Car Dealer Internet Sales: It Really Ain’t All That Hard

Stop Overthinking Internet Sales: 7 Simple Strategies for Closing More Deals Today!

The perception of internet sales for many dealers and traditional sales managers is that it’s still a confusing area best left to those who are more “technologically proficient.” Moreover, industry vendors, other so-called experts and even some trainers continue to profit in keeping internet sales a befuddling mystery for the average dealer’s management team. automotive internet sales

The truth is that internet sales are not just relatively easy to master; internet sales are so easy to master that they’re actually kind of boring.

In this series, my hope is to detail in plain language how you can stop overthinking much of what goes into making a sale to an internet prospect, and how to use these seven simple strategies to start setting more appointments that show and buy today:

Simple Strategy #1: Pay for the Performance You Want

The Problem: Many dealers have developed convoluted BDC Pay Plans that pay a good base wage and merely “spiff” on appointments and sales; all while paying the floor team a full commission for doing less than half the work. (It’s not your fault: some misguided industry trainer told you to pay them this way.)

Consider the shortened Road-to-the-Sale we see as today; the process from Lead to Close for Internet Appointments often goes something like this:

  1. The Connection/Reconnection
  2. The Appointment Show
  3. The Demo/Presentation
  4. The Close

The Reality: When you pay a guaranteed base to the BDC they learn to live off this salary and your spiffs become meaningless. Plus, when you pay the floor a full commission on BDC appointments that show and buy you allow the BDC to set soft or phony appointments and encourage the BDC manager to steal from you in a process called “reconciliation.”

Here’s how reconciliation works: Someone named Bob Smith submitted a lead two weeks ago. Someone named Bob Smith bought a car today. Ergo, this is the same Bob Smith and it is therefore a “BDC Deal.” A fake appointment is created in the CRM, marked “shown” by the BDC manager or agent, and double commissions are paid for this sale.

You see, when you pay a full commission to the floor, your appointments often aren’t real and no one cares that the BDC is stealing. Why should they? The floor gets paid the same either way.

Repeat this out loud until it finally sinks in: “If the floor team did their job we wouldn’t need a BDC.”

Now, review the shortened Road-to-the-Sale above. When we’re honest about these steps we see that the BDC’s job is actually more difficult than that of the floor salesperson who handles their appointment… and here’s my proof (assuming these appointments are “real”):

  1. A great Connection rate is 80%; a good rate is 60%
  2. A great Appointment Show rate to total Connections is 60%; a good rate is 50%
  3. A great Demo rate for Appointment Shows is 100%; a good rate is above 90%
  4. A great Close rate for Appointment Shows is 80%; a good rate is 60%

Based on the success rate, the “hardest” step in this abbreviated Road-to-the-Sale is gaining an Appointment Show, followed by a tie between the Close and the Connection. (Hint: Your salespeople aren’t doing “all the work” – they’re barely doing half the work.)

If you want your BDC to grow and provide you with incremental sales today and in the future – all while maintaining the integrity of your overall sales comp – then you need to create a sustainable pay plan. Simply put, this is a pay plan that (1) allows you to grow the BDC without killing your net profit (2) keeps everyone honest and (3) pays for the performance you want.

The Solution: First, you need to implement a 100% “at risk” Pay Plan for the BDC. This means you are no longer giving them a guaranteed base wage that ends up making the appointment spiffs meaningless. It also means that you are only going to pay on Real Appointment Shows. (Real Appointment Shows are appointments that arrive within 45 minutes of the scheduled appointment time.)

However, to get the checks and balances you need (to keep the BDC from reconciling) and to pay fairly for the job the floor salespeople do when they close a Real BDC Appointment; you need to pay the floor teams as if this was a split deal. (Because, it is a split deal: one team member set the appointment and another one closed it. This is the epitome of a split deal!)

Here’s what that sustainable pay plan for a Sales BDC looks like:

  1. Pay the BDC on APPOINTMENTS THAT SHOW; not on sold units and not hourly (though there is generally an hourly component to the BASE that a BDC agent will make). For most markets, a solid pay plan for an Appointment Coordinator (BDC agent) looks like this:
    1. $10-$12 to even $15/hour in base pay that is a DRAW AGAINST COMMISSIONS.
    2. $50 commission for every VALID appointment that shows.
    3. $100 volume bonus for every 10 VALID appointments that show.
  2. Pay the floor salesperson that CLOSES a BDC appointment a REDUCED COMMISSION. (Generally, this is a half commission with a full or half mark toward their volume bonus.)

