Online to Offline Conversions

(This post is part of a series on the state of multichannel metrics today, one year after the book came out.)

Believe it or not, one of the downsides of the WWW is that it can actually produce too many leads that are unqualified.

Too many leads? How could that be a problem?

Well, …

  • How can Sales and Marketing sift through all the pebbles to find the nuggets, i.e. the serious and profitable buyers that they should jump on first without losing time to cold leads?
  • How to help the sales and marketing teams be more intelligent in what they are going to say to a hot web lead when they do get in touch?

Automobile industry was the original innovator here

As you may imagine, the car industry has been aching for a solution to these questions more urgently than anyone else. After all, the research shopping phenomenon is most pronounced here.

That is, almost everybody researches their next car online. But in all my tours throughout Europe and US I have only met two people who actually entered their credit card online and ordered their car for pick up in the dealership. The rest continued their shopping in the dealerships, i.e. offline.

Me too, I remember, I was up-sold and cross-sold the old fashioned way by a used car sales man in the dealership.

Back in 2006 already, some of the most remarkable presentations that I have ever witnesses at the eMetrics Marketing Innovation summit came from car manufacturers on this very subject.

Ford and Volkswagen

As presented by Ford and Volkswagen, their online teams struck a partnership with their sales and marketing teams for delivering better and more actionable leads.

Their efforts included many action items including wonderful traditional web analytics for improving advertising, landing pages, and web site experience.

But also included was an effort to listen to prospective buyers much more closely and turn the signals that buyers are sending through their click behavior into more intelligent responses offline.

The sausage making process

Through a patchwork of product solutions (from web analytics to data mining and sales force automation), web behavior data was fed into a profiling and scoring process:

  • Profiling
    • Based on their behavior (e.g. in the product configurator), does the buyer seem interested in the brand or already in a particular model?
    • Are there particular accessories that the buyer is looking for?
    • If the prospect is registered what did they specify about their current ownership?
    • Etc.
  • Scoring
    • Based on the online behavior (e.g. recency, frequency) how close does the prospect seem to a buying decision?
    • Based on the profile, how profitable a buyer do we have at hand?

Then Volkswagen would interpret the profile to send the brochure that would be most likely to be helpful, e.g. focused on attracting the buyer to the brand vs. providing more info on a specific model.

Likewise, Ford would aim to give an indication to the dealership how hot a lead seems to be so that they would time and prioritize their sales outreach accordingly.

Business Results

Volkswagen found very high correlation between those touched by their marketing effort vs. closed car sales. But at the time of their presentation in 2006 they had not done controlled testing yet. In other words, at that time they could not yet prove that the buyers wouldn’t have purchased anyway.

Ford found that leads ranked as “hot” were six times more likely to purchase than “cold” leads and still twice as likely as the average lead. So the business case for making the sales team more effective is very strong. The case for customers is strong too, i.e. the ones most urgently in need of assistance are likely to be served first.

The morale

This innovation made sense to many other industries as well. Namely, in all considered purchases where the sales cycle used to be with a live sales person before the WWW, but where the process now tends to start with self-service research online.

Offline, in the store, you used to simply watch shoppers’ behavior to assess their readiness and interests. Should you leave them alone or are they looking like they could use assistance?

Online, the same customer service idea applies. So why would you ignore all those signals that the clicks are sending!

In the next post we’ll go over two modern adaptations of this idea. One in real estate and the other in B2B high tech.

3 Responses to “Online to Offline Conversions”

  1. Hi Akin,

    Interesting post. I work with a major automotive manufacturer in Europe, who has similar problems.

    However, I believe there is something much more fundamentally problematic about the way automotive companies deal with their on-line leads.

    Most manufacturers are the same in that they see their websites as funnels; i.e the ultimate goal is to get people to book a test-drive on-line. Websites generally have calls-to-action around this that throw people into some kind of data collection form. But, there are several big problems with this as follows:

    > This is not the way most people would think about buying a car; i.e. surely its just a lot easier to ring the dealer given that you have to go in there anyway?
    > Very few people actually do it. CapGemini stats that about 85% of car buyers researched their cars on-line, but then when you look at the sales only a tiny proportion can actually be attributed to ‘leads’
    > How do you know, just because someone became a ‘lead’, that this makes them more likely to buy a car than someone who just went into the dealership? It’s possible that they are less likely because you are pestering them!

    So, the point is this: automotive manufacturers try to force people down this so called ‘funnel’ as though it were an on-line shopping cart for buying a DVD, but in most cases this will simply confuse and disorientate the consumer, and works to the detriment of the overall on-line experience.

  2. Hi Akin,

    Interesting post. As Jonny, I am working for a major automotive manufacturer (but another one) in Europe. The Web has become an important channel. With the current economic situation but also high competitive context, all are looking into way to drive more “qualified leads” from the web.

    But I agree with Jonny that online leads (like test drive request or documentation requests) are only the tip of the iceberg. Final goal of the website is to drive “leads” to a dealership. So you have all online requesters but what about the rest – all those who decided to leave the online world to ring or go to a dealership? This part of the picture is still missing in many cases.

    But it is true that lot of efforts are made to increase online “quality” leads. Solutions exist like Netmining (http://www.netmining.com/) that identify potential “hot leads” based on behavior on the site and allow to push information, forms or actions to these.

    And many efforts will be devoted to tie the two worlds – online & offline. That is where lie the future. Great challenges in perspective.

    Cheers,

    Michael

  3. Hello Jonny and Michael,

    What could be better than to hear from direct practitioners in this industry! Thanks much for checking and commenting.

    To add to your points of how complex it can be to turn web activity into forecasts I wanted to also mention something that I learned. Namely, a consultant for Mazda in Europe was sharing following observation. Yes, prospects use the product configurator before making a purchase decision. But it is often the case that they use it SOME EIGHT MONTHS before they make the decision. Then, nothing happens for 8 months and all of a sudden they may stand in the dealership.

    A good question would be to verify whether it is true that nothing happens, or as you say, they may be back on the web site but anonymously so that the activity is lost.

    Which brings us to your main concern, if I understand correctly, namely how about all the masses of anonymous visitors on the site.

    * How can the site turn them into online or offline leads?
    * How can the online team get credit for that bigger segment?

    Very good point. No magic bullets here unfortunately. Companies can work on incentives for these folks to register. But if they don’t then there are only a handful of techniques for measuring the offline lift that is achieved by the web site. There is a list of these in the book. One such technique is to use a panel. Another is to tri-angulate as much as possible with geo data.

    Thanks much again.
    Akin