Mishandled Phone Calls Are Costing You Money

Call volumes to dealerships are up significantly, outpacing Internet leads by 4-1, according to ADP Digital. There are numerous reasons for this, including the proliferation of smart phones with easy click-to-call functionality. Also, consumers are no longer willing to trudge from dealership to dealership and are doing most, if not all, of their research online. At the same time, these customers are growing increasingly reluctant to give up their personal information via lead forms, preferring the control—and immediate gratification—of a phone call.

Based on our research, 57% of all incoming calls to dealerships are true prospects—meaning they are hot leads for sales or fixed-ops departments. Disappointingly, our research shows that the average dealership mishandles a full 41% of its incoming sales-lead calls and only converts, on average, 7% into showroom appointments. The fallout of this, and something that should prove eye-opening to both dealers and OEMs, is that mishandled phone calls result in customer defections to another brand 50% of the time.

Often the greenest salespeople are put on incoming phone duty—and, for the most part, they are not getting any training on how to effectively handle incoming phone leads. Interestingly, much time has been spent bemoaning how dealers mishandle Internet leads, with the assumption that phone leads are under control. But today’s junior salespeople are likely less familiar with phone interactions than personnel a decade ago, and more likely to be in tune with digital interaction (email, text, and social media) versus working with live callers.

Predictably, the result is lost sales. With a typical profit of about $2,200 per car sold, a lot of money is left on the table. An average dealership could easily lose up to 20 sales every month, which translates into a sobering loss of $44,000 in revenue per month, or over half a million dollars per year. That doesn’t have to be the case.

Based on analysis of the millions of calls we’ve tracked, here are some of the most common reasons inbound prospect calls are lost:

Rude/unprofessional exchange
Phone handler’s lack of inventory knowledge
No needs analysis was done, so no alternative vehicle is offered
Caller’s question is answered, but phone handler fails to set appointment
Customer’s contact information is not requested/recorded
Phone handler lacks information and asks the prospect to call back
Salesperson unavailable

While it’s important for dealerships to focus on minimizing lost calls, it is also critical that they put a plan in place to recapture them. One of the best ways to recapture a lost call is to understand what exactly went wrong on the call. This information will be invaluable in actively re-engaging with the customer.

Given the number of calls coming into a dealership, this is a major task, so engaging the skills of a third party is key. With a dedicated resource that can listen to—and analyze—call-handler performance and then trigger alerts to the appropriate dealership personnel, the conversion of mishandled leads into showroom appointments can soar. In fact, a recent analysis of over 600 U.S. dealers showed that when a mishandled call is revisited, closing ratios are as high as 25%, translating to an average of $320,000 gross for the dealership.

Some tried-and-true best practices for saving mishandled calls include establishing the group of people at your dealership who should be alerted to missed opportunities, and consistently using a script for callbacks that includes these basics:

Introduce yourself and establish that you are in a position of authority to help the customer.
Apologize for the poor phone experience they had within the last hour, acknowledge that your dealership failed them, and tell them this follow-up call is to fix the situation.
Offer an incentive, if appropriate, to entice customers to come in to your showroom. Invite them to the dealership, give them specific date and time options, and personally greet them when they arrive.

Both dealerships and OEMs pour billions of marketing dollars into getting consumers to pick up the phone—don’t waste that spend by ignoring how those calls are being handled.

Andrew Price is president of CallSource Automotive, the leader in call-tracking management and training. He leads a national team of business analysts and salespeople at the forefront of helping auto dealers, CRMs, and OEMs increase profitability. Andrew spent nearly 14 years at R.L. Polk, where he served as the Vice President of Sales and Client Service, and he has presented at a variety of industry conferences, including NADA, Digital Dealer, and J.D. Power Roundtables.