Hyundai Motor America believes it is whittling away at the problem of poor-quality sales leads from the Internet.
About 700 Hyundai dealerships, with the company's encouragement, are buying leads that have been scrubbed of poor prospects. The leads are provided by a company called Trilogy Automotive.
Handling leads is a growing problem for dealers. Trilogy says Internet leads account for about 30 percent of all auto sales in the United States. But the number of leads is proliferating while the quality of the leads, or close rate, is declining, industry sources say.
Scott Fink, a Florida Hyundai and Mazda dealer who is chairman of the Hyundai National Dealer Council, said the leads that he buys from Trilogy result in vehicle sales about 25 percent of the time. The average close rate for leads that he obtains from other third-party sources, he said, is in the "midteens."
"We get fewer Trilogy leads, but the quality is higher," Fink said.
Fink's group -- three Hyundai dealerships and a Mazda store -- sold about 10,500 new vehicles in 2011, he said.
The Trilogy leads cost $22 per lead vs. a $20 industry average. But Fink said they are "scrubbed" to eliminate bogus names or contact information. Trilogy also "scores" or rates the leads so dealers can spot the best prospects.
Autobytel, which also sells Internet leads to dealers, agrees that the quality of leads in the industry is declining. So CEO Jeff Coats is working to improve the leads generated by Autobytel's Internet shopping Web sites.
As a result, Autobytel today is generating about 70 percent of the leads it sells to dealers from its own Web sites vs. about 38 percent 18 months ago. Autobytel's self-generated leads close at more than twice the rate than leads it buys and resells to dealers, Coats said. He pegged the industry's close rate for third-party leads at about 7 percent.
Autobytel has about 3,500 dealer customers and 30 factory customers.
Hyundai dealers have sold more than 20,000 vehicles from Trilogy leads since the program began in August 2010, said Jon Budd, a Hyundai senior group manager. Before bringing in Trilogy as lead program manager, Hyundai did not offer third-party leads to its dealers, he said.
In addition to rating leads, Trilogy tells dealers which third-party shopping site provided the leads, Budd said. Shoppers on some sites are price sensitive and shoppers on other sites are interested in the product, he said. Knowing the difference allows dealers to tailor their responses, he said.
An Internet lead results when a vehicle shopper on a dealer, factory or third-party shopping Web site leaves a name and contact information requesting more information or a test drive. Among the many third-party vehicle-shopping sites are autotrader.com,
edmunds.com and shopautoweek.com, which is owned by Autoweek, a sibling publication to Automotive News. Another significant lead aggregator is Dealix.
AutoTrader.com, the largest of the shopping networks, sees the influx of smaller Internet shopping sites as a sign of increased car-shopping on the Web, said COO Jim Franchi.