Dealership Marketing

Perfecting the Lead Mix: The Key to Growing Sales in Your Dealership

Perfecting the Lead Mix for your Dealership – White Paper

Dealers receive leads from their own websites; their OEM’s site; and independent Internet sites, which can include large portals as well as auto research, buying, and enthusiast sites. Each source represents different types of investments and different types of buyers – and no two dealers will have the same formula for how much of their lead mix should be allotted for each source. To explore the question of lead mix, Dealix hosted a moderated panel discussion at the 2010 NADA convention. The panel, attended by 50 invited guests representing dealerships of all sizes, resulted in a robust information exchange and debate. In response to requests for transcripts of the discussion, Dealix compiled this edited transcript of the event. You can download it here.

Agreement and Controversy

The panelists agreed on certain important points. For instance, all stated that dealers should have leads from each source in their business mix, and all agreed that evaluation of results should be based, not on lead close rate, but on gross profit per vehicle sold. Certain items, however, produced controversy. Most notably, the question posed by John Holt, CEO of The Cobalt Group and moderator of the discussion, produced different opinions from the panelists

“Which type of lead do you assign to your top salespeople?”

The Set Up

Three industry experts were asked to present and advocate for each type of lead (see speaker bios on page 15 of the white paper.) David Kain spoke of the value of leads from the OEM sites, Brian Pasch of PCG Digital Marketing addressed the contribution of leads from dealers’ own websites, and Anna Zornosa represented the value of leads from independent Internet sites. Note, Zornosa explained that she purposely avoided the term “third party lead” – a term she felt was confusing; instead using the term “independent Internet leads” to refer to leads from independent sites.

Reading through the white paper, there are a few topics that I’ll highlight for discussion purposes, you can then download and read the rest – come back here and share with us your opinion subject(s).

As I read through this, I ask myself; are we really still talking about this? Yes we are, just as we continue the need to talk about lead response and quality of response. I guess that’s why consultants and trainers, many times make a shit load of money training on the same stuff year after year – tweek it a little, and throw their own spin on it – it’s ok, 90% of the population/dealers/businesses never really change and that’s because people never change. Ok – getting of my little rant, let’s move on 🙂 .

Kain was in the corner for OEM leads.

“From an OEM’s perspective, what is critical is that a ‘lead’ be an opportunity to talk to a consumer at a personal level about why a car is designed the way it is, how it fits that consumer’s lifestyle, how it provides safety and security, and what they can expect from owning it.”

Pasch was in the Dealer website corner.

“They (dealer website leads) convert at twice the rate as OEM or independent site leads. I work with dealers who are closing 20 to 25% of their own site leads and 10 to 12% of their independent site leads.”

Anna was in the corner of 3rd Party Leads.

“All three types of leads are important and need to be in the mix. But leads from independent Internet sites uniquely represent an opportunity for a dealer to expand market share.”

Much of the conversation surrounds around not only figuring out what percentage of these 3 lead sources should be apart of your dealers lead mix but what type of consumers are predominantly associated each one. More importantly do you need to “speak” to each one of these customers differently?

Source: R.L. Polk & Co. Consumer Expectations for Internet Lead Shopping Study, May 2008

If you have a solid process dialed in – taking a slightly different approach between the 3 different leads can be beneficial during the initial correspondence and introduction. But let’s face it, getting your lead response time under 10 minutes with most dealerships is a challenge in itself. 🙂

Do you approach your dealer website leads differently than your OEM leads or 3rd Party leads and if so, what are you doing different?

Founder of DealerRefresh - 20+ Years of dealership Sales, Management, Training, Marketing and Leadership.
I LOVE the fact that this conversation is still happening. We all know that OEM and first party (dealer website) leads close at a much higher rate than any third party (independent) lead. If we're still talking about third party leads, then that means most of my competitors are still buying them. And by the nature of third party lead investing, my competitors are mostly concentrating on third party lead closing because they're too invested not to.

I prefer to concentrate on the future. Increasing traffic and lead conversion from my own website will naturally make the lead closing rate fall in line. It is almost impossible not to close your own leads at double the rate of any third-party lead. I can easily give up 500 leads a month from an independent with a lead closing rate of 8% when I'm getting an extra 160 leads from my own website and closing those at 25%. That's 340 less chances to tick someone off, that's 160 people who are closer to being my fans*, and that's a lot less money to be paying.

<a href="http://*" rel="nofollow">*</a>

If it costs me $20 times 500 independent leads to get those 40 sales (8% closing ratio), then I&#039;m looking at a monthly cost of $10,000. What can you do with an extra $10,000 on your monthly budget to generate your own lead?

With that much money you could hire a great digital marketing consultant to drive leads to dealer owned websites. :)

Dealers can also spend $995 a month and join the Automotive Advertising Network (AAN) which provides unlimited high quality leads, SEO backlinks, and social media integration.
  • G
  • May 17, 2010
@Brian While I agree money spent on the dealers&#039; websites is the best spend, it is putting all your eggs in one basket. By this approach (no third-party leads) you are assuming everyone searches the same way. There are still millions out there researching their vehicles on KBB, Yahoo, AOL etc. This is not something you are not aware of. The question to me is what is the right balance to ensure you are getting the right exposure without overspending on 3rd party.

I discovered several years ago our 3rd party leads who were interested in one of my vehicles was not necessarily even in interested in our makes. They were prompted to submit leads to competitive brands to the one they are most interested in.

Yeah, we handled those leads differently by qualifying them immediately to see what they were looking at and where our vehicle stacked up to their first choice and what they liked about that choice. They will tell you how to sell them if you ask
  • R
    Rather not say
  • May 25, 2010
I&#039;m an ISM and my GM hired someone to be my assistant - apparently, but instead this person seems to have taken half my leads, and now I still don&#039;t have that assistant I need and was promised, and I have 1/2 the opportunity. They don&#039;t seem interested in buying more leads right now, so what should I do? Anything I need to know or explain to my GM?
  • F
    Frank Isley
  • June 11, 2010
There is some good information here. However, David Kain is not the honest broker he professes to be. He has been in Cobalt&#039;s pocket for years. So, to sit him on the panel is suspect in itself.
Hi Frank,

Not sure what I may have said to frustrate you or to earn your comment above but the content of the discussion on the panel was not slanted to the benefit of Cobalt or any vendor. The discussion notes will bear me out on this and it was quite an enjoyable exchange about an important topic.

As a businessperson it is helpful for our little company to have a presence in sessions of this nature and coincidentally I left this panel to respond to questions at the booth at the same NADA convention. It&#039;s important for our business to have positive relationships with vendors so we can benefit our clients when they need assistance. We have no paid relationships and do not accept commissions when our clients use their services. This allows us to measure their product results on behalf of our dealer clients and if they are performing we recommend they keep using them and if they are not we recommend they switch to a better option.

You will have to judge for yourself my honesty but it would be helpful if you knew me personally and could make a true assessment. Look forward to a day when we can chat and we can resolve any concerns you have with my character.


David, thank you for pointing out to @Frank Isley that the session during the last NADA was a great panel discussion and displayed a neutral insight for all invitees on the topic. It is indeed very important and a common procedure in the automotive industry to invite panels of renowned Consultants, Dealers and other industry related small business owners into these consortiums to see and hear how they are seeing the future progress.

And yes David, you told the truth, when you left the Dealix panel discussion earlier because of your meeting with our friends at So, all-in-all - nothing really dramatic in this whole story &ndash; no bias, no scandal, no partisanship &ndash; just a great discussion round.