Lead Providers Should Offer More Transparency

The third-party Internet lead providers I know are operated by good people who want to provide a valuable service to car shoppers, dealers and auto makers.

Companies like Autobytel have worked diligently to bring buyers and dealers together using the magic of the Internet. Likewise, AutoUSA and Dealix are well-intended companies that realize in order to grow their business they must also grow the businesses of the dealerships that buy their leads. 

Beyond the well-known third-party lead providers are others that lack marquee profiles but each month send dealers thousands of leads in the name of auto makers. Companies like Shift Digital and Urban Science do that.

Lead providers are necessary and generally beneficial to new-vehicle sales across the country. However, if they want to thrive, not just survive, they need to be totally transparent about the sources of the leads they sell.

The business model used by most lead providers is that of a lead aggregator.  They sell leads to dealers and auto makers from their own sites (AutoByTel and AutoUSA) and sites they own (Dealix’s InvoiceDealers) as well as leads they buy and then aggregate to dealers from root lead sources.

There are hundreds of these root lead sources that are not well known to dealers. But you can easily find them if you search for your brand’s current make and models in your community. 

These root lead sources typically show up on the side bar with the other pay- per-click advertisements just to the right of the organic search. A recent Google search I conducted using the term “2013 Ford Fusion Lexington KY” returned several results including one that said, “Don't Pay $21,700 for a Ford Fusion – Submit Form for a Free Quote!”

A click on this link www.fordfusion.carpricesecrets.com takes us to a site with a headline, “Did You Know Every New Ford Fusion Has a Secret Price?” 

When I filled out and submitted the form to obtain my secret price, I was given the option to get additional pricing on Mazda, Honda and Chevrolet models.

Wow, four quotes just for filling out one form. Sadly though, four dealerships will receive leads from a presumed buyer interested in their brand. But the salesperson likely will not know the origin of the lead because it will be masked as a well-known source, too often as a manufacturer third-party lead.

Oh, and the four dealers that receive a lead like that? Each will pay for it, even though none of them will know whether their brand was the primary choice of the auto shopper. 

We teach dealers how to effectively respond to their leads and how to motivate car buyers to visit their dealership. One technique is to read the lead and identify the source. 

When the source is identified as a manufacturer partner or a manufacturer third party or even one of the big-three lead providers (Autobytel, AutoUSA and Dealix), the dealership can’t be sure of the original source and therefore doesn’t know what the customer experienced during the lead-submission process. 

We encourage dealers to take digital field trips with their Internet sales teams, clicking where the customers click. That gives a clear understanding of their experience and actions before they hit “submit.”

When dealers know what the customer experienced, they can respond accordingly, knowing what the customer was told during the shopping process. This helps buyers and sellers understand one another. 

This works great when the sources are clear-cut such as Kelley Blue Book or Edmunds.com, but it is confusing when the source is called a manufacturer partner or lead provider.

There is no good reason why this root lead source isn’t clearly identified to the dealership that buys the leads. The reasons for not providing the names of these obscure sources are likely to keep the dealers from being concerned with the quality of individual sources. But that’s not fair to those who write the check for the leads.

All dealers appreciate that leads are scrubbed for valid phone numbers and email addresses before they are forwarded to them. The leads I am concerned about are the ones that get through filters without dealers knowing they are the third or fourth brand choice or that an invoice price or a below-invoice price was provided.

This would be useful information for dealers to know. It would help their sales staff when replying to the shopper.

If Trilogy, SmartLeads and TrueCar can provide the sources of their leads, then so can all the third-party lead providers.

It’s time to eliminate unnecessary tension. Let shoppers know a dealer likely will call to provide a price. Tell dealers that a shopper has shown an interest in a brand, but it was a second or third choice, and that the shopper already knows the invoice price.

It’s only fair. It’s also the best way for the business of lead providers and dealers to thrive.

David Kain is president of KainAutomotive, an Internet sales/BDC training and digital marketing consultancy (www.KainAutomotive.com). He also holds an interest in a family dealership. He can be reached at [email protected] and 859-533-2626.