Market Study-Consumer Expectations CC926

May 2008
© 2008 R. L. Polk & Co. All rights reserved. www.polk.com
MARKET STUDY
Consumer Expectations for Internet Lead Marketing

MARKET STUDY
Consumer Expectations for Internet Lead Marketing 1
Executive Brief
Changing Times
With over 85 percent of all eventual car and truck purchasers using the Internet as
a means to conduct their research, it has never been more crucial for automotive
marketers and dealers to view their online hand raisers as one of their most impor-
tant competitive assests. However, moving an online shopper from an unidentified
prospect to hand raiser is tricky at best; these information savvy consumers are initially
anonymous, direct and in command.
From an automaker or dealer point of view, engaging with potential buyers should
always be tempered with an understanding of what the consumer wants at the time
they make themselves known. And in cases where buyers ask to be contacted to speed
up the sales cycle, paying close attention to their needs can result in selling one more
unit that month or not. Thus, lead marketing, and specifically managing online leads,
has been an area of growing interest to the automotive industry.
This study, conducted by R. L. Polk & Co., reveals critical insights useful for automotive
brand managers and retail managers as they strive to convert a growing base of Inter-
net online leads into new vehicle buyers. Findings in this study will help automotive
communities better understand the unique preferences among online leads and the
follow up tactics which impact subsequent purchase behavior. Specifically, the follow-
ing questions are explored:
How do leads differ based on need?
Are first time buyers worth identifying and how should they be approached?
What types of online interaction influences brand loyalty?
Topline findings from this investigation follow.
What You Should Know
Leads can, and should be, treated uniquely
Seven distinct segments of leads were identified based on the specific input shoppers
submitted to OEMs, dealers or third party sites when requesting new vehicle informa-
tion online. The information contained in these segments illustrates how leads can be
communicated to differently to increase shopper satisfaction and potentially increase
brand and dealer sales. Two segments in particular were found to purchase from
dealers that responded to their online request for information at above average rates
compared to the total population. Among other factors, lead attributes tied to these
two segments relied heavily on receiving high quality content from a dealer when web
inquiries were made.
First time buyers are worth identifying
Given the importance of developing new relationships with a customer, first time
buyers present long-term business opportunities to any automaker and their dealer
network. Among the responding lead population, over 80 percent of those buying a
vehicle for the first time acquired their vehicle from a dealership who responded to
their online request for information. First time buyers were noted as using third party
automotive sites more often than experienced buyers. This implies that dealers and
OEMs may need to place higher emphasis on third party leads to attract first time buy-
ers to their dealer showrooms.
Consumer Expectations for Internet Lead Marketing
About the Authors
LONNIE MILLER is the
Director of Industry Analysis
with R. L. Polk & Co. With over
17 years of consulting and
research experience, he focuses
on examining underlying issues
driving automotive market
and consumer behavior trends
in the U.S. and other global
regions.
DAN ZETU is an Analytic
Consultant with R. L. Polk &
Co., focusing on implementing
advanced solutions that solve
critical marketing problems.
Dan has developed market
segmentations, in-market
and loyalty scoring models
and conducted product
development optimization and
consumer behavior studies
in a variety of industries,
including the automotive,
pharmaceutical, finance and
insurance sectors.
MARGARET ZEWATSKY is a
Global Market Analyst with
R. L. Polk & Co. and focuses
on identifying market trends
that aid in the development
of new services for Polk’s
global automotive clientele.
Margaret has led multiple cross-
functional teams on key global
initiatives and is seasoned in
new product development and
product management.

