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CRM

THE EXECUTIVE EDITION: Lies the Digital Age Told You About Selling Cars

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| by David Metter, President of AutoHook powered by Urban Science

In Part I of Lies the Digital Age Told You About Selling Cars, we overturned one of the most blindly accepted industry-wide standards about the current state of consumer car buying behavior. For far too long, the assumption has been vehicle shoppers have everything they need to make a purchase decision online, and they already know what they’re buying before ever stepping foot in a showroom. The common misconception has been that the average consumer in the digital age only visits one dealership before purchasing a vehicle.

What we found after surveying 2,748 U.S. consumers that have purchased a car in the last year is that the above statement couldn’t be further from the truth. In reality, not only does the average customer visit at least 2.4 dealerships before making a buying decision, but almost half – 46% – said they visited three or more dealers before purchasing. Over a quarter of our sample size, 26%, said they visited four or more dealerships before buying. All of this data was collected by AutoHook and Urban Science in May of 2018 from people who purchased or leased a vehicle within the last year – not from a published study conducted five years ago.

As a former general manager of a dealership, CMO of a privately-held dealer group and as a marketer in general, I found the fact that roughly 1 in 4 people (26%) in the year 2018 visit four or more dealerships before buying a car to be personally absurd. Though surprising, this statistic solidified a new truth about the state of our industry. Contrary to what dealers have been told, the in-store experience is arguably more important in the digital age than ever before in the history of the car business – and for several reasons.

The most prominent reason being if a customer has a bad experience with one of your salespeople when they come in for a test drive, they will leave and buy from someone else. If they go to two dealerships and have a bad experience at both, they will go to a third and even a fourth dealer to buy from the one that provides them with the experience they expect and deserve.

Just like everything else that has surfaced from the digital age, car shoppers have a LOT of choices when it comes to what they’re going to buy and who they’re going to buy from. Purchase decisions are still made at physical dealerships, most likely following a test drive – NOT exclusively online. Shoppers in-market for a new vehicle don’t have their minds made up about what they’re going to buy by the time they visit their first dealership. Outsell says 6 out of 10 car shoppers enter the market unsure of what they want to buy. Our own research and survey data consistently shows 78% of people are still considering multiple brands by the time they visit their first dealership.

So we as an industry, we HAVE to get this right. Instead of operating based on pure, often biased assumption, dealers need to seriously reconsider their order of priorities in terms of how they run their business and where they spend their money. The digital age has armed us with so much intellectual power, yet at the same time, it’s made us a little lazy. It’s cast a shadow over what’s really important – defining value and personal worth by likes, clicks and follows rather than interpersonal relationship skills.

Part II of Lies the Digital Age Told You About Selling Cars verified the auto industry has become too quick to rely on technology as a crutch to do the work for us, rather than picking up the phone and having a conversation - or dare I suggest having the inventory knowledge and social skills to not only sell a car, but to foster ongoing relationships that lead to repeat, loyal customers. It is officially time for a new dialogue to emerge. The question we as an industry need to be asking is not how can we leverage new technologies to help us sell cars, but how can we leverage new technologies to help our salespeople sell cars?

Rather than answering the above question based on my expertise and years of experience in this business, I’ll share the real-life success stories of how two actual dealerships in the digital age are using great data processed through great technology to help their people sell more cars and lose fewer opportunities.

DEALERSHIP #1

One of our dealer clients needed an accurate way to measure the true effectiveness of their follow-up process by knowing what was and wasn’t working within their current lead mix as well as how many opportunities their salespeople sold compared to how many they lost to competitors. Using their individual salesperson data, we analyzed each person’s sales and defections and identified who had the most potential to improve. We then pinpointed the time frame during their follow-up process when their people struggled the most, which for this particular store was during days 0-4 after a lead hit their CRM. Lastly, we exposed their highest defecting lead source.

Armed with a roadmap highlighting their greatest areas of opportunity, the owner of this dealership shared this data with his sales staff and reviewed each person’s sales and defection trends with them one-on-one every month. He created an environment of transparency and friendly competition by making this defection analysis technology available to all his salespeople, thus holding them personally accountable for every sale they lost in addition to what they closed.

The dealer then helped his staff implement a more aggressive follow-up strategy for working leads 0-4 days old. He provided additional training on how to better work leads that came from their highest defecting source (especially during this time frame). He took the time to listen to feedback from all his salespeople and found opportunities for peer coaching to help further reduce their collective number of defections. He also implemented a system to reward the people who showed improvement each month.

