2005 eDealers of the Year: How They Did It – February 2005
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By Patrick Luck
February 2005
Our January issue was dedicated to honoring the Top 10 eDealers of 2005 and this month we’ll provide insight into how they accomplished their results. The benchmark for consideration for this year’s award is results as measured by volume of Internet sales and successfully using the Internet and digital marketing to promote all profit centers: new, used, service, parts, etc.
The 2005 eDealers of the Year sold 80 to 800 additional units each month, while using their Web sites to drive additional revenue to all profit centers. Success like this is possible for all dealers who have the know-how and ability to implement. In an effort to share best practices with our readers, we’re publishing our conversations with this year’s award winners below.
“Use customizable e-mail templates for every scenario, such as price, trade, payments, availability, etc. The templates should increase the speed and professionalism of your response and set the stage for a phone call.”
Question 1: What are the key elements of a successful Web site?
Dick Hannah: We offer 12 different makes at our Web site, so it was important to us that we keep the online process simple and consistent for our customers. Our goal is extra sales, and to do that, we know we need to generate leads. One example of how we do that is to be very aggressive with our focus on special finance. We provide a link through “Dick Hannah Says Yes” to the 6 steps to rebuilding your credit where we also post an online credit application. We get tons of leads through that.
Sheehy: We aim to generate extra sales and leads by offering transactional opportunities that the customers can’t find on any other single Web site such as searchable inventory, model reviews, payment calculator, MSRP and invoice, trade-in information and so on. Customers can find this information at various different sites. so we want to make sure they have no reason to leave www.Sheehy.com in search of it.
Schomp: Think like a consumer and devote your site to what the customers want to do online, which is research product information, find a specific vehicle or service their car. It’s also crucial to present information in a way that’s interactive and to keep your inventory, specials and pricing up to date. Our Web site provider does that automatically, which takes a load off our staff.
Courtesy: Everything on our Web site is designed to help us sell extra cars by creating more leads, and so it’s important to track the source of all our leads. Our lead source reports tell us that one super lead generator is the Internet Specials pop up, which prompts the customer to fill out their name, phone number and e-mail address in order to print the coupon for $500 off any new or pre-owned vehicle.
Tasca: For a Web site to generate leads, it needs to stand out from the rest to get the customer’s attention. Our Web site does this because it looks and feels high-tech with multi-media technology that’s quick to load, highly engaging and works fast even on a low-speed connection. We also offer cool features like online coupons, specials, virtual test drives, online credit applications, online trade appraisals and a full range of pricing information.
Question 2: How do you use the Web as a marketing medium?
Dick Hannah: To make it easier to find us on the Web, we use BZ Results for search engine optimization to ensure that we appear at the top of the list. We’ve also had a lot of success with our e-mail marketing campaigns, so we focus on gathering e-mails from our parts, service and sales customers to fuel the e-mail database for future digital marketing.
Schomp: We started attracting customers to our Web site by adding our URL to all conventional advertising and displaying huge banners and posters throughout the dealership. We use search engine optimization and e-mail marketing, but what I really love about the Web as marketing medium is that we use www.schomp.com as a way to build value in our dealership and present our pricing philosophy to our customers. We were one of the first dealers to successfully adopt the one-price method of selling, and our customers love it. So, naturally we want to use www.schomp.com to get the word out and generate more leads for the store.
Red McCombs: We bought all the right URLs and use search engine placement services. We then put our URL on absolutely everything that has our name on it.
Courtesy: I took a look at how much we were spending on conventional advertising and tracked that for a few months before making the decision to transition away from print, TV and radio and move toward digital marketing. Our return on investment has gone up, our cost per sale has dropped and our traffic and incremental sales have skyrocketed.
Tasca: We dominate the search engines, post banner ads with links to www.Tasca.com in the newspaper’s online automotive section and target large companies in our area by offering “fleet purchase programs.” We’ve been able to measure that seven out of every 10 customers who visit our dealership are using the Web so we view it as a critical marketing tool.
Question 3: How do you use e-mail marketing?
Paragon: We know that digital marketing is cost effective because everything is measurable, including the view rate and lead source. In just a couple minutes we can reach hundreds or thousands of customers with just a few clicks for less than the cost of a stamp.
Tasca: If FMCC comes out with an Explorer incentive, I can send a buzzmail to everyone who has been in on an Explorer, I can select just our lease renewal customers who are currently in an Explorer or even customers who were in to service their Explorer. There’s no limit to how I can target my campaigns, and our customers actually tell us how much they love our Buzzmails because it’s like watching a mini-movie about the product. It’s unlike anything else out there so it gets their attention.
Schomp: We’ve established a database of e-mail addresses so that we can send a mini-movie of a walk-around presentation straight to the customer’s inbox without requiring the customer to open an attachment. We simply select from a suite of multi-media e-mails that use the latest in compressed animation to send a “virtual test drive” of the vehicle they’re interested in.
Question 4: What‘s one process best practice for handling leads that can help other dealers convert more leads into appointments and sales?
Paragon: Get all team members together to clearly define what needs to happen, how it needs to happen, who will be responsible and how they will be held accountable. Document your process and follow through to ensure every lead gets a fast, professional response that results in an appointment.
Courtesy: What some dealers don’t realize is that an Internet lead is just a phone up on steroids, so the single most important best practice is to get people who are great on the phone, make sure they are 100 percent proficient with their scripts and create some
passion for setting the appointment so that they can overcome objections.
Red McCombs: Use customizable e-mail templates for every scenario, such as price, trade, payments, availability, etc. The templates should increase the speed and professionalism of your response and set the stage for a phone call.
