Closing RatioAre you a lead junkie? Are you addicted to testing every lead source that someone throws in front of you? Are you always asking others for that secret lead source that will solve all of your closing ratio problems? Is it time for an intervention?  Is it time to stand up and say, “I am a lead junkie and I need help”?

I have been asked these questions many times by automotive dealerships: “Which is the best lead source?” “Can you tell me if I should cut out this vendor or that vendor?” “My friends in my 20 group swear by these leads but they aren’t working for me, should I stop buying them?”

Answering these questions in a vacuum is hard for me because I need to understand how the dealer’s team is handling its leads. Is the team efficient with all lead sources or are members deciding in their own minds that one source is better than another so they cherry pick which ones they want to work on thus affecting their closing ratio?

In my humble opinion, the addiction to finding new leads or more leads is causing you to look at the wrong end of the horse so to speak. As I have written in the past, there are two ways to increase sales:

  • Increase marketing budgets and close the same percent but, because of more opportunities, you sell more. Cost per car is higher, but you can see an increase in sales volume so you are happy.
  • You can refine your employee processes and become more efficient with the opportunities you have, thus increasing sales without an increase in marketing dollars.

How To Maximize Your Closing Ratio

You should be investigating your team’s ability to handle leads correctly before judging a lead source’s value. I recommend first investigating if your team is prepared to handle an increase in leads. I would hazard to say that most auto dealerships are understaffed, especially in their BDC.

In my experience I have found that many dealership do not have enough people to handle the leads they are currently receiving. Of the dealerships that reach out to my company for help to improve their results, almost every single one of them has this problem.

Let me give you an example. A very successful dealership asked me to review what its team was doing because the dealership wanted to continue to improve. When I asked the GM how many leads the team was getting to its BDC (not calls mind you), he said approximately 500-600 each month. I then asked how many people were handling those leads and he said two. WOW. I asked how much they were spending each month on marketing and then told him they are wasting part of their marketing budget paying for leads that are not being handled. Imagine if people came on to your lot to ask about a vehicle and you ignored them. Well, that is what you are doing by mishandling leads.

It is not the fault of your workers; there are just so many hours in the day and the number of leads they can properly follow up on exceeds the workday. In this case, I told the GM that he needed four or five people handling these leads.

Now, every dealer immediately goes into a defense mode because I am telling him or her to increase staffing. My rebuttal to this posture is to review the amount of money each month is being wasting on marketing that is generating leads no one is following up on. I further explain that this cost each month is more than what you would pay these new employees to SELL MORE CARS, let alone the long-term impact of future sales and service revenue.

Go Beyond the BDC or Internet Sales Department

The process of inspection does not stop once you get your BDC or Internet department fixed. You then need to inspect what your floor staff is doing to follow up and maximize the opportunities they have; then Used Cars, then Service as well. Every person who is responsible for interacting with an opportunity must have a process in place that he or she follows, along with someone who is inspecting these results.

Continuing to pour water into an already filled glass is just wasteful. So is continuing to pour more leads into your dealership that your staff cannot handle. When you feel that craving for more leads, before you go out to find yet another lead source to test out, look inside to see if your team is staffed to handle the leads you already have.

Once your staffing is correct and processes are being executed correctly, then and only then will you be able to judge lead sources correctly. It is time to admit that you have been a lead junkie and get the help you need.


If I can ever be of service or you wish to discuss anything in this article please reach out to me on Twitter @glennpasch.

 This version of my article was first seen in CBT News Magazine.

Glenn Pasch is the current CEO of PCG Digital Marketing as well as a writer, National Speaker and part of the Educational staff for the Automotive Digital Marketing Certification courses