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Dealership web sites are becoming more important in the car buying process. Dealers are reporting that close rates on their sites are climbing while the close rates of leads coming from manufacturers and lead providers sites are leveling off and in some cases, dropping. A proliferation of convenient shopping tools is turning web sites into virtual dealerships. Dealer sites today can provide nationally
July 1, 2005
Dealership web sites are becoming more important in the car buying process.
Dealers are reporting that close rates on their sites are climbing while the close rates of leads coming from manufacturers and lead providers sites are leveling off and in some cases, dropping.
A proliferation of convenient shopping tools is turning web sites into virtual dealerships. Dealer sites today can provide nationally branded trade valuation options, national and regional finance options, respected vehicle comparison tools, virtual test drives, 360-degree interior and exterior views, branded vehicle history reports, multi-lingual options, search by price, search by payment, save search capability and on and on. But customers primarily go to your site to check on inventory and availability. Customers are researching globally but shopping locally to see what is in stock.
Selecting a Web Site Vendor — Select a company with a solid reputation for success and talk to their customers to determine satisfaction levels. Ask about the return on investment they have obtained from their sites. They should have a positive return on investment to be considered productive.
Conversion Rate — Measure the production of your site by the number of visitors who submit leads — not just by the number of visitors. Your site should motivate customers to submit a request. The best web site builders can provide you specifics on their customers' conversion rates. Average sites convert 1%-2% of their visitors into leads. Leading sites convert at rates of 5%-10%.
Closing Rate on Web site Leads — When talking to a vendor's clients, ask for their actual web site lead close rate. Dealers who succeed selling online claim their web site leads close nearly three times better than leads from other sources.
Return On Investment — Web sites don't have to cost a lot of money to be productive. Project what your return on investment will be at various close rates before you decide. The chart below is a simple calculation for estimating.
New Technologies — Make sure your vendor is on the cutting edge new technology and offers these updates free of charge to loyal customers.
Training — The best web sites are easy to update but as people advance or turnover you may need your new staff trained. Negotiate ongoing training.
Contract Terms — Ask your web site provider about different contract options available and choose the one that best fits your business philosophy. Some dealers prefer flexibility of short-term agreements while others prefer long-term locking in of pricing.
Make your selection carefully and stay involved every step of the way. With 80% of your customers using the Internet to start the car buying process your online showroom is as important as your real showroom. One final comment: Even the best sites are only as good as the process in your dealership. Shore up your lead handling process and you'll find your close rates will soar.
David Kain is president of Kain Automotive Internet Sales Training and Consulting. He is at [email protected] and 1-866-546-3428.
Average Leads per Month | Total Monthly Website Cost | Cost per Lead | ~Close Rate | Vehicles Sold | ~Gross per Vehicle Sold | ~Monthly Gross | Estimated Monthly ROI | Estimated Annual ROI |
|---|---|---|---|---|---|---|---|---|
15 | $1,000 | $67 | 20% | 3 | $1,500.00 | $4,500.00 | $3,500.00 | $42,000.00 |
20 | $1,000 | $50 | 20% | 4 | $1,500.00 | $6,000.00 | $5,000.00 | $60,000.00 |
80 | $1,000 | $13 | 20% | 16 | $1,500.00 | $24,000.00 | $23,000.00 | $276,000.00 |
100 | $1,000 | $10 | 20% | 20 | $1,500.00 | $30,000.00 | $29,000.00 | $348,000.00 |
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