Articles: Marketing & Sales

By Dave LaLonde

Generating or Purchasing Quality Leads

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.

In the last couple of years I have seen more and more dealers entering the sub prime arena and utilizing internet lead generators as part of their advertising budget as well as sub prime dealers that have taken the initiative to generate their own internet leads. During the NADA conference, I was able to speak with many dealers that have used a variety of lead sources as well as dealers doing a decent job of generating their own leads. In both cases, the topic of the conversation eventually migrated to generating or purchasing quality leads.

I've had the advantage of studying lead quality and conversion from both sides of the fence; from 1995 to 2002 as a national sub prime trainer, and from 2000 to present as a search engine lead generator. One of the things I found was that optimizing conversion online is often at odds with optimizing conversion at the store. In other words, when you entice more web visitors to submit their information online, you most likely will decrease the ratio of leads that turn into more car sales.

As a lead generator, my first handful of websites did a fantastic job at converting visitors into leads. Some days I was near an astonishing 50% web visitor to application conversion. But as the sub prime manager working those same leads, my closing ratio was dismal and consumer confusion was high. Many of the leads I contacted did not want to talk to me, and many more would not return my calls. More often than not they thought I was a bank or finance company and were disappointed or upset when they found out I was at a car dealership.

To correct this reaction, I developed an online questionnaire that the website visitor had to complete prior to landing on my application page. Whenever they selected an option that was outside the scope of my services, I presented them with recommended links to third party websites that could help them. If a visitor made it all the way through the questionnaire and completed the application, I had one heck of a lead. These people were anxiously awaiting my call. I even got calls and letters from people that I sent to other websites just to thank me for the recommendation. Unfortunately, they were the only happy ones. My site visitor to lead ratio fell to less than 3%.

What I learned from my experiments helped me formulate my definition of a quality lead. In my opinion, the motivation of the customer is most important. To me, a quality lead is a person with bad credit that believed my story and thought I was uniquely qualified to help them finance and buy a car right now. Not a person with good or marginal credit that wanted a free gift, was shopping rate, wanted to buy their neighbor's car, or refinance an existing auto loan. Nor someone that has either contacted, or been contacted by, multiple competing stores.

Over time and many site redesigns, I was able to generate a lead that met my definition of quality at a consistent visitor to lead conversion ratio over 20% and a lead to sale conversion ratio over 10%.

One man's treasure is often another man's trash
br /> The definition of a quality lead, however, can vary greatly from store to store. If your store is new to sub prime or does not have the lenders and inventory in place to service bad credit customers, the motivation of the customer may not be a priority. Instead, a quality lead would be judged by customer attributes such as credit score, job time and income. Combining these leads with an exceptional sales pitch and diligent follow-up will generate successful conversions to sales.

And one man's trash is often another man's treasure
br /> If the store has the lenders, inventory and the experienced staff to handle most credit situations to get the customers in the store, your definition may focus more on the sheer volume than credit score, customer motivation or even lead exclusivity.

Determine Your Definition of Quality

If you want to generate a quality lead from your website or purchase quality leads from a generator you must first formulate a definition of quality. Then design your website to attract your target lead, or hire a lead generator or aggregator that conforms to your quality definition.

Lead Focus – Motivation

The number one objective is to make them believe that they finally found the right website and that you will get the deal done.

Upside: Leads have realistic expectations and are willing to work with you.
Downside: Typically rougher credit.
Main Conversion Gate: Getting them approved.

To generate a motivated sub prime buyer your site could mention:

Tools at your disposal to get the deal done: Lenders / Technology / Inventory
Explain your qualifications to the customer: Knowledge / Expertise / Experience - let them know you are on their side and that you have helped many customers with similar situations such as bankruptcy, repossessions, no credit, etc.
Interest / Desire – Let them know if anyone can get the deal done, you can.
Establish the rules - Don't shop around. Give us 24 hours (or some other time period) to get the deal done.

Lead Focus – Credit Quality

This customer can usually get approved anywhere. Why should they complete your application?

Upside: Easier to get them approved.
Downside: Leads may have unrealistic expectations.
Main Conversion Gate: Selling the appointment, getting them in the store.

To attract this type of customer there is typically little or no mention of specific bad credit situations.
A prominently displayed list of deal killers on the site helps weed out the tough deals.
I've seen some sites entice the visitor with offers of low interest rates, or refinancing.

Lead Focus – Volume

The objective here is to get them to complete an application with little or no barriers.

Upside: More unit sales.
Downside: Higher cost per sale, higher staffing requirements, lower lead to sale ratio.
Main Conversion Gate: Selling the appointment, getting them in the store.

A popular technique used to increase volume is to send visitors directly to a short application page. Limit disclaimers such as deal killers and types of services provided and make little or no mention that the application is being processed by a dealer.

In closing, remember that stores and leads are not created equal. Before designing a site or hiring a lead generator or aggregator determine what a quality lead means to you. Defining quality will help you develop your strategy and allow you to accomplish the results you are seeking. Next install a process that will effectively and efficiently convert the leads into deliveries. Regardless of your means or method, the bottom line and determining factor of success will always be - increased deliveries.

Published in World of Special Finance Magazine
April Issue 2006