October 2009, Auto Dealer Today - WebXclusive
While most businesses have acknowledged the influence of the Internet on modern-day commerce and have embraced it as a powerful advertising medium, it’s still difficult for some auto dealers to imagine not keeping more conventional methods of television, radio and print as part of their advertising and marketing strategies. However, for Dream Cars Credit in Austin, Texas, letting go of traditional methods in favor of a purely online strategy has been extremely beneficial.
Dream Cars had been in business only a few years when Owner Scott Elder purchased it in 2002. At the time, the small store was selling roughly eight cars per month out of a leased location. Elder later purchased a two-acre lot on Highway 290 and changed the name from Dream Cars to Dream Cars Credit, reflecting a shift in focus toward attracting more subprime business, which now makes up roughly 80 percent of sales.
The dealership’s online efforts started soon after Elder purchased the business. “When I first got into the car business in 2002, I was looking at eBay and we actually started out doing quite a bit of eBay auctions,” he said. They began branching out further and using sites like AutoTrader.com and cars.com, as well as some local online listing services, to promote inventory online.
For a few years, traditional advertising such as newspapers stayed in the mix. However, Elder said he could never get the return on investment he received with online advertising. Print advertising was more expensive, and while some print ads generated a lot of response, there were very few quality leads that led to sales. Eventually, the store phased out all traditional advertising. For about two years now, Dream Cars Credit has done nothing but online advertising and marketing. They now focus on a variety of online listing services, pay-per-click (PPC) advertising, online social media and search engine optimization (SEO).
Thanks to their efforts thus far, 79 percent of the store’s business comes from customers who learned of the dealership online. The majority of the customers finding their way online to Dream Cars Credit are local. According to General Manager David Richards, they have a handful of customers from out of state, as far away as Washington and New York, but roughly 98 percent of their customers are from Austin or nearby areas. They pull in a number of customers from neighboring markets in Killeen, which is less than 80 miles north, and San Antonio, roughly 80 miles to the southwest. Both areas have military bases, and Dream Cars Credit gets a fair number of military customers.
From the beginning, the dealership has employed third-party sites to promote inventory. Currently, they list inventory with AutoTrader.com, cars.com and CarsDirect. From there, Elder said, their inventory is getting picked up by a number of other sites like KBB.com, Yahoo! Autos and MSN Autos, as well as the local newspaper’s online listings which are now driven by AutoTrader.com. They also make use of the free classified site craigslist. Elder said he has not listed inventory on eBay in quite some time, stating that he had discovered several years ago that other third-party listing sites had proven just as effective and less expensive. However, he also noted that eBay has become more aggressive and creative with their offerings since that time and said he might consider listing inventory with the site once again.
While the use of third-party inventory sites is the online advertising method that Dream Cars Credit has participated in for the longest period of time, it is not presently the most expensive area of online advertising in the dealership’s budget.
“Pay-per-click is our largest budget item,” said Elder, who estimated that they spend $6,000 per month on pay-per-click ads on Yahoo! and Google. If it’s done the right way, he said, PPC can deliver a great return on investment. There was a certain amount of trial and error involved in developing their PPC advertising. Elder expanded the PPC campaign gradually, identifying various key words and testing different ads and landing pages.
“Most people have poor success with pay-per-click, and I think the reason they have poor success with it is because they don’t really have effective landing pages and they don’t have a Web site that’s effective at converting [leads],” said Elder. One kind of landing page they employ is the “squeeze” page—a page that offers up some compelling information in an effort to capture an individual’s contact information for follow-up.
They’re not currently using many finance terms as part of their PPC ads; Elder said they were currently getting plenty of leads using automotive-related terms. He has not ruled out using more financing terms in the future as they begin to try out different landing pages for bad credit customers. Elder plans to try and do a little more experimentation with landing pages in the future, but said it is not their highest priority at present. “Our plan is to build out and develop and test different landing pages, but it just hasn’t been our biggest priority right now because we feel like we’re getting a good number of leads for a pretty reasonable cost,” he explained.
Elder estimated the dealership gets about 250 online credit apps each month. They no longer purchase any third-party leads. “We’ve just found our closing rate [on purchased leads] to not be really high enough that it’s competitive with generating our own leads,” he said.
