As dealerships prepare to ramp up after pandemic closures, the question on everyone’s lips is how to do that quickly to regain the lost and delayed sales of the previous year.
It starts with leads. It’s not about how many leads you get each day, but whether they’re good or bad, and how quickly your sales team can tell the difference. You may think it’s easy to do. But with all the robo-calls, shoppers who are excessively optimistic about their finances or those who provide false information, and a host of other types of bad leads, it’s not.
Chasing a few bad leads here and there doesn’t seem like a big impact to your dealership or your sales team – until you do the math. Let’s say you have two salespeople working on 200 bad leads a month, at 10 minutes per lead making calls, sending emails and texts. Add it up, and you’ve just wasted 16 hours of their time per person, every month.
On top of that, chasing bad leads can dampen employee morale and if you’ve had to furlough some employees due to COVID-19 cutbacks, and you’re trying to accomplish more with less, then your team certainly shouldn’t be wasting time chasing down bad leads when they could be closing good ones.
For a deeper understanding of how lead quality affects close rates, Cox Automotive has analyzed four of the top third-party automotive listing sites for lead quality using aggregated and anonymized data from VinSolutions (which did not include personally identifiable information). These sites covered 6,536 dealers, both franchise and independent. The analysis found car dealerships received a total of 3,758,377 leads from these four sites from January through May 2020.
While they generate more leads than Autotrader, Autotrader’s close rate is 61% higher than CarGurus and 72% higher than Cars.com. It’s important to see that buying cheaper leads by the barrel isn’t better than getting the quality leads you can close.
But what about profit? While leads that convert to sales are important, profits are imperative. Autotrader and Kelley Blue Book lead the industry with an average gross profit per vehicle of $1,750.
But the real difference in the quality of your leads shows up in the difference in gross profit per lead. Autotrader’s average gross profit per lead is $120; our closet competitor’s is $75. That’s 59% higher per lead than any competitor in the market and it’s the best way for you to gauge the ROI on your digital marketing spending with third-party listing sites.
In our current reality, two-thirds of shoppers are willing to conduct their purchasing transaction 100% online. So, having access to digital/virtual tools and resources is critical now more than ever, as consumers have been limited to online interactions. Which is why dealers offering Autotrader’s Dealer Home Services and Digital Retailing are well-positioned right now, and for the future.
Cox Automotive is hosting the Cox Automotive Experience through February 5, 2021. This is a perfect time for you to get in on insights for the coming year but most importantly, reserve a demo to see how you can take advantage of the highest close rates and highest gross profit per vehicle in the industry. Visit b2b.autotrader.com/CAE-2021 to reserve your demo now and learn more about the Cox Automotive Experience.
Sourcing information provided by the following: VinSolutions Sales and Data Table via Collibra, 2020 May, Autotrader site statistics, comparison of VDPs per listing per day, May 2020, Cox Automotive COVID-19 Digital Shopping Study 2020