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Thursday, October 11, 2007

Best Used Car Classified Site #4

Previous Post on this topic

Pricing has been reduced across all sites to $7599 to see what that does for leads.

Lead #4 Update: The person who I spoke with the other evening did finally submit a credit application through the dealer website, however it was for a different vehicle. Not surprising since a large percentage of shoppers end up in a different vehicle from the one they first inquired about.

Lead #5: Another Craigs List response. This woman called yesterday and told me her entire story about why her credit was bad and that she needed financing. I referred her to the dealer site for an application just like I did for Lead #4, so we'll see if she gets sidetracked into another vehicle too. So far she has not submitted an application, but from what she was telling me it sounds like she should be approved (significant down payment, no repo's, $45k annual salary).

Autotrader.com - 0
CraigsList.org - 2
Cars.com - 1*
AutoExtra.com - 0
Google Base - 0
A Dealership Website - 1*
Kijiji - 1

* Denotes the lead originated from an affiliated site

4 comments:

EJ said...

Any thoughts on why autotrader has done poorly in both of your tests, but is the dominant classified site? Too much inventory or not enough emphasis on driving a lead? Something else?

Jake said...

That's a good question, and even though it's still early on this one, it's probably the biggest surprise to me so far.

Autotrader has a strong presence in my local market (Norfolk, VA area). I have, however, been hearing for quite some time that they are not generating the leads they used to, so I think something is definitely going on, and not just based on my personal results. I don't think it's necessarily the type of vehicles because during my time at Autotrader the vehicles under $10k actually got the most leads. For my listing, there are 40 similar vehicles (same model from 1 year older to 1 year newer) within a 25 mile radius, so the amount of inventory is probably a big factor. This makes for a saturated market where dealers must compete even more. What's going to make one dealers car stand out above the competition? There are still 9 vehicles from $7k to $8k, and 7 more that don't have a price listed at all. This selection is good for shoppers, bad for dealers.

At the end of the day Autotrader (or any similar classified site for that matter) is a must have for the dealers. Sure, Autotrader is the most expensive in this case study, but with 3 million listings and the amount of consumer marketing they do, if a dealer isn't there they are sure to miss out on some sales. I can understand why dealers get so mad at annual rate increases for flat ROI (see last paragraph).

One thing that really confuses me is that Craigs List has quite a few listings too, 17 Grand Cherokees from 1998 to 2000, the site isn't as user-friendly, but it continues to generate more leads than the paid sites.

Now, here's something that really provides an example of the current market. One of our dealers in the metro DC area averaged 9.0 leads per vehicle Sept. through Aug. 2006. That same dealer with the same advertising package, same type of inventory, etc. only averaged 5.4 leads per vehicle Sept. through Aug. 2007. I'd call that a significant drop, so something is going on. Whether it's the number of available vehicles, market fluctuations, or something else is anyone's guess.

William Bryant said...

Why not take the app over the phone while you're talking to her and building rapport?

Jake said...

Since I'm not a dealer and wouldn't be the one financing her, there's not a lot I can do with the app info she provides other than give it to the dealer or submit it through the dealer's site on my own. I did talk to her for a little while to build rapport. May not be a bad idea to get the SSN and personal info if people don't have a problem giving it out to a person who isn't the finance company. If they are comfortable doing that, it may avoid what happened with lead #4.

You bring up a good point though which I try to tell our customers. Most dealers want a full credit app that asks for all the info the bank will need. When a customer sees the amount of information wanted, they will often navigate away from that page and not submit the app. Our dealers who do the best use our short app form which only asks for name, address, phone, SSN, and DOB. Of course you won't get everything you need for a bank, but it provides a good opportunity to call the customer and get the rest of the info while starting the rapport building process. It's been much more effective than asking them for all the info up front and having a non-personal application process where the dealer just calls to say "you're approved, come in".