With a refined follow-up strategy fueled by better prepared, more empowered salespeople, they saw the following results in just 90 days:

  • Their overall defections decreased by 89%, with a 44% decrease in defections specifically during days 0-4 post-lead.

  • They increased their number of closed sales tied to their highest defecting lead source by an astounding 242%.

  • Most importantly, when it came to the salesperson identified as having the highest defection rate, that individual successfully increased their closed sales by 78% and went from being the worst performer on the team to one of their top performers.

DEALERSHIP #2

This store needed a way to identify any potential problems with their lead mix to see which sources were underperforming and why. Using the same defection analysis technology as Dealer #1, they were able to determine the issues they were having with their highest defecting lead source were due to external factors outside of their control – rather than a lack of effective internal follow-up. They then confidently decided to cancel this lead provider and put those marketing dollars back towards their bottom line.

Ninety days later, they saw a 61% average increase in salesperson performance after removing that lead source – not to mention they were able to free up a total of 40 man-hours per week that were previously devoted to working those high-defecting leads. The best result of all? Four of their salespeople went from being average or below average performers to their TOP FOUR salespeople.

And they didn’t stop there. This dealer applied the same technology to define which model(s) in their inventory represented the most defections specific to their salespeople so they could go after leads tied to underperforming models more aggressively. Model A represented the most opportunity for improvement, and again within 90 days, they increased closed sales specific to Model A by 51% and reduced defections by 30%.

What we can conclude from the examples listed above, is that technology can help your people in a multitude of ways. Technology can help your salespeople close more deals and reduce their defection rates. Technology can help your people free up wasted time chasing leads from a faulty source. Technology can identify which models your people struggle with the most in order to boost specific model performance. Technology can even tell you if your customers are leaving your store to buy the same model somewhere else, or if they’re defecting to another brand entirely.

But the most important thing to take away is that technology in the digital age still doesn’t sell cars. It can do a lot to light up the right track for your people to do just that, but at the end of the day your salespeople need to know your inventory like the back of their hand – what makes it better than competing brands or models, and what makes doing business with you a better option than anywhere else.  

The truth in a current landscape littered with lies is that there’s no way for any one dealer to know everything they need to know about their overall market, which models represent the most opportunity for their store, and if their salespeople are doing their jobs and following up with leads appropriately. That’s where the technology and data come into play. With a complete view of who is struggling and exactly what they’re struggling with during the initial contact and follow-up process, dealers can take immediate action to help their salespeople reduce defections and improve their performance across all facets of their sales operations – so they can be one of the 2.4 dealerships (at least) with a shot of winning the sale.

 

Lies The Digital Age Told You About Selling Cars [Chapter 2]: Are We Using Technology as a Crutch?

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| by David Metter, President of AutoHook powered by Urban Science

There is this perpetual echo of the word “disruption” in the car industry. What will be the next big disruption? What do we need to prepare for that will change everything we know about selling cars? The reality is disruption is largely incumbent upon technological advancements and the rate of societal adoption to these new, uncharted territories dominated by things like artificial intelligence and machine learning. These future “disruptors,” such as the rise of alternative online retail formats, subscription services or the transition from gas-powered vehicles to autonomous, connected cars are impossible for any one dealer or OEM to predict, let alone control.

Therefore, I’d like to propose a new approach. What if instead of the next big disruption we focused a little more on what we can control – the constants – the parts of the equation that aren’t powered by data or machines. What I mean by the constants is the people, or more specifically, the relationships that form when a customer goes to look at a car and has a positive interaction with a salesperson while doing so. The value of relationships when it comes to selling cars has been vastly undermined by the shiny new innovations of the digital age.

I think we’ve become so infatuated by the latest technology and the newest cutting-edge solutions to selling cars that we forgot about the fact that technology becomes useless without the people behind it who make it work. Relationships in the digital age still take precedence over technology and despite the advancements we have yet to see, technology in all its glory can’t replace social skills. All this talk about connectivity and connected devices yet I think we’re failing to connect the dots when it comes to knowing what will ultimately yield the highest ROI for dealerships, both in today’s world and in the future – knowing who your best salespeople are and how to keep them.

We as an industry need to stop using technology as a crutch. We’ve become so focused on the next big disruption in digital marketing that we’ve started to rely on the help of digital tools entirely, forgetting that cars are still bought and sold by actual people at actual dealerships. Deloitte’s 2018 Global Automotive Consumer Study reported car shoppers still rate physical interactions with a vehicle as critical to their buying decision – with over 8 out of 10 needing to see the vehicle in person before making a purchase decision. So, if this is the case, why are we spending the majority of our time and money on the minority of the buying public?

It’s all about striking a perfect balance between technology, the right data and the right people. It takes all three to get the job done. Technology is a powerful tool that can be leveraged to enhance or continue existing relationships, but it can’t create them in the first place. When it comes to the right data, we are extremely fortunate because our solutions are powered by the Urban Science® DataHub™, which allows us to be the first to know when a customer buys a car, what car they bought, where they bought and if they didn’t buy from you. And we get that sales data and the equally important defection data within days – not months.

In the same way that technology lacks value without good people, the right data can uncover things about your salespeople you otherwise never would have known. For example, you consistently see all these closed sales opportunities by let’s say, “John,” so naturally you think John is one of your best salespeople. But how many opportunities is John losing every month to one of your competitors? You’d never know without the right data. So it all goes hand-in-hand. The person selling the most cars may be losing more opportunities than he or she is closing, so your “best” salesperson can quickly become your worst salesperson when you can compare what they’re winning to what they’re losing at the same time.

Having that ability to layer sales and defection data on top of your CRM data is critical if you want to operate more efficiently. Without it would be like making decisions for your dealership based on a cost-benefit analysis but forgetting to include the cost part of the equation. It’s the only way to add enough dimension to your CRM data to make it truly actionable – instead of looking like Flat Stanley.

Having the right data combined with great technology can help your operations in a multitude of ways. It can suppress the leads in your CRM that have already purchased so your people can stop wasting time following up with them. It can pinpoint the ideal time and channel to re-engage your lapsed or dormant leads. Technology can help dealerships interrupt a customer while they’re shopping online and grab their attention just long enough to influence their decision-making process. It can also help ensure a customer chooses to visit your showroom instead of your competitors with things like test drive incentives.

The reality is technology will never be able to stop a customer from walking out of your dealership after a negative experience with one of your salespeople. Furthermore, when it comes to closing lead opportunities, your salespeople may already be at a disadvantage. A recent Automotive News dealer training webinar reported that as many as 98% of qualified leads fail to result in closed business. So instead of pouring all your focus into staying ahead of the next big disruption promising more and better leads, maybe we need to shift our focus back to the one thing capable of converting those leads into sales once they hit your showroom – your people.

Great employees are what gives meaning to the capabilities that stem from great technology. Your salespeople are the foundation needed to ensure data-powered solutions work in favor of your dealership. In a word, the future state of our industry’s digital landscape is unpredictable. But there are two things we do know. Change is constant and retaining great salespeople is still paramount. There’s not a lot we can do to control the rate of change, but fortunately for dealers, there’s a lot we can do to help our salespeople and to make sure we're holding on to the good ones.

 

Stay tuned for Lies the Digital Age Told You About Selling Cars, Chapter 3: Power to the [Sales] People to learn more about the importance of retaining your best salespeople and how to provide a better in-store experience.

THE AUTOMOTIVE PARADIGM SHIFT: Is it Time for Science to Take the Wheel?

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by David Metter

In baseball, one slight alteration in the way a hitter approaches the ball can be the difference between strike one and a home run. If a batter’s swing is off by only a few millimeters, or even just a fraction of a millimeter, this makes all the difference in how powerfully they hit the ball, foul it off, or if they strike out entirely.

I believe it's time to take a step back and rethink, rewire, reverse, and reevaluate the way we sell cars today. In order to solve the problems dealerships face when it comes to their operations and overall sales performance, we have to change how we approach the ball. Once again, it's time to disrupt the game and attack from a new angle.

Vendors, dealers, agencies, digital advertisers, partners, and OEMs all have the same end goal - to sell more cars and gain more customers. The dealerships and the experiences customers have at those dealerships determine whether or not people buy cars - so dealer support is what it's all about.

The car business is in desperate need of a complete paradigm shift. Revolution starts with forgetting everything you think you know and making decisions based on facts and a scientific approach.

Thomas Kuhn is an American physicist and philosopher regarded by Stanford as one of the most influential philosophers of the 20th century, if not the single most influential. The University of California, Berkeley, credits Kuhn for the defining paradigm shifts and the idea of scientific revolution as one in the same.

