Since closing sales is the name of the game in the new automotive e-commerce world, how can you significantly increase their closing ratio? What is a good closing rate? How do you separate good leads from bad leads? How many leads should you be closing every month? Let's start by saying that just as in the real world, you should be closing 25% of the leads you receive via the Internet. If your dealership is below that, apply the techniques that we are about to discuss. If you are already closing that percentage, apply the following techniques to add an additional 5 to 10 percent on your closing percentage. Each of these techniques can move your closing ratio up by 1 to 3 percent. By putting them together, you'll receive compounded results. The following four techniques are simple and easy to put to work immediately within your Internet department.
Response
How long does it take you to respond to an e-mail inquiry? Anything over two hours is wasting leads. Why? Would you expect someone that entered your showroom to wait two minutes before someone greeted them? I doubt it. You'd give them immediate attention; the longer you wait to respond to an e-mail nquiry is in direct inverse proportion to the amount of leads you will close. How long do you wait? If you are like many dealers who think 24 hours is a reasonable time to return the inquiry, you are letting good prospects slip out of reach. The easiest way to solve your problem is to get an alpha-numeric pager that will notify you when you receive e-mail, so you are not waiting by the computer all day. It is the same concept as returning a page. This way you will never miss a lead. It also allows you to run your Internet department and respond to leads from any place that has an Internet connection. Doing this now will save you time and money in the future.
E-Mail Management
This is a greatly overlooked program, but one that will keep you organized and on top of your Internet business. You need to have an e-mail program. I recommend either Eudora or Microsoft Outlook to manage your incoming and outgoing e-mail. You can set up individual mailboxes to sort and process all your mail. If you don't have an organized flow of information, you will lose leads and forget to process requests promptly. I also recommend that you purchase contact management software that you can use to set appointments, take notes, and remind yourself of when you need to call someone or e-mail them. The program we use at our company is Goldmine 4.0, but if you want a simpler program that you can use within minutes of taking it out of the box, then try ACT. It is very effective and will keep you on top of all your work whether you are processing 20 or 300 leads per week. Both programs can be bought off the shelf and are quite reasonably priced.
Autoresponders
Here is a great system that will keep you in constant contact during your prospect's entire buying cycle. In direct marketing, it has been proven that to close a sale, the prospect needs to have seven contacts with your organization to make a comfortable decision. This technique is called compounding or sequencing the prospect. By setting up an autoresponder program, you can send seven highly targeted and personalized e-mails to your prospect with time-sensitive offers during the eight weeks after the initial contact with your dealership. This eight weeks is the entire cycle that most customers take from their initial interest in a vehicle to their actual purchase. By marketing your dealership to them using e-mail, you create a consistency and build rapport that in return will increase your close ratio. If you set this up properly, you will increase your sales. I have personally run programs where I have achieved an 18% increase in sales just by setting up an autoresponder sales system.
Negotiations Using E-Mail
You never want to lose the battle over price alone. Adding value to the sales process is the key. When you go to buy tires, the primary difference you notice between one tire shop and the other is price. Tires have become a commodity, which is exactly what you are trying to avoid when you are selling cars. When people request a price quote, give them your "Internet special pricing" and add value to the offer by saying that all ABC Motor Internet customers also receive x, y, and z, along with the best price. If you allow the people to come into your dealership and negotiate from your Internet price, you will lose credibility. If people want to negotiate, tell them you will be happy to refer them over to a regular salesperson that will be capable of negotiating the price of the car.
In the end, those who succeed will meet or exceed the expectations of their prospects. If doing business with your Internet department is the same as doing business with the rest of your dealership, where is the value? Doing business with the Internet customer needs to be a no-hassle system that provides an obvious value differentiation. The techniques and systems mentioned above can have a dramatic effect on your closing ratios.
Todd L. Smith is the President and CEO of Target Marketing Group, the leading automotive Internet solutions provider. He is the publisher of the manual "Automotive Retailing on the Internet." Todd works with OEMs, dealership groups, and individual dealerships to create Internet strategies. Visit Target Marketing Group's website at www.tmg-online.com. If you have specific questions or require more information about this subject, please check the appropriate box on the reader response form on page 3.# tsmith@dealeronline.com.