Article

Only Working Leads From Your OEM? You're Missing Half Your Customers

August 2006, Auto Dealer Today - WebXclusive

by Dean Evans - Also by this author

By now, it’s pretty much a universal truth that the Internet is helping dealers to sell more cars. In spite of this, there are still far too many dealers who have not fully embraced this channel. Some employ a half-hearted approach – they “accept” sales leads provided by their OEM because the leads are either free or offered at a subsidized rate, or, simply because the OEM is pressuring them to start an Internet program. A passive approach to the Internet opportunity is causing these dealers to lose customers. The fact is, auto consumers do not only visit OEM sites; they surf, research and submit leads at a wide array of third party auto sites. In fact, third party auto sites are among the most popular with Internet users. Consumers tend to submit leads at one of the three sites - third parties, OEMs, and dealers’ own, not all three. According to J.D. Power and Associates, the overlap of consumers submitting leads at third party, dealers’ own, and OEM sites is negligible - at about 5 percent. Many online car buyers simply feel more comfortable submitting leads at third party sites. Dealers who do not respond to that interest are missing a golden opportunity. In fact, dealers that only accept leads from their OEM may be ignoring half the online market for their vehicles.
Price Sensitive and Practical – Minivan Mom and Dad
Let’s consider one example of typical Internet car buyers. The profile is a working man and woman with a young child and a new baby. They already have a sedan, and now they feel they need a minivan. The most salient features they’re looking for in a minivan are safety, reliability, and of course, price. They epitomize price-sensitive shoppers. She is less concerned with brand. In fact, she’s not even sure which brands make minivans. He chose the sedan, so he’s letting her choose the minivan. Will she go directly to an OEM site? No. She wants to look at a variety of models within their price range. In her research and information gathering process, she visits ConsumerReports.org and InvoiceDealers.com. She asks her husband to do some research also. He goes to MSN Autos and KelleyBlueBook.com. All are third party sites. Both husband and wife feel that third party sites offer more objective information. They conduct copious amounts of research at sites where they feel they’ll get the best, most unbiased information. After reading all the safety and performance reviews at these third party sites, as well as talking with their friends who have kids and drive minivans, they’re ready to talk to a dealer and go for a test drive. They want a good deal. So, they submit leads for three different models at the third party site where they feel they got the best information.

The Porsche Lover – Brand Loyal
In the previous example, with the car buyers whose primary constraint is price, brand takes a back seat. By comparison, for the consumer who is less price sensitive and more concerned with design and image, brand reputation is the essential factor in their decision making process. This is the profile of a car buyer who can be found at the OEM.com site of choice. For instance, a Porsche brand loyalist is going to spend a lot of time on Porsche.com learning about the Boxster that she already has her heart set on. She spends hours on the configurator, building her dream Boxster, trying out different options packages, colors, interiors, sound systems, etc. She’s even a member of the Porsche Club of America. When she’s finally ready, she finds the dealer in her area listed on Porsche.com and requests a call back. Having a good relationship with the dealer in her area is important to her because that’s where she’ll take her Boxster to be serviced. She has trust in the brand and there is very little risk that Porsche will lose her to a competitor. This is the type of customer who submits a lead at OEM.com. How many of her type are out there? The truth is, she’s a rare gem.

Image Conscious and Brand Curious - the BMW or the Jag?
Then there’s another type of brand loyalist. He really wants a BMW. Or, at least he thinks he wants one. He’s been driving Toyotas his whole life. Now that he’s gotten his promotion at work, he’s ready to make the switch to a luxury brand and has been researching the 3-Series. He spends time at Bmwusa.com, configuring the perfect 325i, but he’s also looking at 330s. Yet he’s not content to just hang around at Bmwusa.com. He goes surfing. Why not, when you can get all that great information at other sites? He visits Edmunds, MWerks.com - a BMW enthusiast site, and New-Cars.com. In his research, he learns about the 3-Series’ competitive set. The Audi A4 is cool and it’s in his price range. He’s seen a lot of A4s and 3-Series’ on the highway during his commute to work, and his neighbor drives an older A4. He also reads up on the Jaguar X-Type and learns it’s in his price range. He never considered a Jag before. He thought they were too expensive. Jaguar represents the height of luxury and is very sleek. He spends some time configurating the X-Type at Jaguarusa.com, but he doesn’t submit a lead because he’s not quite ready to buy and thinks he might get bombarded by dealers. Having seen the MSRP for each of the three vehicles he’s interested in at the OEM sites, but he wonders about invoice price and wants to read more reviews. He goes back to one of the third party sites to get more information and the true market value for each car. Once he’s comfortable enough with the amount of information he has, he’s ready to negotiate a price and schedule a test drive. He submits leads for all three models at the third party site where he got the best car reviews.

It’s a Broad Market
When it comes to the online automotive market place, dealers should cast a wide net in order to capture all online car buying interest in their vehicles. Consumers visit third party auto sites because they offer what they perceive to be unbiased information and the level of choice they expect. Internet customers, above all, love choice. Great brands can stand on their own, but consumers will always be on the lookout for choices and better deals. It’s human nature. This is why it is essential for dealers to be where online car buyers are – at third party auto sites - instead of passively waiting for consumers to come to them.

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  

Blog

On-the-Point

Jim Ziegler
Objects in the Rearview Mirror

By Jim Ziegler
The past is right behind us and the future is coming fast. The Alpha Dawg plots a course for your store’s success and shares advice for Elon Musk, Johan de Nysschen, and pre-owned managers.

The Big Talent Drain

By Jim Ziegler
The Alpha Dawg tackles the shortage of talent in the managerial ranks and reflects on Amazon’s rumored foray into vehicle sales, the imminent used-car correction, Hyundai’s plan for the Genesis brand, and the untimely passing of Tammie LeBleu.

A Faster Horse

By Jim Ziegler

Strangers in the Mall

By Jim Ziegler

Opening Observations

Over the Curb