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Derrick Woolfson

Derrick Woolfson Business Development

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OEM Leads: The Good. The Bad & The Ugly

Lead generation remains a hot topic as it should! However, the issue itself has not evolved much. Wherein, the same answer is offered - noting that Dealer Website traffic is by far the best source for lead traffic. And while it is not saying that third-party leads are over -  it is telling us that dealers still shell out thousands of dollars a year for low-quality leads! Leads that for all intents and purposes might not even be considered a lead. 

What is a lead anyway? One might offer that a lead is merely a form that provides the customers first name, last name, email & phone number, no? But make no mistake that not all leads are created equal! That said, one of the lead sources that has one of the lowest return on investments are the OEM leads. The leads you are spending anywhere from 15-25 dollars for! (and maybe more?). 

While not all OEMs have the same standards when it comes to lead management or the program they offer. There is a relative conception as to the quality of their leads; where their site (as you might know) is geared towards the OEM, not the dealer. And we know that, BUT what are we doing about that? At the end of the day, it is about selling a unit. And sure, in some facets, the customer will build their unit, and choose the dealer. That leads to another topic (for another day) where the model the customer builds is not offered at their local store. 

More often than not, the customer requests information on a vehicle to then get 20+ phone calls depending on how many stores are in the district. And in some cases more than 20 calls if dealers purchase leads that are not within their PMA! Leaving the customer frustrated resorting to providing little to no information in their lead! 

OEM Internet Lead sub-sources can include: sweepstakes, organic & social which all sounds great! But not so great when their sites do not have strong enough CTA’s. Where while their platform might give dealers more than 200-300 leads. It does not mean it will offer the dealers a strong ROI. Where in some instances the closing rate expectation does not surpass 12%, which albeit it is 2% above national average. But what’s more important to note is that Dealer Website leads have a closing rate 20%+, which is nearly 10% of an increase! 

What does this tell us? It tells us that OEMs have work to do on their platforms and while it is necessary for the OEM to offer informational elements about their brand. It is just as important to brand the dealers! Pushing their inventory,  allowing the customer to easily “click to call” the dealer of their choice housing a drop down to choose their dealer!   All of which can happen on the informational pages vs. having to jump out of the screen to then have to locate a dealer and then be able to call. 

The other issue OEM’s face and have not done a great job working with their dealers on the quality of their leads. Where the customer is largely unaware or expecting the barrage of phone calls, and if the customer chooses to purchase 6-months out, and the dealer is calling - or overcalling - it turns off the customer. And that is not to say that we should not be getting in touch with them. But it does offer that if the OEMs were to focus and work with their dealers, they would not sell and recycle the same leads to all dealers! 

One of the things that the OEM could do is have the customer confirm their zip-code to verify rebates in which case the customer would intuitively insert their home zip-code, which can also trigger which dealer the lead should go too. 

If the dealer were able to focus on their own backyard - with the assistance of the OEM - they would see an increase in sales within their PMA! Versus the game of which dealer is going to drop the price the most, which does not do anyone any favors! 

Well in some cases it does, where if you are a dealer that chooses not to play the 3k loser game you will acquire the customer who purchased out of PMA as a service customer for free. As you did not have to lose 3k to acquire the new service customer from sales. And the dealer that loses big time is the guy who did take the 3k loser for the out of PMA customer who most likely has no intentions of servicing their vehicle with their dealership! All of which can affect their retention rate depending on the number of out of PMA sales made. 

The bottom line: OEM’s have their work cut out for them. Work that will force them to work with the dealers to better the quality of traffic. All of which will better assist the dealers in owning their backyard! It is time the OEM’s support the dealers vs. working against the dealers by pitting them against each other. Making it that much more difficult to sell the brand. 

Do you participate in your OEM lead program? If so, do you have great success with it? Is it mandatory? For those that do not participate have you invested that money in other lead sources? 

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