Major Car Dealership Group here in Chicago - They Want Leads ONLY - Next Step?

24 replies
Hello All,

I've been offered an opportunity to work with a huge car dealership group here in Chicago. They have 10 franchises! Several millions of dollars a year in business. Over 200 employees! Anyway, they want SALES LEADS. They're not interested in generating traffic to their sites. They really need this. They're lucky if they get a few hundred visitors a MONTH to their website(s).

Here's what they're doing now...

They do print advertising. A ton of it. They don't even measure it. I was told, "the phone rings and we get walk-in traffic so it must work" ALL of they're online lead generation is through AutoTrader.com and Cars.com They even told me what they're paying PER LEAD.

They're paying $17 per lead to both Cars.com and AutoTrader.com (this is good intel for you folks out there targeting car dealerships).

They also have to PAY for leads directly from Ford.com, etc. and they're usually junk. It's all tire kickers "building' their dream vehicle on Ford.com but not a buyer.

Anyway, they're OK with the leads they get but feel they could be doing better. They get these opt-in names like "Mickey Mouse" and "Betty Spaghetti" and it costs them money to filter out this crap. They also have to fight every month and reconcile what is a garbage lead and what's real so they can get a credit to roll to the next month.

Off topic here, but I can't believe Cars.com and AutoTrader.com treat their customers like this. The dealership group is fed up but I was told "what other options do I really have"? They even realize these two car lead websites are the "Google" of the auto dealership world since they have all the consumer traffic.

BIG QUESTION HERE....

I was told they would pay me good money for leads that convert and they'd try me out for 30 days and if they convert a sale they would buy from me on a continued basis. They prefer to be in the $12 - $15 range for each lead.

So, what's my next step? Do I build a few localized blogs, get them ranked and try to get opt-ins? Can I even get enough leads monthly to sell and make it worth my time? Can I compete on a local level against these two 800 pound gorillas?

I'd be willing to partner with the right Warrior that's in the offline space. There's a lot of money that can be made here. They're spending $thousands monthly on Cars.com and AutoTrader.com.

My next step?

Thanks,
Dennis
#car #chicago #dealership #group #leads #major #step
  • Profile picture of the author imageworx
    Hey Dennis,

    I would definitely do local domains that are keyword rich for that local market based on what people are searching for in that area (G Keyword tool). I would also look at doing PPC for local search so you don’t have to wait for the SEO traffic to build up and can start generating leads immediately.

    I recently pick up a Lead WSO on here by Peter Maxwell, and am implement it for a couple of regional industries. You can easily calculate your cost on getting leads so you can tell what your break even point is which will help you know how to price.

    If you do PPC should shoild make it easier to compete in the market.

    Keith

    Sounds like an excellent opportunity
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    • Profile picture of the author jkstam3
      Do you feel 12-15 dollars a lead is worth it?

      I mean they are apparently a major client with money; and I've heard of plumbers and roofers paying amounts far higher than 12-15 bucks...more like 35-50 in my opinion, and from experience (my brother runs a car dealership...I know what they make and don't make on vehicles)

      I understand they have been jaded and are questionable about what you can do BUT maybe counter them with like 12-15 per lead and an extra 25-35 if the lead converts.

      just my .02 cents...could be way off here.
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      • Profile picture of the author DennisM
        Originally Posted by jkstam3 View Post

        Do you feel 12-15 dollars a lead is worth it?

        I mean they are apparently a major client with money; and I've heard of plumbers and roofers paying amounts far higher than 12-15 bucks...more like 35-50 in my opinion, and from experience (my brother runs a car dealership...I know what they make and don't make on vehicles)

        I understand they have been jaded and are questionable about what you can do BUT maybe counter them with like 12-15 per lead and an extra 25-35 if the lead converts.

        just my .02 cents...could be way off here.
        Hello JK,

        The dealerships here in the Chicago market are paying $17+ per lead at Cars.com and AutoTrader.com with NO backend fees. How can I ask the dealership to pay for a lead conversion? I'm not sure if they'll buy into that (no pun intended).

        My goal is to get them 30 days of FREE leads and charge from there. This is the sales model that both Cars and AT use.

