THE EXECUTIVE EDITION: Lies the Digital Age Told You About Selling Cars

| by David Metter, President of AutoHook powered by Urban Science

In Part I of Lies the Digital Age Told You About Selling Cars, we overturned one of the most blindly accepted industry-wide standards about the current state of consumer car buying behavior. For far too long, the assumption has been vehicle shoppers have everything they need to make a purchase decision online, and they already know what they’re buying before ever stepping foot in a showroom. The common misconception has been that the average consumer in the digital age only visits one dealership before purchasing a vehicle.

What we found after surveying 2,748 U.S. consumers that have purchased a car in the last year is that the above statement couldn’t be further from the truth. In reality, not only does the average customer visit at least 2.4 dealerships before making a buying decision, but almost half – 46% – said they visited three or more dealers before purchasing. Over a quarter of our sample size, 26%, said they visited four or more dealerships before buying. All of this data was collected by AutoHook and Urban Science in May of 2018 from people who purchased or leased a vehicle within the last year – not from a published study conducted five years ago.

As a former general manager of a dealership, CMO of a privately-held dealer group and as a marketer in general, I found the fact that roughly 1 in 4 people (26%) in the year 2018 visit four or more dealerships before buying a car to be personally absurd. Though surprising, this statistic solidified a new truth about the state of our industry. Contrary to what dealers have been told, the in-store experience is arguably more important in the digital age than ever before in the history of the car business – and for several reasons.

The most prominent reason being if a customer has a bad experience with one of your salespeople when they come in for a test drive, they will leave and buy from someone else. If they go to two dealerships and have a bad experience at both, they will go to a third and even a fourth dealer to buy from the one that provides them with the experience they expect and deserve.

Just like everything else that has surfaced from the digital age, car shoppers have a LOT of choices when it comes to what they’re going to buy and who they’re going to buy from. Purchase decisions are still made at physical dealerships, most likely following a test drive – NOT exclusively online. Shoppers in-market for a new vehicle don’t have their minds made up about what they’re going to buy by the time they visit their first dealership. Outsell says 6 out of 10 car shoppers enter the market unsure of what they want to buy. Our own research and survey data consistently shows 78% of people are still considering multiple brands by the time they visit their first dealership.

So we as an industry, we HAVE to get this right. Instead of operating based on pure, often biased assumption, dealers need to seriously reconsider their order of priorities in terms of how they run their business and where they spend their money. The digital age has armed us with so much intellectual power, yet at the same time, it’s made us a little lazy. It’s cast a shadow over what’s really important – defining value and personal worth by likes, clicks and follows rather than interpersonal relationship skills.

Part II of Lies the Digital Age Told You About Selling Cars verified the auto industry has become too quick to rely on technology as a crutch to do the work for us, rather than picking up the phone and having a conversation - or dare I suggest having the inventory knowledge and social skills to not only sell a car, but to foster ongoing relationships that lead to repeat, loyal customers. It is officially time for a new dialogue to emerge. The question we as an industry need to be asking is not how can we leverage new technologies to help us sell cars, but how can we leverage new technologies to help our salespeople sell cars?

Rather than answering the above question based on my expertise and years of experience in this business, I’ll share the real-life success stories of how two actual dealerships in the digital age are using great data processed through great technology to help their people sell more cars and lose fewer opportunities.

DEALERSHIP #1

One of our dealer clients needed an accurate way to measure the true effectiveness of their follow-up process by knowing what was and wasn’t working within their current lead mix as well as how many opportunities their salespeople sold compared to how many they lost to competitors. Using their individual salesperson data, we analyzed each person’s sales and defections and identified who had the most potential to improve. We then pinpointed the time frame during their follow-up process when their people struggled the most, which for this particular store was during days 0-4 after a lead hit their CRM. Lastly, we exposed their highest defecting lead source.

Armed with a roadmap highlighting their greatest areas of opportunity, the owner of this dealership shared this data with his sales staff and reviewed each person’s sales and defection trends with them one-on-one every month. He created an environment of transparency and friendly competition by making this defection analysis technology available to all his salespeople, thus holding them personally accountable for every sale they lost in addition to what they closed.

The dealer then helped his staff implement a more aggressive follow-up strategy for working leads 0-4 days old. He provided additional training on how to better work leads that came from their highest defecting source (especially during this time frame). He took the time to listen to feedback from all his salespeople and found opportunities for peer coaching to help further reduce their collective number of defections. He also implemented a system to reward the people who showed improvement each month.

