2015 Sales Effectiveness Report: LEAD FOLLOW-UP IN THE AUTOMOTIVE INDUSTRY

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1 2015 Sales Effectiveness Report: LEAD FOLLOW-UP IN THE AUTOMOTIVE INDUSTRY

2 About This Report During 2015, Conversica undertook an initiative to discover best practices for lead follow-up by companies across a diverse set of industries. We queried 327 companies in nine industries, including automotive, through websitedriven inquiries from our research team. As part of the larger study, 30 companies (approximately 1) were from the automotive industry. The good news is that, of the nine industries researched, automotive demonstrated the best promptness. 96% of those who responded to the lead did so within 24 hours, and 10 responded within three days. The bad news is that there s still plenty of room for improvement nearly a quarter of auto dealers didn't respond to the lead inquiry at all. We first researched industry best practices then tested real-world execution and found that even direct website inquiries presumably the hottest of prospects often get left behind. Our research revealed four critical elements that must be followed to be successful at sales practices. Conversica calls them the Four Ps. Table of Contents Executive Summary Results Promptness Persistence Personalization Performance Combined Automotive Grades P Promptness: You need to be fast if you want to be first Persistence: One or two tries are rarely enough Personalization: Prospects want conversation, not promotion Performance: An snagged in the spam filter looks like a non-response to a lead Characteristics of Top Performers Conclusions Solutions Endnotes About Conversica 2

3 Executive Summary This report studies the various components of sales effectiveness as they pertain to dealers, and how initial lead engagement sets auto companies on a course for success or failure. As part of the larger study, Conversica sought to uncover whether automotive companies were putting the Four Ps into practice in the field. Our findings revealed where the automotive industry stands in comparison to the other industries, which factors are strong predictors of success or failure, and what practical steps can be taken to align an automotive sales team with best practices. This report offers a snapshot of how automotive companies handled lead engagement in We hope its findings will help you to implement the Four Ps to optimally leverage your sales team. 30 Number of automotive companies studied 2 MONTHS Research period Research persona Consumer Inquiry method Contact forms, The Lights Are On But Nobody s Home Nearly 25% of automotive companies contacted did not bother to respond to a direct sales inquiry from their website. Contact periods Monday Friday 8 a.m. to 5 p.m. local time 3

4 Results Unfortunately, 23% of the automotive companies we contacted did not respond at all, even though we contacted them with a direct, specific inquiry. Among the automotive companies who did respond, we ranked how they performed on our four key metrics: Promptness, Persistence, Personalization and Performance. Promptness 9% of automotive companies who responded did so within five minutes, during the typical period when qualifying and conversion is most likely to occur. 4% took more than 24 hours to respond. Lead Inquiry Response Rates The automotive industry outperformed the other industries, with 77% attempting at least one response with our research team. In contrast, only 65% of companies across the other industries attempted at least one response Did not respond 23% Did not respond 35% Persistence More than half of the automotive dealerships made at least eight attempts to contact our researcher. However, 9% made only one or two attempts to reply to our inquiry before letting the opportunity slip away. Personalization 13% of automotive companies in our study did not personalize their communication in any way, despite best practices suggesting that including a personal greeting or signature increases the likelihood of a response from a lead Responded 77% Responded 65% Performance While is replacing the phone as the most efficient way to contact leads, the spam folder continues to be an obstacle to reaching leads. Among researched automotive companies using , only 55% of them used messages that were likely to land in a lead s inbox at least 9 of the time. 2 1 Automotive industry All other industries With many sales teams not hitting best-practice targets, it s clear that inbound leads are not getting appropriate attention. Prioritizing responsiveness and making use of sales and marketing technology can help improve sales effectiveness in the automotive industry. 4