        Thanks
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      • Profile picture of the author TyBrown
        Originally Posted by jkstam3 View Post

        Do you feel 12-15 dollars a lead is worth it?

        I mean they are apparently a major client with money; and I've heard of plumbers and roofers paying amounts far higher than 12-15 bucks...more like 35-50 in my opinion, and from experience (my brother runs a car dealership...I know what they make and don't make on vehicles)

        I understand they have been jaded and are questionable about what you can do BUT maybe counter them with like 12-15 per lead and an extra 25-35 if the lead converts.

        just my .02 cents...could be way off here.
        I agree with you. These people are already paying $17 for leads that they acknowledge aren't great. Now they want to pay less for better leads? Seems a little nuts.
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  • Profile picture of the author sdentrepreneur
    You need a lead generation system, sales funnel. You also need the ability to get a massive amount of traffic using PPC and Adnetworks.
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    • Profile picture of the author DennisM
      Originally Posted by sdentrepreneur View Post

      You need a lead generation system, sales funnel. You also need the ability to get a massive amount of traffic using PPC and Adnetworks.
      Hi James,

      You're very successful with offline clients. Is the car dealership niche even worth pursuing since the PPC can be expensive? I guess one option is to have leads that are sold exclusive at one price point and then a "shared" lead price that can be sold to multiple dealers.

      I assume to have this sales funnel, PPC, etc. rolled out is expensive or do you scale up slowly? I'm assuming I need to get lots of traffic first before even offering to the dealership?

      My fear is I get something launched and it produces just a handful of leads the first month. Only one chance to make a first impression.

      Thanks,
      Dennis
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  • Profile picture of the author Jacer
    You should take a look at a blog post by Shoemoney. He ran some ads to generate leads for a Nebraska car dealer last year and did really well. It was during the gov cash incentive program, and on myspace, but you could easily set up something similar with the dealership and find other ad platforms(facebook, etc) to use. The underlying strategy is pure gold.

    Cashing in on Cash For Clunkers With Myspace
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    • Profile picture of the author yukon
      Banned
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      • Profile picture of the author TJ Kazunga
        The key to selling leads for more cash is to qualify them, that's all.

        Before you pass the leads on, call the prospect and make sure you call them as soon as possible. Within minutes preferably...

        The conversation goes something along the lines of...
        "Hi Jenny. This is name from www.yourcar.com. Just a quick call to say thanks for visiting our site and signing up for our free report - "The 10 deadly mistakes people make when buying a car". I'm sure you'll find it very useful.

        Anyway, the reason for the call is to let you know about the advanced free service we offer visitors like you who might be looking to buy a car. What we do is take on all of the initial leg work of finding the best dealer for you.

        This saves you a lot of time and effort, and as I said, it is a free service. Would you be interested in giving it a trail run?

        You would, great!

        Let me just ask you a few questions and then we'll match you with the most appropriate dealer in our database, you ready?"

        At this stage ask them info that the dealer will find useful.

        What sort of car are the looking for? Whats the budget they have? Are they looking to trade in,? if so, whats the model. When's the best time for them to see a dealer. morning, afternoon, what?

        Etc etc.

        Now, you'll lose a lot of leads but when I did this previously (in a paid job a long time ago) I was closing around half but you need to do your own testing obviously.

        Anyway, the whole point is that these leads are super targeted and are worth a lot of money to the dealer so can be sold for big bucks no doubt.

        Good luck.
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  • Profile picture of the author Fernando Veloso
    I swear I don't get it, but I probably misread something: You're getting paid $17 per Lead generated to sell a 10-20K car?

    Is this correct Dennis?

    If yes, I am amazed on how low this works for you cause:

    a) Cars.com (and similar) have problems - as you stated above...
    b) Cars.com Cars.com (and similar) have a huge competition for each Dealership - they are NOT the only ones getting leads...
    c) Cars.com (and similar) get low prices cause they sell a lot of leads per month, so they can sell cheaper...

    BUT on the other side:

    a) You can work almost flawlessly and give them just GOOD leads (not Mr spaguetti)
    b) You can get leads ONLY for ONE dealership (more leads, no competition)
    c) You can get paid better cause you can pre-sell those leads using your IM knowledge - among other benefits.