With a refined follow-up strategy fueled by better prepared, more empowered salespeople, they saw the following results in just 90 days:

• Their overall defections decreased by 89%, with a 44% decrease in defections specifically during days 0-4 post-lead.

• They increased their number of closed sales tied to their highest defecting lead source by an astounding 242%.

• Most importantly, when it came to the salesperson identified as having the highest defection rate, that individual successfully increased their closed sales by 78% and went from being the worst performer on the team to one of their top performers.

DEALERSHIP #2

This store needed a way to identify any potential problems with their lead mix to see which sources were underperforming and why. Using the same defection analysis technology as Dealer #1, they were able to determine the issues they were having with their highest defecting lead source were due to external factors outside of their control – rather than a lack of effective internal follow-up. They then confidently decided to cancel this lead provider and put those marketing dollars back towards their bottom line.

Ninety days later, they saw a 61% average increase in salesperson performance after removing that lead source – not to mention they were able to free up a total of 40 man-hours per week that were previously devoted to working those high-defecting leads. The best result of all? Four of their salespeople went from being average or below average performers to their TOP FOUR salespeople.

And they didn’t stop there. This dealer applied the same technology to define which model(s) in their inventory represented the most defections specific to their salespeople so they could go after leads tied to underperforming models more aggressively. Model A represented the most opportunity for improvement, and again within 90 days, they increased closed sales specific to Model A by 51% and reduced defections by 30%.

What we can conclude from the examples listed above, is that technology can help your people in a multitude of ways. Technology can help your salespeople close more deals and reduce their defection rates. Technology can help your people free up wasted time chasing leads from a faulty source. Technology can identify which models your people struggle with the most in order to boost specific model performance. Technology can even tell you if your customers are leaving your store to buy the same model somewhere else, or if they’re defecting to another brand entirely.

But the most important thing to take away is that technology in the digital age still doesn’t sell cars. It can do a lot to light up the right track for your people to do just that, but at the end of the day your salespeople need to know your inventory like the back of their hand – what makes it better than competing brands or models, and what makes doing business with you a better option than anywhere else.  

The truth in a current landscape littered with lies is that there’s no way for any one dealer to know everything they need to know about their overall market, which models represent the most opportunity for their store, and if their salespeople are doing their jobs and following up with leads appropriately. That’s where the technology and data come into play. With a complete view of who is struggling and exactly what they’re struggling with during the initial contact and follow-up process, dealers can take immediate action to help their salespeople reduce defections and improve their performance across all facets of their sales operations – so they can be one of the 2.4 dealerships (at least) with a shot of winning the sale.

If Your CRM Could Talk…How to Expose Your “True” Top Salespeople

| by David Metter

One of the only remaining constants in the car business is an overwhelming surplus of opinions. Unfortunately for Dealers, it’s almost impossible to silence the constant stream of opinion being pitched in their direction at all times – unless, of course, they choose to operate based on what they know. The beautiful thing about science is that it turns the volume of opinion down so much we can no longer hear its intrusive racket. What we’ve come to find is that the opinions within so many facets of a dealership’s sales process can be overpowered and replaced by science, ultimately resulting in Dealers selling more cars, operating more efficiently and employing better salespeople for a longer period of time. 

Before we had the type of data we have now, we could look at all the opportunities in our CRM, whether they were Internet leads, phone calls or ups on the showroom floor, and do sales match on those opportunities using registration data. The problem with that however, is that registration data is 45 days old and CRM data can be one-dimensional. Meaning, we could see how many opportunities we lost and what they ended up buying, but we had no insight as to where they bought or which salesperson touched the opportunity before they walked out and bought from a competitor…until now.

What’s been fascinating to watch develop over the last couple of years is the ability we now have to look at data in different ways than we’ve ever have before – and one of those ways is at the salesperson level. In the past, salespeople have been judged solely by how many sales they closed out of the opportunities they had in the CRM. So essentially, we could see their closing ratio under a one-dimensional view. But we couldn’t see what they were losing. Today on the other hand, due to innovations in what we can do with a Dealer’s CRM data, we get a much more accurate, three-dimensional view of how our salespeople are truly performing based on the complete picture.

We know not just how many cars each of our people sold, but how many leads they touched that walked out and bought from a competing dealership. And we know if those defections bought from a dealer within the same brand or a competitive brand. We can also dig even deeper into the quality of the leads they’re working to gauge the true performance of your lead providers. Couple that with the performance of your salespeople, and that’s when data viewed through a scientific lens becomes incredibly powerful and prescriptive. That’s when you can start making improvements and executing more efficiently based on what you know, rather than opinion.

