Car Dealers and Manufacturers:
Are You Fishing Where Your Fish Are?
Are You Using Irresistible Bait?

Here is one way to tell...

50%

Since many of you are closing out your month, the above is a number you may want to keep in mind.

50% is the figure I keep hearing from car dealer eCommerce Directors who are (in my opinion) at the very top of the car dealer Internet business.

50% of their dealership's vehicle sales originate from the Internet and they do it with front and back-end grosses are the same or better than the showroom.

50%.

It makes sense to me.  If 90% of in-market, car-buying consumers use the Internet as a significant part of their selection and decision process, I don't see how it could be otherwise.

50%.  Pause.  Let it sink in.

If you are not getting your share of Internet sales (50%), how much is it costing you at your dealership?

What would it look like on your store's bottom line or in your paycheck?

I won't go on about management attention and budget being lavished on buildings, traditional advertising and showroom activities rather than the imperative of executing on efficient, effective Internet operations.  Either this missing profit and the things it will do for everyone involved is important enough to change behavior or it is not.

Solid processes, management support, dedicated budget, as well as quality technology to enable well trained and managed people; it takes it all to get to 50%.  Anyone who tells you there is a shortcut or that you can buy a magic bullet piece of technology is a snake oil salesman.  No website, CRM tool, video solution, blog or shopping cart is going to get you there by itself.  I wish it was true, but it isn't.

So, if getting to 50% is important to you compared to the other things you work on at your dealership, you need to start eating the elephant one bite at a time... and recognize that here are a lot of bites.  It will take time, attention and budget over a sustained period of time.  You will have bumps and hiccups along the way.  You'll need to make sure your dealer and general manager don't throw the baby out with the bath water at the first hint of trouble.  Do they stop advertising in the newspaper, on the radio or using direct mail if they try something that doesn't work out perfectly the first time?  Do they stop hiring salespeople in the showroom if one doesn't work out?  So why is the Internet department the perennial whipping post?  What is the alternative?  To go back to doing things the way they've always been done?  But what about that 50%?  Do they want to live without it?  Do they think that this figure is increasing or decreasing?

Since I've been down this road before (although in the mid-late 90's it was about CRM not the Internet), here is a bit of advice I still live by:  "No one ever taught a kid to ride a bike at a seminar."  You can learn what is new and what others are doing at great conferences like the upcoming Digital Dealer show in Orlando, but as Thomas Jefferson once said "Knowledge without action is just a dream."

If you want to get 50% of your sales from the Internet at regular grosses, you need to learn to fish where the fish are and then use irresistable bait.  This is what I would do:

#1 - You need customer friendly selling practices.  There can be no hostage-taking over information. 

Customer:  "How much is it?"

Dealer:  "We'll give you a price when you come in."

Customer:  Click.  Gone.

Our shopping cart is free to the consumer, but requires an email address as the consumer's commitment to getting price, but there are lots of ways of handling price.  If asked, give them one, but use the opportunity to verify how specific they are about the vehicle they have selected.  This gets the conversation going which is the key.  If you don't have a shopping cart where they can explore their own alternatives, give them some.  Use helpful, forthright language to draw them in to the selling process - which is your goal - get them talking to you.  Get rid of the price mooches as quickly as possible (by the way, that is a perk of having a self-serve shopping cart... you don't need to waste your time on these any more).  Price mooches (Everyone has had one:  "Hey, I'm buying a car today.  I'm paying cash.  I want it for $500 under triple net.  Yes or no only please.")  are only 5% of the market and you can't make any money there since they don't value the great service you provide.  Let them experience "you get what you pay for" at your neighboring dealership that specializes in negative gross and bad CSI.  You get to hold for your gross from the majority of consumers who will pay a reasonable premium ($100-$500) for a better experience.  The path to profitable dealership sales success is about a fair price, not the lowest price.  You don't have enough gross profit to buy trust, so stop trying.

#2 - You need to merchandise online.  Generic vehicle info will not do. 

Customer:  "Is it a base car or is it loaded?"

Website:  "Here is generic VIN decoder info.  Call or email for details!"

Customer:  Click. Gone (or at least 97-99% of them are ***).

*** If the ratio of unique visitors on your website who view your inventory vs. the number of trackable calls and lead requests is 1-3%, then the other 97-99% gave up.  Click.  Gone.  They are now a part of another dealer's 50%.