MARKET STUDY
ConsumerExpectationsfor
InternetLeadMarketing
Loyalty can be influenced among online leads
When predicting whether a lead will be loyal to a brand (e.g., Chevrolet, BMW, Nissan),
three factors accounted for 44 percent of the overall influence on this outcome. The
three factors include the overall shopping and sales experience, whether the seller was
viewed as honest and trustworthy, and the manufacturer’s response time to infor-
mation requests. All three reflect controllable factors experienced during the online
shopping phase among leads. Furthermore, a lead’s satisfaction was found to increase
loyalty rates by as much as 3.4 percentage points when pricing information was pro-
vided and/or a prompt response time was achieved.
Ask how and when
Leads want what they want. This includes communicating with them on their own
terms and in the time frame they expect. Determining the method of preferred com-
munication and an acceptable time for a response appears to be achievable and shows
interest in understanding the shoppers’basic communication needs. Most leads prefer
email communication, which tends to afford a longer tolerance for replies to requests
for information. Yet when the telephone is the preferred communication channel,
expectations are higher given that 68 percent of those preferring to dialogue via the
phone indicate one hour or less as an acceptable time frame to receive a response.
This summary provides only a few of the themes revealed in the study Consumer
Expectations for Internet Lead Marketing. The additional findings and recommendations
that follow are intended to enable automotive brand, dealer and Internet marketing
managers to improve their engagement, measurement and business expectations
when nurturing online leads in the new vehicle market.
How the Study
was Conducted
In January 2008, online inter-
views were conducted with
571 vehicle buyers in the U.S.
that bought or leased a new
car or truck from a dealership
between November 2007
and January 2008. Qualified
respondents visited an auto-
motive website and provided
their contact information
online while researching a
vehicle online. Results reflect
weighted proportions based
on U.S. distributions of age,
income, ethnicity, and gender.

MARKET STUDY
How Do Leads Differ Based On Their Needs?
Relevancy
The conventional wisdom in lead management is that all leads have to be treated
equally well. If this were actually the case, it is reasonable to assume that the current
lead conversion rate of approximately 55 percent would be higher1
. On the other hand,
does every lead warrant“royal”treatment?
An area of interest is to reveal the degree of difference in expectations when leads
engage with automotive websites and in particular, with dealers. Practically speaking,
interactions dealers have with leads often come down to a simple email response, or
a phone call to field questions posed by the shopper. The more relevant these basic
interactions are to the needs of the shopper, the better chance of a showroom visit
and eventual purchase. It stands to reason that efforts to profile and detect differences
among leads should be made.
Key Findings
In this study, a number of attributes were combined to produce a segmentation model
of the interviewed online lead population. Primary emphasis was placed on their pat-
tern of communication when submitting leads and their expectations when interacting
with dealers and OEMs. In Figure 1, key attributes are listed that were used in the seg-
mentation model, including the vehicle purchase information, attitudes about certain
shopping and buying behaviors, Internet-based vehicle research behaviors, dealership
response and follow-up preferences, and dealership selection drivers.
Figure 1:
Attributes Used In
Lead Segmentation
Model
Vehicle Purchase Drivers Brand effects
Price and incentives
Styling
Vehicle features
Safety
Warranty
Shopping and buying experience
Attitudinal Attitudes about driving
Attitudes that drive vehicle consideration
Affinities with specific manufacturers
General shopping behaviors
Expectations as shoppers
Internet-Based Vehicle
Research Behavior
Specific automotive sites visited
Number of dealer web sites visited
Specific information submitted
Specific information requested
Number of leads submitted
Dealership Response and
Follow-up Preferences
Method of communication
Response time
Information content
Satisfaction with dealership response
Expectations of dealership response
Rate of purchase from a responding dealer
Dealership Selection Drivers Previous relationship
Quality of response
Vehicle specific attributes
Price and incentives
Location
Synopsis
As online leads reveal their
needs and interests when
shopping for a new vehicle,
finding and listening to these
market cues is necessary to
compete in a challenging U.S.
automotive market. Since
automakers and retailers con-
tinue to shift their advertising
expenditures to include a
wider range of online media,
intercepting these prospec-
tive buyers requires disci-
plined follow-through with
these consumers to ensure
that lead marketing strategies
are successful. Much of this
comes down to the type of
information gathered on a
lead and from the information
used to determine how to
treat and communicate with
the different lead segments
relevantly once an engage-
ment with a dealer begins.
Shared findings and recom-
mendations in this report
from R. L. Polk & Co. were de-
rived from online interviews
conducted in January 2008
with 571 vehicle buyers in the
U.S. Interviewed respon-
dents reflect a population
that bought or leased a new
vehicle from a dealership
between November 2007 and
January 2008. It also includes
those who visited an automo-
tive website and provided
their contact information
while researching a vehicle
online. Results reflect weight-
ed proportions based on U.S.
distributions of age, income,
ethnicity, and gender.