    So, in the end, I really don't understand WHY work for $17 per lead in a VERY competitive market.

    I have a short experience selling leads to Realtors BUT I'll never send them one lead for less then $100 PLUS sales bonus.

    Otherwise, it would be more profitable work at a coffee shop from 9 to 5.

    Just my 2 cents, hope you can get better advices and grab that deal the best way you can.

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  • Profile picture of the author DennisM
    Fernando,

    I'm NOT charging $17 per lead. That's what AutoTrader.com and Cars.com is charging this large dealership group (they have 10 dealerships).

    The average price per lead that AutoTrader and Cars charge is $25 each. AutoTrader gets 6 million plus visitors a month! Cars.com is 3 Million plus. I'm just trying to find a way to compete.

    To the dealership, a lead is a lead. I don't think any leads I generate are worth "more" than what these two websites charge?

    Dennis
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    • Profile picture of the author Bronwyn and Keith
      Hi Dennis

      We think you may have missed Fernando's poiint.

      What he is saying to you is that all of the others are paid on the basis of a "lead".

      If you go in to bat with correctly targeted leads and only work for that dealership (i.e. exclusivity) they should pay you much more.

      You seriously need to have the "crap" conversation with them. Ask them if the leads that they are paying for are crap - if yes ask them what a "quality" lead would actually be worth to them.

      That's your positioning.

      Take advantage of it and don't undersell your skills.

      Regards

      Bronwyn and Keith
      Originally Posted by DennisM View Post

      Fernando,

      I'm NOT charging $17 per lead. That's what AutoTrader.com and Cars.com is charging this large dealership group (they have 10 dealerships).

      The average price per lead that AutoTrader and Cars charge is $25 each. AutoTrader gets 6 million plus visitors a month! Cars.com is 3 Million plus. I'm just trying to find a way to compete.

      To the dealership, a lead is a lead. I don't think any leads I generate are worth "more" than what these two websites charge?

      Dennis
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    • Profile picture of the author jkstam3
      Originally Posted by DennisM View Post

      Fernando,

      I'm NOT charging $17 per lead. That's what AutoTrader.com and Cars.com is charging this large dealership group (they have 10 dealerships).

      The average price per lead that AutoTrader and Cars charge is $25 each. AutoTrader gets 6 million plus visitors a month! Cars.com is 3 Million plus. I'm just trying to find a way to compete.

      To the dealership, a lead is a lead. I don't think any leads I generate are worth "more" than what these two websites charge?

      Dennis
      Dennis,

      You say you are just trying to find a way to compete...and I may be taking this idea completely wrong so forgive me if thats the case.

      Cars.com and autotrader.com may very well have an audience of 6 million+ viewers which to you may make you feel like you can't compete...but your wrong.

      You will compete because your leads will be much more targeted and thus much more likely to convert.

      I don't know who told you a lead is just a lead because thats wrong...I lead that has a greater chance of converting is worth much more than a mickey mouse lead...especially when the dealership will be profiting at minimum a few thousand dollars.

      I'm with the above poster...you could probably get a significant amount of money (100 or more) for your lead if it converts...
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    • Profile picture of the author paulie888
      Originally Posted by DennisM View Post

      Fernando,

      I'm NOT charging $17 per lead. That's what AutoTrader.com and Cars.com is charging this large dealership group (they have 10 dealerships).

      The average price per lead that AutoTrader and Cars charge is $25 each. AutoTrader gets 6 million plus visitors a month! Cars.com is 3 Million plus. I'm just trying to find a way to compete.

      To the dealership, a lead is a lead. I don't think any leads I generate are worth "more" than what these two websites charge?

      Dennis
      Dennis, the reason why they're only paying $17 per lead is because they're pure crap, as you've detailed in your explanation.

      The real key here is how responsive the leads are. If you sell them leads at $50 a pop but they ultimately generate 4 times as much revenue, they'll be all over you begging for more of them!

      The key here is to negotiate with them. Perhaps give them a couple of free samples or a few at a "discounted" rate so that they can see the kind of quality you're delivering with your leads.

