Joining us today to discuss Cox Automotive’s new whitepaper, “The High Cost of Poor-Quality Leads”, is Kevin LeSage, director of digital marketing for Autotrader.
VIDEO TRANSCRIPT:
Jim Fitzpatrick: Welcome into the show, Kevin.
Kevin LeSage: Thanks, Jim. How’re you doing?
Jim Fitzpatrick: Great. So can you tell us about the findings from Cox Automotive’s white paper, The High Cost of Poor Quality Leads? I love the title.
Kevin LeSage: Yeah. So basically, we partnered with VinSolutions, obviously our CRM solution, to identify and really analyze over 3 million leads and look at the quality of those leads. So what we mean by that is after a dealer gets the lead, what’s the show rate of that lead? And how often are they actually closing lead to sale? So you know, I like to tell dealers today it’s not always just about generating the leads, it’s time to start really monitoring the quality of those leads, and making sure that customers are actually coming to you with the right questions. And, we’re informing our customers along that sales process.
Jim Fitzpatrick: What are some of the most common mistakes that dealers make when identifying good or bad sales leads?
Kevin LeSage: Well, I’d like to say immediately, one of the first things we have to do is learn to cut off bad quality leads at the source. But when consumers are shopping for a car, dealers really need to learn to arm that consumer with the information they’re looking for. Poor quality leads can be things like simple questions that dealers just can’t find answers to on your website or on Autotrader. So, what we like to do is really arm the consumer with the experience they’re looking for. Give them that information and not necessarily beg them for name, email, phone number to get the information they’re looking for. What we find is when we do arm them with that information, and then they convert into a quality lead, then that shopper’s much more receptable and educated when coming into that sales process with the dealership.
Jim Fitzpatrick: What do dealer’s stand to lose if they spend time on bad leads?
Kevin LeSage: Well, we’ve done some research on it and we put a price figure to it. But honestly, if you think about how demoralizing it is for a dealership to have sales guys chasing poor quality leads, and consumers might just fill out a form for the information they’re looking for, literally giving the name Elvis Presley with a fake email address. So that’s just a waste of time at a dealership. And dealerships need all the efficiency and software and tools and process at the dealership they can get. So, really by making sure that they’re working with partners that deliver those high-quality leads will make a big difference for them.
Jim Fitzpatrick: So how can dealers ensure that they are chasing quality leads?
Kevin LeSage: Well, you have to, again, make sure you’re working with the right type of partner. When you’re really sourcing through those partners ask them the type of customer experience they’re delivering. Are we going to be showing pricing? We don’t want people reaching out for a lead just to ask what the price is of the vehicle. Are we giving them that information? So again, make sure you’re working with partners that are giving pricing, they’re merchandising correctly, and arming the consumers with exactly what they’re looking for.
Jim Fitzpatrick: Sure. Is it safe to give pricing on vehicles today?
Kevin LeSage: Oh, I think you have to do that today. I mean, I’ve had this conversation with dealers over the last decade, right? Consumers have had the expectation that we’re going to be giving pricing and we’re going to merchandise correctly, right? I think that’s only becoming more and more important as a foundational element to a digital strategy. No one’s going to buy a car until they see it first, right? So we want to make sure that we optimize that consumer touchpoint with the merchandising, and all of those little opportunities that we can find along the way to optimize that consumer experience.
Jim Fitzpatrick: Yeah. A friend of mine, at a party recently, said there was a dealership that he went to that was close by his house, that he had actually purchased a car from five years ago. He went onto their site to look at their used cars and none of them were priced. He got so frustrated that none of these vehicles were priced. He said, “I don’t care how much they sell the car for once I go in there, I’m never buying a car from them again.” He said, “That to make it that difficult in today’s market where I can’t get pricing right up front on their website, I have no use for them.”
