Articles: Marketing & Sales

By Dave LaLonde

Minimizing Risk When Utilizing Third Party Lead Sources

Dave LaLonde is Senior Vice President and Search Engine Optimizer for Auto Credit Express. The ACE Group is a special finance total solutions firm offering their dealership partners entry level and advanced sub prime training, an easy to use online software, and an expert auto sales lead system.

Traditional sources of advertising such as television, radio, and print have long been scrutinized by consumer advocates such as the state Attorney General and the Federal Trade Commission. These traditional mediums have high exposure; the message delivered via these mediums is heard by the general public, and your competitors, whether or not they are a candidate for your services. If a dealership intentionally or unintentionally makes a false claim in their ad when using these mediums, chances are they will be challenged by one of these advocacy groups.

The same consumer protection laws that apply to traditional media apply online as well. The internet marketplace, however, is much like the Wild West. Back in the 1800's, the western states and territories had laws, but not enough sheriffs in place to enforce the law. With the low start up cost associated with launching a web site, thousands of new sites are created each day. In fact, there are over 24.5 billon English web pages originating from numerous countries that target American web surfers. Some of these sites use deceptive tactics to coerce their visitors to perform an action, such as completing an auto loan lead form. Many of these leads then end up at a dealership that subscribes to a third party lead program as a sub prime finance lead. Unfortunately, like the Old West, there are not enough sheriffs around to separate the cowboys from the rustlers, so dealers must perform their due diligence and protect their own interests when utilizing third party lead sources.

Sources of online traffic used to generate sub prime leads.

Dealerships that subscribe, or are considering subscribing, to a third party lead program should understand the differences between the sources of online traffic used to generate a sub prime lead.

Search Engine Results – Compared to other traffic sources, leads generated via sites that appear when a consumer proactively searches for a product or service online tend to be of higher quality.
- Sponsored Search Results - Labeled as "Sponsored Links", these are displayed on top of the results page when a web browser searches for something online. The site that pays the most is usually displayed first.
- Organic Search Results - These are displayed below the Sponsored Links on the results page when a web browser searches for something online. Placement is determined by the search engines algorithm.
Web Portals – Many websites sell ad space on their site. These are usually banner or text link ads.
Email Campaigns – Anyone that has had an email account for a short period of time is familiar with this, it's called Spam.
Turndowns from Direct Lending Sites – Some of the sites that offer direct to consumer loans resell the consumers information to third party lead sources if they do not approve the consumer for a loan.
Ads that target competitor sites – Many computers are infected with malicious programs that display advertising, these programs are known as Spy-ware or Ad-ware. If Dealer A subscribed to an Ad-ware campaign they could have a pop-up ad displayed whenever anyone infected with the Spy-ware visited Dealer B's website.

As I have discussed in a previous article, if you intentionally mislead web visitors to submit their information online, the lower your chances are of converting that lead into a car sale.

Some of the deceptive ways lead generators use to generate sub prime leads:

Not displaying that they are a car buying service or a dealer network, not a lender.
Not disclosing that the service is primarily for those with credit problems.
Tying in a free gift with the lead submission process.

As the demand for leads from car dealers rises, so will the influx of third party lead sources. Before subscribing to a third party lead service, dealers should interview at least two companies and ask the right questions.

Questions to Ask Third Party Lead Sources

How long have they been in business? How many references do they have?

Newer companies may not have the financial wherewithal or proper insurance coverage to withstand a lawsuit filed by a consumer that has fallen prey to deceptive lead generating tactics.
What is / are their primary lead generating site(s)?

a. How do they drive traffic to these sites?

The first step is to evaluate the site(s) that they claim is the primary source of their leads. Does the message on the site coincide with the dealership's or the sub prime department's philosophy of a quality lead?

If the service claims that the majority of their traffic comes from keyword searches on the major search engines; go to the major engines, Google, Yahoo, and MSN and conduct a few relevant searches. Were you able to find their sites? Next compare the traffic rankings of the different services' sites on the following rating sites:

www.alexa.com

www.ranking.com

If a sub prime finance site has a numerical ranking above 500,000 on Alexa.com, the site does not receive much traffic.
Do they buy leads from third parties? How do they monitor the quality of these leads?

It is common practice for third party lead sources to supplement their leads by purchasing additional leads from affiliates and competitors. Sources that purchase additional leads should have an automated system or score card in place to monitor the quality of leads and terminate sources that fall outside of the quality guidelines.
Do they try and get the consumer a direct loan first?

Many dealers have had success with leads that were first turned down for a direct loan from a sub prime lender. If not handled properly, however, these leads may be more trouble than they are worth. Most direct lenders do a poor job of informing the consumer that their information will be sent to a dealer if they are not approved. When this is the case your lead may turn hostile. They may ask "How did you get my information, I did not authorize that!"

Another pitfall of these leads is that they are more difficult to get approved. If all the auto-approvable leads are being scooped by the direct lender the ratio of leads the store will be able to get approved is reduced.
Do they or their affiliates offer incentives to consumers to complete the lead form?

Some websites mandate that consumers request more information on a product or service, including auto loans, to receive a free gift. The consumers that utilize these sites blindly fill out the required number of lead forms required to get their free gift. Individuals that submit a sub prime lead form via these sites have little or no interest in purchasing a car and few are aware that they agreed to a have their credit history checked.
Can consumers contact them directly if they have a complaint?

Most reputable third party lead sources have a dedicated customer service department to handle consumer inquiries and complaints. If the service does not have an internal customer service department consumers originating from these services will look for other outlets to voice their complaints.

Pursuing the answers to these questions should help you evaluate potential lead acquisition programs available from third party lead sources and give you the ability to separate the "good guys" from the "bad guys". While that alone won't eliminate the risk associated with sub prime finance, it should greatly reduce the chances of being ambushed by a consumer that has fallen prey to deceptive lead generating tactics.

Dave LaLonde is Senior Vice President and Search Engine Optimizer for The ACE Group LLC. network of companies. The ACE Group is a special finance total solutions firm offering their dealership partners entry level and advanced sub prime training, easy to use software, and an expert lead system.

Published in World of Special Finance Magazine
August Issue 2006