Obviously, it is essential for the dealership to have a Web site that can convert Internet shoppers into solid leads. Nearly three years ago, after Elder made the decision to pursue more subprime business, he turned his focus toward having a Web site that was effective at converting customers by motivating them to either complete a credit application or to make contact with the dealership by phone, in person or by e-mail. Once the site was redesigned, said Elder, “I really just focused on doing everything possible to drive traffic to the Web site and having the confidence that the Web site would convert the people.”
As soon as an Internet shopper arrives on the home page, the site begins working toward engendering confidence in that potential customer and motivating them to contact the dealership. They are greeted by a video going over the reasons to buy from Dream Cars Credit, while the top of the page shows a rotating display of photos and quotes from satisfied customers and a link to view the extensive list of testimonials. The page also prominently features the dealership’s hours and toll-free number, and the box displaying that information also links to a convenient e-mail contact form. Another area displaying the dealership’s message of guaranteed credit approval links to a secure online credit application.
Elder also takes care to provide as much information as possible on every vehicle. It was a lesson he said he learned early in the process by paying attention to eBay. He believed having lots of photos and information in the vehicle listings was what helped eBay grow so much in the automotive marketplace, and Dream Cars Credit adopted a similar approach to its own inventory listings. From 2003 on, Elder said, they started taking 25 to 30 photos of every car and writing individualized descriptions of each vehicle.
Getting a vehicle listing together is a time-consuming process, but it’s one that Elder prefers to handle in-house. “That way you can control the quality and the process better,” he said. They have developed a system for putting together their vehicle listings and have a specific set of photos that must be taken of each vehicle. Two employees are trained to take those photos and load the listings, while a third employee writes the vehicle description.
The next step is to incorporate video into their vehicle listings. They are currently in the process of developing a system for shooting videos on every vehicle and recently hired an actress/model to present the cars on camera. Elder described video as a lead-generating tool and said that by bringing out the personality of the dealership, they can inspire more confidence in the customers and motivate them to call or visit the store. The videos will not only be utilized on the dealership’s main site but will also be pushed out to places like YouTube and social media sites.
Aside from developing their use of video on the site, Elder said the focus right now is on improving their internal systems and processes before they begin trying anything else new online. “We’re actually just in the middle of streamlining all our internal systems and processes to take advantage of the latest technology and the latest offerings in terms of efficiency.” As part of their quest for efficiency, the dealership is switching over to HomeNet to help them with their online inventory listings. “Two or three years ago, you didn’t have much choice except to load your stuff in multiple places,” said Elder, “so now we’re trying to streamline it.” HomeNet provides a centralized location for loading inventory and takes care of populating all the sites the dealership is currently using to list inventory.
“We’re really kind of spending more time right now trying to fine-tune some of our processes and systems internally, and then we’ll really, in the next couple of months, turn up the focus on doing microsites and varied landing pages,” said Elder. He said the dealership is also exploring ways to use social media sites like Facebook, MySpace and Twitter, which they’ve dabbled in, but have yet to make them a serious part of their online marketing campaign. He speculated that would change by the end of the year as he looks to expand the number of opportunities they’re gaining through the Internet, and he believed the work they’re doing right now with video will help them when they make a bigger push into social networking. “I think by moving forward so much with video,” he mused, “when we really move hard into social media and promoting ourselves that way, it’s going to make the effects … that much greater.”
Search engine optimization will be a continued focus for Elder. The dealership is currently utilizing some outside help on SEO from a consultant to ensure their site is properly optimized and their organic results are as positive as possible, especially on heavy search terms like “used cars Austin.” While he hasn’t ruled out the idea of trying to pull in more customers from greater geographic distances, that’s not his immediate goal.
“Really what we’re going to do is just try to more completely dominate the Internet market here in our region,” said Elder. “My goal is, if anybody in Austin, Texas, gets on the Internet to start looking for a used car … they’re not going to be able to avoid running into us at almost every turn.” A tall order, to be certain, but one Elder feels is achievable. “We’re going to do it by just continuing to build our content and give more, by … doing specifically targeted sites where we have valuable information and content for the customers,” he explained. “I think that just builds our credibility and gives people more and more reasons to do business with us.”
Vol. 6, Issue 10