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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: 896

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

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Comment by Tom Gorham on July 29, 2014 at 4:39pm

Steve and Mike, thank you.  You both get the thrust of this article. I don't believe the decline of email leads is a bad thing, but it is a trend that requires consideration as to where and how we focus our efforts and communications with prospects and customers.

Comment by Mike Maggs on July 29, 2014 at 4:27pm

I agree with you Steve.  Now imagine if that customer clicked a button on the dealer's inventory page and received a text quote with all the vehicle's details, including images, sent directly to their phone in seconds.  In addition, the dealer gets that lead sent to their CRM in minutes.  This outperforms emails and the dealer gets a valid phone number and a hot lead.

Comment by Steve Davern on July 29, 2014 at 3:54pm

Great article Tom. If I'm a dealer and my email leads are down and my phone calls are up, I like it. Just short of a buyer walking into the dealership, I want him to call. If he calls, he is way more serious than someone who sent an email. 

Comment by Tom Gorham on July 27, 2014 at 9:59am

Thomas Ieracitano, I believe you are right about change and leaders must watch for and initiate change.  Jared Hamilton says leadership requires vision and the ability to inspire and initiate change that then must be translated into management.  This trend is surely a logical one base on the adoption of smart phone and soon wearable computers.  And as Ralph Paglia said below, it is being advanced by increasingly effective spam filtering and another trend of messaging through social media.  Thank you for commenting.

Comment by thomas ieracitano on July 27, 2014 at 9:45am
Could be another trend, as always the only thing consistent in the Automobile Industry is CHANGE!
Comment by Tom Gorham on July 17, 2014 at 7:14pm

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.

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