MARKET STUDY
Seven segments of online leads were identified as noted in Figure 2. Looking across all
of these segments, a few observations are worth noting:
Drivers of vehicle choice have a high bearing on leads’expectations when interact-
ing with dealers; therefore, differentiating treatment of leads based on their own
expectations seems like a sound business strategy.
Elaborating on the above observation, perhaps it is not profitable to treat all leads
“well”; not having a specific vehicle in inventory, or not being competitive on price
are bigger turn-offs for certain leads than“poor”treatment. By the same token,
apathetic shoppers (i.e., Segment 1) are not likely to convert into sales and dealers
could derive more value by focusing on higher potential leads.
First time buyers are a category worth identifying due to their high likelihood to
purchase from a dealer who responds to their online lead.
While responding to leads fast is definitely a good business practice, a large
proportion of leads value the quality of the dealer response at least as highly as
the speed of a response, if not higher. Leads that value response time more than
information content tend to have a lower conversion rate than the ones that value
information content the most.
Results of this analysis imply communication strategies for each segment as noted in
Figure 3. There are three segments that would not necessarily respond to a particular
treatment. For example, shoppers in Segment 4 seeking a specific vehicle type are more
sensitive to vehicle inventory than the way they are treated. Similarly, price shoppers
in Segment 5 respond favorably to price quotes that are within their range. At the
same time, apathetic shoppers in Segment 1, with no specific expectations, have a low
likelihood to convert into a sale, and therefore should not be treated with high priority.
Dealers should still respond to these apathetic shoppers with the requested informa-
tion, but time is not of the essence with these buyers.
1
First Time
Apathetic
Buyers
2
Make Loyal
Information
Content Buyers
3
First Time
Response and
Content Buyers
4
Specific
Vehicle
Buyers
5
Price
Buyers
6
Response
Time Buyers
7
Information
Content Buyers
Apathetic
shopping
behavior, low
incidence of
purchase from
a responding
dealer
High degree
of loyalty,
value quality
of information
received from
dealers
Large proportion
of first time
buyers, value
both information
quality and fast
response times
Seek specific
vehicles,
select dealer
based mostly
on inventory
Buy
primarily
based on
price
Mostly
value fast
response time,
indifferent
about content,
low conversion
rate
Value
information
content over
response time,
high conversion
rate when
treated properly
Figure 2:
Lead Segments
1
First Time
Apathetic
Buyers
2
Make Loyal
Information
Content Buyers
3
First Time
Response and
Content Buyers
4
Specific
Vehicle
Buyers
5
Price
Buyers
6
Response
Time Buyers
7
Information
Content Buyers
Respond with
low priority
Emphasize
information
content; respond
as soon as
possible, but do
not compromise
on content
Respond to them
immediately;
preferably call
them with all the
information they
requested
Ensure you
have the
requested
vehicle in
inventory;
if not try to
get it from
another
dealer
Treat
with low
priority
if you
cannot
fall within
their price
range
It is important
to respond
immediately,
even if not
all requested
information is
available
Provide them
with all the
information
they requested;
they prefer
email as the
method of
communication
Percentage of Segment Purchasing from a Responding Dealer (Average Purchase Rate = 62.6%)
47.2 61.3 83.2 55.5 59.8 58.5 74.6
Figure 3:
Recommended
Communication
Strategies by
Segment