This second point is hard for most sales managers to swallow. They like to argue something nonsensical like “My salesperson closed the deal; he did ALL THE WORK; so he deserves a full commission!”

Repeat this out loud until it finally sinks in: “If the floor team did their job we wouldn’t need a BDC.”

Simple Strategy #2: Internet Teams & BDCs Must be Managed Like Call Centers

The Problem: Old school sales management and tactics just don’t work when the prospect is sitting at home & your salespeople or BDC agents are sitting at their desks. Moreover, because the average consumer has done over nineteen hours of research before they ever step foot on your lot, pick up the phone or submit a lead, they’ve already done their own Needs Analysis. The old school Road-to-the-Sale doesn’t fly over the phone.

Many dealers I know created their internet sales teams and BDCs by staffing them with a few of their existing floor salespeople, treating them like floor salespeople and paying them like floor salespeople (generally only on sold units). Their argument was simply that they needed knowledgeable folks to be able to answer customer questions on the phone or via email, and that they only felt they should care whether or not this department sold a car.

Wrong and wrong.

Staffing this team with product experts who answer too many customer questions leads to lower overall show rates and (of course) lower sales. To compound the issues facing these dealers, by only looking at sold units they end up just managing the results instead of the activities that lead to the results (like phone calls).

This leads to internet salespeople and BDC agents spending all of their time milling about and “playing” on their computers instead of working the phones.

The Reality: You cannot sell an empty seat. When your team becomes fountains of information instead of appointment-setting wizards, they set few real appointments and close a below average percentage of their opportunities (leads and calls).

The truth is that your BDC or internet team is more like a bank call center than it is a traditional sales team. Until they get a warm body in the door you should never expect them to sell a thing. Their primary job is to set appointments that show, period. When you allow this team to freelance their workday they will gravitate toward the activities that provide the least amount of rejection: sending worthless emails or wandering around the dealership. You need these people on the phones! “Smiling and dialing” is what working looks like with an internet team or BDC. Everything else is just filler.

Like a bank call center, your BDC or internet team should be driven by metrics and talk tracks, not selling and product knowledge. In fact, the less product knowledge a BDC agent or internet salesperson has the better – it means they can only stick to the approved talk tracks and will spend all of their time setting appointments that show and buy.

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The Solution: Drive the activities, not the results. Like a call center, you need to manage the activities that drive the results; and the three most important activities for internet sales teams and BDCs are (in order):

  1. Phone calls
  2. Phone calls
  3. Phone calls

Just like a great call center manager, you want to focus on a strict adherence to your written processes and the word tracks being used for these phone calls. Moreover, one of the most important pillars for success in great call centers is that they make immediate course corrections. That is, they don’t wait until the end of the month to discuss talk tracks or appointment show rates or whether a required phone call was missed or mishandled. No; supervisors in great call centers pull up a chair next to their agents and discuss the issue immediately.

Simple Strategy #3: Stricter Rules Drive Higher Sales

The Problem: In an attempt to increase CRM usage by your floor and internet teams, you created a “72-Hour Rule.” You believe that a side benefit of your 72-Hour Rule is a reduction in skating, because you can give your team the proper credit for their contact efforts.

The average dealer’s 72-Hour Rule works like this: If a salesperson or BDC agent shows “meaningful contact” with a prospect in the CRM – and this prospect buys a vehicle within 72 hours of this “meaningful contact” – the salesperson or BDC agent who entered the data in the CRM receives some credit for the sale. (In the case of a salesperson, this means they get a split deal with whoever actually sold the customer. For a BDC agent, this means they enjoy their appointment show and sold unit spiffs for this customer.)

The Reality: The 72-Hour Rule guarantees your salespeople will make zero calls, while your BDC will rely on soft appointment setting and information vomiting. Additionally, you will be supporting (and even compensating) cherry-picking by anyone handling internet leads and phones.