“Kuhn famously distinguished between normal science, where scientists solve puzzles within a particular framework or paradigm, and revolutionary science, when the paradigm gets overturned.”

During times of scientific revolution, anomalies disproving old theories are broken down, and new ones form to take their place in what’s known as a “paradigm shift.” So how does this relate to selling cars? Science’s definition of a paradigm shift is really just a fancy way of saying, “You don’t know what you don’t know…until you know.” Or in other words, you’ll never be able to know what you’re winning until you know what you’re losing. 

The fact is, science is the only paradigm to live by in the information age. Undoing everything we think we know is not an easy task, especially for an industry overpopulated with often unjustified ego. There is this mindset that dealers only need to measure themselves against themselves. But when you think about it, that’s a myopic way of looking at your business.

So if you sell 200 cars this month and you only sold 170 last month, that means you're improving, right? Not necessarily. To be able to see what’s really happening in your market, we need to look at the entire landscape of the opportunities you’re working. Selling 200 cars is great, but 240 is better – and having the ability to see all these existing opportunities without spending an additional dollar on your marketing, that’s revolutionary.

Another common misconception is that if you don’t sell a car within the first week or two of the lead hitting your CRM, that customer is not going buy. Seems logical, right? Wrong – and here’s a perfect example…

One of our dealerships was seeing a jump in sales between day 8 and day 14 post-lead in their CRM. They did a great job picking it back up and getting more sales during this time frame. However, in actuality during this same time, more than TWICE as many customers purchased from one of their competitors. The data shows that during days 8-14 when this dealership thought they were killing it with 60 sales, there were 150 customers, marked opportunities in their CRM, that they touched, that went on to buy a car somewhere else. That’s a problem.

When we approach this same data set from a scientific perspective, we see something entirely different that our industry has never thought to focus on before – the loss. If we can see all the opportunities you let slide through the cracks, along with the people or sources tied to those defections, we can then see a new side of an often-skewed story. We can’t just look at the wins, as there is a lot we can learn from knowing the number of customers our dealership encountered that left to purchase somewhere else.

Because the dealership in the example mentioned above had never been able to compare closed sales versus defections in this capacity, they really had no idea what was going on both in their own store and in their market overall. During a time frame where they thought they were winning, they lost 100 sales to same make competitors and another 50 to competing brands in their market.

So we start to see these ailments, or weakness that start bubbling up to the surface. It’s also so important to keep in mind that each and every dealership is unique – and that’s fact, not opinion. If you attack the way you sell cars with a science-based approach, you start to see sales and defection data differently than you’ve ever seen it before and the facts become crystal clear.

Never underestimate the power of knowing what you’re losing. Think about it this way; it’s a lot like choosing to watch a movie in black and white when you have the option to watch it in 3D HD, multidimensional color. Which would you choose when it comes to the way you view your CRM data?

 

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.

What Dealers Don’t Know About Their “Best” Salespeople

by David Metter

As it turns out, what you don’t know about your salespeople can hurt you. I am not sure why, but we don’t often associate analytical tools as the best way to measure the performance of the people we hire to connect with our customers and build lasting relationships. I’m a common sense guy, so if my staff is hitting their numbers and selling cars, there’s really no reason for concern or to take a deeper dive into the opportunities they’re working…right? Not necessarily.

What I’ve come to accept over the last few years is that when good data is presented in a way we can easily understand, it has a tendency to challenge everything we “think” we know about selling cars. Too many of us think that we are the “Presidents of the I Think Club.” I learned that from one of the truly smart guys in the car business, Gary Marcotte, over 10 years ago and I've never forgotten it. 

Dealers have always been able to see their close rates, or how many opportunities each salesperson successfully converted into a vehicle sold. But there is an entire other half (or I could argue 2/3) of the story they haven’t been getting – and that’s how many opportunities they didn’t close and purchased a car from someone else – or in other words, their defection rate. When you layer in data that shows defection rates to competing dealers or brands in your market, it gives life to a story we’ve not only never been able to see before, but one we never even thought to look at before.

I sold cars for seven years, spent years as a sales manager, then the General Manager of a dealership and I eventually became the CMO of large dealer group with 1,100 salespeople to account for. It would have been impossible to analyze every opportunity every person in our organization touched – so the first time I saw this data in action I was blown away.

