If you’re an auto dealer, you know that complexity across the landscape is only increasing. With digital disruption, evolving consumer behaviors, and economic uncertainties shaping the market, dealerships can’t afford to leave sales to chance.
As the auto industry continues to face challenges, building an airtight strategy is key to navigating the ever-changing landscape and coming out on top. Let’s talk about how you can implement a sales funnel that transforms prospects into loyal customers.
Table of Contents
Understanding the Sales Funnel
A sales funnel is a visual representation of the customer journey from initial awareness to final purchase. Just as a physical funnel is wider at the top and narrows toward the bottom, your sales funnel captures a broad pool of potential buyers at the start and gradually guides promising leads toward purchase. At each stage, you’ll see fewer but increasingly qualified prospects– from casual website visitors to serious buyers.
This system enables sales teams to better segment prospects based on where they stand in the process. That way, they can better allocate resources and cater their efforts to moving each customer forward. It also creates alignment across the entire team, from agreeing on what it means for a lead to be “qualified” to understanding your progress against monthly goals.
The stages of the sales funnel
While the stages of an automotive sales funnel may vary depending on your dealership, you’ll want to start with a baseline framework. One common type of funnel is the AIDA model, which stands for awareness, interest, desire, and action. This model outlines the key stages a potential buyer goes through before making a purchase.
Here’s what the AIDA model might look like during the car buying process:
Awareness: Building brand recognition (ex: prospect sees an ad online)
Interest: Active research and evaluation across multiple options (ex: prospect goes to your website and submits a form asking for a quote on a specific vehicle)
Desire: Forming an emotional connection with the product (ex: prospect visits your dealership and takes the car on a test drive)
Action: Making a decision and purchasing (ex: prospect negotiates and signs on the car)
However, it’s important to remember that this is just a framework. Customer journeys in automotive sales rarely follow a perfectly linear path. Some buyers might enter your funnel halfway through– such as when they walk into your dealership knowing exactly what car they want. On the other hand, others might spend weeks or months researching and deliberating in a single phase.
Rather than getting caught up in rigidly categorizing each prospect’s stage, train your team to focus on behavioral signals and engagement patterns. Are they repeatedly viewing the same model pages? Have they booked multiple test drives? Are they asking detailed questions about financing? These actionable insights will help your team provide more relevant support and move prospects forward.
A common critique of the traditional sales funnel is that it ends at the point of purchase. This can be particularly problematic in the automotive industry, where long-term relationships drive substantial value through repeat business and referrals. Instead of considering the sale the end of the journey, it should be viewed as one milestone in a longer relationship.
That’s where the flywheel model comes in.
Beyond the Funnel: Embracing the Flywheel Model
Unlike a funnel, which has a clear endpoint, a flywheel is continuous– using the momentum of delighted customers to drive future growth. Similar to the sales funnel, the flywheel can be represented in several different ways. One of the most popular models is divided into just three sections: Attract, engage, and delight.
Attract: Drawing potential customers in through value (ex: prospect follows your social media for weekly inventory highlights)
Engage: Building trust through personalized, helpful interactions (ex: prospect calls your dealership to discuss options and prices with a sales rep)
Delight: Creating advocates through exceptional service (ex: prospect works with a sales rep to buy their dream car)
This model better illustrates the value of going above and beyond to delight your customers, rather than just closing the biggest deal. Customers who leave happy become advocates who refer new business, return for service, and eventually make repeat purchases. This creates a self-reinforcing cycle that accelerates your growth over time.
Upgrading Your Auto Sales Strategy
Now that we’ve explored funnels and flywheels, let’s combine these principles and apply them specifically to the automotive industry.
The auto sales funnel is a powerful tool that can help dealerships streamline their sales process and maximize conversions, but it’s limited to just customer acquisition and not retention. Let’s break down each stage of this funnel and explore strategies to optimize each step while pushing it beyond the first transaction to drive recurring revenue.
Awareness
In auto sales, the awareness stage occurs when a potential customer first discovers your dealership. While this may take place through word-of-mouth or via billboard ads, the buyer journey is increasingly starting in the digital space.
Oftentimes, modern buyers will hear of your business through online forums, digital ads, or your Google Business profile. In the awareness stage, the prospect will be early in their car buying journey, likely just starting to explore their options. In some cases, they won’t even consider themselves to be “in the market” for a car yet.
Because they’re still early in their search, you typically won’t even have any information on the prospects in the awareness stage of your funnel.
Instead, to get a sense of volume, you can look at metrics such as:
- Website visitors
- Digital ad impressions
- Google Business profile views
- Social media content impressions
Tracking these numbers over time will give you a sense of how effectively you’re reaching potential buyers in your market area and which channels are driving the most recognition for your dealership. From there, you can use your findings to continue improving tactics to increase your reach.
How to maximize awareness:
- Updating your public profiles, including Google Business
- Posting more frequently on social media
- Hiring an SEO consultant to appear in searches like “car dealerships near me”
- Running digital ads in your local area
Once you’ve captured attention, the key is maintaining engagement. Consider implementing retargeting campaigns that show relevant vehicle ads to recent website visitors. For example, someone who viewed your SUV inventory might see ads featuring your latest family vehicle promotions, while someone who looked at sports cars would see performance-focused content. This keeps your dealership top of mind as prospects move into the research phase.
Interest
Once a prospect demonstrates a concrete interest in your dealership, they’ll be upgraded to the interest stage. Within the auto industry, this is often known as a lead. This transition might happen via a phone call inquiry, a PDF download, or a test drive sign-up.
At this stage, you’ll also typically qualify the lead, or conduct some basic research to ensure that they fit your target audience. Since car buyers can span a wide range, this typically just means making sure any contact information they submitted is valid.