Kevin LeSage: And that’s a perfect example too Jim. People might call in as a lead just to ask what the price is. Then we’re going to drop off because they’re just looking for that one piece of information. So arm them with the price. And with digital retailing tools, like Accelerate we have on Autotrader now, people can actually enter their credit score, get real APRs. Autotrader can arm the consumer with the information they’re looking for, and that’s going to separate the dealership and create the efficiency when it comes to really monitoring those high-quality leads.
Jim Fitzpatrick: Sure. And I think it separates the old school dealers out there from the new school dealers out there.
Kevin LeSage: Hundred percent.
Jim Fitzpatrick: The old school dealers is don’t give anybody a price, get him in here, let’s lock them down. Let’s fill them up with everything but the information that they’re looking for, which is best price, trade allowance, best interest rate, down payment necessary. It’s just an old school way of thinking. So for the dealers that are out there listening to me right now, stop it. There’s no place for it.
Kevin LeSage: Yeah. If you actually said a good point too about getting the consumer in the dealership, right? The old school way of thinking, just get them in the door. Let’s be at the front run.
Jim Fitzpatrick: Set the appointment.
Kevin LeSage: It’s more about getting the dealership to the consumer and not the consumer to the dealership today.
Jim Fitzpatrick: That’s right. That old school way of thinking in the industry is to say we don’t trust the consumer at all. We know if we give them a price, they’re only going to shop us. They’re only going to undersell us by 100 bucks. And that just isn’t the case. I mean, CarMax today wouldn’t be the nation’s largest used car retailer for 27 years running, if in the event that customers said okay, we got the best price and now we’re going to shop it around and not go there. In fact, it’s the reason many people go to a CarMax because of the ease of doing business, and getting the pricing upfront, right?
Kevin LeSage: Yeah. And it’s really nothing a dealership can’t offer too, right? I don’t see CarMax offering a competitive advantage that a dealer can’t. They just do a good job of marketing it and really getting that message out to the consumers of transparent pricing, or whatever their competitive advantage is. Dealers today need to have that clear why buy message. They need to do a good job of getting their inventory to the consumer and again, making sure that they’re arming the consumer with the information they need without having to identify and give name, email, phone number. Because I think moving forward in this industry, less and less people are going to want to fill out forms and identify their personal information. So it’s more about that consumer experience. And really using that as your competitive advantage at a dealership to be able to draw that consumer into your store rather than your competitors.
Jim Fitzpatrick: I agree. I agree. What advice would you give to dealers trying to identify quality leads from bad ones?
Kevin LeSage: Again, I would say the biggest thing I would hype on is the fact that you need to be transparent. Like we brought up pricing as a good example. My story is my wife’s shopping for a new car today, and we’re in Vermont. So Subaru’s are very popular, but the Subaru dealership up here it doesn’t have custom photos of their vehicles. So it’s really frustrating for her because she can’t see the car. It doesn’t mean that she’s necessarily going to drive in or call to ask questions. It’s just a frustrating user experience that’s not arming her with the information and the content that she’s looking for.
Kevin LeSage: So pricing is going to be a huge one. Merchandising your inventory correctly. Making sure you have those detailed clean custom photos, and you’re really making an effort to get all that information to the consumer without them having to identify online too. The thing is with dealers as the dealers that include price on their listings actually get 53% more VDP views. So it really just goes to show how important pricing, and getting those custom photos, is for the consumer today.
Jim Fitzpatrick: Well, Kevin LeSage, Director of Digital Marketing with Autotrader, I want to thank you so much for joining us on CBT news. Very enlightening. I completely agree with all of your comments. Give the price, dealers online. That’s what consumers are looking for. The days of making an eight-pound deal on a Toyota Corolla are over. So just price the cars right in the marketplace. Trust the consumer, and you’ll get a consumer, I think, that you’ll be able to win over for life.
Jim Fitzpatrick: So again, thanks so much, Kevin. I appreciate it.
Kevin LeSage: Of course, Jim, thanks a lot. Have a great day.
Jim Fitzpatrick: Thanks.
CBT Automotive Network, the number one most-watched network in retail automotive. This has been a JBF Business Media production.
