The most successful dealerships today have Internet strategies that leverage a combination of their own web sites and partnerships with third-party lead aggregators.
Case in point: Courtesy Chevrolet in Phoenix, AZ. Its Internet department alone generated more than $200,000 in additional gross profit last month.
Robert Revere, director of Courtesy's Internet and Business Development Center, explains, “The key to our success is that we have a blended online marketing strategy where we use our own web site and leads from third-party sites through our lead aggregator.
“We generate over half our leads at our own site and the other half are from third-party sites. As a result, we sell almost 100 incremental units a month through the Internet and average $2,200 gross per unit — all at less than $200 per unit sold.”
The combination of having their own sites and connecting with online car buyers through third-party lead aggregator relationships works because the two channels attract different audiences and serve different purposes for the dealership.
Data show that 30% of Internet leads are generated at dealers' own sites and another 57% are generated at third-party sites. Revere sees only a negligible amount of duplication of leads from both — about 4%.
Dealers' own sites provide top-of-mind awareness and credibility in their given market areas, just as their showrooms do.
In addition, close rate for leads from these sites tend to be high, in the 20% range. Dealer sites offer the dealership a level of brand recognition and creative control that is unmatched anywhere else.
Courtesy partnered with a web design and marketing company to create its site and uses multi-media email campaigns and online advertising to promote it. In turn, the site promotes all profit centers for the dealership. Moreover, unlike traditional mass media advertising, all results can be measured.
Where the third-party lead aggregator fits in is connecting the dealership with an audience it might otherwise miss, and in offering the dealership the benefit of economies of scale.
Revere says, “Even with a state of the art web site in place, we knew there were a lot of prospects out there that were not coming to our site due to lack of awareness or simply a preference for third-party sites. Our focus is on selling cars, not consumer Internet marketing. So, the most cost-effective way to connect with these buyers is through our lead aggregator relationship.”
Third-party lead aggregators specialize in partnerships with the hundreds of auto sites on the web that attract online car buyers. The third parties also have the technology to verify, “scrub” and deliver those clean leads to dealers.
By working with lead aggregators, dealerships benefit from all the email marketing, key word buys, search engine optimization, and other online marketing programs that third-party sites conduct — essentially, letting them do the consumer-marketing work. Such economies of scale are why the third-party lead providers can charge a $25 per lead price, which averages out to a $200 cost per vehicle sold.
Ideally, dealers want to connect with every qualified online car buyer in their market area while keeping customer-acquisition costs low.
By having the right marketing mix of their own dealer-branded site and leads from third parties, dealerships such as Courtesy are leveraging the enormous opportunity presented by the Internet to attract more car buyers and increase sales at a far lower cost than before.
Dean L. Evans is the vice president of marketing for Dealix Corporation. Sean Wolfington is the co-owner of BZResults.com.