How to improve lead generation:
- Implement a live chat feature on your website to answer immediate questions and collect customer information
- Offer downloadable resources in exchange for contact information
- Create targeted landing pages for specific vehicle models or promotions
- Add forms to your website for customers to easily request a quote or test drive
Once you get a new lead, it’s time to start your nurture process to move them to the next step. Research shows that prompt follow-up dramatically increases conversion rates, which is why successful dealerships respond to inquiries within minutes, not hours.
Consider setting up automated responses for form submissions and phone inquiries as your first line of engagement. Then, use the information you’ve gathered to create personalized follow-up messages that resonate.
Desire
The desire stage marks a critical shift in the customer journey– the point where interest evolves into intent to purchase. For instance, in automotive sales, this phase may begin when a customer visits your dealership in person. At this point, the prospect gets a chance to build connections with your sales team, experience your dealership culture, and get behind the wheel of the vehicle.
How to increase dealership visits:
- Offer online scheduling for test drives to make it convenient for customers
- Provide virtual tours or video walkthroughs for customers who can’t visit in person
- Train your sales team to build rapport over the phone and create urgency for in-person visits
- Use email marketing to showcase new arrivals or limited-time offers that encourage dealership visits
To guide a prospect through the “desire” stage, focus on creating a sense of urgency that encourages them to make a decision. This means giving them the opportunity to experience the vehicle firsthand.
For many dealerships, the test drive is a major opportunity for improvement. According to CDK Global’s 2025 Friction Points study, 55% of shoppers said they had to wait to take a test drive in 2024– up from 41% the previous year. By providing an easy process for scheduling test drives online, you can enable a streamlined experience once the customer arrives at the dealership.
It’s also important to provide alternative options for shoppers who prefer digital touchpoints. Google’s research reveals that 64% of customers who use video for research say immersive formats like 360° tours could convince them to buy without a test drive. By enabling digital experiences, you can free up resources and reduce wait times for in-person buyers.
Action
The action stage, also known as the sale, is the point at which the buyer makes a decision. But it doesn’t just mean the moment the customer signs the contract. For many dealerships, it also involves all of the steps leading up to the deal close, including negotiation, financing, insurance verification, and paperwork.
While this phase marks the home stretch, it’s important to focus on maintaining a good experience. Strong execution is essential for not only closing the deal, but fostering a strong relationship with the customer moving forward.
How to improve your sales process:
- Streamline the financing step with online pre-approval options
- Offer transparent pricing to build trust and reduce negotiation friction
- Use scanning tools to streamline identity checks and screening
- Automate your insurance verification process with self-serve technology
To master this stage, focus on making the process as smooth and stress-free as possible. By enabling your customers to handle administrative tasks ahead of time, you can reduce time spent at the dealership for a better customer experience.
In fact, data shows that time spent waiting for the F&I manager can make or break customer satisfaction. In CDK Global’s study, shoppers who spent 15-30 minutes waiting for F&I had an average NPS of 49, compared to a score of 19 among those who waited 45-60 minutes.
Don’t make customers do double work! 📝
While some customers like to take care of paperwork from home, it only works if you retain that information to use later on.
According to CDK Global research, only 75% of shoppers who started their journey online said that the salesperson had their information incorporated into the system when they visited the dealership. The remaining 25% had to re-enter their information in person– leading to a 24 point reduction in NPS.
With CheckMy Driver’s digital insurance verification, you can provide customers an option to verify their ID and insurance from home– then pull up the report when they get to the dealership.
Renewal
To convert your funnel to a flywheel, you’ll need to add a step to bridge the two ends– connecting closed deals to ongoing growth. In this model, we’ll call it the renewal stage. This phase includes all ongoing touchpoints after the car is sold, including service appointments, trade-ins, referrals, and repurchases.
Maintaining client relationships into the renewal stage is crucial for the long-term success of your business. And with some estimating that the average American will own 10 cars in their lifetime, the ROI of a loyal customer is much higher than a single sale.
How to increase renewals:
- Track customer interactions and preferences in your CRM or DMS to manage relationships
- Offer loyalty programs that provide benefits for service visits or referrals
- Send personalized communications about maintenance reminders or trade-in opportunities
Unlock deeper customer insights 🔓
With CheckMy Driver’s Driver Insights feature, you can gain deeper findings on your customers to better inform your strategy.
Based on their insurance policy, you’ll get a live look into their garage, including the year/make/model of all vehicles on their policy and names/ages of other drivers in their household.
By plugging this into your CRM, you can deliver more personalized offerings to drive more sales, service appointments, and vehicle trade-ins.
For many dealers, excelling at renewals means undergoing a mindset shift to prioritize existing customers and their after-service needs. Sales coach and former new car dealer Sandy Cerami’s Own The Driveway™ strategy gets to the heart of it.
Instead of stopping at selling a single vehicle, Own The Driveway™ means becoming the go-to partner for all of your customer’s needs, from servicing to trade-ins. Cerami teaches dealers to eliminate missed opportunities by prospecting the entire household– not just the individual buyer.
For instance, it’s standard practice for dealerships to continue to service a car after they sell it– but why stop there? “If you do an exceptional job in taking care of them on their Ford vehicle, what makes you think they wouldn’t want to come and do business with you for basic maintenance on their Lexus vehicle?” Sandy posed in a recent webinar.
By maintaining relationships with your existing customers to handle their ongoing needs, you can build a flywheel effect. Increasing customer loyalty becomes a catalyst for everything from referrals to repeat sales.
Getting Started
Implementing an effective sales funnel may look different for every dealership. What matters most is that your strategy reflects your customer journey and enables your team to make better decisions.
Want to learn more about how CheckMy Driver can streamline your sales process and deepen your customer insights? Set up some time to talk with our team.