CDK's purchase of Auto/Mate may create a major disruption in the dealer management system (DMS) industry. Here is our take. DOWNLOAD
If you've been following the trends for the last year in the automotive industry, you’ll note that there are some dealers that are pushing all of their advertising dollars towards driving traffic to their websites. It’s a strategy that was made popular when a large dealer group declared that they were going to focus on generating their own leads and wrote an interesting piece about why they were doing it.
Unfortunately, the strategy that they’re adopting has been misunderstood by many. The idea is that they wouldn't be buying leads from other sites anymore. They never declared that their inventory wouldn't be available on other sites. It’s a concept that makes sense – generate your own leads, whether they’re coming from third-party sites or the dealership’s website.
In an article titled, Why Car Dealers Should Adopt a Modern Digital Merchandising Strategy, we went into detail about why many consumers prefer to shop on third-party sites rather than on a dealership’s own website. The perception of competition and choice has made many consumers today skeptical of the isolation that happens on a company’s own website. The diversity they get on the third-party sites is ideal for many modern shoppers.
This modern strategy translates into companies doing what they can to have their merchandise show up on Amazon and Newegg. It’s why airlines and hotels work with Priceline and Expedia. It’s why dealers should have their inventory on Craigslist and Autotrader.
We all know that the best leads are the ones that come directly from your own website, but you can’t force people to go there. You can put all of your marketing budget into promoting your own website and you’ll still miss out on a good percentage of people who simply won’t go there, at least not initially.
A best practice is to cast the widest net possible. Get your inventory in front of more people regardless of where they’re searching. Whether they go to Google, eBay Motors, or Backpage, you want your inventory to be in front of them. Posting to other sites will increase the number of people who then visit your website for more information on the cars they find.
We aren’t going to argue against the concept of pulling back on buying third-party leads, but we want to make sure that everyone knows that the strategy being discussed is not one that abandons the use of third-party sites altogether. Regardless of whether you’re buying leads or not, you want to have your inventory visible to as many people as possible.
Even CarMax, one of the first large companies to completely abandon posting inventory to third-party websites, has recently began adding their inventory back into the mix. There is simply more reach available to dealerships and dealer groups when they cast a wider net.
Put your inventory in front of more people on or off your website and you’ll generate more leads for yourself. That’s the modern strategy.