3rd Party Leads - What have you done for me lately?
With the annual increases in each of the 3rd Party Lead Providers monthly fees, the question of ‘what have you done for me lately’ really needs to be addressed.
Typically, dealerships will view a ’successful’ campaign by how many vehicles were sold as a result of a particular marketing effort. ‘7 people brought in our newspaper ad this weekend and we sold 2 cars. What an ad!’ is the way ROI is typically measured with print, video, and radio advertising. The beauty of the Internet is that you can determine, down to the penny EXACTLY what each Internet Lead provider is worth to your dealership.
If you are not doing this exercise on a monthly basis, I recommend you start ASAP!!!:
1. Identify each of your Internet Lead providers. These are your dealership website, your 3rd party leads, your manufacturer leads, and any other lead source that is supplying you with customer information in your market.
2. Get the last three invoices from each of your Internet Lead Providers and find out if you are bound by any kind of contract.
3. Using your ILM, CRM, or (if you are a caveman) your email account, calculate how many leads in the form of emails and phone calls each source has produced over the past 90 days.
4. Average your monthly fee from your last three invoices and your average lead count from the past 90 days to determine the Cost Per Contact of each lead source.
The Cost Per Contact is the reason you are advertising online!! The Internet is supplying leads to your dealership at a rate that is SIGNIFICANTLY less than ANY offline advertising source (See for yourself by performing the above exercise on your newspaper, radio, TV, and direct mail campaigns. Prepare to be shocked!). Make sure you are aware of the cost per contact for each one of your lead sources to REALLY determine what is cost effective and what isn’t.
BTW - Don’t be surprised if you find some $400/lead costs for 3rd Party Leads. Just make sure you know about your contract end dates so you can take care of this problem once it is identified!!
I’ve complained to lead providers that they aren’t providing us with ‘good leads’, and in some cases, depending upon what their definition of a lead is, this can be correct. BUT…a lead is someone that has expressed some interest in a product that you sell. When all is said and done though, each incoming lead to your dealership is JUST like a walk-in customer, somebody looking for information on buying, trading, or servicing an automobile. Make sure you have processes in place for constant communication for each of your customers and watch yourself sell more and make more!!!
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