The idea began at dinner five years ago

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It began at dinner five years ago, according to Mirza Thomas, Internet services director for the Jim Koons Automotive Companies. Thomas, then a dealership group trainer, owner Jim Koons and vice president Jim O'Connell were dining and developing an Internet strategy.

"We were very specific about how we were going to set this up," says Thomas.

That dinner was the genesis of what would become one of automotive retailing's most successful Internet operations.

"We wrote our first check to AutoVantage and to CarPoint for $50,000 before we sold our first car on- line. It was a real leap of faith," says Thomas.

The fledgling Internet department sold 20 cars online the last two weeks of December in 1997.

Fast-forward to 2002 and the metro Washington D.C.-based dealer group has nine of its 14 stores on the Ward's e-Dealer 100. In 2001, the 250 Internet-related employees sold 9,309 vehicles on-line - up from 7,058 in 2000.

Koons' Internet success is getting attention. Last year, Thomas entertained visitors from dealerships all over the country wanting to see the operation. Much of its success reflects Thomas managing and communicating her vision to the team she has assembled.

"I don't think there really is a secret," Thomas says. "It comes down to doing the same ordinary things every day consistently - reporting, measuring and tracking. We like to say around here, 'Ordinary things with extraordinary excitement.'

"Mr. Koons is a very passionate man, but he is also very practical. For him, the tools we use don't necessarily matter. Instead, he demands that we concentrate on the basics - things like training, traffic control, filling out the logs and reporting."

Adds Jodi Schaffran, Koons' assistant director of Internet Services, "When we sold those 20 cars the last two weeks of 1997, we didn't think those things were important. The information was all in our heads, but we stayed with those processes and it's a good thing we did."

The tracking and reporting procedures haven't just driven sales, they've led to impressive closing ratios. For the 2001, the Internet staff closed 21% of all of its online leads. Tysons Toyota led all of the Koons dealerships closing 31% of its Internet leads in 2001.

"Mr. Koons has raised the bar for us this year," says Thomas. "The goal for 2002 is a 30% closing ratio."

Thomas has set up a simple yet effective process for managing all of the Internet leads.

It uses Applied Virtual Vision's (AVV) lead management product, WebControl. New-car leads are funneled to the dealerships depending on zip code and make. The used car leads are dispersed manually.

Each day, the leads are exported from WebControl into Excel, and from Excel into Sales Prospect Control, a module of the Universal Computer System (UCS), Koons' Dealer Management System.

This process incorporates the Internet prospects into all of the dealer management reports and become part of the daily work plan for the individual salespeople.

It also allows desk managers to see all of the working prospects for each salesperson in one place. All outgoing phone calls to the prospects are logged and a call history is then created.

"It is another way to ensure our prospects are getting the manager's attention," explains Thomas.

Thomas has employed an aggressive strategy at getting those leads. She uses 13 third-party lead providers and the closing ratios are surprisingly high. With AutoTrader, the closing ratio in February was 29%; for CarsDirect.com, it was 22% - although, CarsDirect.com provided three times as many leads as AutoTrader.

The closing ratio for leads from the Koons.com site was 43%; the OEM site, 61%.

The Koons.com Web site is robust and interactive. A popular feature lets prospects chat live with an Internet department person. Usually, it's Meg Shih, Koons' web developer.

Customers can configure vehicles, search for certified used vehicles, handle financing, have trade-ins evaluated and get a personal web page using the MyCarPage tool.

Customers now can set service appointments in real time using a feature developed by UCS. The industry has been waiting for that for quite a while.

To cater to the Hispanic customers, Koons has a complete site in Spanish.

Each dealership has an Internet manager who oversees a team of salespeople. It's not a socialist system at Koons. The top 20% of the Internet salespeople receive 80% of the leads.

Although, the Internet departments in each dealership are housed in separate sections away from the showroom floor, some blending is beginning to occur. "We are starting to do that BDC (Business Development Center) thing," says Thomas.

In the Tysons Chevrolet Chrysler store, Internet manager Nita Gaskin had the dealership build the Internet section right next to the receptionist's desk.

"I felt like we were carrying the baby to full term and never seeing it," she says. "So I had them build an area for us where it is visible just so us managers could see the customer."

Having Gaskin and her assistant, Ricky Jacobs near the showroom floor has helped fuel some of the blending between the departments. There's no tension between the two departments. Good-natured bantering goes on, but working in the Internet department is considered a prime position.

"The salespeople on the showroom floor are always asking for Internet leads," says Gaskin with pride. Part of Thomas' strategy is to provide overflow leads to the top traditional salespeople. Usually, those salespeople end up working in the Internet department.

The "focus on basics" philosophy espoused by Koons just doesn't affect process, it also means that the group concentrates on selling in its market area, not far-off places.

Thomas explains, "Of course, everyone has those fun stories - 'I've just shipped a car to Japan' - but we can't focus on those. We have to get our market and keep our market share!"

In February, 35% of Koons new car sales were from the Internet. Virtually all those buyers were locals.

Thomas foresees the next couple of years as a chance to nail down some things.

She says, "The Internet will help us assume full ownership of the customer. We're going to be able to use the information and data to create a much better relationship with the customer."