Looking for Leads in all the Right Places
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We recently spoke to Josh Vadja about the changing online environment and what dealers need to do in order to keep leads flowing into their prospect pipeline.
AutoUSA: How is the lead generation landscape changing?
Josh: There's a school of thought being promoted - loudly and with great passion and emotion by some advertising agencies and consultants - that encourages dealers to "take control" of their lead generation. If the dealers just stop partnering with and buying leads from third parties, they can drive all of the search visitors to their own websites, cutting out the middleman. It sounds fantastic. And it would be...except it doesn't address what the online auto shopping customer wants. It's also like saying a dealer should buy software and develop their own website and not use a third party company to build their website. Some things are just best left to experts.
AutoUSA: How important are third party web sites in providing information to online shoppers?
Josh: According to a 2009 Google survey, 85% of consumers consult with independent automotive web sites before making a purchasing decision. There is, and will be for the foreseeable future, a strong market for independent automotive websites. To ignore the independent automotive websites and focus solely on search is to limit your reach and your market, essentially limiting your potential market share growth.
AutoUSA: So should dealers participate with these sites or pull their marketing from them?
Josh: For dealers this is a confusing situation. They need to balance their need and right to capture their local online shoppers with acquiring leads generated through independent sites. Finding the right mix of search engine marketing (SEM), search engine optimization (SEO), website development and independent lead generators is critical to managing cost per sale.
AutoUSA: What are some of the factors a dealer should consider when looking for leads?
Josh: Consider the Cost of Search Engine Marketing (SEM). Recent estimates show that almost 3/4 of all automotive search terms are purchased by independent automotive websites. Because there is tremendous competition for broad automotive search terms, SEM can become cost-prohibitive for individual dealers, driving the cost-per-lead up 30-40% over independent lead sources. Consumers who find your dealership's website when they are looking for a dealer to work with have a very high closing rate; however, consumers drawn to a dealer's website by broad search terms early in their research do not show the same propensity to buy. Many use it as virtual yellow pages, clicking on a pay-per-click ad just to get the dealer's service department phone number.
AutoUSA: So as you said earlier independent sites are an important part of the marketing mix?
Josh: The previously-mentioned 2009 Google survey reported that Kelley Blue Book averaged more than 86 million page views per month and Edmunds.com received more than 56 million page views per month. Though some of these consumers are drawn in through SEM, the vast majority seek independent, objective sites as a place to begin their research. Even if a dealership spends thousands of dollars a month in SEM to attract these leads, many of these consumers are in the beginning of their decision making process. The information these research sites provide to consumers pushes them further down funnel and closer to the purchase. And each site gives the consumer the option to contact a dealer when they're ready. It's nice to have someone the consumer trusts working for you.
Josh Vajda is a highly regarded sales and business development executive. He has held numerous positions of increasing responsibility since joining AutoNation, a Fortune 500 company, in 1997 and has led the company's efforts in training and development, customer satisfaction and sales operations. He currently serves as the Director of Inside Sales. He can be reached by email at: VajdaJ@autousa.com
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