Segmenting Auto Leads: When to Contact Now, Nurture or Equity Mine8 min read
Not every person who visits your auto dealership website is ready to buy, even if they share their contact information in a static lead form. Know when a helpful, less-aggressive approach works better and decide how segmenting auto leads based on a customer’s shopping behavior can help your dealership.
Some car salesmen and auto dealerships get a bad wrap for being too pushy about making a sale, especially when a customer simply fills out an online form on a dealer’s website to request more information and their phone suddenly blows up.
What those curious online consumers don’t know is that many auto dealerships treat every auto lead (including requests for information) as “ready to purchase” instead of segmenting auto leads, because they have little to no information about the customer’s shopping journey or where they might be in the process.
“When you submit the request, whether you’re just casually shopping or if you’re aggressively ready to buy, the dealer doesn’t have that transparency,” says David Kain, an automotive internet marketing professional and president of Kain Automotive in Lexington, Kentucky. “Most dealers are handling those leads blind, so they present everybody as ready to buy right away.”
When an auto dealership follows up with every online customer the same way, it inadvertently ends up sending away two-thirds of its potential sales leads to third-party websites or other sites that offer research tools for consumers. Collect better leads by adding some of those helpful tools on your own dealership website, then decide how to segment auto leads and respond appropriately to convert more leads to sales.
Segmenting Auto Leads who are Ready to Buy
Auto dealerships typically define potential customers as falling into one of two buying-stage funnels: low funnel, or people who know which vehicle they want and it’s just a matter of where they prefer to buy it; and mid-funnel customers, who just began searching online and don’t know which vehicle they want.
Auto marketing professional Frank Lopes advises his auto clients to focus on the low-funnel customers first because those online visitors are more likely to make a decision and convert to a sale. Then an auto dealer should focus on the mid-funnel buyers, providing helpful information about its products to move those customers closer to a purchase.
“No matter what stage of the buying journey they’re in, it’s all about communicating with the customer on the customer’s terms,” says Lopes, vice president of FB Digital and Forrest & Blake Marketing & Advertising in New Jersey. “What you want to do is always try to convert them to the next level of engagement. You always want to make the engagement as personal as possible.”
“You always want to make the engagement as personal as possible.”
Kain also teaches his auto clients to focus on genuine interactions, remembering to treat auto buyers as human beings instead of red meat. “I think the first thing to do is recognize they are living, breathing human beings. The nicer you are and the more respectful you are, the better your opportunity is to maintain an ongoing relationship,” Kain says.
When to Nurture an Auto Lead
Nurturing auto leads takes a bit more finesse and work by the auto dealer to come across as helpful to the customer, instead of the stereotypical pushy car salesman. “There is a scumbag effect, or scumbag syndrome, in the automotive space. Every dealer is a scumbag right out of the gate,” Lopes says. “Do everything you possibly can to eliminate the scumbag syndrome by being of service.”
One way to do that, Lopes says, is to build website lead forms upside down. As opposed to auto dealerships that force customers to share personal contact information first, Lopes’ lead forms start by asking the customer to enter any questions they have regarding a vehicle search. “How can I help you? How can I be of service to you?” he explains. “If we’re trying to build a ‘why buy?’ message, we need to show we’re here to help, we’re low pressure. The lead form should go hand-in-hand with that.”
The key to making the right sales approach lies in knowing the customer’s intentions, which often dictates whether the auto dealer responds aggressively to those ready to buy now or more gently with helpful information, Kain says. The current environment in the automotive industry pushes sales teams to pounce on potential customers immediately to get them to visit the dealership.
“Even if the customer is asking about equipment, availability or colors, it’s all really, ‘OK, yeah, yeah, we’ll get to that, but when can you come in?’” Kain says. “That’s so frustrating to hear, when at the end of the day if they were just really nice … If they would just say, ‘I would love to help you buy a car when you’re ready,’ a lot of people would say, ‘Hey, that’s exactly what I’m looking for — help!’”
Help is exactly what most online customers seek when they search an auto dealership’s website, Lopes says, adding that most people would rather go to the dentist and get a hole drilled inside their mouth than go through the hassle of buying a new car. “Nobody is going to a dealership’s website for fun,” he says. “There’s no free food, no beer, no pretty girls, no handsome guys, no cat videos, no pony rides, no carnival games … there’s nothing there besides cars. If you give customers more control over the interaction, they’ll be less hesitant or less resistant to actually engage.”
“Nobody is going to a dealership’s website for fun. There’s no free food, no beer, no pretty girls, no handsome guys, no cat videos, no pony rides, no carnival games … there’s nothing there besides cars.”
When to Equity Mine Auto Leads
To equity mine an auto lead, the dealership must maintain a detailed database of all potential car buyers and know who might be in an equity position, or when their trade-in vehicle is worth more than they owe on it. Then, the salesperson can approach that customer with incentives or deals to upgrade to a new car using that equity.
Another great way to equity mine, Lopes says, is to approach a customer who comes in for service on their vehicle and show them an upgrade offer that includes no cost for repairing their existing vehicle, if they buy a new one. “The chances of selling a car increase … if the customer is physically at the dealership,” he says.
What’s the Magic Formula for Converting Sales?
All car leads are not the same, so to be successful auto dealers must develop a strategy to gain more quality leads. Using the detailed consumer data insights provided by PERQ’s Online Guided Shopping Solution, auto dealers can segment those leads to create customized follow-up messages to prospects with the right message at the right time.
Lopes says there are three pain points in any car deal: 1) vehicle availability 2) financing and 3) trade. Selection is a luck of the draw, financing depends on the customer’s credit history, and a vehicle’s trade value is fairly easily to determine. But having that information about a customer before they even come into the dealership, along with other important details gained through interactive website quizzes, such as how the vehicle might be used and when they intend to buy, makes a difference when segmenting auto leads and following up.
It builds rapport and trust with a consumer, and saves everyone some time. You’re helping them do research and making the buying process easier by gathering information as they move along the sales funnel.
“I think it’s extremely important that the dealer puts out a message that conveys they are not a typical car dealer,” Lopes says. “This transaction is going to be easy and it’s going to be transparent. Everybody is going to be upfront, and there won’t be any hidden games and no bait and switch.”
Kain thinks the magic formula to selling more cars includes speed, transparency and kindness. “If you are nice and you give them the information they’re looking for, people are so grateful that you’re not like every other car salesperson that they’ll say yes,” he says. “I’d like to encourage more sales people to behave the way they would want to be treated.”