Ward's e-Dealer 100 Rely on the Basics

Special Report

Ward’s
e-Dealer 100

Last year, someone working for one of the domestic auto maker's e-commerce division's lamented why so many of its dealers were not paying attention to its online customers.

He visited one dealer that had 800 Internet leads sitting in the lead management tool that had never received a response from the dealership.

In another situation, a dealer was quoted in the press complaining his store was getting no traffic. I checked with the dealer's lead management vendor and found he was getting traffic, albeit, online. But the dealership was not responding to the leads.

Meanwhile, General Motors Corp., in rolling out its OneSource initiative to its dealers last year, found less than 25% of them were using a viable lead management tool.

According to the oft-quoted Cobalt Group study from last year, 56% of people sending a lead through one of the online channels — dealer web site, OEM web site or third-party provider — actually end up buying a vehicle. The catch is that, 92% of those buyers purchase a vehicle from a dealership other than the one receiving the original lead. Dealers are leaving a lot of sales on the table by not paying attention to their Internet operations.

The fact is there are dealers who get it; dealers who want to get it; and dealers who don't get it.

The dealers that get it typically are dealers that make the Ward's e-Dealer 100 list year after year.

Interestingly, the e-Dealer 100 changes little from year to year. Usually, when a dealership falls off the list, it's because the Internet manager has left, or the management decides it does not want to publish its numbers any more.

For the most part, though, many of the same stores on the inaugural ranking in 2001 are on the list this year, seven years later. This year, the Ward's e-100 dealers sold nearly 176,000 new and used vehicles online.

These dealers have committed, philosophically and resource-wise, to using the Internet to improve sales and operations throughout the store.

They understand the competitive advantage the Web brings to automotive retail, and they typically treat Internet initiatives as they do other areas in the store.

They provide their people with guidance, training, and the resources to succeed. But they also demand accountability and professionalism - in other words, if you're an Internet manager, you'd better be able to show you're providing a return on the dealer's investment.

Most of these dealers report Internet sales are incremental — sales they would not have had without the Internet. Even more importantly, Internet sales are not “low gross/low margin,” as many dealers believe.

In many cases, sales driven by the Web create more front and back end profit than traditional showroom sales do.

Much of their success is due to their focus on the basics. Quick response times to leads (the real pros try to respond within six minutes), and providing a range of vehicles with corresponding prices in the response are just a couple of the aspects.

Also, the Ward's e-100 typically will send one e-mail response and then focus on getting the shopper on the phone. The Internet directors argue protracted e-mail exchanges often do lead to sales and only waste time.

Another trend we've turned up is how the Internet is outgrowing the typical Internet department. In the past, the Internet sales manager normally handled all of the marketing efforts online — buying leads, building web sites, search strategies — in addition to managing Internet sales people.

Many dealers are now splitting those duties — one person managing the sales efforts and another directing the marketing efforts. (See David Kain's column on p. 54).

We're also seeing sa trend we've predicted the last few years — Internet sales managers are getting promoted into general manager positions.

At two of the larger dealer groups, the Internet directors are now managing their own stores.

Another Internet manager at a west coast dealership recently was promoted to general manager of that store.

It is likely the industry will see many more Internet managers moving up in their dealersips. The reason is that the Internet is becoming a bigger part of all of the dealership operations.

“All of the profit centers surround the Internet,” says Mike Hills, general manager for Acton Toyota.

For you dealers who still have not engaged fully in the online space, don't get overwhelmed with all of the latest silver bullets. Often, Internet success can just be as simple as beginning to respond to your would-be customers quickly with the information they're asking for.