      If you're using SEO to generate these leads and you're targeting the right keywords, I'm sure your lead quality is going to surpass anything that cars.com or autotrader.com have to offer.

      Paul
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  • Profile picture of the author brik2500
    Hey Dennis,

    I generate leads (a ton) for offline clients all of the time.

    I actually had a dentist in Chicago that was paying $40 per lead.

    There is a colleague of mine in Chicago that may want to do some work with you...

    you can pm me and we go from there!

    Best

    Brik
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  • Profile picture of the author patadeperro
    Dear Dennis:

    Here are my 2 cents, I have work producing leads for offline business for a while, my major expertise is the financial industry, but I have done it for other businesses as well here are some recommendations:

    a) Lead generation is a number game, if you only have 30 day trial period forget SEO, start buying the traffic, buy low sell high, the cheapest quality traffic you can get is Google content network, use images (they are cheaper).

    b) After this buy facebook traffic, they allow you to do it based on their location, age, etc.... do it properly this can be cheap traffic as well.

    c) Work a lot on your copy, even you are using images try tested formulas on headlines such as: "Who else wants to get the best car on Chicago?" or "When A Car Dealership Needs A Car This Is Where They Go", this titles have proved over and over to work no matter what industry you are on.

    d) Work a lot on your landing pages, simple, clean Attractive Headline, Call to action and tell them Why to fill up the form (give them something), use Aweber to do this please.

    e) The less information you request the better your response will be, talk to the salesman and ask them what is the minimum amount of information for them to follow up with a lead (name, email and phone number should be enough, but if they have some kind of incentive program, they may need more data)

    f) Be sure the salesmen call the leads at least 30 minutes after they get the lead (the sooner the better).

    g) On your thank you page explain them the phone number they are going to be called (many people don't answer their phoned from phone number they don't know)

    If you have more questions PM. Hope it helps
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    • Profile picture of the author Bronwyn and Keith
      Hi Patadeperro

      Great blueprint for Dennis to use.

      Well thought out and doable.

      Obviously from someone who has had a bit op practice doing just this.

      Regards

      Bronwyn and Keith
      Originally Posted by patadeperro View Post

      Dear Dennis:

      Here are my 2 cents, I have work producing leads for offline business for a while, my major expertise is the financial industry, but I have done it for other businesses as well here are some recommendations:

      a) Lead generation is a number game, if you only have 30 day trial period forget SEO, start buying the traffic, buy low sell high, the cheapest quality traffic you can get is Google content network, use images (they are cheaper).

      b) After this buy facebook traffic, they allow you to do it based on their location, age, etc.... do it properly this can be cheap traffic as well.

      c) Work a lot on your copy, even you are using images try tested formulas on headlines such as: "Who else wants to get the best car on Chicago?" or "When A Car Dealership Needs A Car This Is Where They Go", this titles have proved over and over to work no matter what industry you are on.

      d) Work a lot on your landing pages, simple, clean Attractive Headline, Call to action and tell them Why to fill up the form (give them something), use Aweber to do this please.

      e) The less information you request the better your response will be, talk to the salesman and ask them what is the minimum amount of information for them to follow up with a lead (name, email and phone number should be enough, but if they have some kind of incentive program, they may need more data)

      f) Be sure the salesmen call the leads at least 30 minutes after they get the lead (the sooner the better).

      g) On your thank you page explain them the phone number they are going to be called (many people don't answer their phoned from phone number they don't know)

      If you have more questions PM. Hope it helps
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  • Profile picture of the author gg282
    I have a feeling the $17 leads from cars.com and autotrader are shared with other dealerships. So even though cars.com sells the lead for $17, if the sell the same lead 4 times cars.com is actually making $68.

    So if your car dealership guy wants "Exclusive quality leads" then I could assume $50 a lead would be a good deal. Especially if you are using adwords to generate the lead. You could end up spending $10 to $15 to generate that lead that you should sell for $50 or more.

    Dont let the dealership bully you or talk you down in prices. Their profit margins for both new and used cars are SEVERAL thousands of dollars, That I can guarantee as I did work for a big auto dealership at one time.
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    • Profile picture of the author Takuya Hikichi
      Dennis, how are you? I come from this industry, used to work as an "Internet" sales rep and sold about 300 cars in Vegas at a dealer in 2005-2008, about 10-20 cars sold every month.

