Leads from Dealers' Own Sites - The Locals
Dealers own Web sites can be as important as dealers' actual retails stores in their given communities. "Local dealers succeed to the degree that they have top-of-mind awareness in their respective communities," says Eddie Coleman, author of Mastering the Art of Selling Cars Online. "Having their own Web sites geared towards their local community is one way to do that." According to Ward's Dealer Business, dealers' own sites supplied roughly 30 percent of Internet-generated sales leads in 2002.
Jason Ezell, vice president of sales at Dealerskins, a web design and creation company specializing in dealer Web sites, attests that dealers' own sites are critical for providing local clientele with information, yet they must meet certain success metrics to be cost effective. "The average dealer site in the U.S. has about a 4 percent lead-to-visitor rate, which is barely more than the response rate for direct mail," says Ezell. "Top performing dealer sites, on the other hand, have high lead-to-visitor ratios, around 9-20 percent." Dealers should have a good sense of their lead-to-visitor and sale-to-lead ratios to get the return on investment that will justify the expense of their own sites. Ezell attests that localized dealer sites, even with strategic search engine optimization in place, will never come out first in a general auto search on Google, or be able to compete with the third parties in terms of volume of visitors and sales leads. However, dealers' own sites do attract the local clientele and yield relatively high close rates, in the 19 percent range.*
Leads from Third Party Providers - The Shoppers
The bulk of Internet leads, about 57 percent according to Ward's, come from third party providers, which cast the widest net online to capture vehicle interest. In addition to the expertise that the top third parties have in terms of lead acquisition, there is a large cross section of the population that will always, as Coleman puts it, "put a third baseman between themselves and a dealer or OEM." Both Coleman and Ezell agree that in their experience, they see little crossover of consumers who submit purchase requests at both third party sites and dealers' own sites. Leads from third party providers also have the added advantage of enabling dealers to be up and running with sales immediately, without spending any money on advertising.
Just as most dealers don't choose only one traditional advertising means, such as radio over television and print, it's important that they be diversified when it comes to their Internet lead marketing mix. What is essential is that dealers tap into the sales opportunities that all of these lead sources offer.
Internet Prospects from the Three Lead Sources, in a Nutshell
Who are they?
Where do they come from?
What's their average chance of closing?*
What percent of the market are they?*
What makes them a good prospect?
The Brand Loyalists
~ 13 percent
They're high up in the buying funnel and they favor your brand.
~ 30 percent
They're from your community and they have high close rates.
~ 57 percent
They're the majority of the market and you'll only catch them on third party sites. They're the key to gaining market share.