Bark's Bites: Dealers Are the Worst Businessmen, Part Two

I’m back like a rebel making trouble with another installment of Dealers Are The Worst Businessmen. Today, we’ll be talking about the information that most dealers use to make every decision in the dealership, and how it’s completely and utterly useless.To those of you who’ve worked in the dealership world, you already know what I’m talking about, right? Yep. The CRM (Customer Relationship Management) tool. Doesn’t matter whether it’s VinSolutions, DealerSocket, or any of the other popular software solutions on the market. Nowhere will you find a more prominent example of “garbage in, garbage out” than in the customer data mining that occurs at every dealer group. It’s a wonderful example of how most dealers spend thousands of dollars on tools they believe they need and then neglect to learn how to properly use.But first, a story.Nearly 18 long months ago, I walked into a Ford store in central Kentucky to lease my Fiesta ST. As I mentioned in my original write-up, I spoke with the Internet Sales Manager for a couple of weeks about my decision, and even submitted a lead through Autotrader’s Trade-In Marketplace tool. But when it came time for my salesperson to enter my information into their CRM tool, I watched him as he selected “Referral” from the drop down window.“Excuse me, sir,” I said, having a near heart attack (as I worked for Autotrader at the time), “but I am not a referral. I submitted a lead through Trade-In Marketplace.”“Yeah,” said the older gentleman, without turning his face to me, “but I get paid less on the deal if the Internet Department is involved.”Oof.You see, my friends, there’s a struggle at every dealership. It’s called “attribution.” Every car dealer in America wants to know where each and every sale originates. Even though it’s a statistical fact that nearly ninety percent of today’s shoppers start their searches for their dream cars online, car dealers refuse to accept it. In fact, if I were to walk into any dealer’s office across the country and ask him where most of his sales come from, I’ll get these answers, and in this order:

1. Referrals
2. Walk-up/Drive-by
3. Dealer’s Website

I’ll address these one at a time, starting with referrals.Bitch, please.We all know that these hoes ain’t loyal. The referral is as dead as Jacob Marley. Today’s car shopper is more price conscious than ever, and they don’t care that you sold Aunt Margie a Ford LTD in 1986. They’re going to go where they can get the best deal, and they’re likely willing to drive up to 100 miles to do it — so stop it with the referral stuff. It isn’t true, and you know it — which is why you complain constantly about third-party sites being a “race to the bottom.” Your pride is just hurting because you can’t admit that your “Family owned since 1953” bullshit doesn’t matter one bit to anyone.Secondly, you want me to believe that the BMW 528i that you had parked behind the building of your Ford store was sold to a “walk-up?” Again, please stop. The only reason that your salespeople mark “walk-up” on the sourcing sheet is because they don’t want to share the credit with the Business Development Center/Internet Sales department. And they damn sure don’t want to give up their best “up” of the day because the customer might have already called and spoken to another salesman. “Walk-up” it is.Lastly, if your website isn’t the number one driver of traffic to your business, you have bigger problems than either of us can fix, Mr. Dealer. In fact, it’s probably a CDK or CarsForSale template that looks no different from any one of a million dealer websites. There’s no differentiation, period. But you’re super proud of it. I get it. So you want to give that “last click” credit to your website. Of course, you rarely spend much time considering how they found your website, because you’re convinced that $8,000 a month you spend on Search Engine Marketing (which you don’t understand — like at all) is driving oodles of people to your site. Especially when they use search terms like “2011 Chevrolet Impala in Bremerton Washington” as one does.As a result, your CRM tool is filled with useless data. Of course, you also get automatically generated data from phone calls and emails from third-party sites, which is probably the number one way that you evaluate the effectiveness of these advertising outlets. There’s just one, teeny, tiny problem with that — nobody, and I mean nobody calls or emails dealers anymore. The most generous study out there is J.D. Power, who estimates that only 24 percent of shoppers contact dealers via email or social media. Most other studies place the number at around 10 percent. Customers have learned that emailing a dealer is a super way to get a thousand autoresponder emails in their inboxes on the daily.But wait: if 90 percent of shoppers use the Internet, but only 24 percent email the dealer, what are the rest of them doing? You got it. They just show up unannounced, at which point the lazy, slightly unethical salesman marks them as a referral or a walk-up. This leads to crazy behavior from dealers, like canceling all third-party advertisers — only to come crawling back a few months later, and at a higher rate. Oops. In my nearly five years in the business on the advertising side, I’ve never seen a dealer successfully walk away from third-party entirely. It might work out okay for a month or two, but eventually they all come crawling back.So what’s a dealer to do? Well, here’s what I’ve recommended in the past: Don’t have your salespeople ask where customers found the car. It’s a bad time in the sales process to do it; customers aren’t ready to be transparent yet. Wait until the deal is done and the paperwork is signed. Then, hand them a sheet with all the logos of the places you advertise — and even the logos of the places you don’t. Don’t ask where they found your car, ask them where they did their research. Instead of having to remember exactly where they found your car, they can simply remember all the sites they used in the shopping process. If you see a large number of customers circling a site you don’t use, consider adding it to your repertoire.Next, instead of figuring out which sources drive the most leads, they should figure out which advertising sources generate the most profit. Some sites drive a high volume of low-quality leads, while others drive a lower number of high-quality leads. Which one would you want as a dealer? A high number of emails and phone calls isn’t necessarily a good thing. It can lead to endless amounts of wasted time on deals that never materialize.Having a CRM tool is a good thing for a dealership, but the corrupted data in it can lead to bad advertising decisions. Learning how to manage the data entry and discovering what the data truly means would help your neighborhood store make better decisions across the board. But until they do that, they’ll be counting phone calls and emails and congratulating themselves on their high number of referrals.And now even you know that’s the wrong way to do it.[Image: r2hox/Flickr ( CC BY-SA 2.0)]