MARKET STUDY
For the segments that value information content, including Segments 2, 3 and 7, it
is crucial to avoid compromising the quality of information in order to simply get a
response to them faster. Shoppers in these segments tend to be more forgiving with
longer response times within reason if the delay ensures that the right information is
being collected and conveyed. These three segments also had the highest rate of actu-
ally buying their new vehicle from a dealer who responded to their online request for
information and it is expected the quality of the response contributed to this positive
behavior. On the other hand, for Response Time Buyers in Segment 6, it is important to
respond to them immediately, even if not all the information is available at that point.
Recommendations
In the end, the main purpose of lead segmentation has less to do with classifying leads
into one of the seven specific segments discussed earlier, and more to do with reinforc-
ing the point that not all leads have equal expectations when interacting with dealers
and OEMs. Given the wide range of expectations possessed by new vehicle shoppers,
it is sensible to make a stronger effort up front in order to better understand what dif-
ferentiates one lead from another and how this can yield higher sales conversion rates.
There are at least three pieces of significant information that leads share which allow
them to be placed into a category that is meaningful to an OEM or a dealer. These
include:
1. Knowing if they are a first time buyer.
Identifying this disposition among a lead sends direct cues to a dealer that they
have a new prospect in their funnel and that the potential to create positive brand
and retail experiences is more critical than ever.
2. Finding out the preferred communication method for follow-up opportunities.
This is another controllable and personally-relevant factor to identify. Whether
online (e.g., email, text messaging) or telephone contact are desired by the lead,
make an effort to find out – 70 percent of the leads who purchased from dealers
who responded to their requests, were contacted via their preferred communication
method.
3. Finding out an acceptable response time to an online request for information.
While certain OEMs and dealers implement operating standards on the response
time they adhere to (including the use of“auto replies”in many lead management
systems), responding promptly may not always be relevant to the lead. The fine
balance of responding relevantly and quickly is a challenge, but self-reported infor-
mation from the shopper can diminish the risk if more time is available to provide
the most convincing or correct answer to a shopper’s questions. While nearly half
(48.5%) of the interviewed leads in this study expected to be replied to within two
hours of submitting their request for information online, nearly 30 percent stated 10
to 48 hours was acceptable to them. Thus, identifying the response time expecta-
tions when the lead is submitted may help to prioritize which leads to follow up on
first.
Applied Learnings
Based on the discussion of
segmenting online leads, below
is a quick illustration of how their
profiles can be used to prioritize
follow-up efforts among these
populations:
• If a lead is a first time buyer
and prefers email as their
communication medium,
they are more likely to be an
apathetic buyer (Segment 1) and
therefore, should be treated with
lower priority. This will free up
resources that can move on to
other leads with higher scores,
or other indicators favorable to a
conversion.
• On the other hand, if a first
time buyer prefers phone as
their preferred contact method,
this lead is likely to be a First
Time Response and Content
Buyer (Segment 3) and should
be responded to immediately
and with as much complete
information as is available.
While the specific lead attributes
noted in this example may not
always be available to marketing
managers, it underscores the need
to collect and analyze robust,
online customer information in
order to optimize sales follow-up
behaviors that are relevant to the
buyer.

MARKET STUDY
Are First Time Buyers Worth Identifying?
How Should They Be Approached?
Relevancy
Taking note of the earlier discussion, first time buyers certainly represent a fresh start
for OEMs and their dealer network. The average age of a new vehicle first time buyer is
28 years old and by 2010, the U.S. expects to have approximately 21.4 million residents
who will be between the ages of 25 and 29 years old. This represents over a 10 percent
increase in this population between 2000 and 20102
. These new entrants to the new
vehicle market are potential future loyal customers.
Furthermore, just under 10 percent of all new car and truck sales in the U.S. are sold
to first time buyers with most of this segment buying compact SUVs, compact cars or
full-size pickup trucks3
. Applying this rate to 2007 U.S. sales figures reveals that first time
buyers acquired nearly 1.6 million new vehicles. That volume is more than the total
number of new passenger vehicles sold in India last year4
. The OEM and dealer network
response to online leads of this growing category are critical in making a positive, initial
brand impression.
Key Findings
Better than four out of five (83%) first time buyers purchased from a dealership that
responded to their online inquiry. Compare that with 73 percent of loyalists and 51
percent of defectors (Figure 4) and it can be seen why it is critical for retailers to identify
them early in the lead submission process. It also raises the issue of not getting back
with a lead who seeks information. First time buyers were almost 40 percent more likely
to have their online request for information go unanswered than other buyers. This is
unfortunate given the high purchase disposition represented by this consumer group.
So what do first time buyers value? While price was cited as the single most impor-
tant reason for selecting a dealership by all interviewed leads, first time buyers chose
“response to their request for information”as the second most important factor in
selecting a dealership. In contrast, experienced buyers only ranked this same attribute
as their seventh (out of 13) most important dealership selection factor. This indicates
the expectations first time buyers have when it comes to the interaction process before
making a decision to even visit a retailer.
20%
40%
60%
80%
100%
%PurchasedfromaRespondingDealer
73%
83%
51%
Loyalist
Defector
First Time Buyer
* Respondents include those
that received a response to
their submitted lead.
Figure 4:
Percent of Leads Buying
from a Responding Dealer

