While slow on the uptake, automotive dealerships in the U.S. are now placing a high value on the Internet, and specifically how third party lead providers can enhance dealerships' overall sales. For those that truly take advantage of Internet marketing, dramatic sales increases, and ultimately a new mix of customers, can be garnered. Simply stated, Internet sales leads can be a golden goose if captured and managed properly.
With two of three households in the U.S. using computers on a regular basis (Nielsen/NetRatings reported that 204.3 million Americans have access to the Internet from home), it is little wonder that research sources claim that more than 80 percent of buyers interested in a new, or pre-owned vehicle check out the Internet before making that ultimate buying decision. So here is the question: do you want to take advantage of that ever-growing field of potential customers who regularly use the Internet for sourcing their vehicle purchase? The answer should be a resounding "yes".
Vehicle Websites are a vital link to generating those valuable sales leads. Every day, hundreds of thousands of potential vehicle buyers are using dealer, manufacturer, and third party sites to obtain information on virtually every model of new and pre-owned car, truck, minivan, SUV, motor home, and special use vehicle. Dealers must be able to capture those viable leads and to react promptly and professionally to generated leads. Most stores do that in conjunction with a third party lead provider that processes and filters leads for dealers. With the proper results, dealers get quick, clean leads that dealer sales personnel can contact within a timely period.
In order to take advantage of Internet sales leads, two basic issues must be addressed:
1) the development of an Internet Sales Department (ISD)
2) the partnering with a third party that can provide you with high-quality, filtered leads.
There are a variety of excellent resources that can provide stores with marketing and lead services. Many offer advertising assistance in addition to lead generation, but the ultimate goal for you is to obtain not only the quantity, but especially the quality, of filtered leads that can actually produce sales.
Providers include firms like Autobytel, AutoUSA, cars.com, CarsDirect.com, The Cobalt Group, Dealix Corporation, Edmunds.com, Kelly Blue Book, OpenAuto.com, and Stoneage.com (recently acquired by Autobytel), among others. Each offers their unique approach to dealer services.
"I don't think we're in the game of volume anymore," says Mitch Golub, general manager of cars.com. "If I were a dealer, I would choose an advertising partner, not necessarily a lead provider. "I want somebody that promotes my brands on their Websites, drives a consumer to my Website, allows me to fully merchandise my vehicle, and most of all understands my market - particularly my local market. This is the formula that made most dealers highly successful in marketing, and in turn, selling cars."
Kelley Blue Book, an online automotive information site, generates over 5 million unique visitors each month, providing new car leads through KBB's Dealer Advertising Program as well as other third party partners. Touted as a cost-effective online advertising tool to help dealers increase brand recognition, the Dealer Advertising Program targets local, in-market shoppers. Dealers purchase banner ads by exclusive territories, where they become the exclusive advertising dealer and brand in their designated marketing area. "It's a great localized solution that drives large volumes of traffic directly to the dealer's website," says Joe Vraneza, director of dealer advertising at Kbb.com. "This is a great alternative to just buying leads, as it truly puts the dealer's brand and message in front of the right person at the right time, all for a fraction of what the local paper costs."
AutoUSA, owned and operated by Autonation, Inc., with 378 franchises nationwide, has partnered with many of the top automotive Websites, such as Edmunds, MSN Autos, AOL, Yahoo Autos!, and Kelley Blue Book to facilitate connecting those in-market consumers to dealers. "Dealers are becoming much more savvy with their Internet departments," says, Jay Andres, director of sales for AutoUSA. "The evolution of CRM systems that enable dealers to track and efficiently manage Internet leads is facilitating this growth," he continues, "We're seeing dealerships that use good in-store tracking tools source up to 50 percent of sales back to Internet leads." Andres believes savvy dealers are no longer making distinctions between Internet customers and floor ups but are treating all customers as informed Internet customers. "The Internet is another marketing channel to connect the consumer to the dealer and vice versa."
The concept of lead aggregators is significant to dealers in today's marketplace. "Lead aggregators, vs. lead providers, is becoming a more important business condition today," says Dean Evans, vice-president of marketing for Dealix Corp. "The efficiencies of buying, processing, filtering, and distributing leads from suppliers in volume lead to holding lower dealer costs and more efficient marketing, plus the dealer does not have to deal with 10 or more suppliers to get leads."
Evans indicates that Dealix currently has relationships with 2200 rooftop operations that encompass 3350 total franchises. "We're generating 100,000-150,000 leads per month," he says. "We're sourcing the right places, and we provide scrubbing control that combines both technology and human elements to create exceptional leads for dealers. The filtering process is the most important issue, because we want to send our dealers quality leads that will result in sales."
"Based on brands and geographic location, each dealership varies as to how many leads we send them each month," continues Evans. "We have one Toyota dealer in Los Angeles that is getting 550 leads per month, while other dealers in smaller cities obviously get fewer leads. Size and dedication to an Internet sales department are key issues," he says. "The close rate averages between seven and 25 percent."
Dealix charts out the cost of investment in a dealership Internet sales department in scenarios based on overall marketing and advertising budgets, plus size and dedication of the ISD at a given store. In the optimum example, if your ISD was to meet all of the consumer demand in your market area, you will want 350 leads available for your marketplace (An approximate number based on metro dealers representing volume franchises). At an average of $24.00 per lead, you allocate $8,400 of your ad budget to buying leads. If the average Internet sales person (ISP) handles from 80-120 leads per month, your ISD should have three to four ISPs dedicated to closing your allocation of leads. If the average close rate was 18 percent, the ISD would close about 63 sales per month, or 16 sales per ISP.
