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We know that dealers
spend massive amounts of money to get people to the showroom.
Over $7 billion dollars were spent on auto advertising last
year, with the average dealer shelling out $444 per new unit sold -
for advertising alone (source: NADA). What a shame that
many of those ad dollars are going to waste!
That's right - you
are burning ad dollars every month.
Think about it.
You spend money to drive people to the dealership. A
percentage - 15% or so - buy a car. The rest walk away.
What if you could reach
out to only half of the people who walk away?
That would be 42.5% of the people who visited your showroom.
If you could continue to sell to them after they leave the showroom
- consistently, regularly - don't you think that many of them would
eventually buy from you?
Sure, you have a
follow-up system in place. Every dealer does. Whether
it's a contact manager database, a dealer control panel, a BDC, or
John and Susie in the back room, you follow up with every single person who
walks in the door. Yeah, right.
The fact of the matter
is that even the best prospect follow-up program is limited to one
or two contacts before the system kicks the prospect to the curb.
What is needed is a
system that contacts every prospective customer
automatically - without having to be triggered. And one that
does so ... FOREVER. We aren't talking about a software
program - we are talking about a coordinated functioning system.
The contact message should be
personalized,
attractive and professional, giving your prospective customer the
feeling that they are valued. It should also offer real value
to the prospect - not simply a continual sales pitch. And it
should hit the prospect on several levels.
Let's run some numbers
for an example. Say your dealership is selling 100 cars per
month. You are converting 15% of your floor traffic into
sales, which means that you are attracting 667 new car buyers with
your advertising. At the NADA average of $444 per new car sold, you
are spending $44,400 per month on advertising.
Now you put a follow-up
system into place. You gain access to only half
of the people who came in but didn't buy - 42.5% of your visitors,
or 284 people. You market to them regularly, and over time 5%
of them come back and buy a car. (This is a low number compared to
what we are seeing in the market.) That is an additional 14
cars!
Say you spent $1,000 to
stay in touch with those people. Your acquisition costs on
those customers is only $71.43. Overall ad costs drop from
$444 per car to less than $400 per new car sold!
Now let's get
creative. Say that you don't want to increase your ad budget.
Fine, move $1,000 from your existing budget to your follow-up
program. Now you are spending $43,400 to get people to the
lot, which means you will only sell 98 cars instead of 100.
However, you have still brought 653 people into the showroom over
the month, and 278 have gone into your follow-up program.
At the 5% closing rate
on follow-ups, you will still sell 14 cars! So your ad
costs per car drop even further!
That 5% figure may not
occur immediately, but over time. That is the beauty of long
term follow-up. Every month, using the figures above, your are
adding about 288 new prospects into your system, selling some but
always contacting everyone.
Now add in the
opportunity to include current customers, service customers, parts
customers and web visitors into your system. Deliver messages
to them that drive more dollars to parts, service and F&I
departments. Be able to instantly send a personalized
message to everyone on special promotions and incentives at
no additional cost. If you don't have a system like this in
place, aren't you leaving money on the table? |
