When is a lead alive? When is a lead dead? When is it just resting?**
Clearly these frivolous questions have a point in mind. They are even more valid and valuable now than when I started in the industry. The reason; the online nature of our business and the increasing multiple touch-points to gather prospect and customer data that we now have, means that it is relatively easy to capture prospect data.
Photo by The Creative Exchange on Unsplash
In years gone by we captured only the strongest leads (typically from walk-ins, and the occasional show or event), whereas now we have social, more events, online listings, web-forms, and enquiries from other sources. Our lead volume has increased dramatically.
As a young sales executive I recall one dealership where we were paid (in part) on our conversion rate. The idea was to incentivise effective closing. So of course, any lead that wasn’t ‘strong’ (in other words we didn’t get clear buying signals) didn’t get entered into our CRM. Our conversion rate remained strong! Another dealer had an ‘all-in’ policy, and generated many more, weaker leads. While the latter may feel the poorer route, this is closer to where we are now. We all know the database and CRM saying; garbage in, garbage out.
The key to unlocking the value of your CRM value is great lead management and how you nurture these leads. It is no longer just about the quality or even quantity of the leads; a typical lead is contacted just 2.3 times before it is marked as lost. Is that lead resting, or is it really dead?
Data from AutoPlay shows that the most effective dealers are the ones that repeatedly contact prospects. In other words, successful dealership sales executives are more disciplined and tenacious. The number of touchpoints to a sale increases to 5.0% from 2.3%. The result; their lead conversion goes from 21% to 30%.
Imagine adding nearly 50% more sales to your business. The results would be transformational. You would need a good lead management process that is well managed (with something like AutoPlay). But even that transformation ignores another richer vein of sales – your lost prospects and lapsed sales.
Consider this. If you were to mark prospects and customers from zero to ten, where would you mark a customer who bought two cars (or motorbikes, or motorhomes) from you? What score for someone who bought one car? What about a customer who didn’t buy from you, but services their cars with you? What about a customer who used to buy from you, and no longer does? What about a customer who test drove but didn’t buy? What about a prospect who came onto your yard and didn’t buy or test drive?. When you layer your database with the knowledge that most families have more than one car, you may just reconsider the value of your whole CRM.
Ask yourself these quick three questions:
How much did you spend on marketing last year?
How many leads did you create?
How many cars did you sell?
You have just worked out cost per sale and cost per lead. You know how much each lost lead is worth to you AND the value of your database. After all; if you had paid for something you would surely use it wisely. It might pay to look more closely at how you maximise this value.
What ever you do, do not fall into the trap of always trying to sell to your customer and prospect database. That is a quick way to gather opt outs or unsubscribes.
Hopefully this boost blog has got you thinking more about database management. Once you think about each group or class of customer needing a different message, you are starting to think about lead nurture in the context of CRM. At that moment you might reconsider whether that lead is dead, or just resting.
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**With apologies to Monty Python