Take a look at the graph below. The blue line shows how many cars each individual sold during this 3-month time frame. The gray lines show you the number of opportunities that salesperson touched that went on to buy from someone else – whether it was a same make competitor in your market (light gray) or from a competing brand (dark gray).

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In this example, this dealership thought that John was one of their best salespeople. But when you look at your CRM data with a 3-dimensional lens and layer that lost sale (defection) data on top of it, you start to see the true story behind your “all-star” players. You see how many opportunities John touched that went on to purchase from your competitor down the street or from a different brand entirely.

In reality, Jordan is this dealer’s best salesperson. Based on the opportunities he was working, he sold substantially more than he lost. In fact, out of everyone, he lost the least amount of opportunities. So success doesn’t always translate to selling more cars than you did last month. It can also mean losing fewer opportunities to competitors.

Here’s another example. The screen shot below shows the actual effectiveness of a salesperson as they compare to the dealership overall. So in this case, Jim may only be selling 8 cars a month, but because he’s not getting all the opportunities, his effectiveness is 149% - meaning he’s outperforming based on the leads he’s getting. Bill on the other hand might be getting way too many opportunities and he might look like one of your best sales people, but he’s really only about 47% effective towards closing everything he touches.

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Your best salespeople are the ones who consistently deliver HIGH close rates and LOW defection rates. But you need that defection data to see who your real winners and losers are. Think about it like this, a pitcher that has a lot of saves, but has equally if not more blown saves, doesn’t really help the team. Or if a starting pitcher has 10 wins but has 14 losses, is he really a great pitcher? If you only looked at saves or wins, you might think so but when you can see everything at once, the story changes. This is the same sort of comparison.

Keep in mind that if a salesperson has a high defection rate, it may not always be their fault. Maybe they’re being assigned far too many leads than any one person is capable of handling. Or the types of leads they’re working come from providers with low overall close rates. There are all these other factors involved. But those are topics for a different day.

If dealers look at their business through this new lens, they will start seeing trends of opportunity and loss that they can’t see by just looking at their own data and what happens within the four walls of their dealership. In order to determine true success or failure you also need to look at the sales effectiveness outside of your dealership.

10 Key Takeaways from the DrivingSales Data Discussion of 2017

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by David Metter

I recently had the honor of co-moderating a dealer panel discussion at the DrivingSales Executive Summit. Together with fellow attribution frontrunner, Steve White, CEO & Founder of Clarivoy, and our dealer experts, Shaun Kniffin, Marketing & Technology Director of Germain Automotive Group and Ben Robertaccio, Marketing Director of the quickly-rising Morrie’s Automotive Group, we we’re fortunate to have a jam-packed room on the last day of the conference. I guess the panel title (or the speaker lineup) evoked some attention…

For anyone that missed it, I’ve compiled a list below of the top ten takeaways from THE DATA DOESN’T LIE: Shocking Discoveries in Automotive Attribution.

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1.    Sales Attribution > Traffic Attribution

As an industry, we need to entirely shift away from traffic attribution models and really zero-in on sales attribution – that’s where the good stuff is. Traffic attribution only gives you one slice of the pizza. It looks at the traffic that comes to your website and builds marketing strategies based on that alone. Roughly 75% of people that buy cars from you visit your website – so what are you doing to account for the other 25%? Traffic attribution doesn’t tie a sale to that site traffic, where sales attribution directly ties a car sold to the path that led to the sale. Furthermore, we have to factor in the reality that 71% of online users remain anonymous.

Ben Robertaccio, Marketing Director for Morrie’s Automotive Group says, “70% of people come into your dealership without first contacting you. Less than 10% contact you or convert through your website. If we don’t have data on the mass of our customer base, then we need to find better ways to understand them.”

2.    There are WAY too many KPIs to realistically keep track of.

Shaun Kniffin, Marketing & Technology Director for Germain Automotive Group shared their recent initiative to define the most important KPIs that exist within all the profit centers of a dealership. “Together we identified 127 KPIs as the key ones to follow. In digital marketing alone, we identified 27 critical KPIs. Our GMs all agree that between 4-16 of those 27 digital KPIs should be looked at on a daily basis.” But how many of them actually do it? Dealers are reported to death. They’re inundated with data and it’s often impossible to know where to start without enlisting the right help. 