Get color matched photos on new vehicles.  Get accurate window stickers up there.  On used cars, get multiple real photos.  I think video would be great too, especially if you have someone in your store with an entertaining wit to do the walk-arounds.  Make producing these videos your salesperson training on how to do a walk-around with a customer.

#3 - You need to attract the right consumers to you, then deliver upon the promise of the message you used in your advertisement when they come to you.  If you haven't seen it, Ralph Paglia of ADP and Rudy Martin of Intellimark just released the results of 5,000 car-shopping consumers and what was important to those shoppers.  Use the findings of this study to help shape your messages and think about where you place and use them. 

#4 - Do not land consumers clicking through on specific ads on your home page.  Create a sub-page that supports the message that brought them to you.  If you advertise $99/down and $99/month, have a dedicated page on your website that speaks to that.  Have the next step, calls to action (enter shopping cart, submit lead, complete credit application) appropriately designed and easy to understand what happens if they do.  Point your banner ads and PPC/SEM campaigns to this dedicated page and not to your home page. 

The same goes for advertising my company's shopping cart.  If you design a message around "shop entirely online just like you are in the showroom" or "No need to come in to the showroom until you are ready and comfortable.  Do all your shopping entirely online at our dealership's website" then you'll want to land consumers clicking through on that promise to the shopping cart and not your home page.  Online user confusion over what to do, reduces the number of selling opportunities you will get and therefore the number of sales you will make.

#5 - Happy talk must die.  We're #1, family owned, guaranteed low price, best customer service, blah, blah, blah.  If it isn't significant to your website visitor's purpose and in language that they care about and delivered when they need to see it, then all you are doing is mentally and visually distracting them from what you do want them to do.  If you use happy talk, you are also subconsciously conveying to them that they can not trust you.  Reduced trust equals lost sales.

You're #1?  What does that mean?  #1 what?  If you are the highest volume Chevy dealer in your market, what does that mean to me the consumer?  That you have low prices and terrible service?  Consumers do not know what it means and you don't want them to guess.  You have to tell them in language that they care about at a time when they will care to hear the message.  This alignment of the cosmos only occurs when the message supports or reinforces the next move you want them to make.  Customers will not read your website except in context of their purpose.

Here is what I would do with the #1 claim... on the inventory page put "Since 1987 we've sold more Chevrolets in Cleveland than any other dealer.  Here is what that means to you and why you should care:

• We have one of the largest selections of new, pre-owned and certified preowned vehicles in the area
• What we don't have, we can usually get - quickly
• We know that having happy customers, a great sales experience and competitive prices is the only way to sustain a large sales volume.
• If you want to be happy with your next vehicle purchase please call, email or enter our self-serve shopping cart.

Design and put the message in a banner ad strategically placed on your inventory pages.  Have each sentence in the paragraph above rotate through in order.  Make sure you end the message with what you want them to do.  If clicked, take them to the shopping cart.

Repeat this process for all happy talk.  You'll burn some brain cells doing it, but your profits and paychecks will thank you.  Translate "Family owned" or "corporately owned" into a why the consumer should care message.  Do not put any of this on your home page or your home page will quickly turn in to what I call "screen vomit."  It is all there, but you have to pick through the chunks to find what you are looking for (sorry about the mental image).  Most consumers won't bother.  Click. Gone.

#6 - Get yourself a good website that you can control and has the things your consumers care about.  You spent how many millions on your physical dealership vs. how much on the virtual one most of your consumers will experience first?  I'm sure you don't think like this, but should free really be the extent of your evaluation criteria? 

Flexibility and clean design are everything.  Think of the iPhone vs. the Blackberry.  First impressions count.  Overload my senses and you hurt my brain.  Click.  Gone.

Personally I like Motorwebs because of their rich, useful feature and function set, but I have no idea how much it costs or how well it converts visitors into selling opportunities.  I just like the feel of it.  Here is one of their sites.  I haven't worked with Ron Clayton at Motorwebs, but we have spoken and I do like what I see.  I like different and visually appealing.  In marketing I like to stand out from what everyone else does.

With the shopping cart we also have good performing sites running Cobalt, Reynolds Web Solutions, BZ Results.  What we find in general is that the less clutter between what is on the site and the call to action relevant to the user's purpose, the higher the website converts.  Go figure.  Don't get between what consumers want to do and the calls to action that you want them to use on your website.

