Zip Code Discrimination Cost Auto Dealers Sales
Posted by admin | Filed under Lead Generation, auto dealers
I’m sure this scenario covers other areas of lead generation just as it does the auto industry, but it’s a topic that the industry in general does not discuss much. It has to do with a sort of wrongfully placed discrimination of zip codes and it’s costing auto dealers nation-wide thousands in car deals each month.
What causes zip code discrimination? While there are other topics that can be discussed regarding zip code discrimination we’ll keep this conversation limited to the fairly standardized way in which auto dealers purchase their auto leads. Typically, they sign a contract with one of the big names you know in the retail lead space and pick out some targeted zip codes. Most auto dealers will choose the primary zip code of their busines and then select a radius of 25-50 miles in which they might be willing to purchase leads.
How are people discriminated against because of their zip code? I can say this with great certainty because I receive emails every day from car shoppers that say something like this. “I live in a rural area and do not have a car dealer in my area. I’m willing to drive 50-75 miles to purchase a vehicle if you can help me.” Car shoppers are unknowingly discriminated against just by not living in the correct zip code or living just outside of a zip code that a car dealer might be willing to accept leads from.
What can be done to stop zip code discrimination? While I won’t pretend to have the best solution, I think it starts with lead generators and lead aggregators educating auto dealers about missed opportunity. Maybe lead generators and auto dealers need to share some of the risk. Maybe the industry developes a tiered system in which a dealer can pay market value for leads within their targeted zones, and then a discounted rated for the wider radius that might present more risk due to the ability to get someone to actually drive 100 miles to the dealership. As a side note, it’s interesting that folks all across the country buy and sell cars on eBay and the cars are shipped or driven thousands of miles to their new owners? Yet, thousands of car shoppers are overlooked because they possibly live 1 mile from a targeted zip code by an auto dealer.
What is Lead Dispatch doing about it? We are currently looking at leads that do not get placed and finding auto dealers willing to work them. If they sell a vehicle we get compensated, if not, we made a best effort to ensure that a potential car shopper and customers got some level of service vs. their application falling into a black hole.
We hope other lead generators and aggregators will join us in finding a better solution than what is available today. It will mean more revenue for lead generators, more potential sales for auto dealers, and more happy customers.
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