MARKET STUDY
Experiences among first time buyers reveal critical reviews on dealer feedback once
an engagement began. When asked if a dealership they engaged with gave them the
vehicle price information they requested, 12 percent of first time buyers disagreed or
strongly disagreed (compared to five percent for experienced buyers). Additionally, the
dealership’s response time has room for improvement among first time buyers as nine
percent disagreed or strongly disagreed that the dealer replied in a desired time frame
(versus two percent of experienced buyers that indicated similar negative ratings). It
also appears that first time buyers prefer a response to their inquiry faster than experi-
enced buyers. Of those first time buyers interviewed , 68 percent thought two hours or
less was an acceptable amount of time to wait for a response compared to 39 percent
for experienced buyers.
Knowing which websites different leads visit is always of interest to those controlling
media budgets and advertising placement decisions. Results from this study reveal that
first time buyers are not as active on OEM and dealer sites compared to their activity
with third party sites such as Yahoo! Autos.com and Cars.com (Figure 5). Studying these
site visitation patterns among lead segments is healthy as it enables targeted messages
to stand out to identified demographic groups. On average, leads reach out to three
different websites during the shopping phase. So applying information gained from
previous lead profiles gives automotive marketers an advantage. With any single lead
seeking responses and content from multiple entities, the chances for lost opportuni-
ties grow quickly. In the case of first time buyers, they appear to reciprocate positively
by purchasing from a responding dealer when given proper attention.
0%
10%
20%
30%
40%
50%
60%
%ofTotalRespondents
DealerW
ebsite
M
fgr.W
ebsite
Loyalist
Defector
First Time Buyer
Kelley
Blue
Book
Cars.com
Yahoo!
Consum
erReports
AutoTrader.com
Edm
unds.com
Figure 5:
Websites Where
Leads Requested
Information

MARKET STUDY
30
35
40
45
50
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Model Year (Oct.–Sept.)
Recommendations
Know if a first time buyer is talking to you by identifying them up front in the lead col-
lection process. Their expectations with the new vehicle buying process should not be
taken lightly even though they share some basic response tactic needs with seasoned
buyers. Using insights from the lead segmentation model presented earlier, one can
envision that if a first time buyer is identified early and indicates phone as their pre-
ferred communication medium, it may be a good practice to respond within two hours
of receiving their inquiry to prevent them from moving on to another dealer. While
this may not be a universal“rule”to adopt, it emphasizes the need to devise an optimal
response model with this audience in order to build loyalty among a growing popula-
tion entering the new vehicle market.
What Type of Online Interaction Inuences Brand Loyalty?
Relevancy
Overall loyalty rates for automotive brands have been steady over the last 12 model
years with 44 percent of new vehicle owners staying with the same make (Figure 6).
With the latest estimates for new vehicle sales expected to be 15.2 million for 2008,
retaining existing owners is of the utmost importance to realize marketing efficiencies.
Whether engagements with these owners are in the showroom, in a live chat session or
over the telephone, impressing an audience that switches more than half of the time to
a competing brand is always important.
Aggregate Brand Loyalty Rates
Key Findings
A significant finding in this study is that three controllable factors can drive nearly half
of the influence on whether an online lead stays loyal to a brand or not (Figure 7). Based
on their impressions of the overall shopping and sales experience, a manufacturer’s
response to information requests and whether the seller was viewed as honest and
trustworthy, these criteria are factors that emerge during the online vehicle shopping
phase. Between these three issues, they represent 44 percent of the overall influence on
brand loyalty or defection.
Vehicle Features 3%
Warranty 4%Incentives 4%
Environmentally Friendly 5%
Manufacturer Response
to Information Request
8%
Road Handling/Maneuverability 11%
Overall Shopping &
Sales Experience
18%
Seller Was Honest/ Trustworthy
18%
Monthly Payment 29%
Figure 6:
Loyalty Rates Among
New U.S. Vehicle
Owners
Figure 7:
Inuence of Vehicle
Selection Criteria
on Predicting Brand
Loyalty

