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Brief Rant about Buying Leads

I've had a lot of dealers telling me that the traditional third party lead providers have low returns and that they're getting worse. Let me say that I'm NOT a fan of third party leads, but they do have their place:

For this exercise, we are talking about the new car leads that are purchased through Dealix, Autobytel, Cars.com New Leads Plus, yadayadayada. Used car leads, special finance leads -- they have their purposes as well.

With that said, those who gripe about the quality of leads from the above-mentioned third party lead providers should remember a couple of key points:

They should suppliment above all else - These leads should not be your primary method of generation. Your website, automotive classifieds, email campaigns, and microsites should be the primary sources. If you aren't getting enough leads to keep your team busy, then the third party leads are perfect. If you are barely handling what you have, there is no need to get more at this time.

They don't suck - You just have to try harder. That's all. You have to get in touch with them instantly and be persistent. These people don't know which dealer or dealers they are going to be dealing with when they fill out the lead form, which is why their quality is often in question. Work them. Sell yourself and your dealership to them. Any human being considering buying a car is a prospect, so any opportunity to contact them is an opportunity.

If you and your team remember these two things, it should help to keep you from cancelling the services for the wrong reason. AGAIN, I am not a fan of them unless they are necessary. The real determining factor is whether or not you and your team are equipped to handle them properly. They are, for the most part, not lay-down customers, so if you have the time and the skill to work them, you should. If you don't, refocus on the type of leads that work for you, grow your department, train your people, and you can consider these leads in the future.

Matt Watson said…: I would also recommend having an ILM tool that tracks bad leads so the dealers can get a credit back from the lead providers. I have seen dealers save $2,000 a month from this function. A lot of leads from places like Dealix, Autobytel, Automotive.com and others come in from all the providers for the same person. You can also just track in the ILM which leads had bad contact info and stuff. Not to mention a good ILM can also help show your ROI from the lead source providers so you know if the money your spending is really worth it!

If the ROI is there, buy all the leads you can!

Stan Sher said…: I think Autobytel provides the best third party leads out there in terms of quality when compared to Dealix and other companies.

Raymond McGowan said…: Well, as a person who looks at P & L statements, I can tell you that you should be looking at lead generation very carefully. Although systems are getting better, if a vendor can charge for a lead and get away with it, they will. You need to stay on top of it. There are new technologies available to dealers that have instant lead generation. These technologies are how internet managers will be doing business in the years to come. Lead generation as we know it will be changing for the better.

Jack Grodeska said…: I have to agree with Mr. McGowan. Be very careful as to you lead costs. Lead Generators have created a "dubious" supply and demand situation wherein you can expect to pay an average of $11-14 in Texas, but the same lead will cost you anywhere between $40-60 in Washington.
Quality is an issue for most lead gen companies. The fact is that most lead suppliers have to buy leads to supplement the ones that they produce because of the demand issued by dealerships. Rather than focus on quality, they focus on quantity, and will accept incentivised leads, unverified leads, and leads from unknown vendors to maintain volume.
I believe that all any dealership wants is a quality product at a fair cost.
With that in mind, some of us within the lead gen industry are working to build a new set of products that are not geographically priced or quality challenged. Call Lead Gen 2.0 for simplicity. Dealerships in the NY Metro area can expect to see this in Q2, 2008.

David Jackson said…: Would it help if your dealership had multiple web sites ranking high on Google? This would give your dealership low cost in-house leads. This gives your dealership major exposure across multiple web sites. You also know that your lead is your lead and the lead will not be resold to another dealer.

One of our clients, Courtesy Chevrolet has built 20+ Micro Sites with us targeting certain vehicle models like the 2007 Tahoe, 2008 Chevy Malibu, 2008 Chevy Camaro, and some special finance sites like great credit, ok credit and bad credit. Through these Micro Sites, our client has received over 12,000 leads in 1.5 years. These leads have a very low cost.

Dealers should consider building in-house leads through Micro Sites. They are very cost effective and very successful for dealers.

Amanda Moore said…: The company I represent offers a technology that generates exclusive leads for dealerships. Not only will it put the dealership in direct contact with the buyer, it measures the effectiveness of their current ad and media sources. www.upleadtech.com