Common sense dictates that you can’t manage and improve upon something without first knowing what needs to be managed and improved. This is true of all forms of digital marketing, but it’s particularly significant when we discuss the most crucial metrics pertaining to dealership lead management. Why? Because some CRM metrics are more important to measure than others; basic KPIs like CLV and clickthrough rates aren’t as critical for auto dealers to track as, say, appointment or closing ratios.
So, how do you define the most vital metrics for dealerships to track? And, most importantly, how does one even measure the right lead management KPIs? Let’s see how deep this rabbit hole goes.
What Lead Management KPIs Must Car Dealers Monitor?
Quality Response & Response Time (Time to Convert)
Most dealers know about the critical 72-hour window to turn a lead into a sale. But that window closes a smidge with each passing year, as the newest crops of shoppers—shoppers of the younger, I-want-it-now generation, that is—expect more urgency from their chosen dealership. If dealers aren’t sending timely first responses, either by text, email, or phone, those leads are likely to dry up in mere hours. So, measure your response times in seconds and minutes, not hours or days.
When it comes to lead response management, time is both your friend and enemy—a frenemy. If you’re the first dealer to reach out to a lead, you’re about 40% more likely to secure that sale. But while it’s imperative you contact a lead promptly (within 30 minutes, ideally), it’s also important to know that qualifying a lead can take up to 8 touchpoints. You’re investing an appreciable amount of effort to bridge that gap between “potential customer” and “probable sale,” so make sure you use that time wisely.
How should car dealers measure this?
If you’re including Lead Response Time to your list of KPIs, you’ll want reporting that offers industry benchmarks, both regional and national, to use for comparison.
For instance, in our lead handling whitepaper, we state that “a lead is 100 times less likely to become a sale if dealers do not reach out via phone within the first 30 minutes.” Yet just 54% of dealers in our study make calls in that timeframe. In fact, we discovered that the average lead response time for dealerships participating in our study was 339 minutes—though the national average is somewhere closer to 100 minutes. That’s nearly 6 flabbergasting hours of thumb-twiddling and finger-tapping. If you compare yourself to the average, is your dealership succeeding or failing?
Additionally, you’ll want to consider monitoring these other metrics as your CRM allows:
- Speed to Contact – The length of time between the lead coming in and your salesperson having a real, live conversation or interaction with the customer
- Number of Attempts – The number of attempts to contact the customer, including first quality responses and follow-up inquiries
- Speed to Qualify – How long it took to qualify the lead as “sales-ready”
- Lead Source Rate – The number of qualified leads compared to the total number of leads received from all lead-gen sources
A good place to start is by having an agency conduct an audit of your lead management. We happen to offer a product (it’s called Customer Engagement Analysis) that does just that, as well as a new reporting dashboard that simplifies the data for you (more on that later).
Appointments Set, Shown & Sold
You may be the best salesperson in the world, but that charm won’t do squat if leads aren’t funneling in through your dealership’s doors. That’s been the case for 37% of dealers in our recent study, all of whom did not offer appointments within their first quality responses.
Appointment setting is an extremely valuable part of any dealer’s sales and lead management process. When it’s done correctly, your customers will realize you’re running a tight and organized ship, and they’ll be more likely to both show up for the appointment and purchase a vehicle. In a roundabout way, having an established, streamlined appointment-setting process in place contributes to your overall reputation. (Two birds, one stone.)
Perhaps appointment setting isn’t your problem; rather, your dealership struggles to get appointments to show up. The best way to increase your Appointment Show Rate is to specifically ask the customer what day and time they’d like to come in, not the generic “when would you like to blah blah blah.” People by and large want to be told what to do, even if they say they don’t. When Person A creates a plan for Person B to follow, Person B is more likely to feel beholden to stick with Person A’s plan. Behavioral scientists call this “implementation intentions.” I just call it “being human.”
“Tell a heart disease patient they need to lose weight, odds are they’ll fail. Give them a step-by-step exercise plan, and they’re much more likely to work out.” – Bob Sullivan, PeopleScience
CRMs sometimes make it difficult to see Appt. Sold Rates, but they’re an important figure to include in your reporting, as well. How else are you to understand your ROI—a rousing game of “Pin the Tail on the Donkey”?
How should car dealers measure this?
A dashboard of success-driving metrics, in-depth reporting, a robust CRM, and a whole thing of candy beans: These are the items needed to accurately measure your Appointment Set, Show, and Sold Rates, which will ultimately provide you with valuable insight into your store’s sales efficiency.
Of course, you’re going to measure the number of appointments set each month, and compare those totals year-over-year (YoY). It’s also a good idea to review the numbers in your region and for your OEM, which will allow you to set realistic appointment-setting goals for the following fiscal or quarter.
