CDK's purchase of Auto/Mate may create a major disruption in the dealer management system (DMS) industry. Here is our take. DOWNLOAD
The exact formula for finance lead generation is illusive and probably varies a great deal based on market and store reputation. However, the following model offers a good guideline for thinking through the key variables: (value of the information provided to the customer + value of the information obtained about the customer) / the sensitivity and quantity of the information required of the customer. I’ll break this down one element at a time.
Lead generation can be measured in quantitative terms, but leads which include credit score are far more valuable than those that do not. Credit score helps the store get the right vehicle and financing in front of the customer early in the process. An increase in finance lead volume at the expense of obtaining credit scores would not be nearly as valuable as the same quantitative increase along with credit scores.
The more valuable the information provided to the customer, the more likely they are to complete the lead form. As an example, receiving a pre-approval notice is of high value to many credit-challenged shoppers.
The value of the information obtained about the customer represents the qualitative value. The most important elements are credit score and contact information. Elements like Social Security number present no direct value to the store and are a sizable liability to the dealership.
Consumers are turned off by having a great deal of information required, and are even less likely to complete the lead form when sensitive information is required, like date of birth and Social Security number.
Using this model, it was determined that an ideal finance lead form would have the following characteristics: