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The Pros and Cons of Auto Trigger Leads
If you are considering buying trigger leads for your store you should consider both the advantages and the disadvantages.
Trigger Leads
Here at Auto Credit Express, we know that the Fair Credit Reporting Act of 1970 permits consumer credit reporting companies (the credit bureaus that include TransUnion, Experian, Equifax and Innovis) to use the data contained in their files to compile lists that they may sell to creditors and insurers to make firm offers (preapproved / prescreened) of credit or insurance that are not initiated by the consumers, themselves.
And while consumers, themselves, are able to opt-out from receiving these offers, most don’t know that they are to do it, much less how to do it. Because of this, many consumers are surprised when they receive a solicitation through the mail or a call on the phone regarding such diverse solicitations as car insurance, car warranties and credit card offers.
And while much of an individual’s information remains relatively static, there are certain changes that can “trigger” a change in personal information. This is where the trigger lead comes into play.
Request for credit
One of the most important trigger events, at least from a dealer perspective, is a request for automotive credit. This means the customer is not only in the market for a car, but a credit application has been filled out by a customer and a credit inquiry has been initiated by either a dealer or, better yet, by a lender in response to a dealer request or directly by the customer. Either or both scenarios will result in a “trigger lead”.
The slicing and dicing of leads
Once the trigger has been “pulled”, the leads can be scrubbed further to include specific credit score ranges with knockouts for bankruptcies and repossessions. Most lead providers will also guarantee you exclusivity for at least three days and you can pick the areas you wish to market to based on zip code.
You can further narrow down the list using such data as months remaining on trade-in, payment information and the age of the trade-in. Credit information can be based on score, mortgage information, student loan information and high credit amounts, while derogatory knockouts can include not only repossession, credit counseling and bankruptcy, but the type of bankruptcy and whether it is active or discharged.
Other data sources
In addition to data provided by the credit bureaus, resellers can also access public records as well as records from companies such as Lexis/Nexis and ChoicePoint.
Advantages
• The leads are fresh – most providers will guarantee a lead is just 24 hours old when you get it, with a good chance to steal the customer.
• If you have an aggressive subprime department, there is a good chance you can get the deal due to a turndown from another dealer before the customer goes shopping elsewhere.
• The leads, themselves, are inexpensive – ranging from as little as .40 per lead to less than $1 per lead.
Disadvantages
• The leads will all have to be cold called. There will be no email addresses and regular mail may take to long to reach them – you are, after all, paying for “instant” leads and you normally have only 3 days of exclusivity.
• Most leads will have no idea how you received their information and may be resistant to a sales pitch.
• Many of these leads may have already purchased a vehicle and signed a finance contract (we’re not talking about spot deliveries – but legitimate contracts).
The choice is yours
As with any product, you get what you pay for. Trigger leads are affordably priced for a reason – there is a high rate of rejection and the time and effort you have to put into them in order to get a reasonable return on your investment is high, since the method of contact is labor-intensive. The customers you contact have not solicited anything from you and are not only not expecting your call, they may be insulted by the fact that you’re contacting them.
Comments (11)
March 17th, 2009 at 9:51 am
Jeff,
I have forwarded your information to our sales department. You will be contacted shortly.
April 2nd, 2009 at 1:08 pm
hi steve
April 2nd, 2009 at 1:14 pm
Wes Crumby,
Good to hear from you. How are things?
January 17th, 2010 at 6:04 pm
As with any product, you get what you pay for. Trigger leads are affordably priced for a reason – there is a high rate of rejection
January 17th, 2010 at 6:04 pm
The leads, themselves, are inexpensive – ranging from as little as .40 per lead to less than $1 per lead.
January 29th, 2010 at 3:58 pm
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March 16th, 2010 at 11:36 pm
Triggers work but only if used correctly, I consistently see a 4 to 9% response rate on MAILED trigger data. It has to go out daily, local and look professional, (not a easy task) I am also looking to build a 2nd independent phone append and email append to this data, no silver bullet but it will help.
May 18th, 2010 at 4:37 pm
Wow..very good…Nice blog and well updated…
December 23rd, 2010 at 3:05 pm
I’m going thru a situation now where Ford Motor Credit are completely ignoring the statute. Federal and sometimes state law state that after a bankruptcy discharge that the creditor can’t attempt to collect the debt but they are in this case. It’s really troublesome that no one seems to look out for the little guy.
February 10th, 2011 at 1:59 pm
There are serious legal and privacy issues raised by trigger leads which push the concept of prescreening beyond what the FCRA allows. Any auto dealer using a trigger lead risks liability as no court has ever approved trigger leads outside the mortgage context which is a commodity different from auto finance. There may also be possible tort claims for interference with contractual relations or similar concepts from the dealer whose activity generated the trigger lead and consumer privacy (tracking consumers around is arguably not a permissible prescreening criteria) and state AGs are looking closely with disfavor on trigger leads. So let the buyer beware.
July 22nd, 2011 at 9:36 am
As with any product that uses customers credit, you have to have accountability.
No dealer should ever do trigger leads themselves unless they can guarantee that any trigger lead they receive get a pre-screened offer of credit mailed to them the same day.
Plus are they are compliant with the ” Do Not Call”laws.
There are so many “fly by night” companies that just give the dealers names and addresses and a bunch of blank mailers for the dealer to send out.
There are actually companies out there that just sell the dealers a bunch of names.
I have run dealers for 30 years now, and it seldom gets done on a consistent basis.
Dealers should just sell cars.