Herb Chambers: The first goal is to sell the appointment, not the car, and having a manager make the confirmation calls can double the show ratio.
Tasca: Process best practices have to include accountability and automation. Whether you’re working out of an Internet department or a BDC, it’s important to establish accountability, and a great way to do that is to display an appointment board that is highly visible. We have found this to be an effective way to create excitement and top-of-mind awareness for all team members, managers and the dealer. As for automation, our system automates much of the follow-up and frees our people up to spend more time on the phone and selling cars.
Question 5: How do you handle pricing?
Courtesy: We build value in our products, our people and the process and address price once they’re in the dealership and have driven the vehicle.
Schomp: We’re committed to a one-price selling with no negotiating, no additional fees and no commissions. It’s not always the lowest price, but people appreciate the philosophy and they feel they’re being treated fairly.
Sheehy: We quote price on the exact vehicle they’re looking for and we always partner that with a couple other lower-priced alternatives.
Dick Hannah: We show an Internet price for all our vehicles that appear in the specials section of our Web site, but we do not price the rest of the inventory. For used cars, we’ve successfully generated a lot of leads by educating clients on wholesale, retail and KBB and then we offer a “Get a Quote” button.
Tasca: We use a menu pricing strategy to build a fair profit into every vehicle. Our pricing is the same on the showroom as it is on the Internet and we pay on CSI
rather than gross profit. I feel strongly that our pricing strategy is the best, but I have also noticed that there are highly effective pricing strategies that are dramatically different from ours. The lesson here is that it’s important to get your leadership team together to weigh the pros and cons of each variable within a pricing strategy and define what will work for you in your market. It’s imperative to involve every member of the leadership team to ensure you create a strategy that everyone can buy into, because the power is in the belief.
Question 6: What type of people do you hire to staff your Internet department or BDC? How do you train them?
Courtesy: We look for people who are passionate about customer service. They don’t need to be superstar sales people or incredibly Internet savvy, but they have to love the phone and love serving the customer. Once we find the right people, I make it my mission to create an environment that they’ll never want to leave, because we all know the cost of employee turnover.
Tasca: We have a recruiting, hiring and training process that we use whenever we’re hiring for any position in the dealership and we like to say that we hire out of inspiration, not desperation, so that means that we’re always on the lookout for energetic, talented people with a good work ethic and an eagerness to learn. We find that the best new employees are referrals from someone who already works for the Tasca family of dealerships. A new candidate doesn’t necessarily need to have automotive experience because our new hire training program and on-going training are so extensive. We have a training company that we bring in for two days every month to help with our training needs.
Dick Hannah: Even though the Internet has made an incredible impact on the automotive industry, this still is and always will be a people business, so nothing is more important than quality people who are well trained. Training is a daily and ongoing process for our dealerships. We’ve developed a friendly business development team, and when we need to bring on someone new, we look for that “friendly” characteristic and an aptitude to successfully use the phone and e-mail for follow up.
Red McCombs: We look for experienced car sales people and we have weekly sales meetings in which we train on our process, our phone scripts and how to handle common objections. We pay on a percentage of the total billed deal.
Sheehy: We like to find people who are new to the business so that we can train them from the ground up without having to correct bad habits or address pre-conceived notions of what the Internet process should be. We pay salary plus commission and we offer incentives to drive our targeted objectives.
“We use a menu pricing strategy to build a fair profit into every vehicle. Our pricing is the same on the showroom as it is on the Internet and we pay on CSI rather than gross profit.”
Our technology provider automates the reports we need so it only takes a few minutes a week to get a great snapshot of how things are going, who is excelling and where the process needs fine-tuning. The most important numbers to track are: Number of visitors to the Web site, conversion ratio, closing ratio, average gross profit and cost per sale by lead source.
Herb Chambers: The Internet makes it so easy to track absolutely everything, so we do. We measure lead volume, response time, closing percentage, cost per lead and cost per sale.
Dick Hannah: We measure everything and we can break it all down by lead source, by rooftop and by sales person.
Tasca: We track everything, but if I had to say what we monitor the closest, it would be appointments, sales and CSI.
Red McCombs: You can get as granular as you want and track response time, appointment percentage, show ratio, closing ratio, average gross and CSI.
Question 8: What does the future hold for the auto industry and the Internet?
Courtesy: We dropped a 2 million dollar ad budget and brought our cost per sale down to about $150 per vehicle while increasing sales anywhere from 80 to 180 units each month. It’s only a matter of time before other dealers do the same.
Dick Hannah: Invest in the best people, the best training and the best tools and the Internet will help increase sales and help your entire organization become more cost-efficient.
Schomp: Two words: Incremental sales.
Herb Chambers: We’ve sold as many as 600 additional units online, and I see no reason for the trend not to continue.
Paragon: I know that for our stores the Internet has been the key to our growth; we’re selling an additional 200 cars per month between our Honda and Acura stores. Last year, our national ranking among Acura dealers was 117, and this year we’re ranked 40 and we’ve sold 205 percent of our objective. We’re taking business away from somebody, and I have to believe it’s the dealers who are not tapping into the power of Internet marketing.
Tasca: The most successful dealerships in the country are adapting to the way customers prefer to communicate and shop for cars.
Again, Congratulations!
Congratulations to the Top 10 eDealers and thank you for sharing your insight on what it takes to use the Internet to sell more cars. If you have any questions regarding any of the best practices discussed in this article, please feel free to visit the dealers’ Web sites.
Patrick Luck is the editor and publisher of AutoSuccess Magazine. He can be contacted at 800.871.9723, or by e-mail at pluck01@autosuccess.biz.
