Article

A Lesson in Success: Internet Retailing at its Best

September 2006, Auto Dealer Today - WebXclusive

by Sean Wolfington - Also by this author

Most dealers know over 70 percent of their customers start their shopping online, but how do they use the Internet to generate more incremental profits for their dealership? The best dealers realize the Internet is not just about selling more cars but also about marketing the entire dealership. The best part about this new marketing medium is it’s very measurable. The most successful dealers’ statistics prove the Internet is one of the most effective marketing mediums to create more quality traffic for less cost.
So, what are the best dealers in the country doing to sell from 200 units to 600 units or more every month on the Internet? We asked two of the 2004 Top 100 Internet Dealers to share some of their best practices: Robert Reveere, the Int/BDC Manager of Courtesy Chevrolet selling approximately 200 vehicles per month from their Internet/BDC department and Jay Gubala, the E-Commerce general manager for the Herb Chambers Companies who sold 663 vehicles online last month. These individuals and their departments are achieving better results than many other dealers of the same size, brand and markets.
 
Effective Web site
 
The first step the best dealers take is building an effective dealership Web site and then do a great job marketing it. So the first question most dealers want answered is “What makes a great Web site great?” According to some of the best dealers in the country, here are the key elements of an effective dealer Web site:
KEY COMPONENTS TO A SUCCESSFUL DEALER WEB SITE:
 
Part 1: Results-Oriented
The most important part of the site is that it generates results. The best Web sites do a great job converting visitors into high quality leads via e-mail, phone and showroom.
 
Part 2: Highly Interactive and Engaging
One of the goals of your Web site marketing strategy is to engage customers and keep them on your site longer by making their experience exciting and different. Buying a vehicle is an emotional experience, and the most successful dealers have designed their digital marketing strategy around this truth. These dealers “wow” their customers by giving them more than just information and static text. They engage their customers by giving them a unique purchase experience through a high-impact virtual dealership that is visually appealing and completely different from what their competitors are doing. However, the key is making it user-friendly and easy to use.
 
Part 3: World Class Design
One of the most important elements is how easy it is to navigate. Too many choices confuse people. Reveere said “Let’s face it, perception is reality to online shoppers; it’s their perception of who you are and the impression you make will influence their desire to shop with you. We wanted separation from our competition not just in look, but in overall design and ease of use in the site, as well.”

Two great examples of Web sites with world class design are www.DartmouthDodge.com and www.ParagonHonda.com
 
Part 4: Promote All of your Dealership’s Profit Centers
Great Web sites promote every profit center: new, used, FI, service, parts and more. “Our digital marketing strategy includes our entire organization,” Gubala said. “One of the key factors in our marketing efforts is promoting all our profit centers with our virtual dealership. Not only are we driving additional opportunities and sales to the front end, we are also focusing on the back end. We now market for service, parts and our F&I departments to drive additional revenue to them without spending any more money on advertising.”
 
Part 5: Build Value rather than Selling Price
Great Web sites build value in the dealership, people, process and products rather than just selling price. “We focus our people on what we offer with our dealership, personnel and products over the competition. Contrary to popular belief, you can hold gross in this arena just as you do on the showroom floor,” Reveere said. “We are living proof because our Int/BDC gross is equal to and, in some cases, more than on the showroom floor.” Examples of great sites that build value: www.DickHannah.com and www.Rothrock.com
 
Strategy and the Plan
 
Many dealers fail before they begin because they jump to set up an e-commerce department without thinking through every part of their strategy. Gubala said, “We continually refine our Internet strategy for marketing, our people, our processes, pricing and more.”
 
Reveere said “We sat down with BZ and went through our initial strategy kickoff meeting, and everyone left with a detailed blueprint and action plan. We made sure we involved all of our key managers in our initial strategy meeting to ensure we leveraged their wisdom from the start.”
 
Marketing Our Site
 
Building a great Web site does not mean customers will visit it; you must have a marketing strategy in place to attract more customers to your Web site. To do this, the top dealers buy all of the right Web site addresses and make sure they’re listed at the top of the search engines. Then they establish relationships with other local Web sites that will drive customers to the dealers’ site. Dealers must leverage their current marketing by adding their Web site address to all of their media as well as their dealership documents and collateral materials.
 
“One of the most successful marketing strategies we use is direct multi-media e-mail marketing. We can do unlimited marketing for no extra cost,” Reveere said. One popular method Reveere uses to collect e-mail addresses is a service that automatically crawls the Web for the e-mail addresses of their customer base. He also uses merchandising throughout the dealership that helps sales and service personnel capture customers’ e-mail addresses.

“We offer customers “free virtual test drives” which are multi-media e-mails that highlight the unique features of all the vehicles we sell. This strategy gives our customer a benefit for giving us their e-mail address,” Reveere said.
Gubala said the key to e-mail campaigns is that they are easy to execute, cost-free and they are 100 percent measurable.
 
Many dealers also use third party lead providers to compliment the leads they get from their own site. “We measure our lead providers by their closing ratio and cost per sale, and we eliminate providers that do not perform well,” Reveere said. “Most of our sales are from our own Web site, but we have a few high quality lead providers including Dealix and a few others because their cost per sale is only $200 per car. They have very little overlap with our Web site leads.”
 
The Process
 
If a dealership generates a lot of leads but does not have a process to turn these leads into profitable sales, it accomplishes little. The most successful dealers have a detailed process to transform their leads into appointments and sales. “We mapped out a detailed Internet and phone lead management process to turn leads into sales. We also identified all of the potential objections in addition to defining a specific detailed process. Then BZ trained our team on how to turn these challenges into appointments,” Reveere said. “The system helps our process because we have e-mail templates for every possible scenario and phone guides that help the Internet sales directors set more appointments.”
 
“One of the best tools we have is a CRM tool called BuzzTrak that automates most of our e-mails so our people can have more time on the phone and selling cars” Gubala said. “The extra automation allows us to handle more leads with less people. We improve loyalty to our service and sales because the system automatically follows up with sold customers for years with birthdays, anniversaries, service reminders, renewal notices and more, helping us with retention, referrals and CSI. It turns customers into annuities.”
 
The People
 
The key to any successful strategy and process is having the right people. But before you decide on what type of people you want to recruit, hire or promote you first need to determine how you are going to staff your department.
 
“When BZ launched our system and laid down the blueprint for us, they explained the many different models for staffing a customer relationship center,” Reveere said. The first model includes a dedicated salesperson that handles the leads, sells the appointment and sells the car. The second model requires a dedicated specialist selling only the appointment while the showroom salespeople sell the car. Both models can help you get to a 20 percent or higher closing ratio, and there are pros and cons to both.
 
The CRM Customer Relationship Center
 
Most of the dealers we observed began by perfecting how they handled Internet leads in their Internet departments, but then they expanded the department into a customer relationship center that handles incoming phone leads, outbound follow-up and the renewals of their customer base and referrals. Courtesy Chevrolet’s customer relationship center generates more than 200 units per month.

“More of our customers are contacting us via e-mail and phone versus walking in the showroom. We decided that we needed a strategy and process to turn these non-showroom opportunities into showroom appointments and sales,” Reveere said. “It has worked great for us because we have continued to increase our volume while reducing our ad expense.”
 
Conclusion
 
The most successful dealerships in the country are adapting to the way customers are shopping for cars. In short, they are shifting their advertising to where 70 percent of their customers are–online. They are using digital marketing and the Internet to find, sell and keep more customers, and the best part is it’s measurable and less expensive than traditional media.
 
Vol 1, Issue 3

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