      May I tell you something? From my own experience, I think you have a great chance at selling your service to them if you could make them see lead generation strategy from a completely different angle than they never knew before.

      99% of industry attempts to sell using their "credibility" pitch -- things like how long they're in business or how many cars they sold (which as you know, customers don't care).

      If I was to do it all over again, I would build direct response website, offering reports to the local car shoppers. Common issues that weigh on their minds are if they can trade in their upside down vehicles, what questions they need to know before walking into a dealership, what if they had bad credit etc...

      I would offer free reports via the Internet and also using 800 toll free number on topics mentioned above. The toll free number can capture address and internet lead can also if you'd want to require more fields than an email.

      Reports go out to capture people who are still early in their buying cycle and stumbled on your site. If you have their mailing addresses, send sales letter and testimonials.

      When I worked, I wasn't very savvy online marketer yet. But I knew how to keep in touch with my customers using a system and employed Send Out Cards website to send thank you cards, Christmas cards, and birthday cards to my own customer database, which can grow by 10-20 customers a month.

      Over time, I would mail out as many as 100-200 greeting cards per mailing. This worked very well by the way. One year, I decided to mail out on St Patrick's Day, which is not normally tied to the usual retail sales by car dealerships. But when I did that, being that's during the US tax refund season, I had 3 ready, existing customers waiting for me to sell them cars the very next morning. It was for my existing databse and my customers' 2nd and 3rd purchase from me and I only worked their for two years. I had to pass one on because they were there when I got there in the morning because I could only help one at a time.

      I also kept testimonials from customers, and I had them write it for me in front of me as soon as I sold them a car. Customers are almost always willing to do this, but I only had two who would still write one up for me after they got home. It's better to have them write one while you're doing the final paperwork. I would display these testimonials in my cubicle, instead of the regular "award certificates" or trophies that tell you how you as a salesperson (which customers don't care as much as what salespeople think).

      Over time, you will see "2nd page" testimonial from the same customer. This convinced the new customer how people were happy with what I did and they returned to purchase one again.

      No salesperson understood this important enough to go actively collect them, everyone had one or two that eventually some nice customers did for them, but they need to be seeking these to let customers do selling.

      Towards the end, I also started taking pictures of customers when they were ready to leave the dealership, keys in their hands. They are happy in front of their vehicles and I would ask them if it's okay to take pictures. In my cubicle, I would display them. If I was to do it today, I would use digital picture frame that changes every 15 seconds and just display faces of happy customers.

      My dealership allowed me to sell in my own cubicle, but if I could go back to it now and set up a perfect cubicle, I could have positioned myself so much better. Instead of "the usual" cubicle look where you'd only see awards and trophies, you put those on the small corner of a desk, but display pictures and testimonials of happy customers more prominently in the cubicle. I would use Lulu.com to go make self-publishing reports as physical books to give away to my customers that didn't buy, that would have worked better than the usual business cards they would have received from everyone else.

      Anyway, Dennis, I went all over the place on your initial question. I just got too excited hearing about it because I couldn't help but to think "if I was to do this again today..."

      I eventually left the business because of the hours, but if I would run my own business like that today, I know I could really gain leverage employing all kids of direct response and follow up system that would have generated leads for myself regardless of which dealership I could be working at.
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  • Profile picture of the author jimmack
    Dennis try what Jacer had to say. Anything Jeremy Shoemaker does works. I know Jeremy and I trust him.
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    Getting back in the internet world after a brief absence. Gonna re stake my claim!

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    • Profile picture of the author Kevin AKA Hubcap
      Originally Posted by DennisM View Post

      They're paying $17 per lead to both Cars.com and AutoTrader.com (this is good intel for you folks out there targeting car dealerships).
      @Dennis

      Are they tracking leads via clicks to the dealers website, calls to the 800 number, both or something else entirely?


