AUTOTOWN CONVERTS FROM LEADS TO MANAGEMENT

Jerry Daniels spent 15 years operating a Buick-Pontiac-GMC dealership in Menlo Park, CA, before selling his store and founding AutoTown.com as yet another of the Internet referral companies that leapt into business during the last couple of years.

While he was providing leads to his dealer clients, he researched and discovered that fewer than half of the leads he was providing were getting phone calls from the dealers. So he changed his new enterprise into one that offers a system that organizes all of a dealership's customer communications.

AutoTown's DealerTrak, launched in February and upgraded three months ago with user interface improvements, compiles data from virtually every dealership department and logs it into one database. The idea is to keep a running record of the store's every encounter with its customers.

Mr. Daniels says dealers as a group spend $10 billion per year on advertising. This advertising leads to two buying customers for every 10 who walk in the door.

"If dealers don't have the infrastructure to handle customers coming in the door, how can they do it with customers coming in through e-mail or fax?" he says. He thinks DealerTrak is the solution.

DealerTrak integrates with the dealership management system (DMS) and collects information from Internet leads, an electronic guest registration area in the showroom and from the sales staff, which enters information from every phone call from potential customers.

In the service department, repair orders are downloaded from the ADP or Reynolds & Reynolds DMS system into the DealerTrak database so that a customer's entire history and relationship with the dealership can be retained and managed.

Jeff Caruso, general manager of Concord Nissan in Concord, CA, credits DealerTrak for helping him increase profits from $237,000 in 1999 to an expected $1.3 million in 2000.

"I'm not saying that AutoTown is fully responsible, but I could never have produced those numbers without a business development (computer) environment," says Mr. Caruso.

He describes the DealerTrak as sort of a "front-end DMS."

Asked if DealerTrak saved him any money, he responds, "It's not a cost savings issue."

He explains, "It creates a daily work plan for sales people. And, it's fully management controlled. Managers can make changes and recommendations to the sales people's work plan."

While he may not give DealerTrak 100% credit for his store's turnaround, he does credit the AutoTown system for the low turnover among the ranks of his sales force.

"I have zero employee turnover and I attribute that to the system," says Mr. Caruso. "Because of this system, they average $4,700 per month. It is responsible for them being able to maintain consistent income."

When sales people follow the DealerTrak daily work plan, for example, they follow up with prospective customers and with those who have purchased vehicles from them more consistently. That leads to more sales and improved relationships.

Mr. Caruso says training his staff to use DealerTrak was "pretty simple."

He's most impressed with DealerTrak's ability to track not only customer communications with the dealership, but that of the sales staff with customers.

"It has excellent reporting capabilities," says Mr. Caruso. "That's one of its strongest features. I use the reports to teach."

AutoTown currently has fewer than 100 DealerTrak customers in 11 states. Mr. Daniels hopes to be profitable by the fourth quarter of next year.

He also says the company is in the midst of a controlled growth program that has six installations scheduled per month for the rest of 2000. He hopes to be doing 40 per month by the end of 2001.