3.    In a perfect world, EVERYONE’S data would reside in CRM.

It would be in the best interest of CRM companies to take into consideration what has made Salesforce so successful and apply that same business model to automotive. For just a minute, take yourself out of our industry. Put yourself in ANY other industry and ALL of the data resides within Salesforce. There are plugins within Salesforce that collectively make it better, more powerful, and virtually indispensable. Salesforce grew exponentially when they opened up those opportunities to make corporations that use Salesforce better. We don’t see that in automotive and that’s a very frustrating thing, and it should be more frustrating to you as a dealer because you are required to live and breathe within CRM every single day.

AutoHook’s data, Clarivoy’s data, everyone’s data should reside in CRM. If we know the behavioral traits specific to the customers in our CRM, our salespeople can simply look at their screen (just like you would in Salesforce) and immediately see every digital destination that customer has passed through. That’s what our salespeople need in order to have much more meaningful, efficient conversations with their customers. 

In a perfect world, there would be an independent 3rd party overseeing the validity of everyone’s data, as we know vendor reporting has the potential to be self-serving. But if we know we have clean, accurate data, then we as marketers can easily figure out how to help GMs make much better decisions with their budget. 

4. Google Analytics is a great tool…IF it’s set up correctly.   

Google Analytics has the potential to be a phenomenal tool, but it can also be complicated, involved and difficult to derive any real actionable insights from. How many GMs go into their GA dashboard every day? Not many. So how can we expect our managers to actually obtain any real value or insights from of GA alone?

Ben Robertaccio advises dealers to have their key goals and conversions set up properly in order to measure what’s actually happening - and that includes SRPs, VDPs, leads, chats, calls, texts, map views, etc. The best reports out there take GA data and feed in multiple other data sources to deliver a clear path towards correcting the flaws in your business.

A great tool is one that’s able to synthesize all the data and turn it into something dealers can actually use. Ben recommends AutoHook’s Traffic Conversion Analysis (TCA) powered by Urban Science data. “TCA feeds in CRM data, new vehicle registration data, our sales data, and what our competitors are selling, and it’s able to show me data like I’ve never seen it before. If we didn’t have TCA, we would have continued to spend, spend, spend, when it reality it was our process that was broken, and TCA was able to make that clear.” 

5. There needs to be massive consolidation of analytics tools in the market space.

Because of the intertype competition amongst tiers and players within the automotive vertical, we need to get to the point where dealers can know (or at least have a solid benchmark) of how many cars each vendor will help them sell per month.

Shaun Kniffin reminds us of the ugly truth that, “This industry has more snake oil than any other industry,” and he’s right! Additionally, there aren’t any real standards or benchmarks to let dealers know how they are doing at any given point because of the fact that every dealer and every market is so different. We need to push for more open data sharing, partnerships, and standardization amongst vendors and at all industry levels.

Ben Robertaccio makes another great point when he says, “I see this operational divide across industries: operations vs. marketing. We see it in every industry. But what we need to do is foster an environment where I show you results, you show me results and we work together.”

6. 3rd party listing sites like Cars.com & Autotrader are NOT lead generators.

Leads aren’t everything. Clarivoy Founder & CEO, Steve White says, “Don’t ignore the cumulative effect of the journey that took place to produce that lead.” People don’t just go to Cars.com and submit their information – it’s not that simple. Autotrader, Cars.com, CarGurus all those sites are not lead sources. Their responsibility is to expose your inventory on a grand scale.

Shaun Kniffin happened to be the very first Cars.com customer in Columbus, OH back in 2001. He says, “I’ve never looked at Cars.com as a lead source. A lot of GMs don’t understand how many VDP views these sites generate for their stores each month - it’s more activity than your Search Engine Marketing could produce in an entire year. It’s our job as educators to bring them to the forefront and say let’s put this into perspective – how do you replace all these VDPs? And that’s all part of multitouch attribution. Exposing that inventory is the #1 job of Trader, Cars, Gurus, etc.”

7. Using Last Click Attribution is a lot like…

Clarivoy CEO & Founder, Steve White, made the incredible analogy of comparing attribution to a hangover. “It’s a lot like blaming a hangover on that last beer you had. But in reality, it wasn’t just that last beer, it was the cumulative effect of the 10 other drinks you had before that. So that’s what you have to think about from an attribution perspective. There is a cumulative effect to all of your different marketing touchpoints.” Making really big decisions based on last click is just not the smart thing to do.

8. Dealers suffer from A.D.D. 

Which of course stands for, “Another Damn Dashboard.” Every vendor has their own dashboard. The last possible thing today’s dealers want is another report or system to log into. These dashboards have become nothing more than complex conundrums of numbers and statistics that lack meaning and more than anything, lack the ability to execute.