      Originally Posted by jimmack View Post

      Dennis try what Jacer had to say. Anything Jeremy Shoemaker does works. I know Jeremy and I trust him.
      @Jim

      I'm sure Jeremy has had and continues to have his share of failures. Just because something works for one person doesn't automatically mean it will work for everyone.
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  • Profile picture of the author joshril
    As far as pricing, several people are saying you should charge... $xx or $xx for a lead... What Cars.com is charging is something to consider, but whether the leads are shared as well as the quality of the leads is something to consider.

    When generating leads, ultimately it's all about ROI (return on investment). Despite what some may think, margins in the car business are not huge, although dealerships make money on a lot of things besides just the car itself.

    You need to have a discussion and find out what their average margins look like for new cars and used cars. You need to find out how many leads on average results in a sale. Then you can determine what a qualified lead is actually worth. There's absolutely no way to know what a lead is worth to them if they aren't tracking these numbers.

    Assuming they're not tracking now, if you decide to move forward with a 30-day trial of some sort, then make sure they're tracking conversions on your leads as well as the conversions from their current lead vendor.

    Just to reiterate to those looking to do lead gen... It's all about ROI... If you discover the lifetime value of a new customer is $2,000 and it takes 5 qualified leads to get a sale, that means the value of each qualified lead is $400. Obviously you can't sell the leads for $400 each because that is their "break even" point, but you can certainly get more than $10 or $20. (This is a generic example used to make my point... I'm not suggesting this is what the numbers look like in the auto industry)

    Someone else mentioned taking a cut of the backend... In many cases, you can charge a business an up-front amount for leads as well as a percentage of the revenue or just a percentage of the revenue. Many business owners are glad to do this because they realize that 75% of something is better than 100% of nothing...

    Of course, the key is actually being able to generate leads. Assuming you can get leads flowing at a reasonable price point, finding a business to send them to is not going to be a big issue.

    All sorts of ways to generate leads...

    1. PPC
    2. Facebook (Free/paid)
    3. SEO
    4. Offline tactics (signs, direct mail, flyers, etc.)

    Find your target market, give them a reason to give you their information, and track everything.

    Joshua
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  • Profile picture of the author ncb1985
    Hey DennisM,

    I was a telemarketer and find it more effective in generating good leads. Sorry for crashing, I'm just a newbie trying to find ways on doing things online.
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  • Profile picture of the author peter.max
    Don't worry too much about the lead price now. You say that you are looking to give them free leads for 30 days in any case. If you get high converting leads then they will want to buy them from you, trust me. Especially if you can raise the profile of your coampaign inside their business. More about that further down in this post.

    You need to focus on the sign up offer. A "10 things before you buy..." isn't going to give you serious buyeres. Something that I've used in the past is to create some exclusivity by creating an offer that gives the buyer VIP access. Arrange a "special VIP access" deal with the dealership for people that sign up on your list. It serves a couple of purposes.

    1. It raises the profile of your campaign inside the dealership as they know exactly who comes from you.

    2. It gives them a legitimate reason to phone the prospect to set up the VIP appontment, get their preferences in drinks, arrange private viewing at their homes etc. Be creative in the VIP access.

    The VIP access must be something that will give the customer significance, one of the basic human needs. A wine club, for example, will have a private tasting room for VIP members and their friends, assortment of snacks and a few wines that can only be bought in this VIP environment (special offer). But you need to let them know beforehand that you are coming. You can apply something similar.

    If you only have 30 days then SEO will be a challenge. You can go with PPC but I would see if I can get the dealership to sponsor a small ad in the local paper (they probably have ads running in any case) that is structured almost like an Adwords ad. "Buying a car make? Then get access to the VIP Buyers Circle. Go to www.vipcarmakebuyers.com and see the benefits of buying through this exclusive VIP members access. Numbers are limited, so get get VIP access early. (you may want to think about the ad. I did this early morning before my first cup of coffee )

    Send them to the squeeze page, paint a picture of the VIP offer and treat them like VIPs after that.

    I've seen an early version of a lead valuation calculator put together by another Warrior that takes PPC values for the niches, customer profit per sale, sales conversion rates and Life Time Value of customers into consideration when looking to price a lead. I know that he is planning to launch it as a WSO soon. I'll ask him to post on this thread on how to price a lead once he has his calculator ready. It is an analytical approach that takes the emotion out of pricing a lead and gives a basis for justifying the price, high or low
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