If you could generate a steady stream of qualified buyers to your dealership for less than $10 a lead knowing you are averaging over $1000 front end gross, would you jump on this opportunity?
Recent LinkedIn Survey
In a recent LinkedIn survey, we asked the question, “How much are dealers currently paying for leads”? We were interested in learning how much dealers currently pay for leads so we could cross examine that with the cost of using our software to gain the same type of lead. We understand the term “lead” is kind of a loaded question since there are different types of leads a dealer may get. We were mainly interested in qualified buyers ready to buy in the next 30 days. The answers varied depending on the market and the lead source primarily from 3rd party sites.
One respondent shared they have seen $3500 per month for third party sites’ getting 50-75 leads a month. That roughly equates to an average lead cost of $55. In the Canadian market it went as high as $150. A majority of the responses given were in the $25 - $30 ballpark for an "interested in purchasing a car" type lead. These types of entry level leads can be worked effectively utilizing immediate initial response, speed and a commitment to long-term follow-up (30-90 days).
Now that we are armed with the foundation of the industry average lead cost, we can now break down how much our software + Craigslist $5 fee will be in comparison. Craigslist changed the game two months ago and the leads generated have increased per ad posted by nearly 800%!
Assuming you post around a 100 cars a month, a highly qualified lead costs less than $10 inclusive of the new $5 Craigslist fee and our software costs. As an added bonus, our software also has the ability to generate credit application leads which dealers pay around $50 or more for.