Another great overview of the Premier Lead Exchange in October 8th’s AutoRemarking:
Full article here.
By Jennifer Reed, Auto Group Editor
October 08, 2008
ROYAL OAK, Mich. — With showroom traffic dwindling for many dealers, compounded by the challenge of getting the customers who do show up approved for loans, sales are suffering across the board.
However, two companies recently joined together to help dealers bolster sales in such a difficult operating environment. The partnership between Detroit Trading Co. and R.L. Polk & Co. is now helping dealers capture strong buyer leads, which display the most chance of turning into sales.
Just how are they doing this? Via their new program called the Premier Lead Exchange.
So, the question becomes just how can this program help? Basically, since 2004, Detroit Trading Co. has partnered with hundreds of lead origination sources, pushing leads into its Detroit Trading Exchange. As of early August, the company is passing all leads on to Polk for scoring that will ultimately identify which leads have the most chance of resulting in sales.
Polk assigns each lead a score from one to 10, with 10 being the most desirable lead with highest chance for sales success. Dealers can then purchase the leads they prefer.
“Until now dealers and OEMs bought leads by the bushel with good and bad leads all mixed together,” Don Campbell, president of Detroit Trading Co., explained to Auto Remarketing.
“For the first time ever, dealers can now buy exactly what they want based on a prospect’s propensity to buy,” he continued. “Every lead traded through PLX is scored by R.L. Polk and Co. The scoring scale is one to 10, with 10s being five times more likely to buy than ones.”
To offer specific examples of the success rates for the program, the companies culled out 100,000 leads and accompanying scores, breaking down the success rate by how many of these leads led to deals within 45 days of submission.
Their findings include:
10: 37.6 percent closing rate
9: 34.4 percent
8: 30.2 percent
7: 26 percent
6: 22 percent
5: 19.3 percent
4: 15.6 percent
3: 12.3 percent
2: 10 percent
1: 7.5 percent
According to Detroit Trading Co., the closing percentages come in even higher after 90 days.
Pricing for the leads is based on the score and the range of scores a dealer buys, thus giving dealers more control.
Leads that match a buyer’s purchase criteria are passed along to TARGUSinfo for basic validation of name, address and phone number prior to being passed along.
Campbell more specifically explained, “For example, a lead scored a one costs $6, and a 10 costs $30. The higher scored leads produce the greatest return on investment because they sell cars. Thus, low scoring leads are expensive; high scoring leads are cheap. The higher scored leads are also the most cost-effective leads to work from a labor standpoint.”
Getting started with the program is relatively simple for dealers. All they need to do is open a trading account with Detroit Trading Co. with an initial deposit, according to Campbell.
“After that they buy only leads with the scores they want. The program may be terminated at any time, at which point the buyer would be refunded any money in his trading account,” Campbell pointed out. “In short, we make it easy for buyers to do business with us.”