Why Would a Car Dealer Even Want an e-Lead?


[With the on-again/off-again debate about Third Party Providers currently on (again), it seems appropriate to present this excerpt from our 2015 Online Automotive Leads mystery shop study.]


A high percentage of dealership desk managers still look at the Internet and their own internet sales teams as the enemy. For these shortsighted managers, the elimination of e-leads in their dealership might likely be viewed as a blessing. That’s unfortunate, but not unexpected or even that uncommon.

On the opposite end of the spectrum, the focus for some dealerships trying hard to live on the leading edge in the Digital Age has shifted from “old fashioned” e-leads to more glamorous and buzzworthy, though often meaningless, pursuits.

How did the automotive e-lead – not yet 20 years old (at the time the study was released) – lose its luster in such a automotive e-leadsshort period of time? One need look no further than the onslaught of both new and old automotive digital marketers touting their respective product’s ability to drive “impressions” and “engagement” and “page views” – instead of boring old leads and sales.

Getting the dealer to focus on impressions or engagement – instead of actual leads and sales – is the result of artful misdirection. It is the epitome of smoke and mirrors. Working like skilled magicians, some of today’s digital marketers are masters at the illusion of providing real value while quite literally picking the pockets of their dealer audience.

Certainly, not every digital marketer today is out to dupe their customers. In fact, the great majority of those selling digital- and technology-related products and services to dealers are providing a suitable return on investment. The trick for dealers is to not be fooled by the bad actors. Once a dealer begins to believe that traditional ROI measurements don’t work in a digital world they are at risk of exploitation.

They not only work, but traditional ROI measurements like Cost per Acquisition, Cost per Sale and Cost as a Percent of Gross are decidedly more quantifiable online than they are offline.

Dealers Don’t Sell Impressions

We understand this is a bit of an oversimplification, but the fact remains that despite the change in consumer shopping patterns brought on by the Internet, dealers still sell cars – not impressions, not engagement and not page views. While these activities might eventually lead to a sold unit, there is always a “missing link” that makes it difficult to provide proper attribution to the digital marketer.

There are a few clear paths to purchase for the online consumer that dealers need to understand and maximize in order to gain their share of the online pie. These paths can involve luck or skill.

The lucky purchase path for the dealer – and the one taken most often by the online consumer – involves some sort of prior exposure to the dealership, its offers and/or inventory before arriving (unexpectedly) on the lot. This prior exposure most often involves a complex combination of events; everything from driving by the dealership to hearing a radio commercial to viewing one of the dealer’s vehicles online to any number of activities consumers might take before viewing a vehicle in person. The dealer is basically lucky if they sell any single one of these consumers a vehicle.

Despite all of the prior exposure to the dealership, the consumer who arrives without an appointment on the dealer’s lot is classified as a Traditional Up; and our internal data reveals the average dealer closes about one in five of their Traditional Ups.

The purchase path for the dealer that requires skill involves convincing the online shopper to initiate a conversation before driving to the dealership. Whether through an e-lead, a phone call, an online chat or a text message; getting a consumer to “reach out before setting out” is critical to closing a higher percentage of floor traffic – often at higher grosses and with better CSI.

While the average automotive dealer only sells about 20% of their Traditional Ups, if they can convince the online consumer to schedule and keep an appointment, their closing percentage more than doubles to roughly 50%. Moreover, when the dealer can have the vehicle cleaned and ready to go for the consumer before their arrival, and make them feel special (like a true VIP) during the visit, the closing percentage can approach or even exceed 80%.

So, as we asked at the beginning of this post, why would a dealer even want an e-lead? It’s simple: without some prior connection with an online consumer (via phone, e-lead, chat or text) it is impossible for the dealer to set an appointment, to prepare for the visit or to truly treat a prospect like a VIP (and thus close at 50-80%). Without an appointment, every online shopper is just a Traditional Up regardless of their prior impressions, engagement or page views.