Independent Dealer Excels Online with Powerful New Strategy
At an elementary level, dealers have Web sites to generate business, but to get the most out of the Web, dealers need much more than an elementary-level Internet strategy—especially if they expect their Web site to drive quality traffic.
While Academy Cars in Lawrence, Kan., has had an online presence since the ‘90s, the 2000s introduced a great deal of online advancement for the auto industry, so in early 2008 Dealer Lonnie Blackburn began thinking about taking Academy to the next level online. He immediately decided he wanted “something really first class.” He understands the advantages of staying ahead of the curve online, and that could be why his dealership has been able to maintain profitability during a recessionary economy.
For the past two-and-a-half years, Academy has taken a proactive approach to special finance. Prior to that, Blackburn’s store mainly worked prime finance deals and cash deals. The dealership only had two finance companies on board that would finance subprime credit customers. That’s when Blackburn called on Tom Langas, a special finance veteran, to come into his store on a consulting basis and refocus their efforts on SF.
The first step in transforming a prime dealership into a subprime powerhouse was to sign up finance companies. Langas signed up a dozen finance companies as soon as he arrived. He said, “You only need to use four to six lenders on a regular basis, but I firmly believe that you can have twice that many … And it helped greatly when [the market] hit the fan [in 2008].” After Langas’ consulting period had ended, Blackburn decided he wanted him as a full-time staffer.
Currently, special finance – previously just a fraction of Academy’s business – now accounts for 50 percent of the dealership’s sales. So when creating the new Web site, it was vital to convey the message on the new home page, www.AcademyCarsCredit.com, that Academy Cars helps customers establish or reestablish credit. With the help of TK Carsites, Blackburn was able to do just that in an obvious but appropriate manner. There are no flashing, in-your-face banners that scream, “Bad Credit? No Credit? No Problem!” that often look like they are added to a Web site after it was created.
Instead, the global navigation bar includes two tabs especially for special financing – one labeled “Credit Rebuilders” and another for “First Time Buyers” – and three other tabs labeled “Pre-Owned Inventory,” “Prime Credit” and “Why Choose Academy Cars.” This five-tabbed global navigation bar is TK Carsites’ Power of 5 product, which also assigns a unique URL to each tab. This allows each tab to exist as a home page and thereby be better optimized for organic search engine placement.
The URL for the Credit Rebuilders home page is www.AcademyCreditRebuilders.com, while the URL for the First Time Buyers page is www.AcademyCarsCredit.com. So, if someone in Lawrence is searching for “rebuild credit Lawrence KS,” the Credit Rebuilders link is second in the organic search results on Yahoo! and fifth on Google.* If someone searches for “first time car buyer Lawrence KS,” the First Time Buyers URL is first on the list of organic results on both major search engines.
On the other hand, if someone is simply searching for “pre-owned cars Lawrence KS,” AcademyCars.com – the main home page – is number-one in the organic results of both search engines. Google even picks up the URL for the Why Choose Academy Cars page, www.AcademyUsedCars.com, ranking it just three spots below the main home page. There are a multitude of other search terms that car buyers – both prime and subprime – could type in that would lead to at least one of the five home pages (all of which really comprise one Web site), and Academy is usually on the first page of search results.
As part of the new online strategy, customer testimonials in the form of YouTube videos were incorporated on each page of the Academy Web site. Each video is strategically positioned on the site, so customers who visit a certain page can relate to the customer or message in the video. For example, on the First Time Buyers page, the video features a young man who tells his story of buying his first car at Academy Cars and says he’d gladly recommend his friends to purchase from them as well. On the Prime Credit page, there’s a link to a video that features a woman whose family has purchased multiple cars at Academy that have since been resold and had good resale values. The quality of the video on the Academy site is quite good, especially considering they were shot completely in-house. “We did them all with a little $169 camcorder,” said Blackburn.
Although search engine optimization and use of videos may drive traffic, the dealership needed to be able to capture leads. Blackburn said there are 73 lead submission points on the new Academy site to capture data from customers. That doesn’t count the submission forms attached to every inventoried vehicle that customers can fill out if they’re interested in a particular vehicle. The inventory (typically ranging from 40 to 60 units) changes regularly since the lot at Academy is small and requires frequent restocking, so at all times, there are 110 to 130 lead submission points on Academy’s site. Blackburn visits online auctions three times a week to keep his inventory stocked and hasn’t attended a physical auction in almost six years.
