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Brick-and-mortar vs. Online Dealerships

Indulge me for a moment and picture this scenario in your mind. A customer walks into your showroom or parks on your lot and begins looking at a vehicle you have in stock for sale. The customer walks around the vehicle, opens the doors, sits inside, and no one from your staff approaches the customer to welcome them, introduce themselves, or address them in any way whatsoever. Presented with this scenario, what would your reaction be? How long would you wait before you stepped in, and what would the eventual outcome be with your staff? My suspicion, as a previous GM of a dealership, is that this would not be tolerated or accepted in our brick-and-mortar operation, and we have processes built within our organizations to proactively manage this so that it does not take place.  

Now that I have your attention, let me ask you about the same scenario taking place within your digital dealership, how are you managing it and what processes have you put in place to ensure that this is not happening? This area of our operation, as I see it, is the single most important job we have as it pertains to managing our digital dealerships in this market and economy.  

Our Lotwalk software helps dealers focus their efforts on customers that are looking to buy a vehicle in stock or customers who sent a lead in on a vehicle that was sold but the dealership has a similar vehicle in stock (a switch vehicle) that would potentially work for that customer to move into so we can help them solve the situation they are in and why they are searching for a vehicle. The Lotwalk software uses the acronym WTF which stands for Work the Facts and the facts are that most dealers are not addressing their online customers' needs in an efficient manner worthy of earning these customer’s business. My assumption is that we are still operating under the coming out of covid mindset and that market has long since passed.  

Here are some Facts to consider, based on the data Lotpop has available daily.  

Overall, customers are taking longer to make a purchase decision due to the current economy, high-priced used vehicles, high-interest rates, and more new inventory under $30k starting to enter the market.  

We dealers have no idea what a customer’s buying cycle is or what could potentially change it if presented with the right circumstances.  

Most dealers established processes to reach out to their digital customers are inefficient and outdated and a high percentage of the time have nothing to do with selling a vehicle today. 

Dealership managers are not communicating daily the opportunities to sell inventory that needs attention to their team members responsible for speaking with the dealer’s online customers the very same way you would do if a customer was standing in your showroom or lot.  

Dealership team members responsible for working with digital customers should be required to produce content and contact the dealership customers every 3 days on in-stock inventory. What do people do on their cell phones every day? They look at and absorb content on whatever social media platform they choose. So why are we not providing content for them on the vehicles they are searching for and thereby saving them time, which will build value and loyalty? 

Another function of the Lotwalk software is helping dealers manage their contact gaps with their online customers. Based on the data we are observing with our dealer partners, here are some recent facts.  

0-14-day leads that have not been contacted in 2 days or longer are 30-40% of their total in-stock leads that they have a chance to sell today.  

15–30-day leads go up to 63% not contacted in 2 days or longer. 

31-45-day leads again move up to 79% not contacted 2 days or longer. 

46-60 days leads up to 85% not contacted in 2 days or longer. 

 Let me be clear: This data is taken from a set of dealer partners who are not consistently working their leads. We do have dealer partners who understand how important this strategy is and are outperforming the normal, and their numbers are better, but in the 15–to 60-day lead buckets, they are still averaging around 40% of their leads not getting a contact in 2 days or longer.  

In summary, in today’s market, “the way we have always done things” in our industry is vastly different from what is required of us by in-market customers who have all the tools at their fingertips to research and determine what is best for them and their families and the facts are that they are currently taking more time on average to make the decision to purchase. My question and challenge to you is: what are you doing differently to meet your digital customers where their needs, and how is your team managing your opportunities based on this information? 

For every brick-and-mortar location we own, we also have a digital dealership location, and the facts are those two locations are being managed dramatically differently, and one of those locations gets by far the highest number of visitors daily. The question for you is, what are you doing to ensure that you and your team are maximizing every opportunity that visits your digital dealership, much like you do when a customer drives on or steps foot in your bricks-and-mortar operation? 

Communication between your management team working your inventory to your team working your customers must be established daily so that your team can talk to the customers that can drive the results you need in order of priority and then inspect what you expect daily to drive consistency daily which leads to consistency monthly with the ultimate goal to sell you inventory monthly (12 turns) and producing 60% or higher of your sells out of your 0-30 day or fresh inventory to insure that your dealership is getting the highest return on it’s investment. 

-John Anderson

Sr. Vice President

Lotpop Inc.



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May 06
Rated 5 out of 5 stars.

So true

May 06
Replying to

Thank you for the read!

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