The top dog in the inaugural Ward's Dealer Business e-Dealer 100 is John “Big Dog” Anderson's Honda store in Palo Alto, CA.

Anderson Honda initiated the sale of 2,346 units on line last year. Almost half of its sales revenue came from Internet sales in 2000.

With an owner like John Anderson, the store's success is no surprise. He's a “take-no-prisoners” kind of guy and his energy level is well known in the industry.

He had sold his stores to the AutoNation group a couple of years ago, but was bored and missed the daily operations of running a dealership. So he bought back the Honda store, and has been running it ever since.

Anderson Honda's Internet manager, Manuel Souza attributes the dealer-ship's Internet success to Mr. Anderson, “who believes strongly in the Internet and understands what it has to offer.”

Mr. Anderson has proven his commitment to making the Internet work by building an innovative web site. Mr. Souza says the site has the best of everything technology.

The Internet department sold 274 vehicles in November, the first full month after redesigning the web site.

“We want a site where everything can be done on line. In fact, 4% of our customers never set foot in the dealership,” explains Mr. Souza.

Probably the most interesting technology is the ability for customers to chat on line with Internet sales representatives between 9 a.m. and midnight. They got the idea last year from Windward Honda in Hawaii, the first dealership in the country to use the technology. (See Windward Honda's web site review, page 40.)

“It's been a great lead provider,” says Mr. Souza. “Customers think it's great, and we're able to capture their information and place it in our lead management system. It's another way of keeping in touch with customers.”

Another innovation is the Veretech software, developed by Fleet Lease Disposal Inc., a Florida remarketing company.

Anderson Honda is piloting the software.

It lets customers obtain guaranteed trade-in prices on line. The software directly resulted in 19 on-line sales in the first two months of the pilot program, says Mr. Souza.

“It's another great tool for us,” he says. “For the customer, everything is up front and available. There are no surprises.”

Mr. Anderson says, “We want to provide all of the tools necessary so the customer can get all of the information they need to make an informed decision.”

The dealership's own web site accounts for more than a third of Anderson Honda's leads each month, while third-party sites bring in the rest.

Mr. Souza thinks the quality of the third-party leads is dropping. “They're just not as good as they once were. But we'll continue to use them as long they provide the leads,” he says.

In spite of all the technology, Mr. Souza argues that the process in the dealership is what sells the cars. And the process has to be consistent to objectively measure results.

Anderson Honda uses a three-tier process to handle leads. Fourteen Internet department staff members make the process the work.

The first line of action begins with a three-person response team. They respond to each lead within 10 minutes with a customized e-mail that answers questions and tells customers how the Internet sales process works.

The lead is then sent to a second level of Internet consultants. They delete all of the bad leads. The Internet sales managers handle the last step in the process — closing the deal.

That can take a while. Often, as many as five to six e-mails go back and forth between the customer and an Internet sales manager.

The closing ratio at that point is about 40%, because such leads by then are serious customers, says Mr. Souza.

“We're constantly training,” says Mr. Souza. “Follow up is the key — and that is what we stress in our dealership.”

But he readily admits it's not just about technology and process.

It helps being in an area like Palo Alto, CA, with its large and wealthy population and its proximity to the Silicon Valley.

The dealership is starting to see buyers coming from as far as 25 miles away. That shows the dealership's incremental business is increasing — as much as 3%-4% each month, says Mr. Souza.