I remember my first Consumer Reports customer. He came into the dealership looking for a used car, carrying a copy of the magazine and consulting it frequently. If a car didn’t measure up to the editors’ standards, my customer wouldn’t look at it. If it had a half-circle for the electrical system that year, he wanted to know if we checked it out in our inspection. No matter my assurances, that magazine was the only thing he trusted to validate his decision. And when it came to the negotiation, he opened up to the page that gave him guidance on what to do. While we don’t see that many rolled-up magazines under the arms of our customers now, rest assured, the underlying issue that drove them to Consumer Reports is still there: customers want independent information when they’re researching, shopping for and negotiating on the purchase of a vehicle.

There’s a school of thought being promoted – loudly and with great passion and emotion by some advertising agencies and consultants – that encourages dealers to “take control” of their lead generation. If the dealers just stop partnering with and buying leads from third parties, they can drive all of the search visitors to their own web sites, cutting out the middleman. It sounds fantastic. And it would be…except it doesn’t address what the customer wants.

Consider this:

According to a 2009 Google survey, 85% of consumers consult with independent automotive web sites before making a purchasing decision. There is, and will be for the foreseeable future, a strong market for independent automotive web sites. To ignore the independent automotive web sites and focus solely on search is to limit your reach and your market, essentially limiting your potential market share growth.

For a dealer, it can be a confounding situation, balancing their need and right to capture their local online shoppers with acquiring leads generated through independent sites. Finding the right mix of search engine marketing (SEM), search engine optimization (SEO), web site development and independent lead generators is critical to managing cost per sale. So what can dealers do to take advantage of the environment and position themselves for success?

1. Consider the cost of SEM. Recent estimates show that almost ¾ of all automotive search terms are purchased by independent automotive web sites. Because there is tremendous competition for broad automotive search terms, SEM can become cost-prohibitive for individual dealers, driving the cost-per-lead up 30-40% over independent lead sources. Consumers who find your dealership’s web site when they are looking for a dealer to work with have a very high closing rate; however, consumers drawn to a dealer’s web site by broad search terms early in their research do not show the same propensity to buy. Many use it as a virtual yellow pages, clicking on a pay-per-click ad just to get the dealer’s service department phone number. 

2. Examine the role of the independent site. The previously-mentioned 2009 Google survey reported that Kelley Blue Book averaged more than 86 million page views per month and Edmunds.com received more than 56 million page views per month. Though some of these consumers are drawn in through SEM, the vast majority seek independent, objective sites as a place to begin their research. Even if a dealership spends thousands of dollars a month in SEM to attract these leads, many of these consumers are in the beginning of their decision making process. The information these research sites provide to consumers pushes them further down funnel and closer to the purchase. And each site gives the consumer the option to contact a dealer when they’re ready. It’s nice to have someone the consumer trusts working for you. 

3. Leverage brands the customer trusts. You likely spend a lot of money establishing your brand in the community. Sites like Kelley Blue Book, Edmunds, MSN Autos and Yahoo! Autos have the leverage of a powerful national brand name behind them and have access to a budget that no individual or group of dealers can match. Consumers trust information from these sources – like they used to trust that issue of Consumer Reports – and are therefore more likely to trust dealers affiliated with these sites. By partnering with a reputable lead provider, dealerships can establish a presence on these research sites that gives them an almost implied approval. It also puts the dealerships squarely in front of all the consumers who are now ready to buy and looking for a dealer. Dealerships that choose to remain unaffiliated with these sites are eliminating their chance to interact with thousands of down-funnel customers. 

4. Make your web site content shine. SEO is critical to a dealer looking to capture local customers, and, in the search business, content is king. By focusing on providing updated and relevant web site content, dealers can boost their SEO rankings and capitalize on their local markets. It’s essential that every dealer have access to down-funnel potential customers – and existing customers looking to reconnect with the dealer for any reason – by managing their natural search position. 

5. Cost-benefit and the value proposition. The competition for a dealer’s business is fierce if you’re a lead provider, and that’s good for a dealer. It means that you can work with a partner who specializes in and offers additional value-added services, like lead scrubbing, de-duplication and premium placements on independent automotive sites. A problem that many dealers encounter with SEM is they have no control over who is clicking through on their ads. It could be a competitor down the street, trying to drive up their costs. Or it could be an existing customer who got lazy and looked up the dealership on the Internet, then clicked through in order to make a service appointment. Partnering with independent automotive lead providers virtually eliminates these potentially costly issues. 

6. Be wary of strangers giving advice. Every consultant, company, and writer has an agenda. Hey, I work for AutoUSA, so you can guess what part of my recommendation for your dealership would be. But the numbers do not lie. Constructing a comprehensive lead-generating strategy that maximizes your exposure, effectiveness and sales while managing your cost per sale should be based on the realities of the market, not what we wish the market were. Anyone who espouses an extreme view – that a dealer should do only one thing and exclude all other methods of generating online sales opportunities – likely doesn’t get paid commission except on that one thing they can offer. Pick partners in the web site, SEO, and lead generating space that you can trust to act with your mutual best interests at heart and you’ll see fantastic results.