AutoNation Says 'Peace Out' to Third-party lead providers

[ryan.gerardi]

Big fan of the Southwest model. Keeps their costs lower and you know you are getting the best price with them. Car shopping is different though because of the dealer model. AutoNation is unique obviously compared the single dealer too. Because of these things, it's not really an apples-to-apples comparison.

 

[ddavis]

http://www.autonews.com/article/20140417/RETAIL07/140419814/autonation-says-q1-net-income-rose-15-to-95-1-million

Yeah Davis... You're right... what was I thinking...? They are so mediocre...

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Daniel, they are the largest automotive group and they have about a dozen stores in the DFW market. Behind them, in DFW, in the number of stores, is Group 1 and VanTuyl. They don't have one store that beats either a Group 1 or a VanTuyl store. Many of the family stores crush them. Group 1 is smaller but their stock price is $10 more per share. VanTuy is the largest privately owned group and known for their profitability.

They stifle creative people and are notorious for low pay. They will buy a market leader and within a year all of the good people are gone and the store is average at best. There have been a bunch of open points awarded in Dallas and Ft. Worth but none of them went to AutoNation. That tells me that the manufacturers don't want them.

Nothing like reporting to a bunch of MBAs telling you how to do something that they have never done.

There was another article quoting one of their big shots about how they were going to re-invent the internet and concentrate on used cars. It was a year or two ago. I haven't seen any signs of this but again, this is the company that once owned Blockbuster video. You would think they would have learned something about the internet back then.

As far a size is concerned, I remember when Sears was the largest retail outlet and J.C. Penny was the largest clothing chain. There is no other industry that is as vulnerable to big market fluctuations as automotive.

 

[BHavican]

We sell some cars each month from the 3rd party lead providers we use, so it's tough to just stop when there is some ROI there.

However what I've started to do with our BDC is develop processes to better work manifest/equity lists (formerly given to salespeople).

I believe that with a proper action plan we can close those prospects at a similar rate to the 3rd party leads. I guess the thinking behind it is if my team can properly work say 800 new leads per month for example why not cut the 50 I buy and replace them with free prospects from manifest lists, then my marketing director can use some or all that money in ways that will give us more prospects that close at higher percentages.

 

[Aussiewebmaster]

the problem really lies with the increased use of these lead providers - early adopters made serious money with them but now they are out there competing directly with you for leads - dropping them only thins that competition once again and those remaining there will get more from the ones you would have gotten

bit of a catch22 but if there is still profit dropping them just hurts you