MARKET STUDY
While positive experiences with certain shopping criteria are keen predictors of repeat
sales, satisfaction plays an integral role in the loyalty of online leads as well. In this study,
satisfaction with pricing information and response time were found to positively influ-
ence make loyalty at significant levels5
. For example, an improvement of 0.5 points (on
a 1 to 5 scale where 1 is least satisfied and 5 is most satisfied) in satisfaction with pricing
information translates into an improvement of 3.4 percentage points in make loyalty
(Figure 8). Coincidentally, the same improvement in make loyalty can be attained by an
increase of 0.5 points in satisfaction with dealership response time (Figure 9).
One implication from these findings: current customer satisfaction measures used by
automakers and dealers can be applied to online shopping engagements as a way of
understanding how the dialogue went earlier. If improved satisfaction scores indicate
a higher likelihood of the lead being loyal, it may be wise to employ existing measure-
ment tools in this environment for the benefit of maximizing loyalty behavior.
Recommendations
Pricing, response time and the impressions made while interacting with a shopper are
important and recurring themes that certainly influence the chances for making a sale.
In the case of maximizing repeat sales among gathered leads, these business planning
questions should be considered:
Can you find out if leads were past customers? Is it feasible to qualify this fact at the
moment the lead hits a CRM system? And if it cannot be verified via database inte-
gration efforts, it is feasible that this may be a worthwhile question to ask the lead
directly once a dialogue begins?
Is there value in measuring customer satisfaction among online shoppers? Programs
focusing on tracking (and rewarding) satisfaction exist today for new and used
vehicle customers and for service customers. If certain attributes from existing sat-
isfaction metrics can help influence business behavior that leads to positive loyalty
outcomes, these should be explored.
Figure 8:
Relationship between
Satisfaction with Price
Information and Make
Loyalty
Figure 9:
Relationship between
Satisfaction with Response
Time and Make Loyalty
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1–5 Scale - Satisfaction with Pricing Information
1.5 21 2.5 3.53.5 4.53 4 5
%MakeLoyalty
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1–5 Scale - Satisfaction with Response Time
1 1.5 2 3 4 52.5 3.5 4.5
%MakeLoyalty

MARKET STUDY
Paying Attention to the Basics
So far the discussion has focused on how leads differ in their needs, the opportunity to
communicate uniquely to each audience, the opportunity to qualify and pay more at-
tention to first time buyers, and on strategies to strengthen owner loyalty. Yet all of this
is purely speculative if certain basics are not fully adopted by retailers and automotive
marketing managers. There are some basic truths for marketing to online automotive
leads. From this body of research, much of what has been discussed converges to three
fundamental issues which relate to:
1) Vehicle pricing information
2) The communication medium and timing practices used for responses
3) The expected quality of shared communication from a dealer or responding party
“Price is King”
New vehicle buyers submit an average of three leads during the online vehicle shop-
ping process. In doing so, they consistently request four pieces of information:
Price
Availability of a specific vehicle
Available incentives or discounts
Available vehicle specifications
While price was requested by three out of four leads (74%), access to the vehicle’s price
information was rated the most important item when determining which dealership to
purchase a vehicle from. Despite the importance of price information, recent studies re-
veal that only one out of four dealers answered questions about vehicle availability and
price6
. Including price in the initial response helps increase satisfaction with the lead
follow-up process, yet this item of interest can mean many things. Among price factors
explored in this study, the model’s actual purchase price range rated higher than the
dealer invoice price or MSRP (manufacturer suggested retail price) for all buyer groups
including first time buyers, loyalists and defectors (Figure 10). Together with the earlier
finding of how satisfaction with shared price information may positively influence
brand loyalty, a more wide-spread adoption of price transparency with vehicle buyers
would be of benefit. As one audience member from an April 2008 Polk Automotive
Intelligence Summit stated, “If I don’t give price information to the customer, I’m automati-
cally viewed as the highest priced guy in town.”
3.3
3.4
3.5
3.6
3.7
3.8
3.9
4.0
4.1
1– 5Scale-LevelofImportance
Loyalist
Defector
First Time Buyer
Model
Purchase
Price Range
Dealer
Invoice Price
MSRP
1 = Not at all important
5 = Extremely important
Figure 10:
Importance Ratings
for Pricing Informa-
tion

