Manhattan Beach, Ca — With youthful enthusiasm but no customer base, David Metter began his automotive career at a Dayton, OH, dealership as the youngest person on the sales floor.
He says he realized quickly “there was much more to selling cars than greeting customers at the door.”
So he took it upon himself to build a prospecting and follow-up system. It helped make him a top Chrysler salesman in the U.S.
Now chief marketing officer for Mile One Automotive Group, Metter is spearheading another system, this one using modern technology to boost vehicle sales through Internet lead scoring.
“This is the most exciting thing I've done in my career,” he says.
Early results are encouraging enough for Mile One to likely use the system at all 63 of its dealerships, most of them in Maryland; the Washington DC area; Virginia; and Pennsylvania. Collectively, the stores sell more than 50,000 vehicles a year.
Twenty-five Mile One dealerships were involved in a preliminary testing of the system, with 14 stores using it and 11 serving as a non-participating control group.
The participating stores sold 45 more vehicles a month, while the control-group sold two fewer vehicles than they normally do.
The additional 45 sales represent an extra $67,500 a month in gross profit, premised on an average gross of $1,500 per sale. That's without increasing costs, Metter says.
“It's stupid not to do Internet leads,” he says, noting that many dealerships do a bad job of it. “But you've got to do lead scoring, too. It is absolutely the next step.”
Lead-scoring proponents — and their ranks are growing at the dealership level — see a clear need for systematically differentiating serious buyers from shoppers who are just looking.
“Lead scoring focuses on the best leads,” Metter says at an E.N.G. automotive conference here. “If any lead is missed or not followed up on properly, you at least want it to be a lead that's less likely to close.”
In considering a lead-ranking system for Mile One, Metter knew where he wanted to go but not how to get there. He turned to automotive data-cruncher R. L. Polk & Co.
Mile One turned over years worth of Internet-lead data — including leads that did and didn't result in sales — to Polk. The data company, in turn, created a ranking model predicting consumer purchasing habits, as well as which types of customers are likely to buy and which aren't.
“Data collection is relatively easy,” says Mike Spadafore, a product strategist for Polk. “The difficulty is how to leverage it to sell cars better.”
Adds Scott Zientarski, who oversees a similar scoring program for dealership chain AutoNation Inc.: “Raw data alone doesn't have much value.”
Metter says: “We needed to know what customers did. We found that 42% of people who submitted leads bought vehicles, but not necessarily from us.
“Twenty-four percent bought what they intended to buy. With Saturn, only one in 10 leads bought a Saturn.”
Information accompanying Internet leads that are sent to dealerships helps predict the likelihood of a sale. So do demographics. Both are part of Mile One's proprietary lead-scoring system that runs through its customer-relationship management software.
“If a guy has a job and two Hondas in his driveway and hasn't bought a Honda in two to three years, that's a good lead vs. a guy in an apartment, with a car who just got laid off,” Metter says.
Scores in the system's top 40% are marked as “hot.” They get the most attention “and close at a fast clip,” he says.
But one conference participant says a hot lead can become a self-fulfilling prophesy for sales people.
“If they think it's a great lead, they'll work it as a great lead; and if they don't, they won't,” she says. “The results are predictable.”
Metter hopes to increase Mile One's Internet-related sales from 25% to 35%.
“Internet customers are no different than other customers,” he says. “They just use a different means to buy a car. A customer is a customer.”
Conventionally, a customer learns about the product at the dealership, then potentially returns to buy it. But Internet customers “already knows about the product when they arrive at the dealership.”