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Two Parts Cornmeal. One Part Flour

betty-crocker1

Sometimes lessons can be learned from the most unlikely of sources. If you aren’t happy with your Internet close rates it may be something easily fixed with a lesson from Betty Crocker. Betty Crocker’s recipe for cornbread calls for two parts cornmeal and one part self-rising flour. Get the ingredients wrong and you won’t be happy with the results (yucky cornbread).

Things like a speedy response, personal emails, offering choices, answering verbatim questions and asking a few of your own certainly drive an improved close rate. But these tactics are subordinate to your lead mix.

Despite all your efforts the results could just be a matter of the math.

There is a recipe for a good close rate and it’s 2 parts mid and low funnel leads and 1 part high funnel leads. Here’s what I mean.

You can expect third party leads to yield a close rate somewhere in the 6%-10% range. Mid funnel leads like AutoTrader.com and Cars.com can produce a close rate somewhere in the 12%-15% range. Your low funnel leads from your website should be at or above 20%.

Now let’s look at a hypothetical lead mix. This scenario shows one part high funnel to only one part low and mid funnel.

Lead Source

Lead Count

Sales

Close Rate

High Funnel

200

6

6%

Mid Funnel

50

8

15%

Low Funnel

50

10

20%

Total

300

24

8%

The 15%-20% overall close rate you want is mathematically improbable because your lead mix is wrong. It’s the wrong recipe.

Look what happens when the lead mix is corrected.

Lead Source

Lead Count

Sales

Close Rate

High Funnel

100

6

6%

Mid Funnel

50

8

15%

Low Funnel

150

30

20%

Total

300

44

15%

You might be thinking “duh”! But until you put your leads in this context you may not realize the mathematical headwind your facing.

I’m not suggesting you terminate your third party leads. What I am suggesting is you need more leads from your website to get your recipe calibrated for a healthy close rate and ROI.

I find most dealers get plenty of traffic to their website they just have a low conversion rate. Of course there are many factors such as your pricing philosophy, pictures, descriptions and calls to action.

However, in many cases a little work on your homepage can cure what ails you.

Drew Brown, BDC and Internet manager at Brent Brown Toyota in Orem, UT had such an experience.

The dealership was receiving about 300 leads per month and had an overall close rate of 9.9%. Recognizing his site was getting plenty of unique visitors he redesigned his home page for better conversion. Focusing on his Point.Click.Drive value proposition, Blackbook leads and credit applications.

Within a few months his lead count had grown to over 400 leads and 225 of those were coming from his website. His overall close rate improved to 18.1%. Not only did his overall lead mix improve his results, but Drew paid a lot of attention to the mix of his website leads as well.

Of his 225 website leads, 98 came from the Blackbook tool on the dealership’s home page. Drew built a custom strategy for trade in leads and this really boosted his close rate. The rest of his website leads were credit apps and price quote leads.

Brent Brown Toyota’s strategy went even a little deeper by also managing the mix of their website leads.

There are three types of sales leads you get from your website. VIN specific leads in which a customer is asking for the availability and/or best price, trade in leads and credit applications.

Drew knew that a customer asking for a price or availability was a good lead but did not yield as high a close rate as his credit apps and trade value requests. Why was that? It’s really the strength of the hook.

When a customer asks for a price quote, and you give it to them, they may or may not decide to visit the showroom and test drive the car. Quite possibly that customer will continue to shop.

However, trade requests and credit apps present a much better hook. Contrary to a price quote, a trade value has a more compelling hook because customers understand in order to give them a firm cash offer you need to see the trade. Drew’s Blackbook tool gave the customers a range and his BDC Agents had a compelling reason for customers to visit the showroom. His agents put a lot of emphasis on the dealerships need for the customers trade and the conversion rate began to climb.

Drew’s agents had a similar experience with credit applications. Providing the customer again with a compelling reason to visit the showroom. Due to privacy laws and the need to verify the prospects identity, customers are given a compelling reason to visit the showroom, and conversion rates grew even more.

Look at it this way. When a customer asks for a price, they’ve taken the first step. When they ask for a trade value or credit approval, the customer has taken a second step.

Recognizing this, Drew offered his Blackbook tool and credit application to every lead. The effect was Brent Brown Toyota became an asset to these prospects. The dealerships third party leads were offered these steps as well, literally pulling customers “down the funnel” by turning a third party lead into a lead right off their website.

For sure, mathematics is a constant element of your Internet success. You can make the math work in your favor or work against you. It all comes down to the lead mix, or the recipe for a healthy and profitable Internet operation.

By | 2013-11-16T02:18:25+00:00 February 17th, 2013|Uncategorized|0 Comments

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