When a great salesperson’s defections are almost pacing what they sold, Dealers can see right away when one of their “best” salespeople is actually losing way more than they’re winning, or burning through opportunities. By layering in this defection data on top of the sales data, you can see the true success and failure of each individual player on your team. CRM data is so important, but it’s not three-dimensional in the sense that you can’t see lost opportunities or defections on top of closed sales. Having this information gives you the actual true effectiveness of each one of your salespeople.

Additionally, if one salesperson has significantly fewer opportunities but closes more sales than they lose, that all plays into the overall methodology of how effective they are. It’s just like in baseball when you have a 300 hitter, but he only gets 100 at-bats. He’s not getting regular daily playing time – but this guy is a 300 hitter! So, he should be getting more opportunities up at the plate. Same thing applies to salespeople that deserve to get more opportunities based on their true performance.

We can also track their performance or “batting average” over time to see if it improves or declines. Or, you can test to see if an individual’s batting average changes based on the number of opportunities assigned to them. Whether it does or it doesn’t, the important thing is we now have the necessary information to diagnose where our blind spots are along with a science-based prescription on how to operate more efficiently. Oh – and the best part? Dealers can rest easy knowing they can make decisions and take immediate action based on fact alone.

RECIPE FOR SUCCESS: Tactical Advice for Growth in a Flat or Down Market

FREE WEBINAR RECORDING

Only the lucky ones get to attend webinars like these. Don’t miss this rare opportunity to engage with the four marketing powerhouses with the secret sauce for digital success. AutoHook President, David Metter will be joined by David Kain (President, Kain Automotive), Todd Smith (Founder, ActivEngage) and Ken Kolodziej (Founder, String Automotive) to bring you tactical advice for growth in a flat or down market during this free, one-hour webinar + Q&A.

Learn from the industry’s masters of automotive data, sales process, conversion, and engagement measurement. Straight talk. Serious strategies. Next level digital targeting.

More Data More Problems: 3 Big Data Problems & How to Solve Them

by David Metter

“Just because it can be counted, doesn’t mean it counts,” said Tom O’Regan, CEO of Madison Logic in a recent IAB study. “As you rise up the scale of performance measurement tactics, you find the increasing convergence of both attribution and value.” These are incredibly wise words to live by. There are dozens of performance metrics that we’re capable of tracking. But just because we can, doesn’t mean we should.

We are deep inside the epicenter of the information age. With all this big data comes an overwhelming opportunity to derive knowledge and take action. Nothing, (not even money) is more powerful than knowledge. We have all this information literally at our fingertips, yet automotive marketers still struggle to validate which solutions delivered the highest ROI or led to a sale. Having this knowledge (and knowing what to do with it) will make everything we do moving forward make a lot more sense.

As technologies become smarter, more integrated, and more systematic, automotive marketers face three big data obstacles:

1. Access to accurate, useful data
2. Access to faster, more timely data
3.  The ability to turn big data insights into beneficial, executable actions

Let’s dive into each problem and how we can diminish these issues as we plan for 2017. 

Useful Data: 

First, you need to know what to look for. It’s not just about obtaining more and more data. It’s what we can to do with the knowledge we extract from the data that ultimately matters. So many advertisers still fail to acknowledge that there is life beyond the click. The number of clicks a campaign generated or the number of unique users it sent to your website is a microscopic fraction of the full picture, and frankly, it's an irrelevant metric.

In today’s world, clicks just don’t hold their weight. Clicks don’t prove conversion and clicks don’t move inventory. Furthermore, you could have the highest rate of website traffic in your market, but if your conversion rates are low, that “traffic” is just a number – which at the end of the day, means nothing.

Going into a new year, when you’re considering which technologies and vendors to work into your budget start with the ones that can prove they can consistently deliver the following:

• A high conversion rate with proof of lead exclusivity
• An incremental increase in showroom visits
• (And most importantly) An incremental increase in sales

Access to this type of data is the most beneficial, as it gives dealers the freedom to stop guessing and start knowing what works – and like I said before, nothing is more powerful than knowledge.

Ask the right questions upfront so you can better determine if a vendor and their data will be of use to you. Start with the following:

• At what rate do their solutions convert?
• What is their showroom visit rate?
• How do these rates compare to industry averages?
• What is their method of tracking sales?
• Can they link a vehicle sold to a specific user or campaign?

If they don’t have the validation stats to prove these things to you, they are not worth your time or money.