MARKET STUDY
“Talk To Me My Way”
Accommodating the lead’s preferred communication medium can have an impact on
sales. Respondents who were contacted via their preferred communication medium
purchased from a responding dealership 70 percent of the time. Email was overwhelm-
ingly the most requested medium for responding to online leads with 63 percent of
respondents requesting this form of response (Figure 11). However, only 52 percent of
respondents received an email reply from the dealership that they purchased their ve-
hicle from. Not surprising, a phone call was the next preferred method of communica-
tion at 26 percent, yet 40 percent received an answer to online inquiries in this manner.
With 83 percent of respondents telling dealers how they want to be contacted, there
should be no excuses for ever missing the opportunity to communicate in the manner
desired.
The preferred communication medium can also help provide insights into response
time tolerances. Of respondents who preferred an email response, 47 percent viewed
10-24 hours as an acceptable response time, while 68 percent of respondents who
preferred a phone response viewed one hour or less as an acceptable response time.
Collecting information from leads on what represents an acceptable response time can
be useful in gauging the segment a lead is very likely to belong to and consequently
can help prioritize lead follow up instead of a first-in-first-out methodology.
In general, the speed of response is important in closing a sale with an online lead. How
fast is fast enough? While many standards exist, dealers should target five hours or less
because respondents were less likely to purchase from a responding dealership with a
response time greater than five hours. Related to this point, dealers appear to be target-
ing a faster response time and have improved their response behavior in recent years.
In the 2007 Dealer eBusiness Performance Study, the dealer response time average
had dropped from 6.5 hours in 2005 to 5.4 hours in 2007. What happens if a lead feels
they are not replied to quickly enough? In Capgemini’s Cars Online 07/08 global study,
it was revealed that half of the consumer respondents would look for another dealer if
responses to their questions took too long. An additional 25 percent of the respondents
in that study indicated they would look for a new manufacturer or both a new manu-
facturer and dealer with delayed responses to web inquiries7
.
Email Phone Mail Fax Other
%ofTotalRespondents
70%
60%
50%
40%
30%
20%
10%
0%
Loyalist Defector First Time Buyer
Figure 11:
Preferred Communi-
cation Media Among
Online Leads

