For those of you who have entered a supermarket in the last twenty years, at some point in time, I’m sure your eyes have fallen upon a tabloid. Is the Pope an alien? Is Lindsay Lohan dead? Is Pat Buchanan a transsexual? Unless you just woke up from a coma, you probably just snicker to yourself, and buy your spirulina and flax seeds.
Sometimes, though, throwing out random “facts” can be dangerous. A few weeks ago, I was sitting through a sales pitch that was thinly disguised as a presentation. The audience was subjected to a barrage of “statistics” without any listed sources or sample sizes. In fact, this likable gentleman guaranteed a 20%-23% closing ratio (on third-party leads, no less) if you followed his five-step plan. He GUARANTEED it!
Now I’m guessing most of you are probably scratching your heads, thinking aren’t there a lot a variables to be making those assertions? Inventory? Pricing? Market? Value proposition? Salesperson hygiene? After seeing the results from 30,000 leads/month (give or take) for about 9 months, I would tend to agree with you. Imagine, however, you’ve never read an article or attended a conference regarding automotive Internet sales. You’re a Green Pea. You don’t really have any reason other than to take these proclamations as the rule because you have nothing to compare them to. Therein lies the problem.
I am a big supporter of continuing education and I encourage dealer personnel, no matter what department, to learn as much as they can about their craft. BUT, don’t take everything at face value. The old “don’t believe everything you read” adage still holds true. If a speaker starts offering up benchmark numbers, put on your referee jersey. Here are a few things you should be considering when you’re presented data (dare I say, call someone out on it):
They don’t include source data on their slide
Only a handful of companies commission large scale studies (e.g., Cap Gemini, comScore, JD Powers, Cobalt, etc). If the presenter is trying to position themselves as an authority, they should be confident enough to let you check on the data yourself. Also, since many of these studies are conducted annually or semiannually, the data frequently changes from year to year.
They present the biggest dealer/manufacturer as the rule
Unless you are the biggest said dealer, how can you possibly compare? What if you only have six new Hyundais on the lot and no allocation? What if you live in Juneau, Alaska? What if your dealer insists on retaining dial-up? What often works for the top ten, rarely works for the bottom 1,500.
They use a tiny sample in their study
We work in an industry where 10 million sales is a disastrous year. Think about it. One thousand sales in a national study borders on irrelevant. Would you make bets on 1/10,000 odds? Look for context, qualifiers, and/or statistics based on bite-sized chunks (e.g. 10,000 Jetta buyers, 36,000 non-GMS Buick owners, 100 regional Ram dealers, etc). This is what makes it relevant for your dealership or market.
They use one city in their study
I love slides that start with “we sampled 20 Metro Detroit Ford Dealers,” or “8 Orange County Lexus dealers, or “10 Toledo Jeep dealers.” Those markets are hardly the representative of the whole based on their regional demographics, or proximity to manufacturers and tier one suppliers. If best practices are truly the best, they’ll work everywhere, and not just one area.
Now imagine you are closing your new-vehicle third-party leads at 4%, and the national average is 4%-6%*, and some “expert” tells you that you should be closing at 20%-23%. What do you do? Believe that Elvis does indeed work at Burger King? Take it with a grain of salt. If a dealership just started from zero and it flips 50% of its leads to bad, then it’s plausible. There are always exceptions to the rule, however I personally feel that presenting the “only case” scenario is just plain irresponsible. Start doing your homework, ask questions, and analyze your own results. Don’t be the kind of person who believes that an octogenarian gave birth to a 48 pound baby.