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���� Year End Report

Positioning for Success? A Study of Canadian Dealer Responses to Online Leads

Barry Baker –Director of Professional Services, Sun Media

1

Contents Overview ....................................................................................................................................................... 2

Background ............................................................................................................................................... 2

Terminology .............................................................................................................................................. 2

Methodology ............................................................................................................................................. 3

Sample....................................................................................................................................................... 3

Executive Summary ....................................................................................................................................... 4

Response Times ............................................................................................................................................ 5

Prompt Responses ................................................................................................................................ 5

Brand ............................................................................................................................................................. 6

Responses within 1 Hour .......................................................................................................................... 6

Overall Response Times ............................................................................................................................ 7

Pricing Information ................................................................................................................................... 8

Invitations to the Store ............................................................................................................................. 8

Province ........................................................................................................................................................ 9

Dealers in BC, Manitoba Positioning for Success ...................................................................................... 9

Response Times ........................................................................................................................................ 9

Errors ....................................................................................................................................................... 10

Web Site “Leaks” ..................................................................................................................................... 11

Month ......................................................................................................................................................... 12

Response Times ...................................................................................................................................... 12

Other Critical Success Factors ................................................................................................................. 13

Summary ..................................................................................................................................................... 14

Works Cited ................................................................................................................................................. 14

2

Overview In an effort to help Canadian auto dealers identify opportunities to improve online sales processes,

Autonet Dealer Solutions regularly secret shops dealers with Internet leads.

Between January and December of 2011, 245 automotive dealerships were shopped. This study

presents a portion of the data collected during those shopping processes.

Background

In 2007, Dr. Oldroyd of the Massachusetts Institute of Technology (M.I.T.) published a ground-breaking

study which revealed that when following up on sales inquiries, the ”… immediacy of response far

overshadows (other factors) in its effect on contact and qualification ratios” (Oldroyd & Elkington, 2007).

Leads age rapidly, such that that the window of opportunity to successfully contact and qualify

prospects diminishes within minutes. In fact, “… the odds of contacting a lead if called in 5 minutes

versus 30 minutes drop 100 times.” Further, “The odds of qualifying a lead increase by 21x if attempted

within 5 minutes versus 30 minutes.”

Prompt responses often face little competition. The reality is that many retailers don’t respond at all! In

2010 Cobalt reported that 39% of service leads never received a response (McCann & Kahn, 2010), while

more recently it was revealed that, “55% of top companies” in a variety of other industries “don’t

respond to web leads” (InsideSales.com Research and Analytics Division, 2011).

But response time is just one critical element contributing to online sales success; the content of the

response is also a contributing factor. Oftentimes sales people overlook even seemingly obvious

verbiage, such as inviting the customer to the store, or answering a Price Quote lead with a price. And

with the advent of services such as CarCostCanada.com, online automotive customers have become

increasingly empowered and well-informed, pressuring dealers to provide information and engagement

that was not necessary when the customer just came to the store.

Terminology

It is important to understand the terminology used in this document. Some of the key terms include:

- Meaningful response: indicates a response which in some way advances the sales opportunity with

the customer, via means such as a personal reference by the responder to the situation or lead

(such as an answer, or a promise to answer a question). Obvious auto-responders indicating little

more than that the lead has been received do not qualify as a meaningful response.

- Sales tool: indicates any one of a broad range of online mechanisms which allow the customer to

advance themselves through the sales process. Sales tools relevant to a post-lead circumstance

include (among others) Credit Applications and Trade-in Evaluations.

3

Methodology

The Secret Shopping process included the submission of electronic leads via either the dealership’s

independent web site, the dealer’s OEM web site, or the dealer’s listing on an automotive portal.

Telephone numbers for the secret shopper were either not provided, or were provided with a specific

request for no phone calls. In some cases, leads could not be submitted either due the design of the site,

or as a result of errors encountered at the site.

