There is a misconception in automotive retail that you only need one trade-in partner providing your dealership with trade leads. This is lunacy and would be the 1990’s equivalent of advertising on just one radio station.
For those who weren’t around dealerships back in the 90s, limiting yourself to advertising on just one radio station in the average city would allow you to reach basically no more than 5% of the available radio audience. Lunacy, right? Well, the same goes for trade lead providers today. (In this article, I’m going to make the case for using up to seven different sources of trade-in opportunities… anything less, and you’re at a competitive disadvantage.)
For dealers, it’s time to rethink how you look at this marketing spend: Trade leads providers are not the same as DMS or CRM vendors – you can and should have more than one. In fact, given the attractiveness of acquiring used inventory directly from the public, dealers should be casting a very wide net when it comes to trade lead suppliers.
Working directly with multiple dealers gives me an unbiased look at those trade lead vendors that perform well and those that simply do not. I get the opportunity to see firsthand how these companies can fill your sales pipeline with leads and whether or not these leads are indeed sales opportunities. Based on this insight, here are the providers I’ve fully vetted and now strongly recommend to my clients:
Off-Site Trade Tools
Your dealer website isn’t the only place where you should be focused on generating trade leads from your market. In fact, if you’re casting a wide net, you’ll find that while your website will be a good place for trade leads, Off-Site Trade Tools (as I call them) will generate far more leads than your website ever could. Let’s look at the three best approaches for generating Off-Site Trade Leads:
Third-Party Trade Leads
There really is only one legitimate player in the third-party trade leads game as of this writing, and that’s Kelley Blue Book’s Instant Cash Offer. (Kelley Blue Book’s Instant Cash Offer is a lot like Autobytel’s core leads product: Very effective for the dealers who actually have a process in place and will actually make phone calls.)
Let me be very clear: I’m a huge fan of Kelley Blue Book’s Instant Cash Offer (ICO). Heck, I was a fan back when it was called AutoTrader’s Trade-In Marketplace.
ICO is a terrific way for dealers to acquire solid leads from prospects legitimately looking to either sell their vehicles outright or trade them in. Either way, ICO can be a win for any dealer who uses this tool correctly and who utilizes proven processes and talk tracks for getting the ICO customer in the door.
(To learn these proven processes and talk tracks for getting trade customers in the door, please watch our free video Attract and Sell More Trade-In Leads Today.)
There are two aspects of ICO leads that give them the legitimacy you want from a third-party trade-in vendor:
- The lead came from a website that showcases vehicles for sale or was the result of a purchase intent click (i.e. search engine marketing-driven visitor); and
- The form is comprehensive and collects a tremendous amount of detail from the prospect.
Of course, these same two features are exactly why I NEVER recommend a dealer use ICO on their own website. Putting KBB on your dealer website is akin to advertising for Kelley Blue Book. You are reminding your site visitors about this “other website” where they can find lots of cars for sale from your competition.
Additionally, while the form is “comprehensive” when presented on KBB.com, it becomes “onerous” on your website. In other words, the form is way too long for dealer website visitors to complete. The abandon rate for this form on your site (and especially your mobile website) is too great to ignore. So let’s be clear:
USE KBB’S INSTANT CASH OFFER ON THEIR WEBSITES; BUT NEVER, EVER USE KBB’S INSTANT CASH OFFER ON YOUR DEALERSHIP WEBSITE. EVER. EVER. EVER.
Are we clear? Ever.
Another great way to generate off-site (as in “off-website”) trade leads is actually sitting right there in your dealership: Your sales team!
Unfortunately, the dealers who lament the lack of selection or the high prices/fees at the auction – and who would love to buy more local vehicles outright from consumers – are often the same dealers who won’t even consider looking at a customer’s trade until/unless they’ve come to an agreement about their vehicle purchase.
Hey! It’s 2016 and WE BUY CARS! (All of us. Every dealer. Everywhere.) So, let’s start buying cars.
