Some people who opt to use the chat function of a dealership website aren’t exactly bashful types, but they aren’t yet at the point of wanting to talk to a car salesperson.

So says Ted Rubin, who along with Todd Smith cofounded ActivEngage, a chat service for dealers.

Rubin bills chat as providing a non-threatening way for prospects to begin the search for a new vehicle.

Chat customers are different from those who contact a dealer by telephone, he says. “A lot of people are going to click on chat to be anonymous, thinking that if they call a dealer they’re going to ask for their name or number.

“They like having a conversation, gathering information, and not being pressured into a sale,” he says. Some customers prefer chat because they dislike navigating through a website.

“The dealer generally has a different agenda with the conversation than we do; they’re trying to sell the car,” Rubin says. “Our focus is to answer customers’ questions: Do you have the car? How much is it? What are the specs?”

Rubin and partner Smith each started out as dealership porters and have tallied more than 25 years of experience in auto retailing and marketing. They met while working for AutoNation, the largest dealership chain in the U.S.

“We allow customers to interact with a virtual sales associate directly from a dealership’s website,” Rubin says. “We answer their questions, which builds the customer’s relationship with the dealer and moves them further through the sales pipe.”

Eighty percent of chat conversations eventually result in a lead with a name, phone number and email address, he says. Twenty percent of captured sales leads will include an appointment to visit a dealership.

ActivEngage met some resistance in the beginning. “Frankly, there were a lot of dealers who thought, ‘Why would I let someone else handle conversations on my behalf? These are my customers and I should be talking to them,’” Rubin says. Today the company serves 2,500 dealer websites in the U.S.

Employees at the company’s headquarters near Orlando, FL, have access to data and specifications for all brands, as well as subscribing dealers’ websites.

ActivEngage charges from $299 a month plus a set-up fee for the software that dealers can operate themselves to $1,600 a month for managed chat, in which trained associates talk to prospects on the dealers’ behalf. Nearly 70% of the websites monitored by the company use the managed service.

With a response time of six seconds once a shopper lands on the dealer website, Rubin says the associate can begin building a relationship.

Planet Honda in Union, NJ, contracted with ActivEngage in 2012 to handle its web chats. “We found that while the number of e-leads from our website has gone down, when I add the number of chat leads to the e-leads, it’s increased by about 30%,” says President and Dealer Manager Bill Feinstein.

Thirty percent of auto shoppers who engage in chat on a dealership’s website will make a purchase within 60 days, according to R.L. Polk.

Chat also aids people who aren’t shopping in the showroom between 9 a.m. and 5 p.m. Consumers want personal interaction beyond showroom hours, says FordDirect, which just rolled out LiveConnect, a product enhancement.

“With its high conversion rates, chat presents an ideal platform through which dealers can capture valuable sales leads,” says FordDirect Chief Operating Officer Valerie Fuller.

“Because consumers today are demanding instant access to information, chat services enable dealers to connect with customers on their own terms, while building loyalty and improving overall satisfaction,” she says. 

Through a pilot program, FordDirect says it discovered chat increases online customer engagement, provides dealerships with more opportunities to foster customer loyalty and that chat customers are more likely to make a purchase than many other lead sources.

As auto shoppers demand more instant information, they have become increasingly interested in contacting dealers through live chat, Fuller says.

FordDirect chat services allow dealers to monitor current dealership website visits and track activity. The service instantly sends chat leads and transcripts to the dealership.