In my previous post “AutoTrader vs CarGurus vs Cars.com”, I discussed the popularity of vehicle detail page views (VDPs) as a measure of automotive shopper behavior and as a predictor of sales.

In another post, “The Mystical VDP”, I analyzed the value of vehicle detail page views in relation to real factors that shape consumer behavior and impact dealership success and provided proof that VDPs are not all equal in value.  In addition to the VDP quality factors discussed in that post, it also makes sense to analyze VDPs as a both a predictor or producer of leads.

Even though studies consistently show that shoppers dislike submitting personal information in online forms, leads are evolving, and shoppers will continue to engage with dealerships remotely and provide their contact information in exchange for discounts or something else of value. Clearly, each and every shopper engagement is highly valuable for a dealership, so it makes sense to look carefully at leads and their relationship with VDPs.

A hypothetical discussion between a 3rd party website sales representative and a dealership General Manager goes something like this:

Representative: “How was your month?”

GM:  “Pretty good, but in looking at my CRM report, I don’t see as many sales or as many leads from your website as I would like.”

Representative:  “Many shoppers don’t submit leads or contact the dealership in any manner before they show up at your dealership.  Let me show you how many VDPs we produced for you last month.”

This conversation will continue and the sales representative may propose that the dealership upgrade their package so more of their inventory is featured or “spotlighted” with the rationale that this will produce more VDPs which will lead to more sales.

But leads are still important, and it’s likely with the rise of digital retailing that more shoppers will engage with dealerships virtually and more customers will provide their contact information if it allows them to save time at the dealership.  The fact that the vast majority of shoppers visit two or fewer dealerships in their shopping process, shows that shoppers do their homework, and in the case of used cars in particular, many would contact a dealership to verify the availability of a vehicle before taking a trip to the dealership.

So if leads are still valuable and potentially growing in importance, let’s analyze the relationship between leads and VDPs.  Are VDPs a predictor or driver of leads?  It depends.  Look at the example below from two dealerships in the same market, selling the same brand but with two very different 3rd party website packages.

Dealership A - $6000 Package

Dealership B - $3500 Package

Which dealership would you want to be?

If we look at total inventory stats including new, used and certified pre-owned (CPO), we see that Dealership A is paying almost twice as much as Dealership B and they are seeing that investment pay off in terms of VDPs with more than double the quantity of unique VDPs in May (7552 vs 3729). However, this produced significantly fewer leads for Dealership A compared to Dealership B (102 vs 127) and this difference is magnified when we look at cost per lead ($58 vs $23). When we look at the ratio of VDPs to leads we see that Dealership A needed 74 VDPs to produce a lead while Dealership B needed only 29.

What if we look just at CPO and used inventory? The story is similar with Dealership A leading in VDPs (4808 to 2860) while having fewer leads (51 to 65). Dealership A needed 94 VDPs to produce a lead while Dealership B needed 44. With new vehicles, CPO, and used bundled in a package, it’s not possible to isolate the cost for only CPO and used Inventory, but if we make the logical assumption that the primary purpose 3rd party sites is to promote CPO and used, then we see that Dealership A is paying $118 per lead while Dealership B is paying $59.

What accounts for this difference in efficiency? Dealership B has significantly more total used cars than Dealership A (79 vs 107) and a totally different mix of CPO and used (19 CPO vs 58 CPO). If we isolate CPO, we see that Dealership A once again receives more VDPs per CPO vehicle (63 vs 30), but this difference doesn’t produce a proportional quantity of leads (.36 leads per CPO vs .63 leads per CPO). Overall Dealership B’s CPO inventory is outperforming Dealership A when it comes to leads per vehicle.

When we look at used inventory, we see similar VDP results. Dealership A leads in VDPs per vehicle (60 to 23), but we see a different story in leads per vehicle with Dealership A producing .73 leads per vehicle and Dealership B producing .57. For used, Dealership A’s inventory is outproducing Dealership B’s in VDPs and leads per vehicle.

Findings and Recommendations

This analysis shows that VDPs on their own do not drive proportional levels of leads. Clearly there are many factors including merchandising, pricing, popularity/scarcity of inventory, and others that determine the quantity of leads produced, yet the similarities of these two dealerships make this a good comparison.

Recommendation - Dealerships that strive for efficient advertising should tailor their 3rd party website packages to match their inventory and not overspend as Dealership A has done thinking that additional VDPs will produce proportional levels of leads. It’s better to make inventory quality and merchandising the top priority and monitor the ratios of VDPs to leads, cost per lead, and leads per vehicle to find the optimal balance of cost and quantity of VDPs.