Buying leads at their origin versus buying them from one of the big third-parties.
Now that I’m about to bring on my third lead generating vendor, I thought I’d probe the DealerRefresh community for their thoughts on the choice between buying leads at their origin versus buying them from one of the big third-parties. I’m very much on the fence myself, and usually it just comes down to whether or not I think the vendor’s program works for me.
For those of you, who have never bothered to consider the pros and cons of each camp, let me present some ingredients for the debate:
- Lead generators have a web site- or network of sites- that reel in consumers via SEO, PPC, and other advertising, and subsequently sell that lead to a dealer.
- Lead aggregators buy leads from the premier sources in the industry, like Edmunds and KBB. While most aggregators also generate some “original” leads of their own, purchased leads constitute the majority of their business.
- Most generators will sell you their lead exclusively, as opposed to aggregators who are usually going to sell their acquired lead to several dealers. This sounds like a great benefit, until you consider that consumers often submit leads to several sites. So that exclusive customer information you think you have could easily have already gone to your competition a few days ago via a different web site. Think about the brand awareness of consumer sites and you’ll quickly understand how a consumer could go to Edmunds or KBB first to submit their lead, and then decide later on to google “Honda dealers in NY” and end up at one of the other lead generators’ sites. So in theory, if your generated lead isn’t the only lead that customer sent, it’s probably old information to your competition.
- Lead costs should hypothetically be lower coming from a generator, because there’s one less middleman to get paid. However, depending on the vendor’s program, you could easily pay more for generated leads than aggregated ones… I pay anywhere from $16 to $21 for my generated leads. There’s really no consistency here, as the primary factor in lead cost is the intensity of the program (i.e. closing ratio guarantees, buyer status updates, 800# tracking, etc). Nevertheless, if you have a fetish for paying the lowest possible price for a customer’s information, a lead generator is the way to go.
Anyone have some experiences to share? While I believe it all depends on the vendor, part of me wants to be able to say that one of these sides of the fence is greener than the other.
Internet Director – JelMAC Auto Group