|In this political season, I thought it appropriate to discuss the age-old debate heard in our industry day after day: quantity verses quality. Some dealers have it figured out, but most struggle with this question on a regular basis. I believe the answer always lies in the size and growth potential of your business. Can your business handle volume?|
Since we are in an industry where the price point is rather high and the purchase process rather short, the question of quantity versus quality becomes a little more complex. Is there an effective mix to be found? Do you have to sacrifice quality for quantity and vice versa? At the end of the day, no dealer really cares which provider sent them the most leads; he only cares which provider generated the most business and can continue to provide on a consistent basis.
I define quality as a function of credit score. Dealers oftentimes use the excuse that their leads don’t have money for a down payment or don’t have jobs. However, when generating a broad cross-section of leads, these are non-factors. The credit score is the only valuable factor to be considered and the only way to judge a lead as a creditable, “quality” lead.
At the beginning of their relationship, the lead provider and lead buyer must set expectations. This is the only way to establish a working relationship. To determine the true meaning of quantity versus quality in the great lead debate, you must have from the beginning a clear understanding of the end goal.
Quality is important, but only from the perspective of credit score. Lead generation costs money, and if you generate too many leads and your staff becomes overwhelmed, valuable leads are ignored and forever lost as opportunities. The only thing worse than a prospective customer who hasn't heard about you is a prospective customer who wanted to buy from you, but was ignored. As the dealer, you must strike a balance between the values of a customer who is lost against the customer who is not yet acquired.
With that said, you should still strive to make the best use of your marketing budget. Your marketing goal should be a lower cost per lead, so that you maximize the number of people you reach on your fixed budget. Usually a quantity-driven product has a fairly simple decision process, which makes for a short purchase process. Marketing efforts can thus be relatively straightforward and minimally customized using larger volume and lower cost-per-target programs.
The process of working a large number of leads can be, and should be, more standardized. Contact comes first and it must be consistent and paramount in the strategy of any dealer who works a lot of leads. Get your third-party leads out of the market as quickly as possible, especially when working a lot of leads at once.
Again, the important point to remember is that both sides, the lead buyer and the lead seller, must set expectations upfront about what constitutes a quality lead and what tradeoffs might be necessary to hit a specific volume in a short period of time. If the lead seller can meet and exceed these expectations, they can expect to be rewarded.
So what should you do as a dealer when trying to answer the great debate question of quantity verses quality? First and foremost, like most decisions made at a dealership, it boils down to the size of your dealership and personnel. If you are fully staffed with a properly functioning BDC, simply work the numbers backwards with a focus on maximum quantity. If you are a smaller dealer with fewer than three people readily available to work leads, quality is the answer, and you should look at direct mail. It will be easy to target quality because you can mail directly to a credit score. If you’re a middle-sized dealer, caught between a fully-staffed BDC and a one-man show, I suggest you focus on quantity. Test different sources with the goal of finding the lowest cost.
Ultimately, I challenge dealers who complain about quality of leads to consider credit score as the only factor. In most cases, my advice is to lean towards quantity. First, make sure you are buying legitimate auto leads, then dig a little deeper to score quality. It’s really not much more complicated than that. Don’t overcomplicate the definition of lead quality and make sheer quantity your best ally. That’s where I come out in this debate, so until next time make your own “Decision ‘08” on your leads.
Vol 5, Issue 4
Dealer.com announced the launch of three new capabilities designed to help personalize the digital marketing and car-buying experience.