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Are you still buying leads? Aside from OEM leads and funds spent on dealer site promotion, money thrown at third-party lead-providers is dwindling at a shocking rate.

Why? Well, frankly, the paradigm has shifted.

Third-party leads are becoming (have become?) irrelevant in the face of generating incoming buyer action through relevant in-market inventory exposure. Drops the cost-per-sale, spikes the ROI, feeds your staff, and fills your dealership. The new paradigm combines the best aspects of the last 50 years of automotive marketing:

* As quantifiable and trackable as Leads/CRM(ILM).

* Effective Branding like Print.

* Mass exposure like Radio and TV.

* Generates consumer action like Direct Mail.

Tags: Leads, SEM, SEO, automotive, direct, mail, marketing, newspaper, party, print, More…radio, third, tv

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We have not purchased third party leads for two years, we do however get third party leads from GM. About 130 per month on average. Our average sales have gone up not down. We believe in name branding and adverising locally and it has worked very well for us. I am not saying this is right for every store, but ever store should take a good hard look at how they are spending the advertising dollars and the true results from third party leads and all lead sources including your own website.
Ahead of the curve - nice! How does your 20 group react to your strategy? I'll bet you still have dealers spending thousands in the paper every week, right?

Do you find that organic leads from your website have a better closing ratio than those from the factory?
I am not sure about the twenty group, the GM goes to those. As for other dealers in this area I believe they all are purchasing leads and I am very happy for them to do so. The best closing ratio is and always has been from your own website, unless you let those leads just sit there or you do not pick up the telephone. So many ISM's fear that little notation "contact me by e-mail" If there is a telephone number your getting a phone call, hopefully as you are sitting at your desk looking at a vehicle on my website. Has that caused me problems in the past ummmmm nope. Probably sold more because of it.

I have posted my thoughts about third party leads here on ADM a few times and just for some new folks I will Do it again but I am going to copy and paste it to word this time.

Type into yahoo.com the name of your dealership example "Jim Glover Chevrolet" what results do you see? Look really hard and examine the Paid results as well as the organic. If your dealership has done an abundance of advertising and that same search word has been asked for 1,00's or better yet 1,000' of times there is probably a third party generator advertising there and most likely with your dealerships name there in the header of that advertisement. So if you are purchasing leads there is a great chance that you are purchasing leads from your very own advertising. That is just one way that these leads are generated from key words that you are trying to also vie for. You pay them very well for the lead even more if it is scrubbed right? I have heard all the bull for many years. But here is my opinion take it as you will. Name brand your store in all of your advertising, put up as many online banners as your budget allows, use streaming radio (no one else does and its cheap) do whatever you can to keep advertising dollars pointing at your own website, drive that traffic to your own microsites or to your landing pages. If you do that you will sell more cars at a higher gross profit. Do not allow third party generators to use you name in the headers of those ads, call them and e-mail them to take them down, they will do that, they may still advertise under your name but not with your name. I have gotten pretty good at tracking them down including calling one at thier home (his wife answered she was not happy) It has been a tough road for us but we now generate more leads than we could ever purchase unless we bought from every lead provider out there, how much would that cost? A great amount of those leads are credit applications many more are generated through the first and second e-mail or telephone call, so we do not buy those special finance leads any longer. Third party leads thrived so much early on because the automotive industry was not paying attention and did not believe in it enough untill millions were made by these third party generators which in turn made them stronger. The dealers and manufactures have the money to take this market back, but never will without a solid plan to do so. Of course you can just keep purchasing those third party leads right? Thats the easy road, so you think.
This is absolutely golden stuff, Frank. It should be copy/pasted into the brains of every dealer principal that would like to keep the lights on in the next few years.

How active are you with Dealer ratings and reviews, reputation management, etc? There is a local group in the outer Sacramento area that wields social media so effectively we have probably all heard of them (hint: Nissan mammoth) ...

Do you have any tips for dealers (non-local, of course) wishing to begin weaning off of 3PL (Third-Party-Leads - trying to coin a term, here ;o) - ?
Drew,

I would sure like to hear from more ISM' on this subject and many more 1,200 plus people and very few opinions. I am glad you have decided to join in and I hope you keep after all of us.

