Yippee! We’re Above Average!
“What’s the Average Closing Percentage for Automotive Leads 30, 60 and 90 Days Old?”
I recently received a variation of this question from a visitor to my free video training website; and given that many automotive managers, salespeople and BDC agents likely have the same question, I thought I’d post my original answer here, as well as expand a little on your goals, in general.
First, the actual question:
“Would you mind sharing with me what the national closing rate is for leads 30, 60, and 90 days old? Where should my dealership strive to be?”
Now, my original answer:
I don’t have national stats on the close rates in the specific time frames, though the national average for all leads is still around 7-8% for all times frames combined. (I know many dealers who legitimately close more than 30% of their leads.)
I do, however, have data on what percent of a specific (unnamed) manufacturer’s website leads that close, are closed within each time frame. For leads that close within the first 90 days:
- 47.8% close in the first 30 days
- 31.8% close in days 31-60
- 20.4% close in days 61-90
The data is a couple of years old, but indicates (as expected) that closing rates are higher earlier in the process. Even older data that I have shows about 25% of all leads that close, do so in the first 10 days.
So, where should your dealership strive to be?
The answer is you should be pulling people in as early as possible after the lead is received. You do this primarily by assuming that a lead is an order, and not a request for more information. The average consumer has done over 19 hours of research before they submitted the lead to you. They have their information…. now they just need someone to sell them a car.
Now, to briefly expand on this answer with some advice to all automotive retail owners and managers:
It’s important to understand when looking at averages that about half of the dealers perform better than that number; and about half perform worse. Moreover, because these results are (like all measurements of this nature) tightly bunched around the average and less so the further from the average you go, striving to be “above average” is akin to complacency.
Without getting too deep in weeds here (and without providing an entire lesson on statistical analysis), suffice it to say that about 68% of dealers are basically average, about 14% are basically below average and an equal number are basically above average.
Great dealers (and poor dealers) make up only about 2% of mix. The results at these dealerships, with respect to closing percentages, are at least two standard deviations from the norm. (Oops, getting too deep in the weeds here.)
The truly-exceptional-and-wildly-successful dealers (as well as the godawful-close-them-down-now dealers) account for about one in every 1,000 dealerships. (That means there are likely fewer than 20 of these truly-exceptional-and-wildly-successful dealers in the United States.)
So, where should you strive to be?
Without wavering, you should answer simply “The Absolute Best.”
The only thing that is stopping you from closing your internet e-leads at 30% or better each and every month is you. Your belief that “well, if the average is 7-8% and we’re at 15%, then we’re doing pretty good.”
Nonsense. At 15% you’re barely above average. Until you change your target to become The Absolute Best, you’re guaranteed to never be more than average over the long term.
Being satisfied with an above average performance is complacency; plain and simple. And being satisfied with an above average performance means that you’ll always have up and down months, up and down years. You will continue to tread water and your success will be almost entirely dependent on the market.
It’s time to stop caring about the “national average” and to start focusing on setting an appointment that shows with every Phone Up and every e-Lead. Once they’ve arrived at the dealership, your singular focus is to sell every customer… period.
(Let the average dealers worry about averages.)