Some examples of lead submission points on Academy’s site include:
• 30-second credit applications
• full credit applications
• trade-in valuation
• vehicle request forms
While they’re nothing too out-of-the-ordinary, these lead submission points are placed throughout the site multiple times so they are readily available and encourage information submission.
What’s equally powerful is how their site captures customer information. Any information the customer enters is instantly captured. If, for example, a customer enters their name and e-mail address but then “gets cold feet,” as Blackburn put it, when it comes time to enter a phone number or financial information and doesn’t click a submit button, Academy Cars will still receive that customer’s name and e-mail address.
With more lead submission points and better information capture, Blackburn said the number of leads his dealership receives from their Web site has increased from about one a month to more than 100. In November ‘08 alone, the site generated 140 legitimate leads. For Blackburn and a small staff of three finance directors/salespeople who work deals with a cradle-to-grave technique, that’s a fair amount of leads to work in addition to the leads they receive from sources like cars.com and AutoTrader.com.
When all employees are accountable for their work and well-versed in special financing, the cradle-to-grave process works very well. Langas actually prefers this method to working behind a desk waiting for customers to come in off the sales floor. While he’s knowledgeable on the SF process, he said, “My main strength is, I’m a people person, so I really enjoy [the cradle-to-grave process] here and getting back to a small dealership atmosphere where everyone does everything.”
Another lead source for Academy Cars is e-newsletters, which provide two types of leads. If customers sign up to receive the newsletter through the Academy Cars Web site, the store gets an Internet lead. The second type of lead comes from customers coming in or calling the dealership because of the content in the actual e-newsletter. Blackburn said there’s no set schedule for sending them out. The store sent a newsletter in October 2008 to let their customers know they had a new “state-of-the-art and user-friendly” Web site going live in a couple of days. They also sent out holiday-themed e-newsletters in November and December.
In late 2008 when subprime vehicle financing tightened up considerably, Academy sent out an e-newsletter assuring customers there were still finance companies working to get people into cars, but also reminding them that “it’s a process” and “don’t give up.” The same attitude was adopted among the store employees as well. “You have to dig deeper with the lenders you still have … It’s not so much that you have to work harder. You just have to work smarter,” said Langas. “It’s also attitude. We’re not going to not do 30 deals …If you’re not going to settle for less, you’re going to make it happen. There’s still plenty of subprime money out there. You’ve just got to know how to structure the deal properly,”
As mentioned earlier, the fact that Academy had a deep lineup of finance sources to work with helped them maintain sales though the wake of the subprime storm, and when it comes to finance companies, the team at Academy understands the importance of relationships. The word “shotgunning” is not in their vocabulary. However, they might try to get a couple of approvals for one customer to see which finance company will provide a better deal. Since the finance team of four knows their finance sources’ guidelines so well, they know which two or three to send a deal to.
With all these additional lead sources and an enhanced SEO strategy, one would assume Academy Cars is selling more vehicles, but in this down economy, that’s unfortunately not the case. The dealership is averaging 30 vehicles per month, which is on par with its 2008 sales levels. The fact that they have been able to maintain 2008 sales levels, when many other dealers are off by 15 to 30 percent, is a testament to their commitment and hard work. Blackburn said, “I would have [the monthly average up] to 40 if the economy was still cooperating,” adding confidently that his store will get there.
One change in sales numbers he noted was the percentage of deals that were special finance. In recent years, special finance sales comprised 60 to 80 percent of the business at Academy, but currently accounts for about half of the sales. Blackburn said he had to change his way of thinking due to the economy and start selling more prime customers.
As for his success online, he’s very modest. “I feel like we’re a long way from where we have the potential to be,” but, he added, “My friends are coming to me for advice,” so he must know he’s on the right track. He also attributed the dealership’s success to the committed team he has in place. “I have three guys, plus me, all sitting in a 425-square-foot area. There’s plenty of accountability, and there’s plenty of responsibility that goes around. And everybody participates, so not too much slides by. Everybody’s taking cars off the site that are delivered. Everybody helps add them, and I think that’s probably one reason franchise dealers don’t do a good job with keeping online inventory up-to-date. They try to have an ‘Internet department.’ We don’t have departments. We just all go to work.”
And that’s what the team at Academy Cars will continue to do – just go to work – to persevere and stay on the forefront of the auto retail industry, both online and in subprime.
*Search results may vary from day to day; results included in this article were accurate on the date this article was written.
Special Finance Insider Vol. 3, Issue 2