Following the submission of each secret shopping lead, dealer responses were collected for a minimum

of 3 days. Lead responses were evaluated in terms of a variety of criteria, such as:

1. The time it took the dealer to meaningfully respond to the lead, with an emphasis on prompt

responses. Dealers that provided a first meaningful response more than 3 days after the lead was

submitted were grouped with dealers that didn’t respond at all; the contents of those late

responses were, however, still evaluated as below.

2. Whether any response to the lead contained an invitation to either the store or a test drive.

3. Whether any response to the lead included pricing information.

4. Whether any response to the lead included interactive sales tools that would facilitate the

customer’s advance through the post-lead sales process.

Sample

The large majority of Secret Shops collected for this study were clustered within 4 provinces: Alberta,

British Columbia, Manitoba, and Ontario, with a small number from New Brunswick (in some cases, New

Brunswick results have been excluded from graphical representations of the collected data). 245

independent and franchise stores were shopped, including 64 domestic OEM franchises, 91 import

franchises, and 28 independent operations.

91

113

41

0

20

40

60

80

100

120

Domestic Import Independent

Sample Size

Figure 1 - Sample Size

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Executive Summary

The study identified a number of key findings, including:

- The majority of dealers shopped did not respond to leads within a timeframe that would position

them for success; less than half of the dealers responded within the first day, let alone within the

first hour.

- A significant minority of dealers did not respond to leads within 3 days, or at all.

- The highest proportion of meaningful lead responses within 1 hour were produced by stores

carrying the following five brands: Acura (33%), Toyota (21%), Ford (17%), Nissan (17%) and Honda

(15%).

- Just 22% of dealers invited the customer either to the store or to a Test Drive. This is a curious

oversight, given that many managers describe the goal of post-lead follow-up as “get the customer

to the store”.

- More than two thirds of the brands evaluated did not produce a majority of responses within a day

following submission of the lead

- As a group, domestic dealerships provided the highest ratio (13%) of meaningful responses within

the first hour, followed by import dealerships at 8% and independent stores with 7%.

- Independent stores significantly lag their franchise counterparts with respect to providing or

confirming price information in lead responses.

- BC and Manitoba dealers position themselves for success with the greatest consistency. Dealers in

these provinces presented the highest proportion of either prompt or high-quality lead responses

(respectively).

- BC and New Brunswick are the only provinces in which no responding stores provided interactive

sales tools as an element of lead responses.

- A decreasing number of Canadian dealers continue to provide web site “leaks”; that is, links to

other web sites via which the customer may locate another dealer. However this behaviour is still

most frequently observed in Ontario where 7% of dealer sites either “frame-in” or “link out” to

content on other web sites, most typically OEM sites, where “Locate a Dealer” search buttons are

often prominently featured.

- In terms of both responses times and other critical success factors, the quality of lead responses

degrades dramatically during the summer months (Q3), but improves during the final quarter.

- In light of the high number of dealers responding to Internet customers either slowly or not at all,

dealers that do improve online response processes face a favourable competitive environment.

These findings are discussed in greater detail below.

5

10%

36%

13%

41%

2011 - Response Times

Up to 1 hour

1 hour to 1 day

1 to 3 days

3+ days/No Response

4%

8%

50%

38%

2011 - Responses Within an Hour

5 minutes or less

6 to 10 minutes

11 to 30 minutes

31 to 60 minutes

Response Times Considering that the greatest opportunity to contact and qualify prospects occurs within the minutes

following submission of a lead (Oldroyd & Elkington, 2007), the majority of dealers shopped did not

respond to leads within a timeframe that would position them for the success; only 46% of the dealers

responded within the first

day, let alone within the

first hour. The majority of

dealers (54%) either

provided no response, or

responded a day or more

after the lead was

submitted.

A significant minority of

dealers – 41% – either took

more than 3 days to

respond, or did not respond

at all (Figure 2).

Prompt Responses

Only 10% of the dealers responded within the critical first 60 minutes; of these, the large majority (62%)

provided some type of meaningful response within half an hour (Figure 3). But while a 30 minute

response time compares

quite favorably to the

average identified in this

study, one must also

consider whether waiting

up to 30 minutes before

greeting customers on

the lot would hamper or

improve sales.

