Internet Leads:  Is this As Good As Buying A Car Online Is Going To Get?

Years ago, my father told me that to have a successful business, you had to look ahead to where the market was going and develop a product that got there first.  

So here is the question for this week's article:

"ARE INTERNET LEADS (and the methods, strategies and gimmicks used to harvest them), AS GOOD AS IT IS GOING TO GET for manufacturers and dealers selling vehicles on online?"

Here are what I see as the current methods, strategies and gimmicks to gather and harvest Internet leads: 

• Welcome to my website animations
• Life-style car videos
• Build-a-car configurators
• Third party lead sources
• Instant click to call / chat
• Photos of every square inch of the vehicle
• 360 degree tours
• Value your trade
• Site performance optimization
• Search Engine Optimization (SEO)
• Search Engine Marketing (SEM)
• Blogs
• Dummy redirects
• Pay-Per-Click (PPC)
• Banner Ads

Basically anything that attracts a consumer to your dealership and gets them to identify themselves qualifies as a harvesting technique.  Important stuff, but not an end unto itself.

Then back at the dealership, we talk about efficiencies and arm ourselves to the teeth with technology, people and best practices to handle all these expressions of interest.  Examples here include:

• Business Development Centers (BDC's)
• Customer Relationship Management (CRM) tools
• Internet Managers
• Call scripts
• Autoresponders
• And so on

There is absolutely nothing wrong with any of this.  OEM's and dealerships  exist to design, build, distribute, market and sell cars.  The disconnect I see is that this approach just treats the Internet as if it was a billboard.  "Here we are!  Drive to our showroom, call or email us a lead!"  And we'd never say it out loud, so I'll use small print... "we're really good at what we do once you do!"

Quite often I read unbelievable claims designed to give consumers all the power, usually communicated by setting expecations for "unbelievably low prices."  To me that is a violation of consumer trust.  Car dealers all buy thei cars from the same place, so what is really being said?  The more cynical part of me just hears... We are happy to make less profit?... or wore... We'll gouge it out of you some other way?

Rather than digressing into opinions on why dealers have to have their needs met too (and I firmly believe they do need to have them met... cars must be sold + fair gross profits earned)... Here are some quotations I came across this week that say better than I can where I believe things are going:

Digital Dealer Magazine... Shaun Raines: 

"...The underlying theme... is that auto retailers, who have not been particularly adept at the speedy adoption of technology, risk everything by maintaining a nostalgic attraction to the past...

“I can go online and order a $3,300 computer, see the price and have nothing held back, add other features, purchase insurance, see different shipping options and pay, all from home while completely avoiding the mess of going to a mega store,” says Raines.

“But when I get it delivered and get it set up and go online to a car dealer Web site, all I can do is call them or fill out a form. The problem with that is it doesn’t meet the expectations of what consumers want.”

iMediaConnection Newsletter... Mark Hayes:

"Online automotive shopping, an example of the research-online purchase-offline pattern, starkly contrasts with shopping cart-based ecommerce." 

He said it so well I couldn' help myself except to use it out of context... The author has no idea who I am or what my company does.  I give him the benefit of the doubt that he realizes he was commenting upon the current state as a means to promote his company's instant click to call/chat function and that he was not making some "it has to be this way" kind of statement.

If you've been reading these management briefs, you know that Ai-Dealer has a product to empower car dealers with shopping cart-based ecommerce.  Cars get sold.  They get sold directly from the "Submit Deal" function which includes credit, tiered interest rates, trade in values, tax, title, fees, extended service contracts, protections, accessories and accurate monthly payments.  Just as importantly, they get sold indirectly too since an important part of a successful implementation of our application is adding it to your existing website, but shielding access behind a consumer email verification step.  Dealerships therefore get the selling opportunity regardless as to whether the consumers proceed to Desk and submit their own deals or not.  Personally, I like leads.  Good, high quality ones.  Ones that feel they've been treated fairly and so respond well.  I just don't think leads are the whole strategy for the digital age.

Actually I still like a blend of traditional media but with a new age message.  How does this grab you as a consumer?