The majority of dealers should spend the most time measuring and analyzing Appointment Show Rates. If you notice your Appointment Set Rate is growing yet your Appointment Show Rate is stagnant, it may be a sign that your lead-gen specialist isn’t adequately qualifying leads–or your team doesn’t have a good understanding of what constitutes a qualified lead. (You also should be looking at the rate of appointment reschedules, as they’re different from appointment no-shows.)
Don’t forget to monitor how each of your leads trends, either up or down, as you attach more touchpoints to their profile. (As we said earlier, it can take up to 8 touches on average to qualify a lead.) This may present a good opportunity to analyze and adjust your sales strategy or your CRM’s automated email setup.
Close Rate or Ratio
Much like appointment setting, your close rate can provide insight into your overall sales efficiency. Enough said.
How should car dealers measure this?
The average internet close rate for auto dealers is somewhere between 10 – 20%. However, don’t measure against the national average – measure against your region. To do so, you’ll need a good data reporting tool that can track all close ratios of other similar dealers in your zone and area.
Your close rate may vary significantly from month to month, but the overall YoY average should be ticking up. If it’s not, try segmenting your closed sales/leads into buckets: Potential Qualified and Potential Raw. In the Potential Qualified bucket, you want to add all sold leads that were probably sales-ready. In the Potential Raw bucket, you’ll put the sold leads that may not have been sales-ready. Crunch the numbers again.
A thorough report of your close rate will allow you to determine where to spend your time and how much of that time you should be spending to generate your goal conversion rate. With a good Performance Manager or coach in your corner, you can also drill deeper into the numbers to get a full picture of which zones, regions, and geographic locations are most profitable. Then adjust your lead management and marketing strategies to coincide with your findings.
Preferred Method of Communication (Channel Metrics)
We all have a preferred way to communicate; some like texting, others stick to email, and there are still a few purists left who enjoy chatting on the phone. The only way to understand how your leads want to be contacted is to place touchpoints on every form of communication. For many dealers, the key to improvement on this front is a little something called “automation.”
You should have an automated first-response email process enabled in your CRM, as well as SMS text message replies with opt-in options. We found that just 14% of dealers in our recent U.S. study were sending texts properly, if at all, and only about half of dealers were automating their email responses to leads. The dealers who utilized both automated forms of communication saw a dramatic increase in appointments set.
Still, dealers must also stick to more conventional modes of communication by dialing those digits. A phone call or voicemail, as well as a follow-up call within 3 days, is still the preferred option for both consumers and salespeople.
How should car dealers measure this?
Keeping track of your communication attempts per each lead is an excellent place to start; this allows you to identify which form of communication your consumer base is most accustomed to find useful. From there, you could put more money and energy into refining your moneymaker—for instance, if you see a higher percentage of leads set appointments via email, you can run A/B tests on various first-response emails and, ultimately, create digital promotions based on any knowledge gleaned from the process.
But perhaps the best measuring stick for this lead management metric is a month-to-month analysis via mystery shop. You can track how your sales team is improving on all four modes: email, phone, webchat, and text. Then you can compare those numbers to the regional average and formulate new strategies, including the implementation of new sales incentives or back-to-basics tactics. Which leads us to something of which we’re quite proud….
Introducing Momentum Performance Analytics for Lead Management
For the better part of the summer—we used the playbook from Field of Dreams: “If you build it, they will come”—we’ve been hard at work developing what we consider to be the best reporting dashboard for auto dealers. We call it Momentum Performance Analytics.
Our intense hubris aside, we feel that Momentum is the ideal 24-7 platform for car dealers to access the tools they need to drive success. It’s intuitively built to simplify the task of finding and analyzing significant data; our clients can retrieve and view historical CEA scores and Internet Sales Coach data, analyze trends and ROI, view recommendations, and compare how they’re performing versus their region, OEM, zone, market area, or any other preferred filter. Solutions can even be customized for individual stores, OEMs, or multi-store dealer groups.
Here are some of the other benefits our clients can take advantage of on Momentum:
- 24-hour availability of reports, charts, on-demand videos, and Performance Manager recommendations
- Role-based access to maintain dealer security
- Email notifications alerting administrators when reports are produced or another significant event occurs
- SSO-compatibility to ensure clients can access all platform applications with one sign-in
- PDF reports can be downloaded
- Free learning content and resources are provided by our experts regularly
- More reporting options are in the pipeline, too
If you’d like to learn more about Momentum or sign up, we’d be more than happy to chit-chat and get you into the program. Simply connect with our team to get this train chuggin’!