5 Promptness Automotive Promptness Results Response time, measured as time from inquiry to first personalized outreach, for companies in all industries surveyed ranged from less than one minute to 25 days. However, of the automotive companies that responded to an inquiry, 96% responded within 24 hours, and all of the automotive companies that responded did so within three days. The automotive industry outperformed the other industries, with 7 of dealerships contacted responding in less than an hour. 42% of the other industries took longer than a full day to respond. However, it s also important to note that only 9% of dealerships responded within the five-minute, best-practice window. For this metric, autoresponder s were excluded. Rank was measured by the time it took to receive a personalized response. Based on established best-practices research, we created a grading scale to assess each company s promptness. Promptness Insights Of the automotive companies graded A or B on the promptness metric, 6% used only the phone to make a personalized contact, while another 6% used only as a contact method. The large majority (88%) used both methods to respond. AUTO INDUSTRY: 96% 10 within 3 days OTHER INDUSTRIES: 58% 10 within 25 days responded within 24 hours, responded within 24 hours, 10 9 PROMPTNESS RESULTS A prompt response is critical Promptness is the most important factor in contacting an inbound lead. The faster the connection with a lead, the higher the likelihood of conversion to a customer. What s surprising is how much impact even a few minutes can have: The likelihood of conversion drops significantly following the first three minutes after the lead's inquiry 1 The odds of qualifying a lead contacted within five minutes are 21x higher than contacting the lead after 30 minutes 2 Lead response within the first hour increased the likelihood of qualifying the lead 60x compared to companies that delayed contact 24 hours or longer 3

6 Promptness Promptness Grades 7 of auto dealers responded within 1 hour, compared with 26% in other industries. Incentives from manufacturers and stiff competition have forced the automotive industry to be prompt in lead follow-up. All other industries % % 34% 26% 18% 9% 8% 8% 4% A B C D F Grading key: A = within 5 minutes B = within 60 minutes C = within 24 hours D = within one week F = longer than one week 6

7 Persistence Automotive Persistence Results We assigned a persistence grade by counting the total number of times an attempt was made, including both phone and , over a 30-day period. The automotive industry ranked well against other industries, with 57% demonstrating the recommended level of persistence. While the range of persistence within automotive companies ranged from one to 24 attempts, 91% made three or more attempts. The majority of companies from the other industries made only one or two attempts. For this metric, autoresponder s were excluded. Counting commenced with the receipt of the first personalized response. Persistence Insights Ensure both prompt and persistent responses In an industry dealing with dramatic increases in web-based research and first contacts via the Internet, successful automotive dealers have responded by ensuring prompt response times and making frequent contact attempts. Companies that have taken this approach have improved their sales results by as much as 10 during a time of slow growth and declining revenues. 4 Persistence Presents Challenges The automotive industry stood out dramatically from the other industries, demonstrating that it can be done well. In this category more than half of the respondents from the other eight industries ranked poorly. There is a strong correlation between persistence and promptness in the automotive industry. Among automotive firms that ranked high for persistence, 85% also ranked high for promptness (measured as responding within 60 minutes). However, among companies in other industries that ranked high for persistence, only 53% also ranked high for promptness. 7

8 Persistence Persistence Grades 57% of auto dealers ranked highly for persistence, compared to the next closest industry, technology, which showed only 22% scoring at the highest level. Overall, only 1 of companies across all industries received top marks for persistence % All other industries 58% Persistence procures the conversion Connecting with an automotive lead is crucial, but one attempt is almost never enough to be effective. Bestpractice research proves that an increased number of attempts yields increased conversions: Attempting contact just three times instead of once will double response rates % 17% 19% 1 12% 9% 1% A B C D F Companies with the fastest growing revenues were most likely to attempt contact with a lead five to eight times 6 Overall response and conversion rates continue to grow at the eighth attempt and beyond 7 Grading key: A = 8-23 attempts B = 5-7 attempts (too few), or attempts (too many) C = 3-4 attempts, attempts D = 1-2 attempts, attempts F = 31+ attempts 8

