tells a Complete Story
The only way to know exactly where you stand in your market is to have a clear view of what you’re losing. The problem the automotive industry has faced for years now, is that both CRM and DMS data is one-sided, one-dimensional, and only shows your effectiveness against your own sales. But what about the sales of competing dealers or brands in your market? Wouldn’t it be easier to grow your market share if you knew what percentage of it you actually owned compared to your top competitors?
The other problem exists within the reporting provided by some third party vendors, as these reports only show you one side of the story – their side. In other words, what you’re winning. If you think about it, what is the most vital piece of information to have in terms of improving your dealership’s sales operations? Is it how many clicks your VDPs got or is it how many actual vehicles you sold…or didn’t sell? You be the judge.
2. Accurately Quantify Your Lost Sales Opportunities
What if you could know which dealerships you’re losing sales to? How many units per day or per month are you losing to competitors? How many of your customers purchased from competing dealers or brands in your market?
It is critical for dealers to not only look at their own data and sales and defection trends, but also the sales trends of their biggest competitors. Know where you stand. If you have a clear view of what and how much you’re losing, then you have a clear view of what you need to win back.
3. Identify the Source of Lost Sales & Adjust Accordingly
There are several factors that play into each and every lost sale. What dealers need is the ability to recognize if sales are lost due to internal or external factors. For example, is there an internal problem with your sales staff or with a specific salesperson? Are your lost opportunities tied to a certain model? Or, is it an external problem such as one of your lead providers consistently delivering leads that are no longer in consideration? Look into your website traffic and the traffic providers you work with. Are these sources driving low-funnel buyers to your showroom, and can they prove it?
If you don’t know the answer to that question, it’s because you’re not seeing the full picture. You can’t fix a problem if you don’t know the problem exists. Similarly, you can’t make smarter decisions with your marketing budget if you don’t know which sources are driving bad traffic or causing high defection rates.
Now that we’ve identified all these potential problem areas, allow me to leave you with the light at the end of the tunnel. The good news is that the tools and data needed to complete the story of your market’s sales trends already exist. I know this because I’ve been on both sides of the equation. I’ve worked as the CMO of a large dealer group, and I’m currently on the vendor side of the car business. Therefore, I can say with confidence that attempting to grow your market share without a complete view of your market in today’s complex landscape is asinine. I can also say based on factual, proven stats that Urban Science has the fastest, most accurate sales match data in existence. So at the end of the day, you can go with your gut, or you can go with prescriptive science-based conviction. (I suggest the latter).
To learn more about identifying and eliminating lost sales, visit DriveAutoHook.com/TCA.
Has the Promise of Big Data Finally Been Fulfilled?
by David Metter
Big data has been a big topic in automotive for a long time now. At this point, I think we’ve all realized there is a limitless digital warehouse of actionable data that exists. However, the struggle remains in deciphering how all the pieces fit together and translate into more sales. At the absolute core of the car business, when all the digital minutiae and politics are set aside, being able to prove sales is the only way to know if something is working. Owning the ability to prove sales in near real time is unquestionably big data’s most powerful accomplishment as far as the car business is concerned.
Perhaps the focus has simply been in the wrong place, or maybe it’s the fact that the focus has been in too many places. Dealers have been forced to adapt, master new technologies, implement new ways to operate and sell more cars all while being pushed in a million directions, attempting to distinguish between gratuitous opinions and actual science. It’s easy for dealers to lose sight of the end game when they’re stuck trying to figure out how the pieces fit together and how to create the story needed to turn data into action. This is why a lot of people view big data as nothing but a big problem.
I’m going to make this whole big data problem very small. The only data you need to start with, the only data that allows you to take immediate action is sales and service data, nothing else - and this is the reason:
We know that when customers physically walk into a showroom, closing rates jump to roughly 60-65%. Therefore, leads are important, but there’s no argument that showroom visits are more important than leads, and sales are more important than showroom visits. That’s the trajectory. If you’re using big data for anything other than proving sales or service revenue, you’re wasting your time. Sales have always been, and will always be the single most important dealership metric.
You also have to look at the history and trends of your past sales and the sales of your fiercest competitors. Too often, some of the most influential players in this industry forget that no two dealers are the same and no two markets are the same. Therefore, the data you need to own more of your market share may be much different from other stores, including each rooftop within a large or small dealer group.
