Auto dealers are pleased with third-party lead generation
As automotive dealers continue to shift marketing and advertising resources to the web, dealers are generally pleased with the online leads they are receiving from third-party lead generation sites, according to a new study from J.D. Power and Associates.
Dealix ranks highest in satisfying dealers with new-vehicle lead services and AutoTrader.com ranks highest in used-vehicle lead services, according to J.D. Power. “The largest benefit to a good performance in the business generation factor is that price becomes less of an issue to dealers that subscribe to online buying services,” says Min Cho, senior analyst of digital marketing solutions at J.D. Power. “Good online buying services can charge more for their leads as long as they deliver on other measures. Satisfying dealers is not just about the fees per lead—it’s more about the cost associated with the vehicle sale and the overall value.”
The study finds that online buying services can help dealers be more successful with closing leads they receive through their web sites by providing more information about the customer to the dealer. When customers shop for vehicles on the Internet, online buying sites will generally match them up with the right vehicle, demonstrate that the vehicle is right for them and then transfer the shopper to the dealership where the deal is closed. However, when the customer is transferred to the dealership, the salesperson generally knows little or nothing about the customer’s overall shopping experience and the shopper may know little or nothing about the dealership, according to J.D. Power.
“Customers, on average, spend five hours researching vehicle models, features and options online,” says Cho. “However, online buying services generally do not keep track of this information, so the customer ends up starting from scratch again once they are connected with the salesperson. The more information a salesperson has about the customer, the easier it will be for the salesperson to close the deal.”
Training on how to handle leads through the online service site is a critical component in dealer success. Dealers who receive training generally experience higher closing ratios for leads and report higher satisfaction with the service than those who do not, she says.
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