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Dealers Object to Sales Leads Routed to Competitors

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Some dealers think they are paying for exclusive leads when, in fact, they are getting ones that are passed around and re-sold.

A while back, I heard from a dealer complaining about Cars.com’s relationship with a company called RoadLoans. It since has become quite a stir. A lot of dealers have weighed in.

Here’s their beef:

A consumer searching Cars.com clicks a particular dealer’s paid-for used-car listing. A lead is submitted to that dealer. Meanwhile, the consumer is asked if he or she might be interested in RoadLoans financing. If so, click here. But if the inventory-listing dealer is not a RoadLoans client, the lead submitter receives digital marketing about buying vehicles from other dealers who are.

I met with Cars.com CEO Mitch Golub and Vice President Alex Vetter in February, and was assured the situation would be fixed. But it hasn’t been, in my opinion.

In April, it was brought to my attention that Cars.com had started a campaign of emailing customers as many as eight additional vehicles to consider after they had selected a specific dealer’s advertised unit.

Blogs flew across the Internet about that. After fierce dealer resistance, Cars.com said it would discontinue the practice.

Then another dealer showed me screenshots of websites his inventory was appearing on that he didn’t do business with, including CarGurus.com.

CarGurus is dealer-hostile. One blogging dealer showed screenshots of CarGurus.com referring his Cars.com lead to several additional dealers in his area.

In other words, they are remarketing additional units to your lead that came from paid advertising after you thought you were exclusive with that customer.

Many other examples have flooded in. Dealer after dealer showed an underground network of what I call lead-farm websites. They stealthily try to convert a customer off listings you pay for.

CarGurus.com not only tries to direct your customers elsewhere, they rate your deal by some secret formula that lists “Good Deal,” “Great Deal,” “Fair Deal” and “Bad Deal.”

A dealer found three of his units on CarGurus.com, all rated as bad deals. He put in a test lead on his own unit. After Cars.com sent him the lead, CarGurus.com sent him eight other vehicles to consider.

After a dealership I work with found its unit on CarGurus.com, it submitted a test lead. It received the Cars.com lead. It also got a CarGurus email suggesting 20 alternative pre-owned cars to buy.

And get this: The dealer’s own unit was No.17 on that list, following 15 CarMax vehicles. The CarMax dealership wasn’t even in the zip code that he submitted. CarMax gets a lot of good placements from CarsGurus.

Most dealers do not realize this form of piracy is going on.

It’s not just Cars.com using these lead farms. We found CarGurus.com and other suspected bad actors also were receiving feeds from AutoTrader.com, AutobyTel.com, AutoUSA.com, HomeNet and Dealer Specialties. We suspect affiliate relationships.

Cars.com and Dealer Specialties have given dealers a way to disable inventory feeds to CarGurus or any other website you disapprove of. Check your own inventory to see where your car listings are and what websites are carrying them.

Put your used-car inventory VIN Numbers into a Google search and see how many websites have your cars listed. I’m not saying they’re all bad, but you don't know until you submit a test lead and find out for yourself.

Some dealers think they are paying for exclusive leads when, in fact, they are getting ones that are passed around and re-sold.People have said: “Ziegler, this has gone on for years. No big deal.” I say it’s still wrong.

Jim Ziegler is president of Ziegler Supersystems as well as a trainer, commentator and public speaker on dealership issues. He can be reached at zieglerss@aol.com. WardsAuto readers also may comment on this article by logging in or registering below.

Discuss this Blog Entry 1

on Jan 21, 2014

It's a tough one - I say a dealers leads should be his exclusively, but its also useful if your content is spread across to other sites for other lead opportunities. Remember that this works both ways - you might just find your self getting a deal from a competitor website!

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What's Retail Front?

Blogs about automotive retailing, commenting on news impacting the business of selling vehicles.

Contributors

Steve Finlay

Steve Finlay is the editor of WardsAuto Dealer Business magazine. His journalism career started 40 years ago as a crime reporter. A Michigan native, he likes fast cars, big lakes and cold days.

Jim Ziegler

Jim Ziegler, president of Ziegler Supersystems, is a trainer, commentator and public speaker on dealership issues.
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