Article

The Secret Formula To Internet Success: Bob Howard Auto Mall

September 2006, Auto Dealer Today - WebXclusive

by John Carroll - Also by this author

In 2000, David Shear was asked if he wanted to get in on the ground floor of the Internet sales department at Bob Howard Auto Group in Oklahoma City. At the time, he had a good job working as the assistant manager of the service department at the group's Pontiac/GMC franchise.

And at first thought, starting an Internet group from scratch didn't sound like much of an opportunity.

"They came to me and said, 'Hey, lets go back to North Carolina and listen to this seminar," Shear said, who had also racked up several years experience on the sales side of the operation. "But I was happy. I said no, no, no. Let me be. I'm a happy camper."
 
By the time he was headed home from Winston-Salem though, Shear had a change of camping plans. He and his boss, Hal Steinke, sketched out his pay plan on the back of a napkin on the flight home. After he landed, he went back to the Pontiac/GMC franchise and "literally begged" a buddy in sales to come on board as the first sales guy. Together they started to sell cars over the Internet.

But there were plenty of skeptics around.

"I can't tell you how many sales managers said you could never sell cars on the Internet. They'd say, 'It’s the giveaway department.’"

But nobody is saying anything doubtful about Shear's prospects these days.

With his fifth anniversary looming in August, Shear is fresh from a new expansion of his Internet sales team – up to 27 now with a new assistant manager on board to help field the steady stream of leads that come flowing in through the Web. Early in 2005 his team was accounting for more than 300 sales a month. His buddy is still on board, racking up about 16 to 18 sales a month. And Shear can recite a track record of growing success.

In 2002, there was a 51 percent hike over 2001. In 2003, sales grew 26 percent over 2002. In 2004, he says, the department posted a 19 percent increase. And so far this year, they're tracking at a 21 percent growth rate over last year.

“Eventually, we're going to find the edge of the table," Shear said. "We just haven’t found the edges yet."

That kind of performance has lifted him steadily on Ward's e-Dealer 100 commerce list; up to the number two spot for 2004.

And those doubting sales managers?

"They love us," he said. "Their attitude is, 'What can I do to help?'" And it's not hard to see why. "Now I'm a big part of everybody's forecast."
 
Getting the process right

Shear doesn't own a magic wand and doesn't claim to have any super-secret formula for making it all work. He's still working with the same basic Web page he started out with: a simple palette of logos (at bobhowardauto.com) which allows Web surfers to quickly click up a list of vehicles in the inventory by make and model. Aside from the dealership's Web page, he limits his outside links to Autotrader.com. He's never used eBay Motors. And he keeps his department humming with some basic, down-to-earth philosophies that suit the Midwestern auto dealership right down to the ground.

From day one, anyone joining the team learns "the process." And they're not allowed to forget it either. The process comes up for almost daily review.

"The secret of success in an Internet department is process," Shear said. "And that process has to be monitored and measured daily." That's why he's added an assistant manager: "To ensure follow-up. Not just talk about follow-up. But actually follow up."

And then follow up again. And again. And again.

"Sometimes we'll send a prospective customer six or seven e-mails with no response. And then after the eighth, ninth or 10th time they’ll pop back. The person shopping on the Internet has just started the buying cycle. And the first thing they're doing is getting on the information super highway, getting a feel for budgets, prices, what their car is worth. They're just in the infant stage of looking, and that’s where your process has to begin right there. You'd never take home a baby from the hospital and leave it in the other room for three or four months."

It takes time, discipline and an almost iron will to stick with a lead and stay professional, no matter how silly it may look at first glance. And if anyone gets off track, there are written guidelines on every desk to remind them about the process.

"I must have seen 65,000 leads in five years, and to this day I don’t know a good lead from a bad lead," Shear said. "I had one lead who signed his name Mickey Mouse. The guy ended up buying a car. And guess what? His name wasn’t Mickey Mouse."

Every time he hears another dealer say his Internet department isn't working out, he asks about their process. A lot of times, it isn't very good – something he sees his competition has never quite figured out.

"I shop the competition," Shear said. "They'll send you one e-mail and that’s that."

Part of the process is that Shear opens every lead and assigns each one. The other part of the process is following up with the sales rep to see what's happened to it, and that requires plenty of time huddling around the computer.

"My monitor swivels for a reason," he says.