Kniffin says when it comes to their vendors, “I just want to know if you’re involved in the sale. I just want to know are you part of my math, are you part of my chemistry? Are you going to help me attribute more sales? As marketers all we want to know is how can we make these numbers better? How are you who manages my paid search going to make your numbers better and help us optimize our spend?” 

9. Hold Your Vendors to a Higher Standard

Ben Robertaccio emphasizes, “We all need to hold our vendors and our partners to a higher standard to make sure they are feeding into our analytics appropriately and ensuring the data they provide us with is pure and valid. In a utopian world, all our vendors would work together openly and all agree on how to measure things.”

10.  Don’t rely on your customers (or your CRM) to help with attribution.

If dealers were to ask their customers what their click path consisted of before coming in for a test drive, most people wouldn’t have a clue. The digital journey that takes place leading up to a sale is just that – a journey. It’s something that happens organically, over time, across devices, both at home and on the go.

Kniffin adds, “Single source attribution in CRM – THAT’S frustrating! We’ve challenged every one of the CRM companies out there, and it’s a crowded space, but the truth is, single source attribution does not help us develop a strong marketing strategy, period. And how much of that is really subjective data?”

Ben Robertaccio shares Kniffin’s frustration and follows it up with a good point, "Pretty regularly I don’t remember what I had for dinner the night before so how am I going to remember what traffic source influenced my purchase?”

 

Thanks to our friends at DealerRefresh, you can check out this panel discussion live from #DSES2017. Click here to watch The Data Doesn’t Lie: Shocking Discoveries in Automotive Attribution on Facebook Live.

HOW TO SELL CARS IN 1939: Uncovered Documents Reveal Not Much has Changed…

by David Metter

Could it be possible that the secret to selling cars in today’s multi-touch, exponentially data-driven society is exactly the same as it was prior to World War II? I know what you’re thinking. This is either a huge stretch or some sort of joke. However, recently uncovered sales training documents dating back to 1939 tell a very unexpected story that directly parallels the fundamental methods dealers need to sell more cars today.

This handbook published by General Motors in 1939 on how to manage new car sales was recently passed along to me, and as I read through it, I was completely blown away. I think anyone who has been in the car business for a while will appreciate this…

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It states, “The sales manager must have a keen desire to check such things as the number of people buying competitive cars with whom his own organization has been in contact, the reasons why such deals were lost, the reasons why any particular competitor is making headway locally, and similar vital facts to which the average dealer pays little or no attention.”

In one sentence from a 219-page book from 78 years ago, we can derive three secrets to selling cars that remain true today. Not only are these tactics relevant to the way dealers currently operate, but they are also the difference between a dealership that’s running successfully and efficiently and a dealership on the verge of failure.

Below are the three operational insights that have endured in this industry throughout generations, wars, and the age of the Internet that changed everything as we know it…  or did it? These takeaways will continue to be the foundation of how to sell cars in 2017 and into the future.

Dealers need complete visibility into:

  1. The number of people buying competitive cars that your own dealership has been in contact with.
  2. The reasons or sources responsible for these lost opportunities. 
  3. The reasons why a local competitor may own more market share than you do.

This is so interesting to me because these are things GM recognized back in 1939 and STILL today we struggle with being able to put our finger on the number of opportunities we lose each month and the sources (or people) responsible for these losses. A sales manager that concerns themselves with not just their own dealership’s performance but also the performance of their top competitors and defection rates to other dealers or brands is a sales manager with A LOT of common sense!

If a customer is walking into your store, interacting with your staff, and leaving to purchase a vehicle from somewhere else, there’s always a story to uncover as to why. The problem in the digital world we live in is that dealers lack visibility into all the different sources, touchpoints, and online or in-person interactions that may have played a roll in a lost sale.

A lot of these operational inefficiencies are due to the fact that we can only see data from a one-dimensional perspective. What I mean by that is dealers don’t have a comprehensive, multifaceted view of all their different deposits of data – specifically, your CRM & DMS for the following reasons:

  • You can only see the leads that come into your dealership.
  • You only see the opportunities you’re working.
  • Ultimately when leads get to your DMS you can see sales, but what you don’t see is the customers that defected and who they bought from.
  • You don’t see the dealership next door and what is in their CRM and you CERTAINLY can’t see what’s in their DMS, and that’s a HUGE blind spot.