Don’t believe me? Here’s some anecdotal evidence that I bet I could find at your dealership if you employ the 72-Hour Rule:

  • End-to-End Internet Salesperson averaging 30 units per month. Dealership managers were so proud of his “efforts” they gave him an office and left him alone to “do his magic.” We discovered he was receiving roughly 450 leads each month, making zero actual phone calls (despite showing multiple calls in the CRM), and sending the same email to every prospect: “Here’s my best price. Print this email, come to the dealership and be sure and ask for me.” Because of their 72-Hour Rule, this do-nothing received credit for all deals attributable to his “meaningful contact.”
  • End-to-End Internet Salesperson off on Wednesdays seems to always find 3-4 split deals every Thursday from customers who came in on his day off. We listened to his Monday-Tuesday calls and they all included some variation of “We’ll see you on Wednesday.” (You see, he was afraid to close and happy to take half deals for those who showed up and bought.)
  • BDC Manager spends the last three days of the month comparing what the DMS shows as sold with the names and addresses of those in her database of internet leads. When even a semi-match is found, she “reconciles” the two and shows that the BDC was responsible for an additional sale. (This is the all-too-common practice of reconciliation introduced in Simple Strategy #1.)
  • BDC Team of three setting about 250 total appointments per month, but only seeing about 60 shows from these, as all 250 were “soft” appointments. Setting real appointments requires work and you often hear “No;” while asking “When would you like to come in?” is polite and non-confrontational (even though it means the prospects are much less likely to show).

You might think you’re being nice or even driving incremental business when you allow your teams to set soft appointments, but you’re not. In fact, you’re costing them and you money.

When you have soft appointment rules – like paying a BDC agent for an appointment that shows a day early (yes, I’ve seen this more often than the alternative of holding to a strict 45 minutes) or giving the salesman credit for a sold unit because he had “meaningful contact” with that prospect in the last 72 hours – you’re actually hurting your sales and your team’s paychecks.

The Solution: This simple strategy states that “stricter rules drive higher sales” and that’s true across the entire dealership; but to solve the cherry-picking, reconciliation and soft appointment setting created by your misguided “72-Hour Rule” you only need to implement a few rules that define what is and what is not a protected prospect.

Here are my favorite Protected Prospect Rules:

  1. The only prospects that will be considered “protected” and will result in either a split deal (where the primary salesperson was unavailable, though in the store) or a zero deal (where the primary salesperson was available, but not given their protected prospect) are the following:
    1. Same Day Be-Backs (where the primary salesperson has properly documented the customer’s visit in the CRM)
    2. Appointments that arrive within 45 minutes of a scheduled time (where the primary salesperson/appointment coordinator has properly documented the appointment in the CRM)
    3. Customers who ask for the primary salesperson by name within earshot of a manager (on a day where the salesperson is working)
  2. No prospects will be “protected” if they arrive on the salesperson’s day off; and no split deals will be offered on these.
  3. Anyone who “Ups” and sells a protected prospect will receive no credit or commission for the sale unless (1) the primary salesperson was unavailable; and (2) a sales manager expressly assigned the prospect to the new salesperson.

Unless you have strict rules in place for what constitutes a valid appointment your BDC will NEVER have the discipline to pin a prospect down on a specific time. Why should they? That takes work, it’s sometimes uncomfortable, and they’re going to get paid either way, right?

Yes it takes work. Yes it’s sometimes uncomfortable. No, they’re not getting paid, because the prospect won’t be showing up.

When your team allows a customer to say something like “I’ll be there before 9” there is almost no chance this “appointment” will show; because it’s not an appointment. A true appointment requires both a specific day and a specific time. Without a specific time, there is no mental commitment by the prospect to show up, so they generally will not. Once you force your team to start setting stronger appointments (by paying them only for those that arrive within 45 minutes) their show rates will multiply as will your sold units.

If you think these rules seem a bit too harsh, then continue to encourage cherry-picking and soft appointment setting. Given that today’s buyers visit, on average, fewer than two dealers before they purchase, your competition will thank you.

Simple Strategy #4: Treat EVERY Lead and Call Like an Order (because they are)

The Problem: Most dealers respond to leads as if the lead is merely an attempt for more information. This passive communication keeps the prospect in control.

The Reality: The consumer selected your dealership & selected this vehicle from among the millions online today because they are ready to buy. The consumer has spent 19 hours or more online before they ever submitted that lead – they are ready to buy; don’t blow it.