9 Personalization Automotive Personalization Results The data on this metric included all the dealers that responded via (96%). Dealerships that only responded by phone did not receive a personalization rank, nor did personalization factor into their overall grade. Of the automotive companies that responded with s, more than 86% had some personalization elements and only 14% received a poor rank because of a complete lack of personalization. In contrast, nearly a third (32%) of companies in other industries failed to provide any personalization. Personalization Insights Response content matters. Many companies use generic auto-response s as the first touchpoint with inbound leads, so it is not surprising that replies often feel impersonal. In our auto industry research, we found that the personalized responses most commonly addressed the recipient by name. But 14% of dealers didn't even do that. While it may be infeasible for most sales teams to respond to every lead with a uniquely written message, even an automatically-generated response can be effective if personalization elements are included. CRMs and marketing automation systems can be configured to use specific addresses and signature blocks to create automated replies. More sophisticated systems can go even further by interpreting the details of the inquiry and responding specifically to those details, mimicking a human response. Ensure your response is effective The best responses included at least four personalization elements, which increases the likelihood of generating a positive lead response: Personalized greeting Use of the sender s personal Specific mention of lead inquiry details Inclusion of personal contact information to continue the conversation Extra Credit In some cases, companies that ranked well in the personalization metric exceeded the four elements of personalization. In those cases, lead replies offered a clear invitation to continue the conversation, asking the lead to confirm the accuracy of the information provided and inquiring about the lead s preferred means of communication. By engaging in a twoway dialogue, a sales rep can qualify the lead more quickly and increase the chance of closing a sale. 9

10 Personalization Personalization Grades 5 of auto dealers ranked highly for personalization, with only 14% failing to use any personalization elements. In contrast, 53% of companies in other industries used one or zero personalization elements. 4 35% 3 25% 2 15% 1 5% 14% 8% 36% 17% 27% All other industries 22% A B C D F 9% 21% 14% 32% Effective responses are personalized Our research reveals the importance of personalized communications with leads, which dramatically increases the likelihood of a positive outcome: Sending an from a salesperson's address rather than a company address increased the click-through rate by 31% 8 Personalized signatures improve response rates by 22% 9 Personal letter style messages were opened 137% more often, and clicked through 129% more frequently than a graphics-heavy with generic to: and from: fields 10 Grading key: A = 4 of 4 personalization elements present B = 3 of 4 personalization elements present C = 2 of 4 personalization elements present D = 1 of 4 personalization elements present F = No personalization elements 10

11 Performance Automotive Performance Results To calculate the performance metric, we measured the likelihood that an message would reach its intended target rather than be delivered to a spam or junk mail folder. Our best-practices research revealed that, on average, 5 of business ends up in spam folders. This number remains consistent across industries and organization sizes. 11 For this study, we used the SendForensics Deliverability Test, which assesses how likely the content of an is to trigger spam filters at ISPs and in clients. The test generates a score based on a scale of 1 to 100, which rates the probability that an will be delivered directly to the recipient s inbox. Companies using only the phone were not assigned a performance score, nor was performance considered as part of their overall grade. The highest score attained on the SendForensics test (98) was from the automotive industry. 96% of the automotive companies who responded via received a score of at least 80. Performance Insights Poor performance from poor personalization: A high personalization score was not a predictor of a high performance score, but a low performance score correlated with a low level of personalization. The ineffective responses to leads were impersonal, canned, and heavy on graphics, making them more likely to be ignored or delivered to the spam folder. 11

12 Performance Performance Grades 96% of the automotive responses would get through spam filters vs. 9 of responses received from other industries. A caveat about delivery performance success % 41% 41% 49% 4% All other industries 8% 2% A B C D F The SendForensics test measures how likely the content of the is likely to reach the inbox instead of the spam folder. However, it does not test the sender's domain reputation. A great sent from a domain with a poor reputation is less likely to get into the inbox than a poorly crafted or spammy from a domain with an excellent reputation. SendForensics Grading: A = B = 80-89% C = 70-79% D = 60-69% F = 59% and below 12

13 Combined Automotive Grades Overall Grades for Lead Follow-Up As part of the scoring process, Conversica assigned grades for each automotive company. We determined an overall grade for each responding company by averaging grades in each metric category. The automotive industry outperformed the other industries in our study. 13% of surveyed automotive dealers received an A grade for overall metric performance. A significant majority (74%) received a B grade, while 13% received an overall C grade. No automotive companies received an overall D or F grade. In comparison, only 2% of the companies in the other industries received an overall A grade, while the majority received a grade of C and 1 received an overall D grade. Overall Grades The automotive industry outperformed the other industries in our study, as evident when comparing the overall grades. All other industries % 61% % 13% 13% 1 2% A B C D F 13

