Understanding the Difference Between Leads and Customers



Pop quiz: A woman walks into a dealership showroom. “Good afternoon! Welcome to ROI Motors,” says the salesperson as he offers his hand to her.


Should we consider this person a “Lead” or a “Customer?”


Want a hint? You can’t shake hands with a lead. This is an important distinction because the two terms – leads and customers – should not, and cannot, be interchangeable. Let’s further explore the differences:


A lead is just a starting point. It’s data crying out for meaning. It lacks height, weight, hair color, eye color, a voice, a personality, and life experience, to name just a few qualities. It’s an entity with unverified information and unverified intent that has purposefully contacted your dealership. In other words, leads are just words without context.


A customer is an actual person or business with verified and sufficient information that has purposely been in contact with your dealership. To communicate effectively with customers is to work with nuance, to listen, and to fulfill the unique give-and-take of any two-way conversation. A customer is not simply a faceless name, email address, and phone number on paper. He or she is a real-life person with a personality, a story, and the potential to connect with your dealership in a financially intimate way.


While leads are immutable, rigid bits of data from a particular point in time (that are usually sandwiched between tags in ADF/XML format and sent to a dealership’s CRM), customers, on the other hand, are alive. They call you on the phone, chat with you over the computer, and, yes, come in to your showroom in person. Once we begin to understand the differences, and how to communicate effectively with customers, the business of car dealerships evolves rapidly for the better.


Consider the woman above walking into your dealership. How does your system qualify her?  Does it matter? Your sales team might refer to her as an “Up.” But who is this person? Is she a lead? Is she a customer?


If you’ve ever attempted to produce lead ROI reporting, generate customer lists for targeted campaigns, or just generally tried to make sense of your data, then yes, it matters a lot.


The word “verify” appears in both definitions above. And that’s because verification logic is a key to determining the maturation path of a lead.  Is there enough data to verify that the words (a lead) reasonably represent an identity (a customer)? Or are the words without any identity behind them, in which case you’d need further information to make sense of them? If we’re shaking hands, it’s pretty easy to verify that there’s an identity. CRMs are not so fortunate. Verification logic, therefore, is put in place to start separating the wheat from the chaff: the maturation of a lead.


This maturation path is what it’s all about — commonly referred to as “The Road to the Sale.” In the old days, The Road generally started when a customer walked through the door. Today, that door is no longer the glass rectangle hanging on the front of the building, and very often our digital presence is performing the first meet and greet.


As the digital landscape evolves and matures, so must the notions of what constitutes effective measurements for returns on investment. For many years, dealers and vendors have focused on what we effectively labeled as a lead: attract traffic to sites that are geared toward “converting” to a form submission. But the best sites aren’t necessarily focused on this immediate conversion. Combined that with the automotive industry’s tendency to, in general, miss opportunities to truly handle leads effectively, and it’s no wonder that shoppers are skipping the Send button. The customers are still there, however; we just need to learn how to talk about them.


John Quinn is a consultant at Dealer.com