April 2008, Auto Dealer Today - WebXclusive
In today’s market with diminishing sales, declining profits and falling consumer credit, how can dealers increase revenue? One simple answer is Internet leads—more specifically, subprime Internet leads. Only a small percentage of dealerships can truly handle subprime customers. Many dealers say they do subprime, but ask yourself: Can you help someone who just had a bankruptcy, foreclosure or repossession? Can you help someone with a credit score in the 400s? Can you help someone who is a first-time buyer? If you answered “no” to any or all of these questions, then you are missing out on a large population of car buyers that is growing everyday.
There are many lending programs tailored to these consumers that dealers just don’t know about or just simply refuse to participate in. I have heard all of the excuses about these programs: “They charge too much;” “I don’t make enough;” “I don’t want those kind of customers on my lot,” etc. We all know that when you sell a car, you do not choose from a multitude of customers to maximize profit. Why would a dealer pass on a customer based on profit? Profit is profit whether it is $2,500 or $1,000. Would you rather push 100 units at $2,500 or 350 units at $1,000?
Three very important factors that make a successful subprime department are inventory, lenders and a desking tool. With all three of these, any dealer can maximize profit on a subprime customer. Now, one major part left out of this equation is the customer, and this is where CustomerFunding.com, Inc. can help. Customer Funding specializes in advertising on the Internet for subprime leads and has been doing so since 1997 with its flagship consumer Web site, www.AutoCreditFinders.com. Customer Funding strives to generate a high-quality, car-buying customer and employs a large call center that attempts to contact every customer to ensure dealers are getting what they paid for.
With every dealer account, Customer Funding assigns a regional account manager whose only job is to help the dealer succeed. Customer Funding also has a large direct mail department to aid dealerships with lead generation. The direct mail department was created with state-of-the-art technology, which includes a customized Web site, an 800 number with tracking and recording, delivery of customers into any lead management system, and a response guarantee with every direct mail order. Customer Funding plans future expansion into TV, radio, print in 2008, and will be a one-stop shop for all a dealership’s marketing needs.
Many dealers try and fail with Internet leads, whether the leads are subprime or not. The biggest mistake that dealers make is a lack of follow-up with these customers. The most successful dealerships employ a BDC to handle all contact and follow-up with Internet leads. Among our clients, the dealerships with BDCs have three times as many sales as those without them. This dedication to follow-up ensures that every customer is contacted promptly and professionally, and no customer slips through the cracks. In turn, this maximizes the number of sales from Internet customers.
Another big mistake that dealerships make is trying to sell a car over the phone. The only focus should be to get the customer on the lot. Trying to sell a car over the phone only empowers the customer to continue shopping and gives that person no motivation to buy a car from you. Another major mistake dealerships make with subprime Internet leads is telling customers over the phone that they are approved. By telling customers they are approved, you are telling them they can go anywhere and buy a car. Again, the only focus should be getting the customer down to the lot to ensure he or she buys a car from you.
Another important thing to keep in mind is that these people have put their information on an application with the hope of being helped; you need to treat each one with dignity and respect. Every customer has the potential for to generate several more car sales. Satisfied customers have family and friends they will send to you if you make an effort to get those referrals. Two hundred Internet leads can produce 50 more, just from referrals. If you don’t call your customers in a timely manner or if you simply treat them badly because of their credit situation, nobody will ever recommend your dealership to anyone. This social networking is an important aspect of Customer Funding’s most successful dealerships.
These tips and programs are only a small part of what is available at CustomerFunding.com, Inc. Customer Funding offers programs to bring new lenders into dealerships, improve customer loyalty and improve/implement a BDC. We will continue to partner with our dealerships with the goal of making every dealer successful through our marketing programs and will strive to help every dealership grow its revenue via its subprime department. If you have any questions or comments, please feel free to send me an e-mail at [email protected] or call us at 1-877-784-1030
Special Finance Insider Vol. 2, Issue 2