Figure 2 - Response Times

Figure 3 - Responses within an Hour

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Brand Stores representing the following 29 OEM brands were evaluated:

• Acura

• Audi

• Buick

• BMW

• Cadillac

• Chevrolet

• Chrysler

• Dodge

• Fiat

• Ford

• GMC

• Honda

• Hyundai

• Independent

• International

• Jeep

• KIA

• Lexus

• Mazda

• Mercedes

• Mitsubishi

• Nissan

• Porsche

• RAM

• Scion

• Subaru

• Suzuki

• Toyota

• VW

Responses within 1 Hour

Overall, domestic dealerships provided the highest ratio (13%) of meaningful responses within the first

hour, followed by import dealerships at 8% and independent stores with 7%.

Figure 4 - Responses within 1 Hour

The highest proportion of meaningful lead responses within 1 hour were produced by stores carrying

the following five brands: Acura (33%), Toyota (21%), Ford (17%), Nissan (17%) and Honda (15%).

0%

2%

4%

6%

8%

10%

12%

14%

Domestic Import Independent

Responses Within 1 Hour

7

Overall Response Times

Across many brands, it is apparent that a significant portion of dealerships are slow to respond to

Internet leads, if they respond at all. In fact, more than two thirds of the brands evaluated did not

produce a majority of responses within a day following submission of the lead.

Figure 5 - Response Times by Brand

0% 20% 40% 60% 80% 100%

Acura

Audi

BMW

Chrysler

Ford

GM

Honda

Hyundai

Independent

International

KIA

Lexus

Mazda

Mercedes

Mitsubishi

Nissan

Porsche

Scion

Subaru

Suzuki

Toyota

VW

Responses Times by Brand

5 minutes or less

6 to 10 minutes

11 to 30 minutes

31 to 60 minutes

1 hour to 1 day

1+ days

3+ days/No Response

8

Pricing Information

Whenever possible, the price of the vehicle in question was requested as an element of the lead.

Nevertheless, less than a quarter (23%) of the import stores evaluated provided price as an element of

the lead response process, while 21% of domestic and just 12% of independent stores included this

information.

Figure 6 - Price Quote

Invitations to the Store

A similarly small portion of import and domestic stores invited the customer either to the store or for a

test drive, while overall just 22% of dealers initiated that next logical step. This is a curious oversight,

given that many managers describe the goal of post-lead follow-up as “get the customer to the store”.

Figure 7 - Invitations to the Store/Test Drive

0%

5%

10%

15%

20%

25%

Domestic Import Independent

Price Quote

20%

26%

17%

0%

5%

10%

15%

20%

25%

30%

Domestic Import Independent

Invitations to the Store/Test Drive

9

Province

Dealers in BC, Manitoba Positioning for Success

Evaluating the geographical differences between stores provides some interesting insights. BC Dealers

tend to respond promptly, however they are somewhat less likely to incorporate interactive sales tools

in those responses, the lack of which may compromise their ability to advance individual opportunities

through the sales funnel, and build commitment to visiting the store.

Response Times

As 2011 progressed it became evident that BC dealers deliver the most consistently prompt responses

(see Figure 8Figure 8 - Lead Response Times (by Province), with more than a third being delivered within

an hour and a promising 6% arriving within 5 minutes. Meanwhile Ontario (8%) and Alberta (6%) dealers

provide the smallest proportion of prompt responses, likely compromising opportunities to make

contact with and then advance those customers through the sales funnel.

Manitoba dealers continue to present the largest portion of sites at which leads could not be submitted.

Figure 8 - Lead Response Times (by Province) - total percentage may not add up to 100% due to rounding

When other critical success factors other than response times are evaluated, Manitoba fairs better; 35%

of the stores in that province provide an invitation to the store, while 18% present pricing information,

and another 18% provide interactive sales tools to facilitate the customer through the sales funnel

(Figure 9). BC and New Brunswick are the only provinces in which no responding stores provided

interactive sales tools as an element of lead responses.