To generate more trade opportunities from your existing Up Count requires a change in process and (for almost every dealer) the addition of a great kiosk or iPad tool. The process part is relatively simple:
- All trades are reviewed with the customer and a ballpark range is provided (via a trusted provider like Jumpstart’s Black Book) before the test drive. (Yes, I wrote “before the test drive.”)
See, the process part is simple; it’s the enforcement and accountability that’s nearly impossible for most dealers without the addition of a kiosk- and/or iPad-based tool that steps your sales team through the process and ensures trades are evaluated and a range of values is provided before the test drive. (My favorite provider of this technology, as of this writing, is GoMoto.)
Why should you appraise the trade before the test drive, you ask? Simply put: your prospect is most likely to buy immediately after the test drive. Slowing down the momentum and sending your salespeople (even if the prospect joins them) outside to walk the trade at this point ALWAYS reduces your close rates.
Today, your goal should be to give them a bottle of water and the first pencil literally within minutes of returning from the test drive – before they have a chance to jump on their mobile devices to shop your competition. Additionally, even if they didn’t like the vehicle they test drove, you have a reason to bring them inside for the numbers: so that you can give them a firm written offer on their vehicle.
Call it Owner Marketing, Equity Mining or Direct Marketing; it’s all the same: Enticing those in your database to return to the dealership so that you can sell them a new vehicle and/or buy their existing vehicle.
While many dealers I work with use an equity mining tool and spend a lot of time on the phones trying to get these customers back in the dealership, my favorite (and what turns out to be the easiest) way of generating real trade leads from your database is simply developing an effective email marketing campaign that encourages the customer to check the value of their current vehicle.
The best tool for this? Because of their integration with both your database and a simple trade partner, I really like the solution provided by 3 Birds Marketing. In fact, their “What’s My Car Worth” emails generate better than a 20% conversion-to-open rate! That’s strong!
Moreover, the value range 3 Birds provides your customer is supported by great data that’s easy for your customer to understand – meaning you have a better chance of buying their current vehicle within the range provided. (You can contact 3 Birds via our recommended offerings pages on UndeniableAdvantage.com to learn more.)
Okay, I’m In; Which Off-Site Approach Should I Use?
To be clear: as the title of this post suggests, you should be using all of these off-site trade resources (3rd Party, Kiosks & Database Marketing). Anything less and you are intentionally putting your dealership at a competitive disadvantage.
Okay, but what about Craigslist? Isn’t Craigslist a great way to generate off-site trade opportunities? Yes and no. There are indeed dealers and vendors having success here; though the reason Craigslist didn’t make my list of the Top 3 is that the sheer number trade opportunities you can enjoy from KBB’s ICO, In-Store Kiosks and Database Marketing is far greater than even the best Craigslist trade campaigns I’ve seen.
On-Site Trade Tools
Your dealer website is where most of you concentrate on generating trade leads; yet this is where I often see some of the worst practices for truly maximizing trade leads. This is a shame, because these are YOUR customers on YOUR site, and any lead you can generate here is exclusive and generally low-funnel. By not maximizing your trade lead activity on your own site, you are definitely putting yourself in a competitive disadvantage.
For dealer websites, I recommend utilizing a combination of four separate trade lead generation tactics to ensure you capture every possible opportunity. All four are important and all four can be effective (especially when all four are used together). In no particular order, the four tactics you should employ on your website are:
- An “On-Page” Trade Tool
- A “Full-Page” Trade Tool
- An “Instant Retargeting” Tool
- An “All Other” Tool
The On-Page Trade Tool
The on-page trade tool is one where the trade form itself rests directly on an existing webpage (like your Vehicle Details Pages; aka VDPs). The advantage to this type of tool is that you can generate a trade-in lead without requiring your prospect to open a new page or complete an onerous form.