Because of the fact that no two dealers are the same and no two markets are the same, there will always be a different sickness, prescription, and remedy for each and every dealership. If you have a clear view into the ailments in your processes associated with each lost sale, you can then derive the information you need to make beneficial changes to reduce your rate of defection both to other brands or other same make dealers in your market.

Identifying the number of lost sales opportunities in your CRM is just the first step. The second is integrating technology that exposes where the problems are in your sales processes. Maybe it’s a third party lead provider with a high close rate and a high defection rate - meaning you need to go after leads from that particular source more aggressively or put more marketing dollars towards those leads to reduce the defection rate.

Or maybe you have a salesperson with a high close rate and a low defection rate that should be handling more opportunities. Maybe you have high defection rates tied to a particular model in your inventory, so you then know it would be a good idea to increase incentive offers around that vehicle.

Most vendors and digital advertisers only provide a one-sided perspective of your data, which is why big data has been so limiting at the dealership level. Dealers know they’re losing sales, but they don’t know where, to who, or why. If you can see the full picture, you can then start to put together the pieces of the puzzle around whether or not you had the right inventory, or did you have the right selling strategy against your competitors, and who are you truly competing with? The obscure, blurry picture of your market’s sales trends starts coming into focus. So in summary, what we need to do is start incorporating that 1939 mentality back into the way we operate.

 

 

 

 

 

 

 

 

 

 

 

 

EXECUTION: Uncovering Big Data's Missing Piece

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by David Metter

The greatest marketing trends of all time began as insignificant ideas that eventually gained enough momentum to reach a critical tipping point – the point in which uncharted tools and technologies once overlooked by the masses are adopted by the mainstream. When ideas reach their tipping point, an infectious, unstoppable domino effect goes into play. The undiscovered becomes discovered, the unfamiliar becomes familiar, and the unknown becomes universal truth.

Just as the adoption of CRMs exploded in the early 2000’s and mobile marketing reached its tipping point circa 2014-2015, I believe big data has reached its culmination in 2017. I know this because I’ve seen the distinct black and white clarity today’s automotive data has finally been able to give to car dealers. 

For the past several years, dealers have lacked significant visibility into their market regarding:

  • Where and how they’re losing sales
  • Who they’re losing sales to (whether the customer is purchasing the same make or another brand entirely)
  • If sales are lost due to internal or external factors
  • True successes, failures, and trends tied to each salesperson, lead or traffic source, inventory, day of the month, zip code, etc.
  • Close and defection rates for all your leads and lead providers
  • Validation that you are stocking the right inventory and marketing it in the most efficient manner

… the list goes on.

What we know now is that all of the items listed above are finally within reach. It’s also important to note that the problem has never been the data. It’s that dealers have only been able to view sales trends within their own CRM and DMS. How can you possibly improve your sales effectiveness if you’re only comparing it to yourself? The inability to see the sales and defection trends of top competing dealers and brands in your market has been a HUGE roadblock for dealers... until now that is.

Today’s big data landscape has evolved to become 100% executable. We can quickly gain insights from data using a scientific approach that exposes lost sales by source at an aggregate level. By knowing your lost sales opportunities, who you lost them to, and where you lost them, a strategic path towards increasing sales and reducing defection rates naturally comes into view – despite what your market conditions may look like.

We can even take it a step further and look at success and defection trends tied to an individual person within your sales staff. For example, if someone has a high close rate AND a high defection rate, you can break down where these lost opportunities are coming from. You can see that person is being assigned way too many leads and then you can make smarter decisions in terms of how you divide up your employees’ responsibilities. 

When you can see where you’re losing sales across the board, you can then align your conversion goals, the operational training of your staff, and the way you drive traffic and leads into your dealership – so you can have the highest quality lineup of opportunities to close.

The advent of integrating automotive data to make more profitable operational decisions is similar in many ways to when CRM and DMS technologies were first implemented. Using these tools gave you a way to organize and streamline your process to help you sell more cars. The ability to execute smarter sales strategies using data analysis is no longer alchemy. It’s the current reality of this instant gratification world we live in, and it’s the weapon dealers need to be unstoppable.

CASE STUDY: Morrie's Brooklyn Park Subaru Tells Lost Sales to "GET LOST" with AutoHook's Traffic Conversion Analysis (TCA)

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.

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SEE HOW WE DID IT! Read the full case study below.

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.