The Leads Are Dead!
Haven’t you heard? The Leads Are Dead!
According to those who struggle to generate consumer sales leads for businesses, “Sales leads are dead.” Furthermore, these (interestingly, mostly digital) marketers claim that today’s connected consumers are simply unwilling to trade their personal information online in exchange for some promise of pricing or other product data.
What? Wow; someone better tell ForRent.com, aPlaceforMom, Lawyers.com, Autobytel, LendingTree, and all of the other companies who, collectively, are apparently wasting billions every year marketing to these same connected consumers. Moreover, someone will need to inform the hundreds of thousands businesses like car dealers, attorneys, assisted living centers, Realtors, and others who are successfully selling to these reportedly “dead” leads.
The leads are not dead; far from it. Consumer sales leads are alive and well; and they continue to deliver incremental business for any company willing to put away their digital marketing snobbery and focus on boring, old fashioned conversions, and processes, and sales.
But, It’s About Engagement, Right?
While any company with an online presence should be tracking and measuring engagement metrics, for those in the business of selling anything to consumers (whether a book or a car), actual sales, revenues and profits directly related to their online activities must be the first, second and third most important metrics they look at when judging the effectiveness of their digital marketing spend.
Even leads, then, take a back seat to directly-attributable sales? Yes; however, for those not making direct sales from their websites, it is the old fashioned sales lead that must precede the sale. In fact, in the car business, we say that if you fail to get the lead, you’re lucky to get the sale. Let me prove that.
The typical car dealer closes just one out five traditional walk-ins (aka Ups) on the first visit. In today’s market, we can safely assume all five of these Ups were online before coming into the dealership; though for whatever reason, they chose to walk-in rather than call, text or email in advance. The dealer got lucky that they chose his store. He must’ve had just the right mix of product, messaging, promotion, reputation and pricing these five visitors were looking for to earn their visits.
But he only sold one of them. Ouch.
Moreover, today’s car buyers (according to a 2014 McKinsey report) visit just 1.6 lots on average before they buy. So, what if this dealer was fourth in line for these five walk-ins? What if all five had a list of other dealers and vehicles that also met their needs, and this dealer just happened to be fourth on that list? Odds are he would have seen just one visitor from these five; as the other four would’ve already bought or likely given up.
But, Wait! What If We Got 100 Leads?
Holy Schnikes, you’re smart! What if, indeed? Let’s do some spitballing using “perfect math” for 100 typical sales leads (a mix of phone and eLeads) for a dealer following solid BDC processes and The Perfect Appointment:
- 100 mixed sales leads
- 80% connection rate (they speak with 80 shoppers)
- 60% show-to-connection rate (48 shoppers set and keep an appointment)
- 80% appointment close rate using The Perfect Appointment = 38 units sold
So, if the dealer received 100 typical sales leads instead of enjoying 100 traditional Ups, his best case scenario for sales jumps from 20 units to 38?
Yes, but even looking at the low side of 100 mixed leads (remember, with Ups we can expect to sell just 4 of the 20 who ultimately show up if our dealership is too far down the list) a dealer with decent processes can expect to sell 14 vehicles. Moreover, his team could be in control from beginning to end. (Admit it, when you rely on Ups, your team has zero control until they walk on your lot.) Here’s how that would look for the average dealer:
- 100 mixed sales leads
- 70% connection rate (they speak with 70 shoppers)
- 40% show-to-connection rate (28 shoppers set and keep an appointment)
- 50% average appointment close rate = 14 units sold
Okay, I’m in! The Leads are Not Dead! Now What?
If you are truly interested in generating more leads, there are lead-generating strategies I give my clients to ensure they maximize their internet sales efforts while minimizing their digital marketing costs. Among those, these four have proven to be very successful for every client who implements them:
- Cast a wide net. Stop thinking that your website is the only place to generate leads. In fact, as we’re learning from recent research, the average dealer’s Pay-Per-Click (PPC) efforts are falling flat (at best). There is almost no ROI for dealers to be doing traditional PPC, but plenty of ROI for my clients who are using respectable third-party lead providers, like Autobytel.
- Focus on your website. Despite what I wrote above, you still need website leads. In fact, leads from your website close at the highest rates for most dealers, so you should be maximizing your efforts at squeezing calls and leads from your existing traffic. I’ve got two places for you to start on these efforts. First, watch my free 21-part video series on How To Convert More Website Visitors Into Buyers; and second, make sure you’re using all tools available, especially Instant Retargeting.
- Focus on Trade-Ins. Most dealers are missing the boat when it comes to trade leads, because they generally only use one source for these. As much as you want to buy great used cars from the general public, having just one trade leads provider makes absolutely no sense! Just as with all leads in general, you should “Cast a Wide Net” when it comes to trade-in leads. Use this article on Trade-In Leads to help you decide which sources make the most sense for you and your store.
- Give Craigslist a real shot. Dealers who’ve tried to sell cars on Craigslist in the past and failed were probably just not doing it right. I have plenty of clients who follow my Craigslist Best Practices for Dealers and enjoy a high number of quality leads and great ROI from these efforts.
Now, perfect your approach and processes with these four ideas and you’ll soon find that not only are the leads not dead, but that you’re probably generating so much profit that you can afford to experiment with more of the untested digital marketing “engagement” vendors out there.