MARKET STUDY
“Content Really Matters”
Based on the earlier lead segmentation model, most consumers are more likely to
purchase from a responding dealer when they are satisfied with the content of the
response to their online inquiries. In Figure 12, importance levels8
that rate the content
of a dealer’s response are compared to how fast leads received the response from a
dealer. This information is broken down by the seven lead segments. As can be seen
below, the segments placing a higher degree of importance on content are the First
Time Response and Content Buyers (Segment 3) and Content Specific Buyers (Segment
7)9
. Of these two segments, those in Segment 3 preferred a relatively quicker response
time. Yet both of these segments purchase at relatively higher rates from a responding
dealer compared to all other segments.
On the other hand, segments that had lower importance ratings on dealer response
content exhibited lower purchase rates from a dealer who eventually replied to them.
Response Time Buyers (Segment 6) provide the best example of this behavior. Even
though they prefer a relatively quicker dealer response, they display the lowest impor-
tance rating on content and they exhibited a below average purchase rate.
Overall, much of what leads expect tie back to“what, how, and when.”Knowing which
leads want what information is half of the battle in optimizing a brand’s or dealer’s
relevancy to the shopper. Knowing how they want to be addressed adds another layer
of practical and tailored behavior that can increase the chances of closing a sale with
online leads. Unfortunately, knowing something and acting on expressed desires are
not always in tandem. It is expected that those capitalizing on cues shared by automo-
tive leads will punish those who ignore expectations that are available and willingly
voiced in the marketplace.
Preferred
Response
Time
5
4
3
2
1
0
1 = Not at all important
5 = Extremely important
“Slower”
“Faster”
% Purchasing from a Responding Dealer
47.2% 61.3% 83.2% 55.5% 59.8% 58.5% 74.6%
Importance
of Content
1
First Time
Apathetic
Buyers
2
Make Loyal
Content
Buyers
5
First Time
Price
Buyers
6
Response
Time
Buyers
7
Content
Specific
Buyers
3
First Time
Response &
Content Buyers
4
Specific
Vehicle
Buyers
Figure 12:
Importance with
Response Content,
Preferred Response
Time and Dealer
Purchase Rates

MARKET STUDY
Conclusions
This study uncovers the heterogeneity in the automotive lead population in terms of
expectations from the interaction with OEMs and dealers once they submit themselves
into the lead process. It suggests that there is no universal recipe in dealing with sales
leads. While it is always helpful to reach leads as soon as possible with the right infor-
mation, it is highly important to avoid holding back information from leads which they
have requested. Particularly sensitive to leads is the vehicle price information that is
requested by the vast majority of this population. It is also important to emphasize that
it is not always profitable to treat all leads with high priority. Also, by collecting minimal
additional information from leads, one can formulate a better hypothesis about the
expectations of the leads in their shopping process. The study has found that, when
leads’expectations are met by dealers, purchase rates can be higher than average and
buyers tend to be more loyal. These findings uncover opportunities for both OEMs and
dealers to improve their lead management processes in order to meet a demanding
and growing body of customer expectations. About R. L. Polk & Co.
R. L. Polk & Co. is the premier
provider of automotive
information and marketing
solutions. Polk collects and
interprets global data, and
provides extensive automo-
tive business expertise to
help customers understand
their market position,
identify trends, build brand
loyalty, conquest new busi-
ness and gain a competi-
tive advantage. Polk helps
automotive manufacturers
and dealers, automotive
aftermarket companies,
finance and insurance
companies, advertising
agencies, media companies,
consulting organizations,
government agencies and
market research firms make
good business decisions. A
privately held global firm,
Polk is based in Southfield,
Michigan with operations
in Australia, Canada, China,
France, Germany, Japan,
Spain, the United Kingdom
and the United States. For
more information, please
visit www.polk.com.

MARKET STUDY
1
Cobalt, Yahoo!, R. L. Polk & Co. “The 2007 Dealer eBusiness Performance Study:
The New Buying Influences”, 14.
2
Retrieved May 12, 2008 from www.census.gov/population/projections/52PyrmdUS1.xl.
3
CNW Marketing Research, Inc. Based on those buying a vehicle for themselves for the
first time.
4
R. L. Polk & Co. Approximately 1.5 million passenger vehicles were sold in India during
2007.
5
While controlling for other shopping criteria and dealership selection drivers (such as
the previous purchase from the dealership, dealership location etc.).
6
Cobalt, Yahoo!, R. L. Polk & Co. “The 2007 Dealer eBusiness Performance Study:
The New Buying Influences”, 18.
7
Capgemini (2007)“Cars Online 07/08: Responding to Changing Consumer Trends and
Buying Behaviour”, 19.
8
Ratings measured the importance of various content-focused attributes that a dealer-
ship could provide to a lead once a dealer received a web inquiry.
9
During the development of the lead segmentation model, this importance factor was
used to help define certain segments. Thus the name given to Segments 3 and 7 par-
tially reflects their emphasis on this factor.
Endnotes

Market Study-Consumer Expectations CC926

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