Bob Kinney, general manager for Capitol Honda, says he has no idea how many Internet sales his dealership had in 2001. What a difference a year and a concerted effort make.

For 2002, the San Jose, CA-based store is the No. 1 ranked Honda dealership (4th overall) on the Ward's e-Dealer 100 with 2,308 Internet sales.

“We were just playing around with it as an ancillary to our normal showroom business in previous years. Honestly, we had no idea that part of our business would take off like it did,” says Kinney.

Getting it right was trial and error. “We had done all of the wrong things — especially in hiring the staff,” Kinney admits.

First, the dealership placed regular salespeople in the Internet department. That didn't work.

Next, it was computer geeks with no sales experience running the show. That completely flopped. Finally, Kinney settled on a meld of the two — salespeople with Internet experience. And the dealership created a separate department for the Internet sales staff.

Capitol Honda hired Tareq Samaha in October 2001 from rival Anderson Honda in Palo Alto, CA. Samaha immediately redid the Web site, making sure it had the right tools and content.

“The customer is looking for information, inventory and price,” he says.

He used California-based Dealerskins to help rebuild the site. “It provides flexibility that other Web site companies can't. The others have fixed templates that lock you into a certain look,” he explains.

Samaha also constantly evaluates the third-party sites. Capitol tries them for three months and if they're not delivering well, they're shut down.

“We don't sign any contracts for longer than 30 days,” says Kinney. “We cycle through the lead generators but we do have some regulars.” They are Cars.com, Dealix (Invoicedealers.com), Stoneage and AutoVantage.

He says he closes 22% of Dealix leads, his best source.

To manage the leads, Samaha uses WebControl from AVV. “It's an easy tool to use and I like the reporting capabilities.”

With the tools in place, he assembled a staff and started working on a process. The first month, the four-member team sold 70 cars. They haven't slowed down yet.

“We worked round the clock for 45 consecutive days,” Samaha remembers. “We were just trying keep up while developing the processes.”

The dealership is savvy in how it sells to the Internet crowd. The top-end grosses are generally $200-$300 less than regular sales, but “we run every Internet sale through the regular finance department,” says Kinney. “We make it up there with things such as extended service contracts. Customers are more open to those things because they were able to get a great deal on-line.”

Samaha credits the success of the department to an ownership and management that give him complete support. “They make sure we have the tools to be successful,” he says.