For some time now, dealers have been taking a closer look at the cost of doing business on 3rd party inventory listing sites such as AutoTrader and Cars.com. There are many other listing sites to consider as well at varying costs but that is not our issue here. The basic question has been whether to leave them all and put the savings into driving traffic to the dealership website.
On the surface this sounds good. A dealership’s website generally has the highest conversion rate and ROI of all their marketing sources. So it seems to make sense to drive more traffic to it and convert even more shoppers into leads and buyers.
Here are two issues to consider before jumping on that bandwagon.
- There is such a thing as diminishing returns. There’s the very real possibility that the more marketing money you put into driving traffic to your website, the conversion rate will not rise in equal measure and cost per lead and therefore per sale will rise.
- Car shoppers do not all visit the same places during their journey to buy a car. Many don’t even search for dealers. Some only find dealer websites through these 3rd party listings. So going it alone without 3rd party sites means that a large percentage of shoppers will never see your marketing, inventory, or dealership website.
The name of the game is exposing ones inventory to shoppers. So even if a dealer is willing to push the needle on the first consideration, the second is a terribly limiting factor.
Fortunately, there is no need to go to extremes and eliminate 3rd party sites altogether. Dealers are free to move money around and reduce the expenditures for some large sites while increasing their website marketing money gradually, analyzing the results as they go.
They can also look at two very glaring exceptions to high listing prices, eBay and Craigslist. These huge sites pull in millions of visitors and have hosted millions of car sales over the years. Yes, they have had a reputation in the past for being difficult to work with. It’s necessary to have a solid strategy when working with them.
This is where companies like LotVantage come in. They have established themselves as the experts at selling on these two sites. They take the labor out of listing and assist with strategically placing a dealer’s inventory in the best channels that will draw the right customers.
Whatever the case, dealers should make changes cautiously and without going to extremes. Adjust the budget, go slowly and test often – then reevaluate – gain momentum and sell more cars.
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