For on-page trade tools, the best version I’ve seen is TradePending. Their form is unique in its design, intuitive and likely the simplest for most consumers to complete. I have clients using this product and have fully vetted their offering. This is why I highly recommend TradePending as the best on-page trade-in lead generator for your dealership’s website. (You can contact TradePending via our recommended offerings pages on UndeniableAdvantage.com to learn more.)
The Full-Page Trade Tool
Some of you might be thinking “Why do I need a full-page trade tool if I already have an on-page trade tool?” The answer is simple: Cast a wide net. Not every visitor is going to make it to one of your VDPs. In fact, there are lots of service customers on your website every day who would love to sell you their car… they just don’t know it yet.
There are plenty of choices for full-page trade tools and most are actually pretty good. However, in order for these forms to drive the maximum number of incremental leads for you, they do need to cover a few bases:
- They should highlight the unbiased nature of the trade value;
- They should be responsive and perform seamlessly on mobile devices; and
- They should be relatively simple to complete.
In this case, I tend to side with Jumpstart’s Black Book Activator, given the unbiased, third-party feel of the forms and its relative ease of completion – even in mobile. Of course, the TradePending tool can also be deployed as a full-page tool, and it also satisfies all three requirements.
Again, there are many trade form providers that satisfy the requirements, but not all. In fact (as of this writing), I strongly recommend against using your website provider’s “free” trade forms or (as I wrote earlier) using Kelley Blue Book on your dealership’s website.
I recommend against the free website trade forms because they are usually long forms that aren’t very simple to complete, they can be nonresponsive in mobile browsers, and they are missing the unbiased, third-party feel that a provider like Black Book delivers.
Okay, but why not KBB on my website? Even if we’re talking about KBB’s traditional form (not Instant Cash Offer), I am strongly against using this on your website for one primary reason: Because this is your website, why would you advertise for Kelley Blue Book (or Edmunds, for that matter) on your website? Are they paying you for these impressions? There are millions of vehicles for sale on KBB.com, and by advertising for Kelley Blue Book on your dealership’s website, you are reminding your exclusive, low-funnel prospects about this classifieds website.
Finally, to ensure you capture the maximum amount of full-page trade tool leads, you should include a link to this page on virtually every navigation menu drop down – especially in your finance and fixed operations menus. (Watch the recording of our Trade-In Leads Best Practices webcast to get all the tips for attracting and selling more of these leads.)
The Instant Retargeting Tools
(Not sure what this is or how Instant Retargeting benefits your dealership? Please read our quick article on Instant Retargeting.)
When attempting to cast the widest net possible for trade leads, don’t forget to quickly pursue those customers who’ve already left your website and are now searching your competitors’ sites. With an Instant Retargeting Trade Tool (like Black Book’s Enhance) you have one more chance to generate a trade-in sales lead before someone else entices that consumer to act.
The All Other Tool(s)
There seem to be trade coupons, sliders and widgets available from everyone from your chat provider to those that don’t really fall into a single category, like website widgets provider MotorWidgets. And, just because you already have an on-page tool and a full-page tool, doesn’t mean you cannot still show great ROI when you add an “all other tool” or two to the mix.
That’s the beauty of quality Digital Marketing: You can try almost anything with little or no up-front cost and no long-term obligation. Then, you simply measure the real ROI (leads and sales) a solution delivers. For MotorWidgets, one of my favorite providers, you can even try it for free for 60 days with no set fee and no obligation when you order it from our recommended offerings pages.
Wait a Minute! I Should Have 7 Trade Leads Providers?
While not every dealer can handle the incremental business that using seven or more different tools will deliver, for those who can, the answer is “yes, you should be using as many tools and sources you can get your hands on.” It’s called “casting a wide net;” because, after all, trade leads partners are not like your DMS – you can and should have more than one… as using just one would be lunacy, right?
(DISCLOSURE: I received no compensation or anything else of value from any of the aforementioned companies to write this article. As is fully disclosed on UndeniableAdvantage.com, my company could receive a small referral fee if dealers purchase any of the fully-vetted, recommended offerings after contacting the respective companies via that website.)