The Solution: When you start to treat leads like orders, you’ll find yourself responding differently – more proactively, if you will. So, that’s the first step: Look at every lead as if the customer is trying to place a firm sales order. Believing this, you’ll be more likely to:

  • Deliver immediate follow-up. For example, if you assume that a specific third-party lead is an order – and that this order was also sent to two of your competitors – how quickly would you respond? Immediately, right? Within seconds, in fact; because you’d do almost anything to be the first salesperson to speak with this customer.
  • Deliver persistent follow-up. So, if that lead was an actual order to purchase, what are you likely to do after you’ve failed to reach the prospect over the first couple of tries? You’d continue to follow-up until they either bought from you or told you they bought elsewhere, right? That persistence is lacking when we look at a lead like just another “request for information.”
  • Create urgency & excitement. Most of us are still excited when we sell a car, but understandably less excited when a new lead arrives. If we treated that lead like an actual sale, how excited would we be? How much urgency would we have in our voice when a customer asked if it was in stock? Imagine the urgency and excitement we could create if we answered the “Is it in stock?” question like this:“I saw that vehicle this morning but at the price we have it listed for, it will not make it through to the weekend. Now, I do have two test drives open on that vehicle this afternoon, I have a 1:45 and a 2:15; which one works better for you?”
  • Stop asking questions. If someone actually ordered a vehicle you would never ask them something meaningless like “Are there any colors you would not consider?” By treating the lead like an order, you can keep them focused on the vehicle they selected instead of confusing them with worthless salesman speak.
  • Guide them. They really are just trying to buy your vehicle. If you treat the lead like it’s an order, you will find yourself explaining the next steps and telling them what to do. (And guess what? More often than not they will do exactly what you tell them.)

Simple Strategy #5: Yes, You Should Always Use an Auto Response

The Problem: Some industry vendors, OEMs and other “experts” have made dealers question whether or not to use an auto response. Generally speaking, their argument goes something like: “Your team should be responding right away anyway, so sending an auto-response gives the consumer the impression that you are spamming them.”

(Interestingly, I just recently had the “auto response argument” with a client who swore her team “always responds within 15 minutes” so no auto response was needed. Hearing this, I mystery shopped her the following Saturday morning just before 10 AM and, you guessed it, her team responded on Monday morning. Well, at least an auto response would have let the consumer know the dealer got their information.)

The Reality: Your team isn’t always “responding right away;” and even if they were, a properly-written auto response is just like the Order Confirmation email: A welcomed acknowledgement that my order was received.

Moreover, it’s important to understand that the customer might not even know which dealerships received their “order.” If they submitted it from a third-party site, for example, they may have checked a few boxes next to some dealer names that they might not immediately be able to recall. Your properly-written auto response tells them (1) Who you are; (2) That you received their order; and (3) What to expect regarding next steps.

Finally, the only reason a customer would assume you are spamming them is if you’re sending more than one personal email (in addition to the auto response) on that first day. Except for the Day 1 auto response and first personal response, you should never send more than one email on any day to any prospect (unless you’re in the middle of correspondence, of course).

The Solution: Let me be clear, there should be no debate; you should always, always, always use an auto response, however:

  • Ditch the auto response if your lead vendor already sends a dealer-specific one (as is the case with TrueCar, KBB and others). It will quickly feel like spam to your prospects if you double the efforts of the vendor.
  • Review the auto responses (and really all correspondence to prospects) from these vendors and, where possible, rewrite these to better align with your team’s processes and best practices. If you cannot rewrite a vendor’s auto response – and you’re unhappy with the messaging – ask if they can turn off their response so that you can send yours.
  • Frame your auto response as an order confirmation and don’t share pricing here. (Your goal is to outline the next steps and ensure they will take your call in a few minutes; if you vomit the pricing on them automatically, there’s no reason for them to take your call.)
  • Never disguise the auto response as a personal email. Consumers aren’t dummies and a response arriving seconds after a lead submission could not ever be personally written. (I think it’s primarily these auto responses that the critics are against, but they unfortunately want you to abandon even well-crafted auto responses.)

Simple Strategy #6: Email Templates can be Personal AND Automated

The Problem: The owner comes back from his 20 group and announces “Our emails don’t look personal enough!” This, because some consultant trying to get hired by the dealers in the 20 group told all the owners and general managers that they needed to personalize their emails. Of course, the consultant didn’t offer any statistics or facts about your automated process emails; he just said something like “Consumers don’t want canned responses… yada, yada, yada.”

The Reality: No one is reading your emails anyway. (Okay, maybe a couple of the process emails you send in the first few days have a decent open rate, but if you think even the most perfectly personalized missive is getting more than cursory attention, you don’t understand the online car shopper.)

