One of the unexpected consequences of the Cash for Clunkers
program is that car dealers are so busy that they are unable to handle the leads from third party lead generation services. A few months back dealers could not get enough leads to drive sales to their bottom line.
One of the largest automotive lead providers responding to our inquiry why our lead sales were down responded that car dealers have cut back on buying leads in August. From our estimates dealers have cut back anywhere from 25-40% of their normal lead spending
. Have you done the same?
Thousands Of Leads Torched a Day
For example, our Cash for Clunkers website has over 800 leads a day
that can not be placed with new car dealers. Imagine the thousands of leads generated by Edmunds.com, Motortrend.com and other popular lead generation websites each day. All of these leads will become stagnant and cannot be resold under normal contract terms which dictates that leads have to be send to dealers within 30 minutes of being entered into a website form.
It seems that car dealers are flooded with calls and walk-ins that are interested in buying a car under the Cash for Clunkers program and they don't need extra leads. I can understand the rationale especially if the dealer is running low on inventory but I would say that turning away leads may not be in their best interest.
September Sales Projections
Not all third party leads result in an immediate sale. Leads that arrive from 3rd parties can represent consumers in the beginning of the sales cycle or at the end of the cycle. If the CARS program has awakened the consumer to action, it won't last for very long. We predict that the total $3 billion will be used up by Labor Day weekend.
Cutting back on lead purchases now may be a result of dealers being exhausted with all the additional paperwork generated from the Cash for Clunkers program. But in a few weeks that will be gone and dealers who turn away new leads in August will be creating a sales gap in their September and October pipeline.
Automotive Support Sales May Take a Hit
I also imagine that automotive sales support services may be having a tough time getting new clients in August. Sales professional calling up a dealership in August to sell them a new tool to convert more sales, increase visitor time on their website, or to drive more traffic to their website will most likely be told to call back
at the end of September.
So its a good time to be selling cars after a horrible past 12 months and probably rough times for the support industry.
Dealers will have to think of new ways to continue the "good times" this fall is Congress does not inject more money into the Cash for Clunkers program. That would mean getting back to the basics.
Interesting times indeed.