I heard a recent discussion on All Things Used Cars around the volume of leads versus conversion rate. The gist: implementing a trade-in range tool may double or triple your lead volume, but it’s going to drop your closing percentage, and to be careful what you measure and comp your team on, as that will impact their behavior.
This is a 100% true statement, but it’s also misleading.
If your marketing team is comped on leads, they’ll get a crap ton of leads. If they’re comped on conversion rate, they’ll focus on that, but what’s really the end goal of a trade-in tool on your site?
Acquire more trades from your market, and sell them more cars.
Let’s do the math. If you go from 10 leads per month closing at a 20% rate with a single-price offer tool, or 2 cars sold, to trade-in range tool with 30 leads per month at a 10% closing rate, or 3 cars sold, your conversion rate has dropped but you sold more cars and had 20 more opportunities to source a trade-in.
What’s the better outcome here?
Dealers can have success with both types of trade-in tools: the range or the firm offer. And yes, your pay plans will dictate behavior, so they should be focused on the end outcomes, not the leading metrics like number of leads or conversion rates.
If you’re tired of the range vs single-price offer debate and wished their was a company a company that had them both integrated smoothly into a single solution so that you can cater to both the really motivated online shopper and the “just browsing and gimme some information quick” shopper, that’s what we do.