Seems like a pretty solid advertising message to use as a competitive advantage to me.  Will it resound with consumers?  How about those most dissatisfied with the current in-showroom experience?  Women?  Gen X + Y?  Busy working professionals?

What do consumer's think?  Here's a quotation from a review done by the Editor of F&I Magazine:

"I thought I'd put it to the ultimate test... what did my wife think?  She's pretty crafty you know.  She selected the Camry and breezed through the rest of the process... She got a kick out of how the avatar's eyes followed the mouse and how it changed facial expressions... Now my wife has purchased a vehicle before, but it sounded like this was the first time she completely grasped the itemized breakdown of the deal."

How would you like to read that as feedback on a Customer Satisfaction survey?  It would bring a smile to my face if I was a dealer to be secure in my future knowing that I not only had a customer who felt that way, but was happy to pay a fair price for a great experience.

Shopping cart ecommerce has become a major force to be reckoned with in every other industry.  In the early days of ecommerce, "disintermediaries" (i.e.  Amazon) entered the market.  As shopping cart ecommerce markets mature it is brick and mortar retailers adding a click and mortar strategy that carry the day (i.e.  see what BlockBuster is doing to reclaim its market from Netflix).

Is automotive ready for such a trend?

Or is automotive absolutely and forever unique?  Test drives?  Trade in appraisals?  These issues were dealt with long ago by eDealers.

Let's hear it from the readership!  What else is out there?  What are you thinking about as you reflect on the long term competitiveness of your businesses?  I'll print the responses.  Who thinks a different model will prevail?  What model is that?

Who thinks that only people can sell cars?  I mostly do.  We've already seen that some consumers will buy directly when we've ecommerce enabled dealers.  Clearly more and more consumers will too as the shopping cart ecommerce model in automotive becomes more prevalent.  To me that is not what is important.  I think this hybrid approach we've developed will be around for a long time as the means to maximum total results.

Does anyone think that the current Internet lead model is AS GOOD AS IT IS GOING TO GET?  Why?  I'll print those comments too.

I'm 41 years old now and have been married for 16 years.  I have a beautiful wife (Lynne) and two tall, handsome sons (Alex who is 12 and Michael who is 9).  While I am well past doing things just to earn my father's approval, I  wanted to acknowledge his contribution - they were his words that came to me when I wrote this.  Whether I am correct about car dealer shopping cart ecommerce as the next major trend in automotive or not remains to be seen.  Personally I feel pretty good about it.  I was right about how to implement effective CRM in a dealership (yes we did all of what was written by October 2000).  I could be right this time or I could be wrong about it, but I don't think so.  I have yet to hear a compelling argument why it isn't going to go this way, but that's not the point.  As my dear friend Bob Kamm taught me, it is more important to have had the entrepreneurial courage to try.

Why do I keep writing on the subject of OEM's and car dealers on the Internet?  Well there is the self-serving need to spread awareness that what is possible has changed, but it is more than that.  I do genuinely love what I do, but it is more than that.  I've been told by people that I'm ahead of my time.  Maybe, but when I'm not ahead of the effective monetization of what I've created, I don't think so.  I write because I have friends who are car dealers and they are suffering right now.  They are frustrated by the Internet and the results they've achieved with it to date.  They recognize that the Internet is both the greatest threat to and opportunity for their dealerships that has come along in a generation.  There is a lot of vendor noise going on right now and it can be difficult to separate the wheat from the chaff.  Not all, but many don't really understand the Internet or what it is capable of and don't know who they can trust.  The advice of my father applies every bit as much to their business as it does to mine.  As the owner or leader of a business it is your ultimate responsibility to ensure the profitability and competitiveness of your business.  That involves the need to evaluate and try new things.  To do your best to anticipate where your market is going and to get there first.  Not the bleeding edge, just the profitable, competitive advantage edge.

I learned a long time ago that trust is earned, not given.  That's why I write with what I believe to be the voice of truth.  You get to choose whether you come to trust me or not.  All I can say is that any dealer that I ever worked for has already signed up to install Ai-Dealer's product.