#7 - Learn about or find a vendor you can trust who knows Search Engine Optimization, Google Ad Words and Search Engine Marketing.  Personally I like Reach Local for SEM and PPC.  They have some unique capabilities to make sure you don't waste your money, that you are buying the right words, have accountability and can manage your budget, but I am far from an expert.

#8 - Get yourself a good CRM tool.  Make sure it will do the things you want and need it to do - efficiently.  No product recommendations here.  Sorry, I am 8 years out of touch in this area and in my opinion no product on the market today can do what we did back in 2000.  I also don't have a comprehensive list of requirements for managing the Internet area to add to what we did back in the day.  Search around DealerRefresh for ideas and opinions if you would like a recommendation.

#9 - Don't stop what you do online at vehicle sales.  Be the Internet friendly dealer!  Bring service and parts into the discussion.  Add an online service scheduling add-on (book your own appointment online, don't just send an appointment lead request) or add an online accessories shopping cart. 

#10 - Get website add-ons like online credit approval and value your trade in.  Personally I'm kind of mixed on the popup coupons.  I hear good success stories from dealers who use them (consumers respond well), but I wonder what happens with the grosses in the deals.

The shopping cart for vehicles and F+I falls into this category, although it goes further.  It will raise your website's conversion ratio (# selling opportunities per # unique visitors), but it is more than that.  It gives you a unique message to advertise, such as "The only complete online vehicle sales experience."  Experience from our best dealers with it is that 60-70% of these consumers respond to follow up efforts and that if the deals don't close it is over price, trade value and exceeding monthly budget, not a lack of trust.  For the record, our best dealers are closing 20-30% of these leads and the grosses equal or exceed those in the showroom.

Or maybe you would prefer a price response automation tool.  If the goal is to get a lead, these may suffice.  Personally I don't see how they earn trust, build value in you or your dealership, and believe they focus on the least valuable portion of the transaction but what do I know.  Maybe you can lose money on every deal and make it up on volume.  All kidding aside, make up your own mind about what giving up a price for an email address will do - how are you going to earn finance income if the consumer arranges their own financing?  If they have arranged their own financing and come in with a check at delivery, how do you upsell extended warranties, accessories, GAP, credit + life, etc.?  Is that how you want your consumers to buy cars - just the car?

#11 - Get yourself a blog, but outsource it.  At least most of it.  Who really has time for all of that?  Only keep the portion that can't be outsourced.  My good friend Ryan Gerardi can help you with that over at AutoConversion.  Be sure to tell him that Brian Hoecht or Ai-Dealer sent you so get the free evaluation of your web strategy that he has made available.  You want the blog for two reasons... first, you will dominate your organic (the part you don't have to pay for) search market quickly and second (the part you can't outsource) if you tie in your dialogue with your customers they will trust you more.  You don't have to be perfect, just demonstrate that you care.

I didn't say that getting your dealership to 50% sales from the Internet at good grosses would be easy... I only said that in my opinion it was worth it.

I'll give this caution too; if you use half-measures with respect to the Internet or starve it for resources (take a free website, don't use a CRM tool, hold online consumers hostage to get info, make them watch a commercial on your home page, put some young kid in charge of "The Internet" with no management support or involvement and no advertising budget, load him or her up with administrative duties such as taking photos of all the cars, writing descriptions of them, managing the websites and other technology required to do all of this, but put them on a straight commission pay plan... well the list goes on... ), then don't be surprised if you come up short of 50%.

I saw a headline today that March 2007's vehicle sales were down 12% and even Toyota was down 10%.  The 50% dealers were all up last month.  Their showroom sales were flat or down, but their Internet volume more than offset it.  I won't print names, but they are reading this.  To be up in a down market is huge... but it requires change.  Who in your dealership is responsible for saying the status quo is not good enough if you are not getting your 50%? 

So coming off of a terrible car sales month in a year when we are headed into one of the worst car sales years in a decade: here is my parting prediction... today's Internet Managers and eCommerce Directors are tomorrow's General Managers and Dealers.  Digital mastery of sales and operations is no longer optional.  You won't be able to run a profitable dealership for much longer without it.

Evolution is not kind to those on the wrong side of change.

If you would like to make a comment on this posting you may do so in the forum we maintain for that purpose.  Ralph Paglia, if you are reading this and made it to the end, please share with the readers in the forum what % of the total dealership's sales you achieved at Courtey Chevrolet in Phoenix.  I heard it was 4,000 vehicles / year from the Internet, but don't know if that is a lot or a little as a %, but I suspect it was higher than the 50% I have referenced.

Good selling.