No-nonsense data tells you how many showroom visitors purchased (either from you or a competitor) and what specifically drove them in. It can tell you if your buyers are repeat, loyal customers or if they’re new to your brand. Did they visit your store but end up purchasing somewhere else? What brand did they buy and why? These are the types of questions legitimate reporting should be able to answer.

Faster Data:

IBM’s recent whitepaper, From Data to Insights to Opportunities, points out the clouded view of actionable data due to systems not communicating with each other. “Different platforms in different departments can’t talk to each other, so reporting is slowed. And it’s difficult to take proactive steps when your view of the total customer experience is a little blurry.”

The goal is to spend less time compiling data and more time using it to uncover new growth opportunities. Aim for a single, unified and cohesive structure when it comes to analytics and reporting. Ask vendors if they allow other solutions to integrate with their dashboards or APIs? The more people you can get working together towards a common goal, the better your chances become of achieving that goal. It’s the “two heads are better than one” approach. An industry-wide holistic viewpoint must be adopted for all parties to benefit from both faster and more comprehensive data models.

Also, choose to only work with the players that have near real-time reporting capabilities. With each day that passes after a purchase is made, that sales data becomes less and less valuable. What good are insights that remain unseen? The faster we can access sales data, the more we can do with it to extend our finite budgets.

Actionable Data: 

Integrated, cross-channel and cross-device attribution reporting is essential to following the consumer’s buying path. These capabilities illuminate trends in the purchase cycle and allow dealers to make more lucrative decisions with their ad dollars. Behavior across mobile, desktop, and online and offline channels all need to be considered to get a complete, accurate view of the attribution path.

Knowing which solutions are working for your dealership is the key to correcting all your big data problems. Use attribution data to build predictive models that identify trends or patterns in purchase behavior. Pragmatic data can tell you which vehicles to keep in stock, how many of each model, and in which colors. It can tell you how to better allocate every dollar so you can rest assured your money is being spent in the right places.

Remember that useful automotive data is largely derived from the two most important KPIs: conversions and sales. The focus of your reporting should include data that shows a complete attribution path from an advertising source to a sale.

The Marketer’s Guide to Cross-Channel Attribution states, “When organizations are able to measure marketing’s impact on the metrics that truly matter to the business, then and only then are they in a position to make confident decisions about future marketing investments. And that’s just the tip of the iceberg.”

These roadblocks need to be obliterated in order to reverse the rate in which we’re inundated with useless, irrelevant information. The time has come where we’re capable of maximizing revenue across all marketing initiatives. It’s time to show big data who’s boss! If we work together, we can close gaps in communication and better track consumer actions throughout the purchase cycle for the benefit of all.

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Heading to Vegas for the #JDPowerAMR? Be sure to catch the Big Data problem-solving Panel, We’ve Got the Data! Now What? Moderated by David Metter, featuring digital marketing experts from Hyundai, Subaru, Google, AutoNation & more! Panel starts Wednesday, October 26th @ 11:25 AM (Breakout Room #2)

Part IV: The Naked Truth Exposed [EXECUTIVE EDITION] Big Data & Attribution

Big Data & Attribution…Who Has It & How Do We Get It?

by David Metter

There’s good news and bad news on this topic…but mostly good. The bad news is AutoHook’s panel of marketing experts had so many dealer-submitted issues to solve they didn’t have time to address data and attribution at Digital Dealer 21 (as this subject could take 50 minutes alone). The good news is I now have the opportunity to step in and shine my headlights upon the industry-wide struggle I’m most passionate about. This final piece of our Naked Truth Exposed series will represent the most momentous road block dealers face today: proving without a doubt the one source that led to a sale.

First, let me fill you in on a quick story about a guy named Dayn Riegel. Dayn is the eCommerce Director of Loganville Ford and he was AutoHook’s winner of our all expenses paid trip to DD21. Why would we invest so much money in a person we had never met? Because he asked the right question. In our nation-wide poll conducted over the spring and summer of 2016, Dayn submitted the following inquiry:

“The best marketing in the world can’t save a dealership from itself – it’s own greed, ineptitude or lack of drive…lack of willingness to succeed, and I don’t mean just talk about it, do something about it. So, my question is: With all the hype around SEO, SEM, PPC, Bing, etc., who is taking all the big data and marketing know-it-all and applying it? Exactly. Nobody really, truly is. Why not?”

