Dealer-Generated Vs. Purchased Leads
Let’s not pull any punches. If you are familiar with our Newsletter than you already know that we are not the biggest fans of the Third Party Lead Providers. There is no point in trying to be polite about this as I know that they are certainly not fans of us either. Over the past four years we have eroded their business in many markets by helping dealerships realize that they can surely do without the lead providers and generate higher quality and exclusive leads on their own by using the correct web strategies.
The reason why the Third Party Lead Providers exist is because they have the talent and they have the infrastructure in place. Twelve years ago, the OEM’s were asleep at the wheel and the dealerships just didn’t have the enormous financial backing when consumers were making the transition away from traditional media and building a trusting relationship with Google and Yahoo. So now they are ahead of the dealerships and so they leverage this power to siphon money out of the industry by attacking dealerships with unethical online tactics that intercept the Internet leads so that they can sell them back to you and your competitors.
These unethical, but legal, tactics increase the visibility of their websites and grab leads from local consumers that are searching for a local car dealer. Some of these tactics include:
- Creating a business directory page for every car dealer in the United States. These optimized pages on the dealership name have lead collection forms which are sold to competitors.
- Establishing car dealer review program that has a review page for every car dealer in the United States. These optimized pages on the dealership name have lead collection forms and advertising from competitors.
- Publishing blind inventory listing pages for every car dealer in the US which appear to list cars from the dealer but in fact it lists cars from competing local car dealers.
- Creating website pages for every brand of car and every city in the United States which are optimized to appear when consumers type in broad searches for cars in the towns that surround a dealer’s location.
- Purchasing OEM keywords using Google Adwords to make their website appear to be local when in fact they are choosing keywords to benefit from local dealers advertising budgets.
- Advertising car dealer’s inventory and including ads from competitors and OEM’s to create multiple opportunities to capture leads and divert traffic using car dealer assets.
At Digital Dealer 11 we gave a presentation on Dealership Online Intelligence Gathering. In this presentation we listed the critical success factors for Dealership Online Sales. These include: traffic, inventory, Conversions and Finance. The Third Party Lead Providers understand this and, since they have no inventory, they actually use your investment in inventory to generate more leads that they can sell to you and your competitors. For example, dealers have been taken advantage of by many so called “free” advertising websites that list car dealer inventory. These free advertising models promised greater leads and visibility for car dealers. Most have fallen far short of that promise and in fact are just generating leads by showing inventory they don’t even own. By participating in some third party advertising models you are essentially only weakening the search dominance of your own local market.
However, having said all this, I don’t think the Third party Lead Providers have ever done a very good job at generating high quality leads in the first place. While the OEMs and many dealerships are now scoring leads so that they can maximize the lead ROI, I doubt we will see this methodology move upstream to the Lead Providers any day soon. Lead providers comingle the high and low quality leads together and then simply tell you that they “pledge” to replace a bad lead, knowing that they will likely not have to buy back most of the bad ones â€” otherwise, why include these crap leads into the mix to start with?
There are many ways to automatically score the incoming leads and it is not necessary to gather the bad leads in the first place. Scoring should have more to do with how immanent the lead is. If it has inaccurate and missing data than it is not really a lead in the first place and will demoralize your sales staff.
While many dealerships talk about performing their own lead generation and getting away from the Lead Providers, it is much easier said than done. This is because it is not so simple as throwing up a couple websites. These lead providers have entire staffs of people including content writers, PPC experts, SEO experts, programmers, several IT managers and network engineers to manage a data center. It is not easy to find PPC and SEO people who are gifted in their trade AND understand the automotive retail industry. When you actually find good technical people who understand the car business they are often excruciatingly expensive, leaving the dealerships with the least talented people. The Lead providers can afford the best technical talent, the best web and infrastructure technologies and have the dealer beat with a significant financial barrier to serious online lead generation â€” until now!
Advanced Dealer Systems (ADS) has the infrastructure and in-house talent to be a turbo charged Third Party Lead Provider that only collects the good leads, but they have opted out of the traditional Lead Provider business model. Rather than be a lead provider, ADS helps dealerships understand how to generate their own leads and allows the dealer to use their infrastructure and talent on a month-to-month basis, thus eliminating the high barrier to entry and eliminating virtually all the risk. Once the dealer has this technology, talent and knowledge in their camp they unleash this turbo charged lead harvesting power to destroy their online competition â€” including the Third Party Lead Providers.
ADS has a very good understanding as to how to be in the right Internet place at the right time to capture the ready-to-buy leads. Using the right content and longtail keywords is just a glimpse into the daily routine at Advanced Dealer Systems. The Advanced Dealer Systems Lead Harvesting Platform gives dealerships exclusive access to serious new and preowned car buyers. Because they only allow a limited number of dealership clients within a given geo-targeted area, you need to contact them directly for geo-targeted market availability.