6%

3%

1%

18%

12%

4%

3%

12%

6%

3%

33%

6%

47%

37%

13%

12%

6%

14%

47%

47%

24%

42%

3%

6%

1%

0% 20% 40% 60% 80% 100%

AB

BC

MB

ON

Lead Response Times (by Province)

5 minutes or less

6 to 10 minutes

11 to 30 minutes

31 to 60 minutes

1 hour to 1 day

1+ days

3+ days/No Response

Could Not Send Lead

10

Figure 9 - Critical Success Factors (by Province)

Errors

Manitoba stores also lead the way in other, albeit less desirable categories - errors and spam - as

indicated in Figure 10 - Errors during Customer Experience (by Province) and Figure 11 - Lead Responses

Caught in Spam Filters (by Province). In some cases errors were the result of forms on the dealer web

site that produced unexpected or catastrophic results (i.e. 404 "Page not found”), in other cases

interactive sales tools embedded in the lead responses led to unexpected results.

Figure 10 - Errors during Customer Experience (by Province)

0%

10%

20%

30%

40%

50%

60%

AB BC MB ON NB

Critical Success Factors (by Province)

Invitation to Store/Apt.

Price/Quote

Sales Tools

10% 12%

35%

14%

0%0%

10%

20%

30%

40%

AB BC MB ON NB

Errors During Customer Experience

(by Prov)

11

Figure 11 - Lead Responses Caught in Spam Filters (by Province)

Web Site “Leaks”

A decreasing number of Canadian dealers continue to provide web site “leaks”; that is, links to other

web sites via which the customer may locate another dealer. However this behaviour is still most

frequently observed in Ontario (see Figure 12 - Site "Leaks" to Locate another Dealer (by Province))

when pages from the OEM web site are either “framed-in” to the dealer web site, or the dealer’s

independent web site lacks its own new vehicle specifications (i.e. New Vehicle Showroom), and so

visitors are directed to external sites for that information.

Once referred to external content, customers often encounter prominently displayed “Locate a Dealer”

search buttons. Within the context of a customer who has already landed at a specific dealer’s web site,

the ability to search for competing, albeit same-brand dealers, is counter-productive to that dealer’s

interest).

Figure 12 - Site "Leaks" to Locate another Dealer (by Province)

3%

0%

18%

4%

0%0%

5%

10%

15%

20%

AB BC MB ON NB

Lead Responses Caught in Spam

(by Province)

0% 0%

6%7%

0%0%

2%

4%

6%

8%

AB BC MB ON NB

Site "Leaks" to Locate Another Dealer

(by Province)

12

Month

Response Times

Significant variability is evident when evaluating the lead response data by month, likely because many

stores were only shopped once; each month different stores, and therefore different Internet sales

processes, were observed.

Figure 13 - Response Times (by Month)

However when the same data is evaluated by quarterly period, a pattern does emerge (Figure 14 -

Responses within a Day (by Quarterly Period)). In each of the first three quarters of 2011, an increasing

majority of dealerships took more than a day to respond to a lead. Shopping online for vehicles during

the summer months would appear to be a most unfortunate time for consumers, given that 81% of

dealers shopped during the 3rd

quarter took more than a day to respond. Only during the last 3 months

of the year did dealers respond most often within a day.

Figure 14 - Responses within a Day (by Quarterly Period)

0%

10%

20%

30%

40%

50%

60%

70%

Response Times (by month)

Less than 1 hour

1 hour to 1 day

1+ days

3+ days/No Response

48% 44%

19%

57%52% 56%

81%

43%

0%

20%

40%

60%

80%

100%

Q1 Q2 Q3 Q4

Responses within a Day (by quarter)

Up to 1 day

More than 1 day/No Response

13

Other Critical Success Factors

There is also significant variability when examining the presence of other critical success factors, as

illustrated in Figure 15 - Critical Success Factors (by Month) below.

Figure 15 - Critical Success Factors (by Month)

However, when these other critical success factors are examined on a quarterly basis (Figure 16), we

find that with the exception of the 3rd

quarter, dealers tend to respond with more of these factors as the

year progresses. In fact, during the 4th

quarter, more than a third of dealer responses included Price

Quote information and/or an Invitation to the Store/Test Drive.