Of course, there’s no doubt that a personal email is better than a templated one. That said, there’s no ROI in personalizing 99% of your process emails and there is nothing you can write tomorrow that cannot be written today, made into a template and used for the next five years.

Often, internet managers will create process templates, but not set them to send automatically. They do this in order to allow their teams a quick review of the template so that they can personalize it before hitting “send.” This is a bad idea for three important reasons:

  1. Salespeople and BDC Agents are not always good about reviewing a templated email before they send it. If these emails have blanks that need to be completed before sending – and those blanks are not completed – your “personalized” email looks less personal to the consumer than a “canned” response.
  2. By allowing your team to review an approved email template before sending, you’re opening the door to freelancing that quite often takes the message in a completely different direction than the one you intended when you wrote the original template.
  3. Hitting “send” on an email is not an activity equal to picking up the phone and calling a prospect. When you fail to automate process emails, your team hits “send” a lot. So much so that if they have 100 activities assigned today and 70 of those are “send email” while the other 30 are “call prospect,” you can rest assured they will stop after the 70 sent emails; feeling as if they’ve actually accomplished something.

The Solution:  The simplest solution is to make your process emails both personal and automated right from the start; and this can be accomplished in just four simple steps:

  1. Review your current automated templates;
  2. Rewrite them as if you’re addressing a specific prospect with a goal of driving a reconnection;
  3. Make that a template; and
  4. Add it to your automated process.

In other words: Stop overthinking this stuff! It’s not science or surgery; it’s an email being sent on the 37th day of ZERO communication to a prospect that stopped reading your emails 32 days ago.

Simple Strategy #7: The First Call Should Be THE Call

The Problem: Our teams expect to make more than one call to schedule an appointment that shows; because, as we learned in Simple Strategy #4, they’re treating leads like requests for information instead of like orders. This means when they do reach someone (or someone calls them) they immediately go into “information mode” or (worse) “helper mode.”

In information mode, they vomit information all over the prospect. The prospect that has already completed nineteen hours of research, looked at more than twenty different source of information and has chosen our car from among the millions for sale online. All we can do now is tell them too much… just enough so that they do not need to come in.

In helper mode, they believe their only job is to help the customer make an informed decision before buying their next vehicle; when in fact, their only job should be to schedule an appointment that shows. So they engage in a strange back and forth asking question after question in some odd ritual that resembles an old-school needs analysis. Moreover, these needs analysis-like questions often make the helper seems untrustworthy to the customer. (The customer is already well-informed – often armed with more information than our teams have – and they’ve already completed their own needs analysis, thank you.)

The Reality: Not only is the lead an order; but when you fail to set the appointment on the very first call, you often never get another chance. The only reason you should ever have two calls with most prospects is if the second one is to confirm their appointment.

Do some customers require a second or third phone discussion before coming in? Sure, but those are the exception and not the rule for disciplined salespeople and BDC agents who stay on task and keep control of the first call. Expecting a second call ensures you will not set an appointment on the first call. Conversely, expecting to set an appointment (and staying in control of that first call) ensures you will set many more appointments that show.

We must learn how to stay in control of the first call so that we can set more appointments that show.

The Solution: Remember, there is only one goal of the call: To set an appointment that shows. If necessary, write that down near your phone: AN APPOINTMENT THAT SHOWS. This is the ONLY goal every time you have someone on the phone.

Of course, you must maintain control the call, and always bring them back to the goal when (not if) you get pulled off-track. So, be prepared to repeatedly ask for the appointment, because anything less and you will likely never get them on the phone again.

Consider three scenarios; one where the salesperson maintains control, one where the salesperson goes into information mode and one where the salesperson goes into helper mode:

Customer asks: Does it have third row seats?

Helper mode salesperson: Are third row seats important to you?

Information mode salesperson: Yes, it does have third row seats, as well as heated front seats, an upgraded sound system, intelligent four-wheel drive and it gets 16 miles per gallon in the city and 22 miles per gallon on the highway.

Control mode salesperson: Yes, it does have third row seats, and at the price we have it listed at it will not make it through to the weekend. Now I do have two test drives open on that Explorer this afternoon, I have a 1:45 and a 2:15. Which one of those works better for you?

The helper mode salesperson seemed smarmy and the information mode salesperson talked themselves out of an appointment; while the control mode salesperson stayed on task and set an appointment that showed and bought.

Good selling!