That is the question that industry leaders David Kain and Steve Staunning of KainAutomotive.com set out to answer with their 2011 Automotive Internet Study, which they recently presented at Digital Dealer 10. With much debate surrounding this topic and more options than ever for investing digital ad dollars, the team wanted to provide a comprehensive dive into the processes and factors that truly drive internet sales in 2011.

The emergence of social media and search engine marketing have shifted the focus of many dealers away from more traditional forms of online marketing, but is it happening at the expense of proven lead sources that drive sales?

“A budgetary tug of war takes place each day in our industry for dealer advertising dollars by competing vendors and competing categories; and the larger the dollar amount, the greater the tug, with dealers squarely in the middle trying to sort through the right choice,” said Kain. “We wanted to explore the answers to which sources provide the best return on investment and offer our opinions based on a variety of information we gathered for this study from successful internet dealers.”

After interviewing hundreds of dealers, reviewing closing data for more than 4.3 million internet sales leads and reviewing the Monthly Internet Performance Summary data for KainAutomotive.com clients, they found the most effective used a balance mixture of spending on websites, search engines, independent leads and online classifieds.

“We agree with this logic, because it allows dealerships to gain exposure to all types of shoppers, including those who may not see value in visiting a dealership website before they submit a request for information,” concluded Kain.  “Dealers that achieve consistently good results use a balanced source mix and let their metrics determine their spend.”

Despite some dealerships swearing off independent internet leads and a growing number of marketing campaigns encouraging dealers to abandon third-party lead sources, KainAutomotive.com warns that this may be a reckless approach.

“We’ve witnessed firsthand that eliminating independent internet leads will reduce sales and profit opportunities,” noted Kain.  “We’ve discovered that it is very risky to turn your head on independent internet leads in developing your lead mix, as they’ve proven time and again to drive volume and return on investment.”

A Formula for Success:

Beyond the importance of lead mix, another key outcome of the study was a conclusion on the activities and factors that most contribute to internet sales success. Using data obtained in their dealership case studies, KainAutomotive.com detailed the 15 most important factors for internet sales success.

“We surveyed leading Internet sales managers, general managers and dealer principals. They suggested that excellent close rates depended more on proven process and tactics than the actual source of the leads.”

So beyond using a balanced mix of lead sources, how can dealerships make the greatest impact on their online sales success? According to the study from Kain Automotive, it comes down to three key factors that are the formula for success.

“When we separated the best from the rest in our studies, the formula for success truly came down to three disciplines: progressive leadership; innovative marketing and continuous process improvement,” said Kain.

The most important factors they found include:

  • Quality of lead response
  • Adherence to a written process
  • Middle management oversight and buy-in
  • Level of accountability
  • Staff training

For more information we recommend reading the complete report which can be found on KainAutomotive.com.