23 Oct

Good Morning, ABC Motors. How can I help you?

   I saw an ’02 Malibu on your lot yesterday. How much is it?

I’m sorry, we already sold that car.

   Uh, OK. Thanks. Goodbye.

How many sales calls at your dealership sound like this one?  More than you think according to numerous studies.

A  J. D. Powers study of inbound sales calls to auto dealerships found that:

  • Only 11% of phone ups yield accurate customer data
  • Only 6% of phone ups yield an appointment of some type
  • Only 8 % of appointments show

Let’s put that into real world numbers. If potential customers called your dealership 100 times during the month that means you only got enough information to stay in contact with 11 of them. That also means you don’t even know who the other 89 were. And, it also means your staff only set 6 appointments to come into your dealership and maybe one of those show up every other month. Pretty pathetic, isn’t it.

You plaster your phone number everywhere – on your building, in your ads, on your website, etc. – to try to get people to call you and then you basically throw away all the money you spent advertising your number by not handling the calls correctly. In addition to all that expense that did what it was supposed to do but you wasted, consider the profits that you didn’t make on the sales you let slip through your fingers when you hung up the phone on a mishandled call.

Customers who call your dealership are already interested in something you offer. Maybe it’s a particular vehicle or maybe it’s your financing program; but these callers are already, at least, lukewarm. If you and your staff handled these calls properly, how many could you turn into sales?

At most automobile dealerships, the goal is to close 25% of your UPs. That percentage is probably higher in the BHPH business but let’s be conservative and use just 20%. If, instead of getting off the phone with no customer contact information for those 89 other customers, you collected information from 75% of them, that would be another 67 phone UPs to work towards a sale. Closing 20% would give you an additional 13 sales for the month. Multiply that number by your average gross profit on a deal and you can see just how much money poor phone technique is costing you every month.

And yet, we still see BHPH and LHPH dealers that don’t even track their phone UPs. They have no idea how many sales calls they receive every month. They don’t know how many were just blown away like the example at the beginning this article. And, typically, they don’t monitor the way their staff follows up with those few that they do get contact information for.

If you would like to increase your sales without spending $1 more in marketing, you need to start paying attention to how sales calls are handled at your dealership. You need to begin tracking and monitoring the volume of calls you are receiving at your dealership. Every phone UP needs to be logged, even the ones you do not collect contact information from. The first step is determining exactly how many incoming sales phone calls you are receiving on a monthly basis.

You also need to begin to improve how each call is handled. Your staff needs to be trained on what information they are expected to obtain on each call. Their training should include tips and techniques for obtaining that information and how to turn those calls into appointments, how to get more of those appointments to actually come in and how to turn those opportunities into sales.

I painted a pretty bleak picture at the beginning of this article with the J.D. Powers statistics but I will also tell you that I know several dealers who average well above those numbers. There are dealers who get contact data 90% of the time, turn 75% into appointments and get 50% to actually keep the appointment. Their phone UP closing ratio is well above 25%. You can be one of those dealers with a little work and attention to detail.

We’ll spend some time looking at how to make those changes and train your employees in my next few blog posts. Check back here every 3 or 4 days for the next installment.