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Guest opinion: too many 'enquiry rich, process poor' dealers losing sales

BTC chief executive Guy Allman

Earlier this year we carried out some research into customer engagement and dealership management of the customer journey - specifically the level of contact following an initial customer enquiry.

Our data revealed some very interesting insights.

From questions posed to 2,500 consumers, analysis revealed that 35% were still searching for a car, despite having been flagged up as ‘lost sales’.

This undoubtedly points to a degree of lethargy on the part of dealers, yet it seems the problem was more deeply rooted than a neglectful approach to data input.

Our data indicated that dealers were falling short in four key areas of the sales process:

1. the test drive
2. part-exchange appraisal
3. financial advice
4. follow-ups.

In short, customers were being allowed to leave the dealership without having gone through any of the processes that might have allowed them to gain a rapport with the sales staff or add some impetus to make a purchase.

Although this initial research was carried out over six months ago (based on statistics for Q4 of 2015), recent reports suggest many dealerships are still failing to recognise the need for, or indeed adopt, a process driven approach to sales.

Fresh research

Just a few weeks ago, AM-online highlighted how often many seemingly ‘lost’ customers do not hear back from sales staff as a result of their original enquiry.

To gain a clearer picture of dealership behaviour, we decided to replicate our lost sales analysis using data from May – September 2016 and a larger sample size of 9,685 customers, drawn from UK visitors to two prestige brands.

Worryingly, the figures show continued poor performance when it comes to the sales process:

Test drive: Our statistics revealed that 61% of lost customers had not carried out a test drive. Given that 50% of those who take test drives then go on to make a purchase, dealerships are missing out on a significant number of conversions by failing to include this as part of the sales process.

Part-exchange appraisal: According to our research, 58% of lost customers were interested in a part-exchange deal, yet of these only 32% had their vehicle valued.

Dealer finance: Only 34% of lost customers left the dealership having been quoted dealer finance, which means 6,395 (66%) walked away without having a monthly payment quoted. In excess of 90% of buyers now rely on dealer finance to fund any purchase over £5,000. It therefore seems nothing short of ludicrous that customers are able to walk away without being made aware of the financial options available to them.

Follow-up process:  27% of customers marked as ‘lost’ didn’t receive any secondary contact once they had left the dealership.

‘Lost’ customers still in the market: 12% (1,162) of customers stated that they still hadn’t gone onto to buy a car and DID want re-contact from the dealers, yet a sales executive or sales manager had defined them as “not buying”.

"Enquiry rich, but process poor"

As with our initial lost sales analysis, carried out over six months ago, our research suggests that many dealers remain enquiry rich but process poor.

In fact, the quality of sales lead management seems to have slipped even further than before, particularly for elements such as the test drive and part exchange appraisal where a drop in numbers is most visible.

Despite fears over the Brexit fallout, the automotive market has remained relatively strong with a healthy volume of consumers looking to buy a vehicle.

It’s therefore frustrating that many dealers are failing to nurture these leads as a result of a lacklustre approach to sales processes and team performance.

Very simply, it would appear that sales controls are diminishing at a faster rate than overall dealership return on sales. 

This begs the question – are the two connected?

And the only conclusion you can draw is a positive one. 

Overall, our research suggests that sales managers need to revisit their sales controls and focus on the customer experience.

Author:  Guy Allman (pictured), Chief Executive of BTC

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