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During a recent conversation with the president of a national special finance lender, I was asked to please increase training efforts in the area of "800 lead-generating" services. Every day dealers are submitting partial applications received from loan-by-phone 800 numbers to special finance companies. The problem with this practice a that lenders spend time analyzing applications and providing approvals on customers who either do not show up or give erroneous information to the loan-by-phone provider. These applications take as much time to work as "real" applications where the customer has visited the dealership and is serious about purchasing a vehicle. The time spent working with these applications could be better spent working with real applications and getting quicker approvals. Loan-by-phone is a great source for gathering leads; however, until the customer shows up and can verify die information it only serves to hurt your lender relationship by continuing this practice. |
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800 lead-generating services are designed to capture key information in order for you to confirm an appointment and increase business. It is imperative that these leads are handled property and timely. A percentage of all 800 leads are no good; however, many customers show up and allow us to get approvals and make deliveries. The secret is to determine which leads are serious by reviewing the information and confirming appointments that will show up.
When leads are received and submitted to lenders without interviewing the customer, you may be working the same deal twice. Let me explain: if your customer cannot prove income or time on job and residence, dealers find themselves rehashing with lenders in order to save deals as opposed to making deals with serious applicants. Once an 800 lead arrives, it is imperative to review the information and contact the customers that have a high percentage of showing up. Each customer should be told what to bring to the interview such as proof of income, residence, bankruptcy discharge papers, driver's license and other information that may affect the approval. Lenders pay close attention to "looked-to-booked ratios and often dealerships lower their approval percentage because the lender looks at so many applications that never materialize and result in funding. When this happens repeatedly, dealers are often placed on a "watch list" and, in some cases, the dealer agreement is canceled by lenders. This practice is becoming more commonplace by banks in order to increase their response time to dealers who have high looked-to-booked ratios plus control fixed expenses. Remember these simple rules: 1. Call leads that appear to qualify and arrange appointments quickly. Customers have numerous choices and will continue to call until someone takes control. 2. Never submit applications without first verifying the information and conducting an interview. 3. Familiarize yourself with state and federal laws regarding dealers' responsibility for sending declination letters to customers who apply for credit by phone and subsequently their application is not processed through a lending institution. 4. Contact leads quickly. This customer will continue to call until someone explains the program and insists on meeting with the prospect. 5. Play dose attention to the applications being sent to lenders. Do not send applications that do not quality for the banks guidelines. This will raise your "looked-to-booked" ratios and possibly help when you need approvals on marginal deals. Make the most of your valuable 800 leads and lender relations. Dealers who manage successful special finance departments follow the same procedures and receive fantastic results. More customers are using loan-by-phone services due to the convenience and confidentiality of applying for credit from home. Dealers should take this business seriously and set up procedures that will insure success. Each lead coming into a dealership carries a certain cost. Dealerships that pay attention to call counts know when advertising is working or not and can make changes quickly. Staff must be properly trained to handle telephone leads plus know the importance of not submitting telephone applications to lenders prior to meeting with the customer and gaining commitment. I have seen cases where customers would come into a dealership and during the interview admit they had applied for a loan-by-phone through another stores 800 number. When this happens, the finance manager checks the bureau inquiries, calls the lender who reviewed the application and asks for the same approval. The dealer who advertised for this customer to call their 800 number just handed their competitor a qualified lead that can and will take delivery Paul Snider is the president of VOISYS Systems Corporation. An 800 and Iinternet based lead generation company serving the automotive sub-prime, prime, and lease markets. 
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