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On the Point

Show Me the ‘Ups’

After taking a call from an angry dealer, ‘Da Man’ issues another warning to sites that claim to sell customer impressions. He says its time these companies start delivering the ‘ups’ dealers are paying for.

April 4, 2014

A  recent conversation with a dealer reminded me of that scene in the movie Jerry Maguire when Cuba Gooding Jr. screams into the phone, “Show me the money.” The dealer was sputtering with rage after meeting with representatives from one of these online car-buying sites, which he said was directing his customers to other dealers through its online financing tool.

According to the dealer, the “pricks,” as he called them, claimed the company was not a lead provider. Instead, they referred to their company as an information-based website designed to provide consumers with pricing, aged inventory and market comparisons.

Those reps got one thing right: The company isn’t a lead provider.

Folks, it’s time we take another look at what I think is a major rip-off being perpetrated against car dealers, who are paying these companies to provide low-quality leads they resell to other dealers. In fact, Jerry Maguire should be an example to all dealers. If an alleged lead provider can’t show you the money, then what the hell good are they?

So let me ask you this, is your dealership buying leads from a provider you know will only result in one sale out of the 25 you buy? If you’re not sure, it’s happening. In fact, some leads have a closing percentage of less than 1%, while others are being converted at a rate of 18% to 20%. What’s crazy is the people who sold you those leads knew those closing ratios in advance. Even some of the manufacturers are guilty of mixing low-quality, third-party leads into legitimate leads their sites generate.

Aren’t you tired of paying premium prices for leads you can’t convert into a sale? The only thing you get out of these leads are customers telling you things like, “Leave me alone. You’re the seventh dealer to call me today. I already bought a car last month,” or “I was just looking online and had to fill out a form to get information. I had no intention of buying a car.”

First of all, where are these leads coming from? And could you possibly be mixing these third-party leads into leads generated by your own organic efforts? You might be surprised when you pin down exactly where they’re coming from.

Secondly, how many other dealerships are getting the same leads you get? You’ll find that many providers can’t even tell you because they bought these leads on the open market from a wholesale brokerage.

Thirdly, is your inventory ending up on websites you don’t own? In other words, are you putting units on pirate websites that also feature their own inventory. What these sites do is send the leads they generate away from your market?

A few years ago, I played an integral role in leading a movement to reform TrueCar and its business practices. To TrueCar’s credit, the company stepped up and changed its business model to be friendly to both consumers and dealers. Although I am still not a fan of marketing sites that deliver low-gross deals, TrueCar does have an exceptionally high closing ratio. In other words, a TrueCar lead generally results in a sale.

Even Edmunds.com, which I personally despise for perpetuating negative dealer stereotypes, and Autobytel have shown that their leads have an extremely high closing ratio. Of course, there are many other legitimate lead providers out there, but there are also companies selling pure garbage. They’re peeing on your leg and calling it Kool-Aid.

So beware of companies that claim they are just a consumer information site selling “customer impressions,” or some other bogus pop. It’s time dealers tell them, “We know real leads when we see them.” Of course, the best leads are the organic leads you generated without having to buying anything.

So the next time you’re in a meeting with representatives from one of these companies, look these scoundrels in the eye and tell them, “Don’t sell me customer impressions. Show me the ups!”

Comments

  1. 1. Don Wilson [ April 17, 2014 @ 02:41PM ]

    I can't agree more!! Auto Dealers Network -autodealers.net has been designed to connect the customer to the dealer via the Dealers Website and on the Vehicle Detail Page. We are not about generating leads and reselling them to the dealer. Car buyers are fed up with filling out forms and jumping through hoops to reach the car they are looking for. This site is new yet the concept is real.

  2. 2. John Mckinnon [ May 30, 2014 @ 07:38AM ]

    Great article. Very true! Thanks for putting this out there.

    John / TextUps.com

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Author Bio

Jim Ziegler

President & CEO of Ziegler SuperSystems

Jim 'Da Man' Ziegler joined the magazine in 2011 to deliver his On-the-Point message about the car business to dealer principals and store managers. He'll offer strategy advice on everything from sales and F&I to marketing in the digital age. Catch him every month at www.fi-magazine.com.

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