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Reverse Engineer Your Internet Leads


When I was young, I enjoyed taking items apart and reassembling them to see how they worked. When they didn't work after reassembly, it became a challenge to make them function again.



Years later, I found myself applying the same mindset to the leads our dealership was receiving because we often faced questions like, "We have more leads than we've had in a while, so where are all the appointments and sales?" This type of question can be frustrating, offering little insight from the person asking and making many assumptions.



Simply looking at the total number of leads and the closing percentage doesn't provide the complete picture to hold our team and lead providers accountable. For example, if the used car manager aims to improve gross profit or tries to hold gross and sales are down, they might become anxious as inventory ages. As a result, they may decide to drop prices. While this approach increases the number of leads, most of these leads may be for the same car, which causes the closing percentage to fall because we can only sell that car once. Even if the number of leads is up, the increase might not be as significant as it seems due to factors such as a high number of duplicates, high leads per car, or a substantial rise in leads from sources like AutoTrader, Tim, or KBB which are just looking to sell not purchase. Additionally, when leads are down, it's crucial to understand where and why this decline occurs.



So, how should one evaluate leads for accountability? There are several considerations I like to focus on, starting with analyzing all leads in aggregate: total leads, duplicates, sales, lost opportunities, and tracking numbers. It's important to compare these metrics to the prior month and the same month from the previous year. Evaluate your duplicate and lost leads. A good duplicate leads to a sale, i.e., credit app or trade appraisal. A bad duplicate is a lead from a customer on the same car from multiple providers. Monitoring why leads get moved to lost and making sure the resolutions are valid and being verified is essential. It's mind-blowing to see leads moved to lost when the car they inquired about is still in stock, and the resolution is no contact and 14 days old. However, this approach alone doesn't provide the whole picture or answer all the questions.



Evaluating new and used leads separately by a lead provider in aggregate is also helpful. Additionally, I like to group leads by type and forecast for the month, such as leads from the website, manufacturer leads, traditional leads, third-party leads, chat leads, campaign-type leads, and AutoTrader/KBB leads. Comparing month over month helps understand if leads are up or down and why. For example, did the call-to-action button on the VDP get changed, and are the dealer website leads trending down? Or is there a syndication problem with a third party? Trending this data on a chart creates a great visual and highlights successes and improvement opportunities.



It's time to dig deeper and look within our team. Have you ever heard a salesperson or BDC say, "Well, that's because I get all the bad leads"? Maybe they do, but chances are it's not true. The best way to determine this is to look at each individual, separate new and used leads, and then query the leads by individual provider. Analyze total leads, appointments, sales, and lost leads, ideally with lost statuses. Is there a trend across the users? Are some doing great and others doing horribly with certain lead providers? This balanced approach ensures fairness in the evaluation process, making it clear that it's not always the lead providers' fault but a flawed process or team unwilling to do the work.



Other considerations I like to evaluate in this reverse engineering process include looking at leads in aggregate and queried by individual and individual lead providers, appointment percentage, show percentage, closing percentage, how many leads came in after hours, what percentage of leads provided a phone number, what percentage of leads are in-state versus out-of-state, and response times. Understanding this helps define processes for handling certain lead providers differently and making an educated decision to keep, remove, or change a lead provider or process based on the facts.



Next time you ask why we don't have more appointments or why sales aren't up just because leads are up, it might be worth reverse-engineering your leads to see where the opportunity or issues lie. Sometimes, changing prices is a knee-jerk reaction and not even needed. Working leads and inventory should be a symbiotic relationship, but once you take it apart and put it back together, you know how it works and make it work, maybe even better than before!


For more information or a free analysis using your data, visit www.lotwalk.com.


-Jonathan Schrieber

Internet Performance Engineer

Lotpop Inc.

jonathans@lotpop

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