In a lot of ways, big data is like a hammer. We can all go to Home Depot and buy the same hammer, but what we use it for, and what we ultimately build with that hammer is contingent upon its user. Choose to use your hammer better and smarter than the competition. Know that in order to do so, you also have to know how your rivals are using their hammer – in other words, the sales and defection trends of competing dealers in your market. It’s impossible to cut your losses if you don’t know they exist. You need to view both your opportunities and losses from a 360-degree, closed-loop vantage point. Big data exists not only to show you what you sold, but just as importantly, what you didn’t sell.
To put things into perspective, know that the power of big data transcends far beyond the car business. On a global scale, true improvement and change can only occur if a problem or a need for change is identified. Over the last decade, big data has proven its ability to influence the world’s greatest issues, including social change, government policy, and industry laws and regulations simply by its ability to demonstrate a need. When a need is identified, it then opens up the door for change.
In the TEDx Talk, “Stories are Just Data with a Soul, Chris Coates paints a very clear picture that data exposes needs by telling stories. “These stories can help people leaving prison to find work and stay out of prison and build new lives. They can save someone’s eyesight or their leg. Data can give children in the most deprived parts of the country chances in life they wouldn’t otherwise get.” What Coates is saying is that data alone has the capacity to change a life. If big data can change lives, it can absolutely change the effectiveness of your sales operations.
VDP Views are the Top KPI…and Other Data Myths
by David Metter
MYTH #1: VDP views are the metric that matters most.
Since when did VDP views become more important than sales? This is not an attempt to downplay the importance of driving traffic to your VDPs. Reputable evidence exists around VDPs being one of the last digital destinations car shoppers touch before visiting a showroom. But are vehicle details page views receiving significantly more attention than they deserve? Are dealers working backwards? Are we losing sight of our one true goal…to sell more cars?
There’s no argument that with everything our industry is capable of measuring, it all comes down to physical transactions between customers and dealers, specifically units sold and closed service ROs. That’s what you measure before anything else. That’s the reason “big data” exists in the first place – to help you generate more sales and service revenue. Dealers have more data at their fingertips than they realize, and it’s easy to get caught up trying to navigate and make sense of it all. Goals become blurred and dealers lose sight of the end game.
Allow me to remind you of the end game. When it comes to dealership operations, NOTHING is more important than increasing sales, service revenue, and customer retention – and I’m happy to take on anyone who’d like to challenge that statement.
I think our industry has completely overcomplicated the idea of big data. The role it plays is actually quite simple. When you break it down, VDP views are #5 on the “what to measure” list. Below is the infrastructure of the order in which you achieve your end game of more sales, closed service ROs, and repeat buyers.
1. Sales Data: Securing accurate and timely sales match data is paramount. There is nothing more important. Leverage sales match data to see if a customer bought from you or somewhere else? What make and model did they choose? Was it your brand or a competitor’s brand? Monitor your pump in and pump out percent to hold onto sales in your PMA.
2. Service Data: Measure your closed service repair orders – especially during the critical period from after a sale to the first recommended service appointment. This is where most dealers experience the biggest drop off in retention. Did the customer come to your store for their vehicle’s initial scheduled maintenance or to a competitor? Did they order replacement parts from you or somewhere else? How many people made a service appointment on your website? How many of those people actually showed up? What sales opportunities exist among your service customers?
3. Showroom & Service Traffic: Next quantify, how many people physically came into your store or entered your service lane? The majority of people don’t have time to browse around multiple dealerships or visit your service center just for a quote. If they came to you, it’s for a reason. So make sure your staff is in the business of closing deals and ROs.
4. Leads, Phone Calls, & Chats: When potential customers complete an action on your website, whether it’s submitting a lead form or picking up the phone to call you, that opens the door to potential sales. Metrics on your lead, call, and chat volumes are important to analyze, but it’s much more about quality than quantity. Instead of focusing your budget on more leads, calls and chats, focus on the actions that drive showroom visits.
5. VDP Traffic: VDP views drive awareness, familiarity, and consideration. Although they can influence a customer to take further action, they do not directly result in sales.
MYTH #2: VDP traffic is the foundation for future sales.
In what world does a VDP view hold more value than an actual human-to-human interaction? VDP views are not the foundation. Showroom traffic is. Correct me if I’m wrong, but last time I checked, getting people in the door and speaking to them face-to-face is the best way to get them in a vehicle so they can touch, see, feel, drive and experience it for themselves. Show rates are infinitely more impactful than any ad or page view could ever be. Our industry has become so brainwashed, people believe more time, energy, and money should be allocated to driving VDP views rather than using those resources to drive showroom traffic. It’s absolutely mind-boggling.