In my experience here in the Tulsa market you have to treat every customer with respect and sometimes you have to give in to the ones that blame you for even being born. I am probably the only one at my dealership that worrys about what people have to say about our dealership on the internet as I know how good or devastating it can be, reputation management starts at the dealership and should never stop. Get an angry customer with some writing skills and you can be in trouble in a hurry. I have a restaruant I like to vist and the owner comes by and asks " is everything just perfect?" just for the record it always has been. But I am sure if it werte not I would be perfectly taken care of. We shouldnt have to offer up anything for that perfect survey should we? It should be expected because we have asked the customer is everything absolutly perfect, you might ask for a personal letter to be e-mailed to the director or GM and place those on your testimoinal pages.

If you want to cancel third party leads there is careful steps that need to be taken, why? well you need leads right? It can be done one step at a time. I would be happy to help direct the right dealer in a direction, I help select dealers at times but only when I know my work is going to be put to good use. I like many people hate wasting my breath on GM's and managers that know it all already. I will say that if your dealership is not embracing the Internet as an effective advertising media and contact base then I have to ask when are you going to close your doors? Because you will.
Frank,

Most of the dealers I have worked with find they get better results not by cancelling 3rd party lead providers, but rather putting them on a very short leash. If you have been getting 150 leads a month from a 3PLP, then cut them back to 20 leads each month, with a cap of 2 per day. Or, if you have been getting leads from a 35 mile radius, reduce the radius to 5 miles and see what happens... In most cases, the results are MORE than double the closing ratio. The bottom line is that you get the20 best leads instead of 150 leads any way they can get them.
Frank and I have never met, nor is Frank a customer of the company i work for, yet we have both had similar experiences managing Chevy stores in different markets. When more than one dealership discovers marketing realities in the form of cause and effect, then you can usually bet on a pattern that is repeatable and is what we have traditionally called a "Best Practice".

Organically developed leads will almost always be better than those sourced from a company that has a profit motivation to turn one consumer and 1 car sale into many multiple leads. When my own team at Courtesy Chevrolet (back in the day) would ask me how we were generating so many leads from a single customer, I would explain that we were using the same techniques that a 3rd party lead provider would use, only all the leads were coming to us... We sold HUNDREDS of cars to Internet Leads that were mostly homegrown.
Hello Drew,

I work with hundreds of independent dealers in the Northeast and I have seen one extreme to the other from 3PLP's... I have a dealer that replaced their conventional advertising with multiple 3PLP's and are spending $45,000 / mo. + driving 1K - 1.5K leads / month to their showroom with sales over 300 consistantly. I have other dealers who are doing no Digital Advertising or 3PLP purchasing (SEO alone)... Some where between these examples is the right combination I suspect... Ralph may have some industry figures to help...

In a nut shell... don't write off the 3PLP's yet... AutoTrader, Cars.com and OEM's are strong in this area.

Any thoughts from others?

dtg
Ultimately I judge success by sales. Inspect what you expect applies here somewhere...
Would you say that AutoTrader and Cars.com fall into the 3PLP category? They almost fit better into the Local Consumer Action Based Upon Inventory Exposure model, no?
I believe they fit both. They will happily sell you leads and space to list your inventory.

The 3rd party lead generator model is fundamentally flawed. The interests of the parties are not aligned.

Inventory exposure has to be the long term winner. It should also be the most natural adoption for dealers. Its only the media format that changes from print to Internet.

Its also much cheaper. Dealer websites should list all their own inventory plus pipeline inventory with estimated delivery dates. They should also have good configurators with smart delivery date estimators for "build-to-order" inquiries. They should also have smart electronic deal-makers for people who know what they want. In essence a dealers website should be able to satisfy every question that an in-market buyer might have, and take an offer before they get distracted.

They should also list their inventory on as many free 3rd party websites as possible. The more exposure the better.
Preach it, Brother Ferris! What free 3rd party inventory websites do you use or recommend? (that might be a whole new discussion!)
GoogleBase, DealMaker and a few others leading a growing trend. As you say this could be a good topic to assemble and compare all the best (and worst) offerings in one forum.

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