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From the Trenches - The Decline of Email Leads

Question:  What does an Internet Representative do?  

Answer:  They answer email leads and make appointments.

Question:  What if email leads decline?

Answer:  They make less appointments.

These are questions you are now or will soon be asking yourselves.

Some official figures say that email leads are down 2% over the last 5 years.  My analytics say they are down 25% over the last year.  Whatever the correct number is, there is a TREND.

  • Does it mean Internet sales are down? No. 
  • Does it mean we are returning to the past when customers came in unannounced to buy a car?  Yes.
  • Is it a return to our (paradise) past? No.

Here is a year over year website example:

Trends

June 2014 vs June 2013

 

VDPs

-       Up 10%

Phone Calls

-       Up  20%

Email Leads

-  Down  25%

Chats

-  Down  33%

Map Views - H & D

-       Up  38%

Total Prospects

-       Up  12%

Prospects Logged

-  Down   12%

Sold

-       Up  18%


What is happening here?

40% of all website visits are now on smartphones. Ask yourself, as a consumer, would you rather click a button to call, or fill out a form with all your information? Most will click to call.

"Is that price real and do you have the car?"

Customers are now visiting an average of 1.4 dealerships before they buy a car. Compare that to 6 dealerships a few years ago.

How is that possible?

Customers are being pre-sold online.  When dealers began putting "Sale Prices" on new vehicles online, the result was predetermined.  Customers can see a dealers entire inventory and pricing online and decide where they want to go to buy a car.

Why would a customer go to a dealer that doesn't have the lowest price online?  They also consider the following:

  • Inventory - vehicle availability
  • Location - distance
  • Reputation - online reviews

Today's customer is buying before they even meet you. 

Why are customers going to 1.4 dealers instead of just one?

A customer expects that their dealership experience will meet or exceed their online experience with a particular dealership.

Transparency doesn't just mean putting a price online with fine print explaining that the customer may not qualify for this price.  It means: 

This is what we say; this is what we do!

Prediction: 

  1. Customers will increasingly turn to whatever communication type results in instant gratification.
  2. They will expect and demand honesty in what they are told online.
  3. Reputation and word-of-mouth marketing will lead all other marketing efforts.
  4. Digital Marketing will be the determining factor in 90% of all sales.

Disagree?  Let's hear it!  I love to agree to disagree!

 

Written by
 Tom Gorham

Editor, From The Trenches

Automotive Digital Marketing

Professional Community

Views: 643

Tags: Digital, Email, Internet, Leads, Marketing, Mobile, Reputation, Sales, Transparency, Trends, More…Website

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Comment by Tom Gorham on Friday

Tim, give me a call at my workplace.  I'd love to talk.  Keep in mind that I have confidentiality involved in what I can make public about my employer.

Comment by Timothy Martell on July 17, 2014 at 9:09am

Hey Tom, I'd love to take a look at your analytics if you'd be willing to share them. Shoot me a PM. No agenda here. Just always interested in looking at more data to see what others are experiencing. I'd be happy to share my findings and discuss with you.

Comment by Tom Gorham on July 16, 2014 at 8:26pm

Tim, thank you for your insightful comments.  I agree with almost all of them and I always respect your opinion and analysis.  Perhaps you're right about traffic loss but our traffic is up and as I stated, our VDPs are up. 

I believe you are right that the email experience isn't what customers have hoped to receive, and that is exactly why they are doing everything to decide on a car and a dealership online without contacting the dealership.  The increase in mobile traffic has also made it easier to "click to call" than to submit an email lead. 

Comment by Timothy Martell on July 16, 2014 at 1:16pm

Hey Tom. Nice article. I think your anecdotal experience is not representative of the whole and you allude to that yourself by contrasting your experience against the industry as a whole. 

The larger issue we've seen that I believe directly influences your experience is what I have been referring to as "systemic traffic loss." This has gone largely unnoticed because of what I would essentially call a "lucky coincidence." 

As a vendor I have the benefit, like other vendors, of seeing large amounts of data in a variety of markets across a variety of manufacturers. Also, because the trade secrets that allow companies like mine to achieve results for our clients are influenced by larger trends that take place over longer periods of time I am forced to look at much more historical data than a dealer would ever be inclined to look at.

Because of that we've noticed a really disturbing trend that has played out over the last 6-7 years. Whats interesting about that is that without looking at data over that long period of time and particularly comparing it to what other industries have experienced, its really easy to miss.

In short, the auto retail segment as a whole has experienced a 66% drop in website traffic since 2008. While new and used car search trends have slowly declined since 2004, this year marks the highest amount of search traffic for these terms since 2008 - but dealers are getting 66% less of the traffic!