Thank you Dayn for giving me the opportunity to take on this challenge. This question is the reason I do what I do, as I experienced the same problems during my time as CMO at MileOne Automotive. I know firsthand, one of the most common pain points for dealers exists in the gaps (or the disconnects in communication) that form when two vendors don’t properly work together. As competition rises in the digital space, and as more and more companies enter the game, these lapses in digital communication will only continue to grow - creating more cracks in our already distressed methods of attributing a sale to a single source.

During my time at MileOne, I was fortunate enough to have the resources, contacts, a great team, and insight to do something about this problem. One of our biggest strengths, and arguably the reason we had such a competitive edge was in our ability to see the unique advantages of two different vendors, and bring them together in a way that benefitted our needs. We quickly learned that combining the exclusive technologies of two (or even three) vendors made it easier for us to sell more cars. More importantly, we had the power to track the latter half of a specific customer’s buying process, which eventually led to the creation of AutoHook’s award-winning sales attribution engine.

People in general have a tendency to overcomplicate common sense concepts. But this isn’t rocket science. If you need green paint, you take some blue paint and some yellow paint and simply mix them together.

So how do we paint the automotive marketing landscape green? I can tell you since I’ve been on the other side (the vendor side) I’ve seen a need for these types of alliances to happen now more than ever. It’s monumental to think of how much we can accomplish if we open up our strengths to others to generate a mutual benefit. What I’m suggesting, is we need to change the focus from beating our competitors, to working in conjunction with competitors to accomplish a goal that guarantees success for all parties - and not just for vendors, but for dealers and OEMs as well.

As Dayn referenced, there is an undertone of greed throughout both dealer and vendor communities. Everyone wants to make more money. Everyone wants to be #1. Everyone wants to keep proprietary technology a secret. But let’s take a step back. Let me spell this out in the simplest way I possibly can. In order to solve the ambiguity that shadows big data and accurate attribution in our industry, we have to do one thing: change our mentality.

Here’s how. What if instead of keeping secrets, we shared knowledge and worked together? What if we connected the automotive universe and created one cohesive, more efficient railroad system? Wouldn’t this drastically reduce disconnects in our data and reporting? Right now, we are on the precipice of change. No one can argue that there is strength in numbers. We need to unite, rather than surround our solutions with egotistical walls, in order to reap the benefits of the bigger picture.

Going back to Dayn’s question of, “Who is taking all the big data and marketing know-it-all and applying it?” The answer is, WE ARE. AutoHook, powered by Urban Science has the fastest, most reliable sales attribution path data in the industry - 99.7% to be exact, and 95% of that data is updated daily. No one can compete with that! Furthermore, we know how to apply this data to prove our solutions directly led to a sale. So not only do we have the data and know what to do with it, but we’re willing to SHARE our AutoHook rail system and API technology with the entire industry…FOR FREE.

Imagine that, an open API that gives all automotive entities the power to finally attribute vehicle sales to a single campaign. What? Why? How can we do this? First of all, we know for a fact we have access to the most reliable and timely sales data from Urban Science. We also know that achieving accurate attribution is trifold.

First, the solution needs to execute. Second, it needs to be validated with performance reports that show concrete evidence of incremental sales and lift in conversion. This requires vendors to surpass irrelevant vanity metrics such as clicks, impressions, and site traffic. Is there any paid search company out there that can prove to a dealership that one of their search campaign clicks resulted in a sold vehicle? The answer, just as Dayn suggested, is absolutely not!

The third piece of our bulletproof attribution model is that it’s personalized and unique to each customer, further eliminating breakdowns in sales data. By assigning a unique code to every user, we can track all post-interaction behavior. How many people walked into your showroom as a direct result of our solution? Did they end up purchasing or not? What model did they purchase? Are they new to your brand? And what led them to your store?

What if the solution to this problem afflicting dealerships, OEMs, and vendors could be as simple as breaking down the walls that separate and limit us? What if we stopped nickel and diming dealers for every integration they request? The ideal solution for obtaining actionable data must be suited for omnichannel use, meaning available to all publishers and vendors across all types of media outlets, hence the concept of an open, free API.

My friends, this is the beginning of an era. This is how we provide the world with access to big data and the reporting needed to turn it into a story worth sharing. This is how our industry becomes more efficient, more streamlined, and more powerful. If we can patch the holes of automotive’s digital rail system, every vendor and dealership can finally validate the true ROI of their marketing investments.

Stay tuned for more to come on how AutoHook will be providing free API access to all.

If you missed part I, II, or III of our Naked Truth Exposed series, check them out below:

• Part I: Social & Video Marketing
• Part II: Paid Search, Retargeting & Budget Allocation
• Part III: Online Buying…Should we do it?