Twenty years into the Digital Age, some dealers still refuse to acknowledge the shift toward and profit potential of properly converted Internet leads.
Even just a few years ago, if you attended any industry event, there would inevitably be a discussion at some point about the “old guard” among car dealers who were refusing to accept a rapidly changing landscape of lead generation and management. At the time, that term applied to those who would not accept Internet leads as on par with those acquired via phone calls or other methods; today, that term is also being used for those who are slow to accept mobile technologies in the same capacity.
But is there really an “old guard,” or has the industry as a whole become more accepting of the rapid changes technology is imposing on it? ADM asked experts to weigh in on the subject, and they are optimistic about the current state of the industry.
“In my recent experience, most dealers understand the importance of this medium and how vital it is to lead generation and sales,” notes Bill Wittenmyer, a partner in Orange County, Calif.-based ELEAD1ONE. “I see a much greater importance placed on the website and its content — not just sales, but also on the fixed-ops side.”
“More and more, we see that all dealers know the value of Internet leads,” notes Alexi Venneri, co-founder and CEO of Digital Air Strike in Scottsdale, Ariz. She went on to say that where the disconnect is still happening isn’t in knowing the leads are important, but rather in figuring out the best way to handle the diverse types of leads. “They may just not know all the best ways to respond. They may also not realize all the new types of Internet leads; this includes questions and comments on social networks and reviews. When handled quickly and professionally, even negative reviews can be converted into prospects and sales.”
“Sometimes new concepts are hard for us old car dogs to embrace. However, if you aren’t embracing the new digital marketing age, you’ve missed the bus,” stresses Tim Parker, president and co-founder of DealerLink Inc., based in Charlotte, N.C. “This is the first time you have the opportunity to really do what we hoped for in the retail business: Everything you do digitally is 100% accountable, you know exactly where every customer came from and you can instantly pinpoint what works and what doesn’t.”
Accountability, and its ultimate impact on the bottom line, is something Shane Born, ProMax Unlimited’s COO, is looking at. He notes that dealers need to not just be passive about collecting leads from a single source and sitting on them, but they need to be proactive in both obtaining them and managing them. “There are still some [dealers] that only work leads generated from their own website,” says the Davenport, Iowa-based executive. “Often it’s because of their marketplace. In some areas it’s extremely expensive to buy third-party leads, so if you don’t have the right processes in place to get good conversions, you are not going to get acceptable ROI.”
All About Education
Part of the issue isn’t always an unwillingness to embrace change, but rather a lack of knowledge about where to begin and how to properly implement a new solution that leaves many dealers frozen. “I’m not sure ‘old guard’ is the issue,” notes Kim Jennett, the director of marketing and brand strategy for Redwood City, Calif.-based Dealix, a CDK Global Company. “That said, I do think there is a level of education for lead follow-up based on where the lead is coming from that needs to be addressed. This may sound controversial, but I would take a cue from Larry David: Throw out the scripts! Having a loose outline will make the salesperson more human and approachable.”
“Dealers need to research opportunities for learning and get training directed specifically around the digital consumer,” says Todd Dearborn, vice president of sales for CarsDirect, El Segundo, Calif. “A dealer can attend any of several trade shows, attend Internet Sales 20 Groups and hire consultants who can come in and assess and recommend changes, establish processes and suggest vendors to work with.”
“It is not really Internet leads that dealers need to start embracing,” says ActiveEngage CEO Todd Smith, based in Orlando, Fla. “They need to fully understand that the way people buy cars today is completely different than 20 years ago — or even five years ago. Dealers must be open to learning about the shopping habits of today’s car buyer as well as how these shoppers prefer to receive information. I believe most dealers have at least started this process.”
Elise Kephart, the vice president of Internet sales training for Charlotte, N.C.-based Phone Ninjas, quantified it, noting, “Eighty-six of customers are going online now before purchasing a vehicle. That statistic alone should show dealerships that customers are well-informed and do hours of research before coming into a dealership.”
Room for Improvement
However, while the industry as a whole has started moving in the right direction, there are still holdouts. Some are still refusing to accept Internet and mobile leads as valid, while others are responding to the leads, but are slow to realize that even that must change.
“There are dealers who still refuse to respond to leads in a timely manner, and there are dealers who still refuse to give pricing information,” says Scott Pechstein, vice president of sales for Autobytel, based in Irvine, Calif. “Instead of understanding that their processes need to evolve, they complain about lead quality when they don’t get a response back from the consumer. A majority of the time, that prospective buyer has moved on to another dealer, and they’ve already ruled out the dealer from whom they never got a response — or a response that lacked pricing information.”
At the end of the day, dealers who fail to adapt will find themselves left behind by their competitors and the car-buying public. Those who cling to the “old ways” or who refuse to change because “We always did it this way” will find it increasingly difficult to do business going forward. Zach Klempf, the CEO of San Francisco, Calif.-based A1 Software Group put it best, saying, “Dealers who are stubborn to adapt to new changes in consumer car buying preferences — and don’t embrace Internet leads — risk becoming showroom roadkill!”
Toni McQuilken is a freelance writer with expertise in auto retail, F&I and agency operations. TMcQuilken@AutoDealerMonthly.com