November 2009
How did we learn that a rapid price quote response was the key to driving Internet sales? Here’s the simple answer: Stan, Lorraine and Mo told us. ResponseLogix started in an automobile dealership.
ResponseLogix started in a dealership. We incubated our business on the second floor of Toyota Sunnyvale, in the middle of Silicon Valley. In the early days, located as we were in the Small Conference Room, ResponseLogix employees were wedged in like sardines just a few steps away from a ten-person Internet sales department.
It was a wonderful perch from which to observe the daily organized mayhem underway just down the hall. From morning until late into the evening, we observed Stan and Lorraine and Mo and the other wonderful members of that highly successful Internet team. They seemed remarkably adept at navigating through the controlled chaos that constantly surrounded them. Catching leads and trying to respond—making calls to prospects—scheduling test drives—customers arriving early—or late— hanging out in the Finance Dept with a customer—going to departmental meetings—days off—sick days—the adjustments necessary to “be there” for the customer when the customer was ready were constant. Here were top-performing sales reps, working incredibly hard on behalf of the customer—and yet they were constantly pressed to keep up. Here was a top-performing dealership (selling 140 units a month out of its version of the Internet Dept), and yet the average response time on Internet leads was over two hours.
Little did I realize at the time that two hour response time is, relative to the industry, pretty good. 25% of all leads in the industry go entirely unanswered. The average response time on the leads that do get answered is over 5 hours. In the fast-paced, reactive, ever-changing milieu of a car dealership, it’s perhaps not surprising: “stuff happens” that gets in the way of a quick, comprehensive response.
This was the problem ResponseLogix was created to solve. By delivering the customer a price quote on multiple vehicles consistent with the customer’s trim-level request, from the assigned sales rep, in 10 minutes, we help our dealerships surprise and delight their customers. It’s important to note that when a customer sends a lead to a dealership, she has likely sent that lead to two other dealers as well. So each dealer has been “put on trial”. A rapid, relevant, robust response is vital to differentiate from the other guy. In fact, I call the arrival of a lead the “moment of truth”. At no point in the entire customer purchase process does the action of the dealer have such significant impact on the decision of the customer as to where to buy. If the dealer responds much faster and much more comprehensively than the other guy, that dealer wins.
When we first built our SmartQuote product and began to deliver instant quote responses at Toyota Sunnyvale, sales began to pop. Soon the Internet Dept was selling 260 units a month. That’s when we knew we had a business. We soon took our product to other dealers, first in the San Francisco Bay Area and eventually across the country.
Today, with 250 signed customers and growing 20% a month, we see this success play out every day across our dealer network. But all the most important lessons upon which this business is built were learned by watching Stan, Lorraine and Mo—and the rest of that wonderful team. We exist to help them be more successful. And it is to them we owe a deep debt of gratitude — for teaching us what they needed most to drive sales and improve the car-selling (and car-buying) experience.
Cheers,
Tom Mohr
President and CEO, ResponseLogix