No wonder leads are down, but sales are still up. What no ones realizing is that sales should be up by a large margin more. The reason they are not is because to online shopping experience has become more like the bad in-store experiences they had in the past. (Or like to think they had)

Get ready for a absurdly long sentence...

To put it bluntly, the unscrupulous and horribly poor quality of product being put forth by the majority of website vendors in the auto retail space, combined with a general attitude by OEM's to force this extremely low grade product on dealers as well as the efforts of lead aggregators and other 3rd party businesses to capture consumer interest have turned the virtue of online shopping in to a landfill of spam and harassment for the consumer. Let that sink in a moment.

Car dealer websites are so bad, that google has essentially categorized them as some of the lowest quality content on the web today. And whats worse, web providers are hiding this reality from dealers. It is amazing how many new clients we take on now that have manual web spam penalties assigned by google and they're not aware because their website provider is hiding this fact from the dealer.

Now lets think about the consumer experience and the 3rd party lead industry. How does lead aggregation work? You have a handful of wholesale lead aggregators that sell leads to the 3rd party providers that dealers pay for the leads. Then those 3rd party providers sell the leads to each other and then repackage bulk files of leads differently and sell and resell them again and again. The customer's e-mail gets bombarded by every dealer known to man and this often continues for months after they already bought a car and we haven't even discusses the phone situation yet.

 Now where is this "better way to buy a car" they've been hearing about for years?

Its a perfect storm of terrible. But its being masked by the rebounding consumer interest that has slowly rebounded each year since the economic collapse in 2008. Because of this the much greater underlying problem is going largely unseen.

This is something I've been working on for some time and will be talking about at an upcoming conference. Its a massive problem. 

Comment by Carl Maeda on July 15, 2014 at 5:58pm

Hi Tom, no problem.

There are some things you should be aware of using a service like mailchimp.com or strongmail. 

Because these services use mail servers that are easily identifiable, spam filters also know when you are sending email through these services so those emails get an extra level of scrutiny.

But it should be ok if you are sending out emails with no HTML and a minimal number of outbound links.

Comment by Tom Gorham on July 15, 2014 at 5:50pm

Carl, thank you for the tip.  I hurried on over to mailchimp and read some of the excellent articles.  Most CRMs offer bulk email capabilities but they are woefully inadequate.  Mailchimp.com looks good but I would also recommend people take a look at Strongmail (Strongview).

Comment by Carl Maeda on July 15, 2014 at 11:31am

I was talking to a dealer about a month ago and they were telling me that their response rate on their emails increased dramatically after they stripped out all the HTML and almost all their links in their outbound emails.  The emails only had two calls-to-action - a phone number and a link or they can reply.

I told them it was because their spam index was lowered considerably and I pointed him over to mailchimp.com's articles about sending email marketing.  They have some good tips on getting your emails past the spam filters.

Comment by Tom Gorham on July 15, 2014 at 5:18am

Ralph, thank you for your comments.  Always on target.  I agree with you that email communication will remain relevant as will email marketing.  Spam filtering is also a problem that seems to be increasing.  Use of any communications tool is driven by the consumer, not by the dealer and the consumer is increasingly choosing instant or NO communications.  Most everything they want to know is online and there is less and less reason for communication prior to visit.  The visit or walk-in is no tire-kicking.  The customer who enters your door today is yours to lose.

Comment by Ralph Paglia on July 15, 2014 at 1:43am

Tom, great topic, as usual... What I am seeing with email marketing initiated by dealerships is a trend towards highly targeted and extremely relevant email going out on a more frequent basis, throughout the month at much lower volume than the "Master Blast" trends from just a few years ago. The payback on this trend for dealers has been a higher response rate and improved conversion to making money. Fixed Ops is a natural partner to email marketing triggered by data and historical modeling. 

As for a decline in customer to dealer inquiries, there is more involved than just the changing demands and expectations of consumers...  Spam filtering at the ISP level, before an email ever reaches a consumers inbox, has been technologically advanced to the point where any email sent to a consumer by a car dealer who has never received an email from that consumer, is going to get spam filter sniffed and tagged with a big ol' "SPAM" flag in a few milliseconds!

The entire business model of asking consumers to fill out online lead forms and then have that data transferred to a dealer's CRM or Lead Management system, was made obsolete by the introduction, expansion and increased sophistication of ISP based spam filtering algorithms... All of which will technically classify the unsolicited (by email), dealer to consumer emails as truly and in reality... being first class, grade A, USDA certified SPAM.

Combine that with a rapid overall drop in personal email communications, partially driven by social media based messaging systems replacing email as the preferred communication medium, and we indeed have a situation where email use is going to decline, but remain a significant percentage of the communications mix for dealers and automotive consumers. 

Comment by Mike Maggs on July 14, 2014 at 5:36pm

Tom,  It's like I tell my customers....."Email is soooooo 2010"    :)

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