Inventory Exposure Without the Pain
By: Josh Vajda
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Many used car managers are feeling squeezed by the large subscription web sites. It seems like every year rates go up without an increase in the number of leads or sales. A good number of dealers felt - and rightfully so - that they had no choice; if they wanted their used cars represented online, they had to pay the big boys the big bucks. But if the Internet has taught us anything, it's that things can change quickly in a competitive landscape - and they have.
Pay-per-lead competitors of the big subscription sites have finally gained access to relationships once held by AutoTrader and others. Today's Internet savvy consumers use search engines and often browse several automotive websites to research the vehicles they want, look for dealers near them, and find the very best deal available. This has significantly reduced the advantage of the "name brand" touted by the large subscription sites. By signing up with a reputable third party lead provider, dealers can include their used car inventory in pay-per-lead listings available to online buyers on a number of marketing partners' web sites, including Kelley Blue Book, AOL Autos, Overstock.com, and CarDomain.com. These sites reach more than 20 million consumers monthly. Dealers don't pay for the right to list vehicles where allowed by law - they only pay when contacted by a customer. No subscriptions necessary.
For some dealers, this model may represent a replacement for the subscription service they're currently using. For the majority, it's a way to reduce their package or subscription level and maximize their ROI with the subscription service. So how do you know what's right for your dealership?
First, take a look at what you've spent over the last 6-months on your subscription used-car listing services. Divide that by the number of legitimate phone (connected calls that last for more than a minute) and e-leads you've received for your per-lead price. With most pay-per-lead companies charging less than $25 per lead, you'll quickly see if you're generating the right amount of traffic for your spend.
Next, divide the cost per lead generated by the closing percentage of those leads to get your cost per sale. If you're closing 7.5% and paying $35 per lead, it's costing you $467 per vehicle sold. Is that in line with your other ad sources?
Finally, if you determine that your cost-per-sale is higher than you'd like, take a look at reducing your monthly subscription spend by moving down a package level or two. Many stores who have done that see little-to-no difference in their monthly sales from that source and it frees up ad money for the pay-per-lead package.
In this environment, every dollar - and every customer - counts. Smart dealers are looking for ways to maximize their exposure to online buyers without spending ridiculous sums. Now, they've got options to help them do just that.
Josh Vadja is the Director of Inside Sales for AutoUSA.
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