AutoNation Inc. has been the player in automotive Internet sales for the past two years. It operates 51 stores on the Ward's e-Dealer 100, dominating the list.

But the company's cyberspace efforts have gone largely unnoticed. AutoNation is content with that.

“We're just trying to sell cars,” says Randy Rahe, the megadealer's vice president of e-commerce. “We'll let the third-party sites fight it out and we'll pick up the leads and do what we do best — sell cars. And the Internet helps us do that.”

AutoNation started sales of about 63,000 cars on line with revenues totaling $1.5 billion last year. In February, 12% of AutoNation's vehicle sales were through on-line efforts.

The e-commerce initiatives started with AutoNation President Mike Maroone, says Mike Jackson, chairman of the Florida-based dealer group.

“In fact, that is why I came on board here. AutoNation is a very cutting-edge company — they get it,” says Mr. Jackson, former president of Mercedes-Benz USA.

He adds, “AutoNation does not believe in irrational exuberance, or that the Internet will change the nature of the business. The dealers will still sell cars — nothing will change that.”

AutoNation brought Allan Stejskal on board last year as senior vice president of e-commerce. “His thinking is grounded in realism and practicality,” says Mr. Jackson.

AutoNation's Internet brain trust likes to remind everyone that they are car dealers — with nearly 300 stores. Its size plays a significant part in its e-commerce strategy. AutoNation has leveraged its scale to create a formidable presence on line.

A major part of AutoNation's e-commerce strategy is aligning itself with big-name players in the Internet arena.

“We'll pick up the leads and do what we do best — sell cars. And the Internet helps us do that.”
— Randy Rahe

AutoNation has been distributing sales leads for CarPoint.com since last summer. In addition to its own stores, AutoNation distributes leads to almost 300 non-AutoNation dealerships. That's expected to increase to 2,000 this year.

AutoNation also has an agreement with AOL to act as its Internet sales lead distributor.

Says Mr. Rahe, “We want to be where the customer is, and these agreements give us the greatest reach. It helps extend our national footprint in the e-commerce arena.”

The company aggressively obtains leads, getting them from several sources — the corporate, AutoNation.com, dealership, manufacturer and third-party sites.

From the beginning, response time has been critical to AutoNation's on line success. AutoNation's own e-commerce department developed an on-line lead management system, Compass. Leads go to a central system, which scrubs bad and duplicate leads. So, leads forwarded to dealerships are qualified, for the most part.

Compass allows both the e-commerce department in AutoNation's Fort Lauderdale headquarters and the Internet departments of each store to track and manage every lead.

Wireless phones recently were integrated into the Compass system. The phones reduce the time it takes to respond to leads. The salesperson can respond immediately and from anywhere.

The average response time is just under 40 minutes. That's not good enough, though for C.P. Horn, the e-commerce director for AutoNation's Maroone Honda of Hollywood, FL, number 13 on the Ward's e-Dealer 100 list.

His department responds to leads in less than six minutes. He has assigned each salesperson a two-hour time slot during the day to pick up every lead. During those two hours, responding to leads is all the salesperson does. Nothing slips between the cracks, explains Mr. Horn.

Says Kristine Forster, the south Florida district e-commerce manager, “People are our greatest strength. Our Internet sales managers have taken personal ownership in the system and it's a matter of pride for them to make it work.”

Mr. Rahe says AutoNation's most successful Internet staffers are experienced car sales people with high CSI scores and “world-class telephone skills.” They must be good communicators with strong verbal and writing skills. They must possess excellent product knowledge.

Mr. Rahe says, “They are special people in your dealership. They must also be motivated. They have to want to contact that customer.

“We made a lot of early mistakes. At first we went with a referral company's people. The company told us that you could hire someone who worked at an orange juice stand as long as that person knew computers. That didn't work. We had an 80% customer loss rate. Customers wanted answers to their product questions. They weren't getting them with our original Internet sales staff.”

The e-commerce initiatives include extensive training for the Internet department. Eleven e-commerce district managers train each Internet salesperson. Each district manager holds monthly meetings with their Internet sales managers to share ideas and practices.

Twice a year, dealership personnel get training on specific issues. A certification process is being rolled out now. Each AutoNation dealership will be Internet-certified according to specifications developed by the e-commerce department.

AutoNation is showing no signs of slowing down. They are developing a customer service tool to help manage customers. Finance and insurance on-line programs are in the works to streamline the sales process.

AutoNation's size has great value, according to Mr. Stejskal. “We can use our scale to provide technical support, support our e-commerce initiatives, and spread our tools around, so that all of our dealers make best use of the Internet,” he says.