Special Report

logoWard’s
e-Dealer 100

At first glance, Acton Toyota is not the likeliest of candidates for the Ward's e-Dealer 100.

One, it is an independently-owned dealership on a list dominated by dealer groups.

A second obstacle is the market, which has powerhouses such as Ernie Boch's group, Group 1 Automotive's Ira's dealerships and the Herb Chambers Co.'s stores.

Another ironic twist — owner and founder Bob Moran, who just turned 65, eschews e-mail and does not have a computer in either of his offices. He prefers to leave the Internet wizardry to his team, son Rob Moran, General Manager Mike Hills and Internet Director Matt Lamoureux.

But culture begins at the top. Moran established a mindset at the dealership that has made it one of the leading Toyota dealerships long before anyone conjured up the Internet.

The dealership is eighth in a region with 73 Toyota dealerships. For 15 consecutive years — and likely a 16th — Acton Toyota has won the President's Award for excellence in sales performance and customer service. For Toyota, any customer satisfaction grade under 95% is failing.

The Internet is just one tool of many that helps the dealership thrive.

Despite the challenges, the Toyota dealership more than holds its own in the tough and competitive Boston market. Its 1,507 Internet sales places Acton 41st on Ward's seventh annual ranking of dealerships by Internet sales volume.

The dealership is in Acton, MA, a small town a few miles northwest of Boston. Bob Moran has owned the land since the mid-70's. The original building, a tiny brick edifice — which now comprises Moran's office — housed Moran Motors. Then, Moran changed the dealership to a Lincoln Mercury store for a few years. After selling the franchise, Moran turned the location into a retail tire shop. Meanwhile, he owned a Chevrolet store down the street for several years, before selling the store and building Acton Toyota, a new point, in 1989.

The current dealership was added to the original brick building. The store is small, though — the showroom is too small to have any vehicles.

In about 18 months, the dealership will relocate to a brand new and much larger facility a couple of miles away.

Acton Toyota was one of the earliest dealerships to adopt the Internet as a way of selling cars. Hills says he got the idea from an article he read in a business magazine about a small startup company in California called Autobytel.

Moran gave Hills the go ahead to start developing a Web-based strategy.

“At the beginning, we had two PC's and some dial up modems,” Hills says. “You could say we kind of grew up with the Internet.”

There were some early misconceptions. The dealership had to work through the mindset that Internet sales were low gross and low margin.

Also Hills says he thought the biggest opportunity would be in used-cars.

That turned out to be partially true. In 2006, Acton Toyota sold 1,027 new vehicles and 480 used vehicles online.

But Rob Moran says the sales are incremental.

“In the early days we had to justify the Internet, but as we got into it, we saw that it drives incremental sales,” he says.

According to Hills, there is very little overlap between the Internet customers and the showroom customers. Although, Moran estimates at least 98% of the showroom customers come in with a folder filled with information found online.

Acton is resisting the current trend among many dealerships to move to a business-development center model which feeds all of the leads, phone calls, Internet and walk-ins into one centralized department.

“We've never tried to run it as a BDC,” Hills says. “We think that process is somewhat disjointed.”

Instead, the dealership opts for a more traditional way of selling cars online — it uses a pure Internet department.

Led by Matt Lamoureux, the 12 Internet salespeople are housed in a storefront located a few steps from the dealership.

The department even has its own finance and insurance manager.

The dealership averages a 15% closing ratio for its Internet leads, while 69% of the appointments set result in a sale.

Acton continues to buy leads from Autobytel in addition to AutoTrader.com, Cars.com, Dealix.com and iMotors.com. It lists its used car inventory on Cars.com and AutoTrader.com. The store depends on third-party sites for 63.5% of its Internet leads.

The web site, built by Data One Services, drives 28% of the leads while Toyota.com drives only 8.3%.

Acton uses Cobalt for its search-engine marketing, but Lamoureux says it is early to measure the return on investment. But it “does drive traffic,” he admits.

The sales process is typical of most dealerships selling online. The lead comes into the lead management tool — Acton uses the Cobalt Group's Prospector tool — after which a manager assigns it to an Internet salesperson.

“Response time is absolutely critical,” Lamoureux says. “We hear all the time from our customers that we were the quickest to respond.”

Each lead gets an e-mail response that answers the questions the shopper asks. The salesperson then calls the customer the same day. Lamoureux estimates it takes an average of five phone calls before the customer is reached.

The secret to the dealership's success is in how it treats its potential customers. First, every shopper is treated as if they want to buy today, Lamoureux says.

But Acton adjusts as they find out what the customer wants. “We find out what they want and how they want it, and then we provide it to them,” Lamoureux says.

The dealership is so confident of its customer service prowess, it sent an e-mail to all of its customers going back two years asking them write a review of their buying experience on DealerRater.com. As Lamoureux tells the story in his cubicle, Hills shakes his head and says, “That was a bold move. I don't know if I would have done that.”

Lamoureux's gamble paid off. More than 100 people went to the site and wrote glowing reviews of Acton Toyota. Only two wrote negative things. “I think those were false reviews written by the competition,” Lamoureux says.

Acton uses the web site (www.actontoyota.com) to promote how customers feel about the dealership. In the upper right hand corner, the dealership cycles through several customer comments.

It also produced professional looking videos, which can be seen on the web site. The videos are a combination of Acton employees talking about the dealership and customers sharing their positive buying experiences.