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Ed Brooks

Ed Brooks Automotive Digital Marketer

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ab8742b62452d8854025eafb61840cee.png?t=1Leads from your own website close at a higher rate!

That is the conventional wisdom. And it is something that I agree with.  Now let’s look at why – why do they close at a higher rate? Immediately, I can see one reason; they know you already. They, or someone they know, may have purchased a previous vehicle from you. Or maybe they’ve serviced with your dealership. They have developed some trust in you. They have developed at least some affinity for your store. It is only logical that you should be able to close these folks at a higher rate. This is the payoff for your hard work branding your dealership and establishing a great reputation in the market.

Now, let’s look at a different group of folks that you’ve been able to entice into visiting your website. They don’t know you from Adam. Through strong SEO or an aggressive PPC campaign, you’ve earned a click. It will still require more work to generate a lead. And that brings me to the crux of the matter – will a lead, generated in this fashion, close at anywhere near the same rate as the folks we talked about above?

It would be interesting to look some advanced analytics to track the “customer journeys”.  My sense is the folks that know you already – the first group we discussed – will not only close at higher rates, they will also be much more profitable deals. They aren’t the grinders, submitting form-fill lead requests to six or ten dealers.  The grinders are the folks that give the Internet such a bad name – the reason why floor staff often have a bad opinion of the web.

I’d love to hear your thoughts!  

Brian Pasch
Ed, You bring up an interesting thesis. When you test this thesis you will find that it is very hard to know just how many online/offline influences made a consumer submit a lead form or call any single dealership. Dealers and vendors have very limited insights into the customer shopping journey; everyone has a piece. I am sure that you have heard dealers say that their websites produce "first party leads" but that statement only works in some alternate reality that is not on planet earth. Leads submitted on a dealership's website are not sold to others, indeed, but it does not mean that the consumer did not submit a lead elsewhere nor did they only interact with the dealer's SEO/SEM advertisement. Until we have a better way to track customer engagement, any testing will be tainted by the many influences that can not be seen by any one vendor. Companies like Cox Automotive are building a network of web properties (Autotrader.com, KBB.com, MakeMyDeal.com, Manheim, etc.) to track the consumer journey, which will provide some insights. However, at best, the Cox family of properties will only track a small percentage of online influences. So, before invest time testing the success of different classes of leads, which will be guesses at best, let's focus on answering the phone properly and responding to all leads professionally. That will ensure that we maximize all sales opportunities whether we think they are grinders, liars, saints, or sinners.
Jasen Rice
Good point on the phone Brian, but you will also want to work on getting all your leads, no matter where they came from, to your site so they can get to know you. Get them to like your Facebook page and follow you on Twitter to get to know the store. I always wondered why more dealers don't ask for a "Like" or "Follow" in their follow up email templates to help build that relationship with these "fresh internet leads" they you are referring to Ed that are just shopping from SEO/PPC campaigns or anywhere else. If a dealer is good at social and builds a good story about their store on their social media sites that relationship can be built a lot easier. Then lets see what happens to the closing percentage!!
Dennis Galbraith
I agree with Brian, all leads should be worked regardless of origin or quality score. However, Ed's hypothesis is important and has many implications. A corollary would be conversion rate. If those who come to the site directly or through organic searches including the dealer's name convert at a higher rate than the average visitor through paid search, then it stands to reason that the dealer who is more aggressive with their online marketing will have a lower conversion ratio than the dealer doing nothing to drive traffic to the site (controlling for the quality of the site, vehicle pricing, merchandising, etc.) There may be a difference in both the conversion rate to leads and the close rate of leads; one one may offset the other. It may be possible to lower a dealer's average conversion ratio by aggressively attracting more site visitors, yet making a substantial marginal profit from the addition of paid search. The impact of the new activity needs to be looked at in terms of marginal cost and marginal gain. This can also lead to vendors pointing fingers, the website provider says the additional traffic is poor and the digital marketing provider says the site is poor. A good argument for having the same provider for both. Even more importantly, are these the leads the dealer really needs? A great digital marketing firm will work with the data and the dealer to determine which vehicles require the most exposure. The best value in leads may not be the highest close rate or the lowest cost per lead. Low-cost, high-closing leads for vehicles that are hard to stock and sell in 30 days without leads is not necessarily something to be proud of. Does PPC traffic convert at a higher or lower rate for your website? Do those leads close at a higher rate? Does one group of visitors contribute to walk-in traffic at a higher rate? Does one variable offset the others or Is it a compounded tragedy? Is the marginal benefit sufficient to justify the opportunity cost? The answers will vary based on the quality of the website, the dealer's reputation, pricing, inventory, and other variables. While it may seem like there is a lot here that is not known, it can all be tested with a higher degree of certainty than just about any other form of marketing. There is also some common sense that needs to be put into play here as well. Many dealer's websites are so poor and their vehicle merchandising so scant that just about any effort to drive additional traffic to it would be pointless. Third-party sites don't deliver as much value as possible when they link shoppers to a poor website experience, and some manufacturer mandated or certified sites fall into this category. If the customer does not already have a sufficient preference for the dealer it certainly will not be enhanced with a trickle-poor website. Over time, the base of customers for these dealers will dwindle to the point it is impossible to make the online investments necessary to compete. Today, it's very hard to help a franchised dealer selling 35 cars per month, unless they are willing to over invest and grow to a point that truly scales. Sometimes it makes sense to take action even as you gather the facts needed to take better action. Great topic Ed, as always!
Ed Brooks
Thanks for all of the input folks - I love a good conversation! I'm not suggesting that any dealer should treat any lead as a "second class citizen". In the short-term, EVERY lead needs to be responded to professionally and worked diligently. As a long-term strategy, I think paying more attention to reputation and branding (and perhaps investing some additional money) will pay dividends. I think we all agree that the customers that have some affinity for you, the folks that you've earned some trust with, close at a higher rate and are probably more profitable. Nurturing that affinity needs to be a priority. So, maybe, rather than chasing "fresh" leads through PPC you can find the "Glengarry Leads" in your own existing customer base.
Keith Shetterly
Ed, I looked at this when I was eComm for a 3-store group. First, to the point of not knowing the route customers actually take, I agree--however, take a look at your Google Analytics to see how the site visits are created. Very often (to a great degree, to my own experience), shoppers either type the dealer's name into search or type the actual domain name. You can't assume that's their first step, that they know you, or what, as they could've just seen your name on a 3rd-party sites' inventory a week earlier and now are coming to you directly. From visits to leads, some of the logic still applies--but choosing to submit a lead on your dealer site is a higher commitment to YOU specifically. And it that commitment, I found, that made the lead closing higher. You were SELECTED at a higher interest than 3rd party leads and/or 3rd party inventory sites. In other words, to borrow your point, you became KNOWN to them as a direct choice, and they took it. Great point, by the way. :) Thanks.

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