MYTH #3: Big data is very complex and requires experts to turn it into action.
Wrong. All too often, dealers allow outside vendors to come in and tell them what they should be measuring. Social marketers will tell you social metrics are most important. Paid search companies will tell you clicks and website traffic are the secret to more sales. Our industry is stuck in this maze of listening to incessant digital noise. But every dealership is different, and there is no one size fits all solution.
My friends, it’s time to remove yourself from the maze and turn the volume of the noise ALLLL the way down so that you can actually hear the music.
You and your staff are the ONLY people that should dictate what you need to measure. Take the data you already have and zero in on the metrics that involve sales, service ROs, and repeat customers. Data is simply a catalyst for determining and reaching your goals. Sales data shows you where you stand against competitors, but more importantly, how you stand against yourself historically. Sales data will tell you exactly where you are, and exactly where you need to go.
What You Need to Know About DMPs
by David Metter
DMPs are a topic gaining escalating attention as we head into 2017. A dark cloud of big, irrelevant data still lingers above the automotive industry, just waiting to be analyzed. What are DMPs? For those of you that don’t know, the acronym stands for Data Management Platforms. Think of a DMP as a digital warehouse of data, designed to consolidate and organize consumer data from multiple sources all in one place so that it can be put to good use.
eMarketer addressed the need for advertisers to utilize DMPs back in 2013 – a near decade ago in digital time. “If data is digital marketing’s currency, then the DMP is its bank.” So, when it comes down to whether or not to use DMPs either at the dealer or manufacturer level, really dig deep and ask yourself… do you like money?
If the answer is yes, DMPs exist to give you insights that will help you make more and save more (money that is). DMPs consolidate past and real-time consumer purchase and behavioral data across ad exchanges, networks and devices. This allows for granular audience segmentation and targeting that goes far beyond standard demographics.
DMPs aren’t just a place to aggregate and store information. They help us find the most important data points that will actually help our business. And I don’t mean help down the line or months from now, but this very second. DMPs empower us to take action and deploy personalized campaigns with quantifiable conviction. These platforms are the secret to affirming what every advertiser claims they will do, which of course is to “place the right ad, in front of the right consumer, at the right time.” Sound familiar? Without DMPs, these empty promises would remain just that - empty and unproven.
DMPs are the ultimate source of budgetary efficiency for both digital and traditional spending. By illuminating a clean, 360-degree view of a consumer’s online and offline actions, DMPs pinpoint how far along car shoppers are in the buying process. They identify who in the market has already purchased a vehicle and if they bought it from a competitive dealership or brand. On the contrary, they show which consumers are just beginning their research journey, still months away from a buying decision.
Put simply, DMPs hold your campaigns accountable for their performance and help to guide your ongoing efforts to be more relevant, impactful, and efficient with where you spend your money and who you spend your money on. Specifically for the automotive sector, DMPs may be the solution to a lot of our sales attribution problems. Everyone wants to stake claim for a vehicle sold. A DMP may be just what we need to properly assign credit where credit’s due.
When asked about DMPs, Erik Lukas, Retail Operations Manager of Subaru of America said, “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.” Aside from attribution, another much-needed use for DMP-derived insights would be for one-to-one marketing and campaign personalization. Both are becoming increasingly necessary in order for a message to stand out and resonate with car shoppers.
According to MarTech Today, “A DMP offers a central location for marketers to access and manage data like mobile identifiers and cookie IDs to create targeting segments for their digital advertising campaigns.” This is a tremendous asset for automakers when it comes to eliminating waste. For example, if you are a luxury vehicle manufacturer, DMPs can help you only target individuals or households that you know have a net income of at least $200,000 per year.
In summary, the biggest uses for DMPs in the auto industry include:
- More accurate sales attribution
- More opportunities for personalization and one-to-one marketing
- Ideal audience targeting and segmentation
Data management platforms are about unification – unifying consumer data from one source to the next as their shopping journey becomes more and more complex. Big data fails to hold value unless it can be applied to better influence your most lucrative audience segment. Other industries have been using DMPs for years. Automotive has such a complex business model given our three-tier system and the fact that most transactions happen offline. Therefore, we need DMPs more than anyone.
The opportunities DMPs provide are limitless. But don’t get too wrapped up in all the ways you could use them to your advantage. Remember your one objective at the end of the day is to increase dealership revenue by selling more units and obtaining more ROs. Above all, SALES is the metric that matters and DMPs should be used primarily to generate more sales. Everything else is just noise.
