When it comes to the topic of online leads, the Philippine automotive industry is abuzz with both praise and criticism; depending mostly on who you’re speaking to and what you’re talking about.
Amidst all the discussion, however, one thing remains certain — the opportunity for car dealers to generate significant results from online leads has never been more prominent than what it is today. As more brands and more dealers delve into the world of online lead generation, it is paramount that management teams create the right precedent between sales and marketing departments to align on a common goal of accelerating ROI.
Recently we discussed some of our significant findings from 2017 and noted several key highlights that were uncovered through continuous conversations with the car-buying public. As you’d expect, good customer service standards and dealership response times positively correlated with a healthy sales conversion figure. Alarmingly, however, it was found that 35.3% of prospective buyers who did not commit to an initial purchase were totally abandoned by sales teams, subsequently never receiving another e-mail, call, or even SMS. That’s right, nothing. Nada. Zilch.
Based on buyer surveys, many of these abandoned prospects would later go on to complete a vehicle purchase with an alternative dealer within a time frame of three to six months.
The question is, can dealers really afford to turn away business like this? Or maybe, more aptly, what is holding dealers back from being more successful with online leads?
1. Your Sales Team is only focused on the short-term.
Ok, let's not pull any punches and dive straight in with a pretty broad generalization. So, here goes: (most) sales teams tend to be generally quite short-sighted. There you go, I said it. I'll ask for forgiveness later but in the meantime just hear me out on where I'm going with this.
For the last number of years, the Philippine automotive industry, given it’s rapid growth has constantly fed the shortsighed sales mentality by repetitively churning out buyers into the eagerly awaiting hands of sales teams. As such, the level of focus for many sales agents remains firmly fixated on the lower level of the lead funnel, to the people who are eager to buy today, tomorrow, or at least within the next thirty (30) days. In Psychology this is referred to as Psychological Mystopia or Medium Maximization. In the world of lead generation, medium maximization may apply to the mentality of sales to generate more leads in order to generate more immediate sales results (that they can feel) rather than focusing on the more abstract conditions required to be ultimately more successful over time.
To use a (bad) analogy, consider this: If your lead pool is a lake filled with sunken opportunities, then the sales team will more often than not only be interested in the very tiny island in the middle of the lake on which opportunities are visible to the naked eye. They care not for the abundance of long term opportunities that exist beyond their natural line of sight or that might require more work to uncover.
As a result, unless a prospective customer re-engages with a sales agent, it’s likely that the lead will ultimately be abandoned.
As lead-generation becomes more prominent, Philippine dealers today are left with a difficult choice to make — train your sales teams to better nurture your lead funnel or make it an incumbent role of your marketing team. Either way, someone has to take responsibility and get serious about rolling up their sleeves and getting hands on with a lead nurturing process.
2. Marketing teams don't mind the mid-funnel.
An alternative to changing the mindset and skillset of the sales teams is to empower your marketing team to independently manage the mid-funnel. However, let’s be under no illusion that this is a pretty sensitive topic. Why? Because the boundaries and responsibilities between salesmen and marketers hasn’t been conclusively established in the Philippine auto-industry. From a marketers perspective, it’s the job of the sales team to ‘work’ the prospects and generate sales whereas the sales team believe it’s the job of marketers to generate high volumes of ‘good quality’ leads.
Unfortunately, the definition of ‘good quality leads’ is widely susceptible to misinterpretation and varies significantly from the point of view of both sales people and marketers. To generalize, marketers think of leads as long term opportunities whereas sales people only consider a good quality lead to be a lead that is going to buy immediately. This massive disconnect is ultimately most detrimental to a dealer's overall performance. Sadly, while there’s a lot of local literature on lead-management and conversion optimization, not enough of it has been applied by the local auto-industry.
Truth be told, management of the mid-funnel may also be dependent on the other marketing and sales activities of your dealership. Sales teams for brands like Toyota may find it hard to manage the mid-funnel due to the high volume of daily sales activities; whereas sales teams encumbered with slower volume sales might be able to pick up the slack.
Whoever happens to be responsible, it is imperative that you develop appropriate strategies to connect with the mid-funnel, because it is truly where the money is to be made.
One of the simplest methods of mid-funnel management is through an eDMS or email newsletter which targets your entire pool of prospects. From here, you can use simple tools to monitor the open and click through rates of your prospects. As time goes on, you’ll be able to notice trends, enabling you to further segment your core data into various sub-sets, and communicate the most promising prospects back to your sales team. If we go back to the lake analogy, these activities become the fishing lines that bring to the surface more opportunities for the sales team. But that's easy to say and easy to do, if you're a marketer with prior experience in lead management. With lead-generation still in its infancy, many teams have yet to develop the particular skill sets or embrace the necessary technology required to fully maximize their opportunities.
However, get these things right and the result is almost always increased sales volume and conversion.
3. The answer is not always more leads.
Success in online lead generation and lead management can stem from a variety of different attitudes and strategies on how sales volume can be amplified. As a result, sales and marketing teams will forever be drawn into a debate regarding sales conversion vs. sales volume.
From most marketers' stand point, the answer to how to increase sales output is through a higher sales conversion percentage. The mindset being that marketers have already done the job in bringing prospects to the front-door and it is now the incumbent responsibility of the sales team to materialize these prospects into bonafide sales. This belief however is relatively short-sighted and bias in the notion that a marketers job is to only attract new prospects. If dealerships want to ultimately be successful, they need to ensure that retaining existing prospect interest is as much a part of their regular marketing KPIs as attracting new prospects or obtaining 'reach' is.
On the flip-side, a sales team with a low lead-to-sales conversion will ask the marketing team to double or triple the volume of their leads so that their relatively low conversion score can be amplified to more leads and thus generate more sales. The downside to this argument is that with the generation of additional leads comes extra cost, which will in short negatively impact the overall business economics of engaging in a lead-generation program.
It’s all too common of a sight to see a dealer go gun-ho with their lead generation without laying the foundations of their lead-management strategy. More often than not, this leads to substantial waste in marketing budgets.
The time to maximize your lead-to-sale conversion rate is now. However, the blame game between sales and marketing will continue to be counter-productive for your dealership until both departments can agree on a unified strategy for handling all prospects, regardless of where they fall in your lead funnel.
The mid-funnel is and will always be a dealer's honey pot. Your ability to effectively manage this portion of your lead funnel will define the true winners and losers in online lead-generation. There is no perfect answer to who is responsible for doing this, but it is important for management to evaluate who is most suited to the task (based on their skillsets) on a dealer-to-dealer basis.
In closing, I'll use another (terrible) analogy. If the sales opportunity is a hot sundae, the sales that your dealership is making right now from low funnel leads are just the chocolate sprinkles. Wouldn’t it be better to get the banana, the hot fudge, ice-cream, and most importantly — the cherry?
The AutoDeal Platform will be introducing new mid-funnel lead management services as part of it’s Elite package subscriptions this 2018. Want to find out more? contact firstname.lastname@example.org.