Dealers getting more Internet-savvy
To see the 2002 Ward's e-Dealer 100, click here. Requires Adobe Acrobat Reader For free download, click here. Ken Smith set a 2001 goal for Internet sales to total about 40% of his overall business. The Kellogg, ID-based dealer was off by about 22% - his 4,384 Internet sales in 2001 were 62% of his total volume. Revenue from the Internet department was 57% of the dealership's total. Smith's sales
April 8, 2002
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To see the 2002 Ward's e-Dealer 100, click here. Requires Adobe Acrobat Reader For free download, click here.
Ken Smith set a 2001 goal for Internet sales to total about 40% of his overall business.
The Kellogg, ID-based dealer was off by about 22% - his 4,384 Internet sales in 2001 were 62% of his total volume. Revenue from the Internet department was 57% of the dealership's total. Smith's sales in 2001 were 2,100 more than what he had in 2000.
That's impressive. Smith's dealership, Dave Smith Motors, topped this year's Ward's e-Dealer 100.
Although they didn't see increases as dramatic as Smith's store, other dealers on the second annual Ward's e-Dealer 100 this year likewise saw their Internet numbers swell.
As a group, the e-dealers sold almost 20,000 more vehicles than in 2000 - 82,154 in 2001 compared to 61,356 in 2000.
AutoNation, Inc., with 34 stores on this year's ranking - down from 51 last year - increased its total Internet transactions by 12,000 units to 73,662 in 2001.
United Auto Group increased online sales by 6,000 units in 2001 and placed six stores on the list.
Not all dealers saw their Internet sales increase, however. Last year's top dealer, Anderson Honda, in Palo Alto, CA, had about 200 fewer sales in 2001, but only slipped to second place. Manuel Souza, the store's Internet manager, explains, "We were doing great until September 11 and then we saw a big decrease."
Another reason: "The playing field has leveled," says Souza. "Other dealers are getting more Internet-savvy." As a result, the store is no longer looking for that sale from long distances. Instead, it's all about gaining and keeping customers who are in the market area, according to Souza.
That alone points to the importance of every dealership developing a sound Internet plan. Dealers who don't could find themselves increasingly losing market share to the dealers who are leveraging the Internet.
Talk to the dealers and Internet managers whose stores are on the Ward's e-Dealer 100, and a common theme sticks out. Process drives success online. How the dealership manages that Internet lead from the beginning of the relationship to the sale is critical, says David Martin, Internet manager for Bill Collins Ford, 15th on the list.
Quick response time to the e-mail lead, and systematic follow up seem the most critical.
"The most important factor is how that customer is handled," says Smith. "Proper follow up where you can track the customer is king. Without a strong system, a dealership can lose at least half of its on-line customers."
Tools of the trade are important. New lead management tools on the market significantly increase the salesperson's ability to manage that customer. Essentially, these lead management tools are sophisticated customer relationship management applications (CRM).
The Ward's e-Dealer 100 have taken these tools and adapted them to their stores' business practices.
A good lead management system today is automated. Rules can be written into the code dictating which salesperson gets each lead. The systems automatically populate each salesperson's daily planner, giving them the assignments for the day. Also important are features that allow the managers to track each salesperson's follow-up efforts.
Things like which customers to call, e-mail, send thank you cards to - whatever the dealership follow-up process is - the tools can be customized to fit the store's plan.
Some enterprising dealerships on the Ward's e-Dealer 100 have designed their own systems and are taking them to market.
Smith has developed LeadRocket. It's tied it into the dealership phone system. He credits his store's extraordinary success to the process he developed.
Martin also has built a customized lead management tool. He's marketing it to other dealerships. The leads are automatically and strategically distributed. If it isn't answered in 15 minutes, it is sent to another salesperson. If it's not responded to for another 15 minutes, it gets sent to Martin. That way, he knows every customer is responded to.
Thinking has changed from three or four years ago when the Internet was still fairly new to automotive retailing. Before, process didn't seem to matter as much as price.
"In the old days, we ran scared from the Internet, because we thought we would lose profit," laughs Martin. "But now, price isn't the driving factor - customers want service and they want it now."
Nita Gaskin, the Internet manager for Koons Chevrolet/Chrysler, in Tysons Corner, VA, agrees.
She says, "The misconception persists today that the customer wants the store to give the car away, but that really isn't the case. The Internet customer is more knowledgeable, but what they want is service."
Capital Ford's Internet manager, Paul Miller, says the profits for his online sales are higher than that of his store's traditional sales. "Customers aren't invoice shopping. They're looking for a fair price and good service."
Souza says he would have agreed last year. "It used to be process-driven. But now, we're seeing price is the only factor." He may be dealing with some different market dynamics, however.
Anderson Honda is one of 10 Honda dealerships in a 12-mile radius of the San Francisco area.
Owner John Anderson says, "Last year, 600,000 people lost their jobs in the Bay area and we are seeing our market shift to more of a blue-collar demographic. Here, customers want price."
He warns, "If it's here now, it will be that way in other markets very soon."
But Souza adds, "That doesn't mean you should ignore the process.
The Ward's e-Dealer 100 is an annual ranking of dealerships according to the number of Internet transactions from the previous year. Ward's uses an industry-standard definition for an online sale: any sale where the contact is initiated online and is completed by an Internet-dedicated salesperson.
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