14 Characteristics of Top Performers Three of the highest-ranking companies in our comprehensive survey of lead engagement metrics were automotive dealerships. And the only business that received an A grade in all four categories was an auto dealer. The most consistent factor among companies with an A grade was persistence. All companies with an overall A grade received an A in this category. The automotive industry ranked much higher than other industries for persistence, with 57% receiving A grades. In addition, the automotive industry also had the highest number of overall A grades with 13% receiving such a grade. That s more than double the next most persistent industry: technology companies. All of the A-rated automotive companies received top performance grades for deliverability, and all of them used at least three of four personalization elements in their s. Our top-scoring automotive companies attempted contact an average of seventeen times, leaving no lead behind, and they responded to inquiries twice as fast as top performers in the other industries. They were also 10x as likely to include all the elements of personalization as even the B-graded automotive companies. 14

15 Conclusions 23% of auto dealers contacted did not respond to the lead at all. No phone calls, no s. The large majority of those that did respond received good grades. 87% of responding dealers received an overall A or B grade, compared with just 29% in all the other industries. TOP-SCORING AUTO DEALERS 7 of auto dealers who responded did so within the first hour following an inquiry. Only 4% did not make contact within the first 24 hours. More than half of auto dealers received an A grade in persistence. However, 9% of our respondents made contact no more than two times before giving up, potentially missing out on sales due to lack of effort. 14% of our respondents who used did not take advantage of their initial contact with a prospect to establish a personal connection, and another 9% only personalized their responses with the recipient's name. 17x 2x Average attempted contacts Faster response times than top performers in other industries Our research also suggests that is surpassing phone contact as the fastest way to reach leads, and it is the easiest method to use persistently. As more companies transition to communication with leads, crafting s that reach the inbox becomes increasingly essential. The silver lining in our research is that some companies are figuring out how to respond effectively. Most auto dealers that responded to our inquiry by are well above average in successfully implementing the Four Ps. 13x Likelier to include all personalization elements than other auto dealers 15

16 Solutions No sales team or organization sets out to send impersonal s or let leads drop through the cracks. However, poor performers may not be making all of the four key lead engagement factors promptness, persistence, personalization, and performance a priority in their sales organizations. Our research suggests that companies seeking to improve on these metrics should prioritize their efforts as follows: Begin with promptness. Even among our top-scoring companies, promptness was the least likely metric to receive an A. With promptness, every minute counts, which means that every small improvement will yield results. Next, work on persistence. Like promptness, this is an area where a small change two or three more attempts can noticeably increase the conversion rate. Persistence is the metric that places the highest demands on a salesperson. Our research suggested that after six contacts, resource demand is greater than the returned value, despite showing a continued rise in the conversion rate. 12 Many companies are therefore turning to automation to reach out and capture possible opportunities without overburdening the sales team. Finally, address personalization and performance. Because these factors also go hand in hand, it makes sense to tackle them together. Successful companies are tailoring content specifically to the lead s inquiry and personalizing the contact information to put a human touch on what can be an impersonal channel. Additional details in the multi-industry report, including lists of the top companies and industries by overall grade, are available in a companion report available upon request to Conversica. 16

17 Endnotes

18 About Conversica Conversica is the leading provider of lead engagement software for marketing and sales organizations. Conversica s customized virtual sales assistant, driven by artificial intelligence technology, automatically contacts, engages, nurtures, qualifies, and follows up with leads via natural, two-way conversations. The AI sales assistant works around clock, ensuring that leads are responded to promptly, persistently, and personally, with a conversational style that won t end up in the spam folder. Conversica is a cloud-based, software-as-a-service application. No onsite installations or upgrades are required. With Conversica's subscription-based service, you can choose from a variety of tiers to meet specific needs. To learn more about how Conversica can drive lead engagement forward, call +1 (888) , send an to sales@conversica.com, or visit to set up a product demonstration. You can also follow us on Facebook, Google+, YouTube, on Twitter. How Would Your Company Perform? Conversica continues to evaluate how effective companies are at lead follow-up in a wide variety of industries. To have your company assessed as part of our ongoing research, or to receive a confidential scorecard on your company, please complete our assessment request form Conversica, Inc. All rights reserved. 18