A Lead is a Lead

[ddavis]

I remember a F&I director questioning me, in a staff meeting, why I would drop a lead provider. Why wouldn't you want more leads?

We were in an old facility and lacked phones, desks, computers and drops. I got a quote for a new phone system and thought that Pamela Anderson is going to be the receptionist and sexual favors must be involved.

This store had obvious limitations but don't they all? You can have a large facility and rows of phones and computers. Even with a full staff of ISMs and a BDC, is there a point where, low percentage leads become too expensive? With abundant resources, is a lead a lead?

 

[Jeff Kershner]

Even with a full staff of ISMs and a BDC, is there a point where, low percentage leads become too expensive? With abundant resources, is a lead a lead?

When in the position of Director of Marketing, it is/was my job to acquire and drive the BEST - highest closing leads as possible into my dealership. This includes internet leads, phone calls and even walk-ins. That's my job!

Internet form leads, phone calls, walk-ins are all leads and when comparing the physical source of the lead then YES a lead is a lead. But when considering the advertising influenced source of the lead - then NO a lead is not just a lead.

I was privy to thousands and thousands of leads being rolled through Polk Lead scoring and then up against registration data. After studying this data for 3 years, I would say NO a lead is not a lead. Some leads close at a higher clip, in a shorter time on the intended vehicle of interest.

If a lead source is not performing and you can honestly say you're giving these leads the same attention and process you do your other lead sources, only then would it be fair to rate that lead source based on closing ratios. Side note: What if a lead source is driving appointments and appointment to show but not resulting in sales (it happens). Then you need to assess the lead sources and the process. This goes for any lead sources for that matter.

So why wouldn't you want more leads?

Why would you want more leads if you are not set up and have the resources and process to close at an above average closing percentage?

I wouldn't add more leads into my mix for the sake of getting another lead. That's merely throwing enough shit up against the wall to see what sticks. Work on quality over quantity. When speaking of Internet leads alone, I thrive for a 15+% closing ratio (with a balance in leads to employees) before I bring on a another lead source for the sake of getting another lead.

 

[jon.berna]

Here are my factors for reviewing leads sources in no order:

1. Lead velocity - average time to contact, average time to sale
2. Gross profit - (you have to remove the outliers first)
3. "Target Market" of lead source - my PMA or my competitions
4. Leads to employees (depends on who is handling to create the target)
5. Leads to sales target - do I have enough leads to sell X amount of cars assuming an overall 21% closing rate

Conversion is not as important as the factors above. Here are my explanations:

1. If leads sell fast it's just like turning a used car the day after you take it in. If they take forever it will take more man hours and effort to massage the opportunity
2. If a lead source converts 80% of the time but you only make $15 a sale was it worth it?
3. I will live with a lower result if I am con-questing my friendly neighborhood dealer
4. Less leads can mean more sales provided your staff is properly trained
5. What is you sales target? Back into what you need and plan accordingly

 

[Jeff Kershner]

Here are my factors for reviewing leads sources in no order:

1. Lead velocity - average time to contact, average time to sale
2. Gross profit - (you have to remove the outliers first)
3. "Target Market" of lead source - my PMA or my competitions
4. Leads to employees (depends on who is handling to create the target)
5. Leads to sales target - do I have enough leads to sell X amount of cars assuming an overall 21% closing rate

Conversion is not as important as the factors above. Here are my explanations:

1. If leads sell fast it's just like turning a used car the day after you take it in. If they take forever it will take more man hours and effort to massage the opportunity
2. If a lead source converts 80% of the time but you only make $15 a sale was it worth it?
3. I will live with a lower result if I am con-questing my friendly neighborhood dealer
4. Less leads can mean more sales provided your staff is properly trained
5. What is you sales target? Back into what you need and plan accordingly

Jon,

While I appreciate your factors for reviewing leads sources, I'm not sure I agree with your statement "Conversion is not as important as the factors above" but then again I don't think you agree with it either. The end goal of any lead is a conversion into the showroom. After that there are too many human factors that come into play, as you state in your #4 explanation.

3. I will live with a lower result if I am con-questing my friendly neighborhood dealer

But what if you are performing #2 on your list and only making $15.00 - with no chance of service retention?

I don't mean to completely challenge your thought process but it makes for great conversation. As I speak with many dealers every day, and I'm finding many are re-evaluating their 3rd Party leads for 2012. They struggle getting into the double digits closing ratio with most of their 3rd party leads.

Being a Lead is NOT just a lead (IMO) as I stated above in my first response, maybe the next phase of this question is "What Makes a good lead and how do you determine it to be a good lead?"

 

[Derek Bess]

Being a Lead is NOT just a lead (IMO) as I stated above in my first response, maybe the next phase of this question is "What Makes a good lead and how do you determine it to be a good lead?"

Good call Jeff,

My problem with 3rd party lead providers and PPL providers is there isn't enough transparency when it comes to finding out how these leads were obtained, plus we all know many of these leads are sold to competitors within a certain zip radius. How many times do you get a hold of a lead, only to be told they never requested information? The higher education sector has been scrutinized over bad business practices when it comes to obtaining leads and the DOE is now stepping up to the plate and making schools be accountable for 3rd lead providers.

I believe there are many factors that come into play that help determine if a lead is good or not. I believe a lot of good leads are handled incorrectly which result in drop off.