3 Pillars of Success

The Web market changes so fast it is nearly impossible to keep up with. It seems that as soon as we have something figured out, a new innovation moves the market and pulls the rug right out from underneath us.

We do our best to stay current on the latest search-engine optimization, social media, microsite or other innovations to stay connected with the largest source of customers.

Obviously, these opportunities are valuable and deserve our keen attention, but this doesn't provide the largest area of opportunity for our industry. In other words, the focus of our industry seems off.

In 2005-2007, I set out to academically study the economic opportunity dealerships have with the Internet and how the best are maximizing that opportunity.

We looked at the evolution of the dealership business model by studying over 20 years of financial statement data from NADA to really understand the business evolution and where it is going.

Polk, UC Berkeley and others supported the efforts by providing data and brainstorming. In addition to studying the economic data, we began studying the top performing dealerships and Web operations in the world. This analysis is ongoing, and it is fascinating to see how things have changed.

The main thesis produced a framework that is still valid and will be into the foreseeable future. We coined the term “three-pillar thinking” and it explains how a dealership should analyze its Internet operations.

An effective dealer looks at Web operations, not as a whole, but as three parts that make up a whole.

Pillar 1: Marketing

These are all the levers your dealership can pull to connect with consumers through the Internet. There are currently 14 marketing channels such as SEO, search-engine marketing and social media marketing, the most volatile of the three pillars and evolving the fastest.

Pillar 2: Process

This is how a dealership helps its customers once they are inside the dealership sales cycle. There are process points each dealership must achieve to maximize their success. Some of the process points are more obvious than others, yet all must be executed with the dealership's branding and culture to be successful.

Pillar 3: Structure

This is how a dealership is set up to execute the process consistently and with scale. Structure includes the organization chart (who reports to whom), job responsibilities and pay plans.

Structure is killing most Internet marketing initiatives in the industry.

Points to consider:

Does your dealership have a content writer on staff? Search-engine marketing requires fresh content to be published regularly, with appropriate on-page and off-page link building, to rank well and collect search traffic.

Such a staffer is necessary because social media requires engaging quality content that interests your community. Clearly, the future of web marketing is focused on content, but most stores are not set up to create the content necessary to bring in the customers.

Is your used-car manager paid on turn or return on investment, or just paid on gross. I see used car managers every day who are paid on just gross and it creates a friction point to price vehicles on market in a transparent way online. If your cars are not priced right and that price is not displayed, don't waste online marketing money advertising those cars.

These are a couple of examples of how structure is the biggest killer of Internet success in the industry. Our focus should be on reverse engineering the buying experience customers expect, and then creating a dealership structure and culture that can execute that process.

Putting a new process and shiny marketing on your old dealership structure is setting up to fail.