What Percentage of Your Store’s Sales is Generated by Internet Leads?

As a fol­low up to my recent blog on Inter­net Lead ROI, I would like to dis­cuss anoth­er impor­tant met­ric for deal­er­ships to track: the per­cent­age of a store’s sales that can be attrib­uted to Inter­net leads. Just like Inter­net lead ROI is not a sim­ple for­mu­la that every­one can agree on, the per­cent­age of sales that can be attrib­uted to the Inter­net is not easy to mea­sure.

In a recent sur­vey we asked 184 deal­er­ship per­son­nel this ques­tion: What per­cent­age of your store’s over­all sales is gen­er­at­ed by the Inter­net depart­ment? Ful­ly half (50%) of the respon­dents report­ed they were in the 20–40% range. Only 15% of respon­dents report­ed less than 20%, while 35% of respon­dents report­ed their deal­er­ships attrib­uted more than 40% of their sales to Inter­net leads.

Why such a dis­par­i­ty? I’m guess­ing that not every deal­er­ship answers the fol­low­ing ques­tion in the same way:

How do you define an Inter­net cus­tomer?
Since rough­ly 90% of your cus­tomers use the Inter­net before com­ing into the deal­er­ship, you could argue that 90% of sales are com­ing from the Inter­net, and that many of those cus­tomers don’t e-mail beforehand—they just call or walk in. But the oppo­site can also be true. One deal­er group I know of, Homer Skel­ton deal­er­ships in Ten­nessee, recent­ly cre­at­ed a pro­mo­tion for their new Pay­ment ProSM fea­ture on their web­site. The deal­er group ran a radio cam­paign and pro­duced a tele­vi­sion com­mer­cial pro­mot­ing that cus­tomers could pre-qual­i­fy for “real pay­ments” with­out giv­ing their social secu­ri­ty num­ber or date of birth. When the tra­di­tion­al ads ran, Homer Skel­ton saw a huge spike in vis­its to their web­site, which then turned into pre-qual­i­fied web­site leads. So are these Inter­net leads, or should they be attrib­uted to the tra­di­tion­al ad cam­paign?

Although it may be dif­fi­cult to arrive at an indus­try stan­dard for what the def­i­n­i­tion of an Inter­net sale is, your deal­er­ship should have its own def­i­n­i­tion. Just as impor­tant as a stan­dard mea­sure­ment is track­ing the per­for­mance over time so you can iden­ti­fy growth oppor­tu­ni­ties.

Best Prac­tices for Improv­ing Clos­ing Per­cent­ages
The most effec­tive way to increase the per­cent­age of sales attrib­uted to Inter­net leads is to improve the clos­ing per­cent­ages of your cur­rent Inter­net lead vol­ume.

From the same sur­vey I men­tioned above, we fil­tered respons­es from the high­est-per­form­ing deal­er­ships based on the met­rics they shared. The most suc­cess­ful Inter­net depart­ments claimed the fol­low­ing best prac­tices were crit­i­cal in order to make an Inter­net depart­ment suc­cess­ful:

1)    Qual­i­ty & Speed of Lead Response (72%)

2)    Web­site search vis­i­bil­i­ty (66%)

3)    Man­age­ment Buy-In and Sup­port (61%) and Staff Train­ing & Account­abil­i­ty (61%) tied for third.

Oth­er choic­es and respons­es includ­ed: qual­i­ty of leads (58%); qual­i­ty of staff (42%); track­ing & mea­sure­ment of leads and ROI (33%); online rep­u­ta­tion (33%); qual­i­ty of online mer­chan­dis­ing (33%); writ­ten poli­cies and pro­ce­dures that are close­ly adhered to (22%); lead mix (17%); social media involve­ment (14%); and num­ber of leads per per­son (14%).

Deal­ers con­tin­ue to stress how crit­i­cal it is to have a process in place to pre­vent sales­peo­ple from clos­ing out their own leads. It’s too easy for them to say “this lead is bad,” or “that lead isn’t valid,” and sim­ply close out those leads, which results in a high­er report­ed clos­ing percentage—albeit a false one. It’s no dif­fer­ent than if 100 cus­tomers walk through the door and 10% of those cus­tomers are lot drops, and then you cal­cu­late the clos­ing per­cent­age of 90 cus­tomers instead of 100.

At most deal­er­ships, a valid lead is one that comes in with good con­tact infor­ma­tion; but I have heard some sales­peo­ple say a valid lead is one that returns their attempt to con­tact with­in three days. How many cus­tomers return a sin­gle call or e-mail? Most of the time, it takes repeat­ed attempts to get through to a cus­tomer.

So I bring up many ques­tions here, and I’m look­ing for­ward to everybody’s respons­es. I think it’s impor­tant to dis­cuss met­rics so that even­tu­al­ly, an indus­try stan­dard or bench­marks can be estab­lished, to which all deal­er­ships can com­pare them­selves.

More results from our sur­vey will be shared in our upcom­ing work­shop, the “Five Things in Com­mon Suc­cess­ful Inter­net Depart­ments Share,” at the Dig­i­tal Deal­er Con­fer­ence & Expo­si­tion in Las Vegas. These and oth­er best prac­tices will be dis­cussed by our pan­elists, each rep­re­sent­ing a deal­er­ship with high per­form­ing Inter­net depart­ments.
Josh Vaj­da is the Direc­tor of Inter­net Sales, AutoUSA Inter­net Sales Solu­tions. He can be reached at 800–243-9935.