Here are five important considerations for evaluating whether third-party Internet lead providers are delivering qualified new buyers for the vehicles you need to sell - or whether they're wasting your time and money.
Filter out browsers from serious buyers. While the volume of new-car buyers who use the web for research continues to grow aggressively, that's not a statistic that is terribly relevant to your sales success.
What is relevant is whether the leads you receive are buyers instead of browsers. Instead of turning your sales team into a “quoting machine,” let your lead providers take on that role. Converting “lookers” to buyers may be an inefficient use of your resources, especially since most browsers are simply passing leisure time online or gathering pricing information to take to a pre-selected dealer.
When considering a third-party provider, weigh the benefits of partners whose sites narrow the field by providing upfront the most requested information, such as pricing, model, trim and option details. Giving shoppers this information immediately separates habitual browsers from serious buyers early on in the shopping process.
Don't settle for poor quality lead sources. Do you know where your third-party leads are coming from? Since providers who charge you for each lead are actually encouraged to deliver quantity over quality, find out what you are really paying for.
Are leads harvested from sources that attract automotive-minded consumers, or are they captured from gaming sites, online promotions, sweepstakes and general Web directories?
Eliminate wasted marketing dollars by choosing partners who deliver prospective buyers from their own automotive channel, and through automotive site partners. Processing large volumes of poor quality leads can drag down both employee morale and your bottom line.
Find partners who help you gain market share. Assign high value to companies that can help you gain conquest sales and increase market share, rather than cannibalizing existing business. Why pay for customers who are already shopping your store? Frankly, if you're not reaching that audience through your own Web site or local advertising, you need to rethink your marketing strategy. Analyze your online partners for their ability to help you broaden and extend your reach. Question the density of dealers within their zone structures, ask about exclusivity opportunities and make sure that the fee you pay is an incentive for sales and market share growth, not strictly lead volume.
Focus on lead providers that can match your inventory. If you're fortunate enough to have franchises with fast-turning vehicles and customers on waiting lists, why pay for leads for these vehicles? Do you really need to compensate a third-party provider for bringing you a Honda Odyssey lead?
Most likely, you're already getting a healthy gross on your fastest movers. Yet, if you analyze your current volume of third-party leads, a majority of companies continue to burden your Internet sales team with shoppers searching for the latest must-have products. Only a few of your leads should be for these high-demand vehicles. According to a recent Forrester Research study, overstocked inventories are now tying up more than $40 billion in automotive capital. It is these volume cars that sales partners should help you move — not vehicles that essentially sell themselves.
Find partners who understand dealer performance metrics. When you broaden your reach by partnering with third-party service providers, superior customer satisfaction isn't just a good business practice, it's essential.
Under no circumstances should supplemental sales channels hurt your manufacturer CSI program score. Ask your provider which dealer-specific performance metrics they measure, and how they present this critical consumer input to you.
Find out whether there is an effective feedback loop that gives you the right kind of data about these customers' experiences. Regardless of where the sale originated, the buyer is your customer.
Mark Miller, a 20-year veteran dealer, is senior vice president of dealer and industry relations for CarsDirect.com. He's at 1-800-431-2500 x4286/[email protected].