Figure 16 - Critical Success Factors (by Quarter)

0%

10%

20%

30%

40%

50%

60%

Critical Success Factors (by month)

Price/Quote

Invitation

Sales Tools

28%30%

6%

37%

28%

32%

11%

34%

0%

6%

0%

5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Q1 Q2 Q3 Q4

Critical Success Factors (by Quarter)

Price/Quote

Invitations

Sales Tools

14

Summary While it is encouraging to see that fewer dealers exhibit “leaks” on their web sites, the fact remains that

even when a dealership manages to capture a lead, the process for managing that lead remains largely

ineffective. Prompt response times have been proven to produce positive results; however it seems that

relatively few stores have invested in the skills or manpower necessary to convert more leads into more

sales.

There are some signs of positive change however, particularly in BC where dealers produce the greatest

proportion of prompt responses, and Manitoba where an increasing number of dealers today employ

multiple critical success factors during the course of their Internet sales processes, in effect positioning

themselves for success in an age of well-informed consumers. This progressive Internet posture can

produce its own challenges however, as evidenced by the high ratio of erroneous customer experiences

in Manitoba. Effective and ongoing management oversight can help these potentially strong Internet

sales processes become trouble-free.

This study confirms that there is plenty of room for Canadian dealers to improve Internet sales

processes. In light of the high number of dealers responding to Internet customers either slowly or not

at all, dealers that do improve online response processes will position themselves favourably within a

competitive sales environment.

Works Cited Baker, B. (2011). Positioning for Success - 2011 Mid-Year Report on Canadian Dealer Responses to Online

Leads. Sun Media Inc.

InsideSales.com Research and Analytics Division. (2011, June). 55.3% of Top Companies Don't Respond

to Web Leads. Retrieved September 9, 2011, from InsideSales.com:

http://www.insidesales.com/images/aa-isp-2011-response-audit.pdf

McCann, M., & Kahn, P. (2010, April 26). The Marketing Excellence Scorecard. Retrieved September 9,

2011, from The Cobalt Group, Inc. web site:

http://www.cobalt.com/pdf/DD10_Presentation_Customer_Release.pdf

Oldroyd, D. J., & Elkington, D. (2007, October). Lead Response Management Study - Oct. 2007. Retrieved

September 9, 2011, from InsideSales.com: http://www.insidesales.com/images/LRM_07.pdf

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Contact Barry Baker – Director of Professional Services

Sun Media Corporation

Phone: 1.866.955.2255

Email: barry.baker@sunmedia.ca

More about Autonet Dealer Solutions

Autonet Dealer Solutions is an automotive Internet marketing and solutions provider

specializing in website development, online inventory management, Internet merchandising,

Internet sales training, web analytics, and electronic data interchange (EDI).

Autonet Dealer Solutions is a division of Sun Media which is comprised of some of the most

recognized interactive media assets in Canada in the areas of news, automotive, housing,

classifieds, personals and entertainment. Sun Media is itself a division of Quebecor Media Inc.

one of the largest media, publishing and broadcasting companies in Canada.

Quebecor Media's divisions include:

1. Videotron Ltd, the largest cable services provider in Quebec, the third largest in Canada, and the

only provider in its service area to deliver all telecom services - cable TV, Internet access,

residential and business telephone service - over its broadband network;

2. Sun Media Corporation, Canada's largest publisher of newspapers;

3. MediaPages, Quebecor's one-stop shop for all print and online directories;

4. TVA, the largest private French-language broadcaster in North America;

5. Canoe Inc., one of the largest networks of English- and French-language general-interest and

special-interest Internet portals in Canada;

6. TVA Publishing Inc., the largest magazine publisher in Québec;

7. Quebecor Media Book Group, the largest group of French-language publishing houses in

Canada;

8. Archambault stores, the largest music store chain in eastern Canada;

9. Select, Canada's largest independent distributor of CDs and videos;

10. Le SuperClub Vidéotron ltée, the largest chain of video stores in Québec;

11. Nurun Inc., a leading international interactive consulting agency.