Hand-crafted e-mails

Not everything worked, especially if it interrupted the process. Shear tried an automatic response tool that immediately generated a generic e-mail message to every query that came in through the Internet. It just didn't pan out for his department.

"I found by talking to customers a lot of people view that as junk mail. If they want a generic answer, they’ll ask a generic question. But they have a specific question about a specific car."

So he dropped the canned responses and went back to the one-on-one approach that works best. "We personalize each one of these. Every one of them is hand picked, and I say that lovingly."

An early try at creating satellite Internet offices at each franchise also didn't work out. Team members tend to feed off of each other's successes. Keeping them together builds esprit and sales.

It's also not the kind of sales job that everyone thrives at. Top producers on the lot often have a hard time translating their sales strengths to the Internet. A lot of them thrive on a personal approach, and rebel against the process.

"They found it was like working at a library, everyone pecking at a keyboard. It's like shifting for gold. We have a huge pile of leads that we have to deal with, and after we sift through the first time we have to go through it again and again and again."

Shear is also very clear about defining success for his team.

Every time he goes to an Internet seminar, he adds, there's bound to be a long, contentious argument over what qualifies as an Internet sale. Does the department get credit if they generate the lead? Some departments give the Internet arm credit if the Web page comes up during a sale.

Shear's basic reaction: Give me a break.

To get credit for a sale, his team has to do everything from handle the first call or e-mail right through meeting and greeting, test drives, inking the sales deal and waving goodbye. The process is designed to bring the Internet customer directly to his department and keep him there.

"You can't get the Internet number anywhere but our Web site," he said. They either phoned from the Web site or sent an e-mail about a particular car.

"My biggest problem is how we get across to the customer the guy or girl sending the response is going to be the Internet salesperson and actually sell you the car. We'll get an e-mail from a customer, give them a price, information. We do our follow-up, on and on. And all of a sudden, he writes back and says he bought the car. He went down to the lot, he bought the car. I even bought it at your price."

But Shear also has an advantage. Internet customers are looking for a brand new car-buying experience, and they're not going to find it on the lot. They don’t want to drive over to a dealership and put up with some lengthy negotiation. On the Internet, they can find the car they want, come up with the price and have just about everything ready—except for the obligatory tire kicking—when it comes time to drive it and sign off.

"They want the information. They want to make a decision, and they want to buy a car. It's a way for them to deal with the dealership in a very professional and polite way, do their business and go home."

Fast

Most of the time he and the team can cut a customer's time on the lot to 45 minutes to an hour. When pressed, his team can cut face time to 20 minutes.

"I probably get on the average 15 or more e-mails a month from customers saying I never thought I could buy a car that easy," Shear said. But that kind of response is also key to the next stage of the Internet department's evolution: building repeat business as more and more customers get hooked on the Internet shopping.

A big selection helps

Shear is first to admit he gets a lot of help. Bob Howard Auto Group has 13 franchises and about 3,000 used and 2,500 to 3,000 new vehicles sitting on the ground at any one time. Having that kind of inventory on hand is a big reason he draws 70,000 to 80,000 unique Web hits every month. And keeping the cars listed on Autotrader brings him a whole new audience of car buyers from some jaw-dropping distances.

It's not at all unusual these days to have people fly in from surround states in the region – places like New Mexico, Texas and Kansas. For a few dollars, they can fly in on Southwest Airlines and leave with that special car or truck. But it took him awhile to figure out why people would order a $5,000 or $6,000 vehicle from east coast states like New Jersey.

And then it hit him.

If you buy a $6,000 car in New Jersey, he says, chances are it's a rust bucket, beat up by tough winters and corroded by the road salt. But if they buy one of his Oklahoma vehicles, "they take it up there, and it looks like a beauty."

There's another big ingredient to Internet success that he doesn't control: top-level support. Hal Steinke, the group president, has been supportive of the department from day one. That kind of upper-echelon support is crucial for an Internet department to get past the start-up phase and into ratcheting up sales.

"I see so many Internet departments and talk to so many people, and they're just not patient," Shear said. "They won't spend the time and money. These departments are a lot cheaper than building a store. But most people get frustrated and throw in the towel."

And they never get the process down.

Vol 2, Issue 5

Comment

  1. 1. Amber [ August 03, 2016 @ 01:26PM ]

    You speak so much about process for an Internet department but you haven't listed anything about your process. Do you have tips for putting and keeping a process in line?

 

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