The great e-mail debate

How valuable are e-mail leads? The industry still can't agree.

Some experts preach the need to pursue Internet customers and design dealership processes that cater to them. Dealers on the front lines haven't bought into all the hype.

In an EDS study of dealers' information technology attitudes, 96% of dealers surveyed report a maximum of 20% of their leads coming from the Internet. Yet, only 6% of those dealers say the quality of those leads is at least above average. Most dealers — 56% — rate those leads poor to very poor.

One problem is that many consumers shop for vehicles on several different Web sites and often will send emails for one vehicle using several third party sites. Dealer end up getting redundant leads from the same prospect.

Another problem is that Internet users are often unwilling to part with personal information such as phone numbers and addresses. Yet many dealers don't consider the lead without a phone number or address to be valid.

Says Chip Perry, CEO of AutoTrader.com, one of the leading online buying sites, “The industry got started in the wrong direction, when it focused on creating email leads.”

He believes the email approach grew out of a mistaken belief that the Internet was a transactional tool rather than an advertising tool.

He says, “People are information-hungry. Dealers who respond by providing the most information to the customer are winning. But we shouldn't allow that tiny segment of the email customer to control how we manage the dealership.

“The key is to be sensitive to the Internet customer, but a dealership should not be controlled by that small segment that wants to buy online.”

Approximately 90% of AutoTrader leads are phone leads — with a better closing ratio than email leads, says Perry.

Cars.com is piloting an Internet product that does not allow the consumer to email but only call.

“We have dealers asking us to provide only phone numbers,” says Cars.com CEO Mitch Golub.

A different perspective comes from Kevin Root, vice president of the Cobalt Group's Dealer Advisory Services.

“Customers do want to be responded to by email — the problem is that we're not doing a good job of responding,” he says.

Cobalt's internal study indicates 58% of e-leads sent to the dealer go unanswered.

EDS says dealers over the past three years are slower in responding to emails.

Says Root, “The only good news is that we're making it hard for these people to do business with us, and, yet they're still doing business.”