Author: Cameron Healy
New car dealers, in a move to help generate incremental sales and increase their overall marketing clout, are embracing the Internet in ever-increasing numbers, reaching an all-time high this year. That is the finding of a recent survey conducted by the National Automobile Dealers Association's (NADA) Industry Analysis Division. Key findings concluded that 92 percent of new car and truck dealers have websites; up from 91 percent last year and 74 percent in 1999. And the majority of dealers websites are doing much more than just paying "lip service" to the physical dealership. In fact, 99 percent of dealer websites are interactive, many allowing online shoppers to view inventory and MSRPs, apply for financing, and also schedule sales and service appointments. "The survey confirms that new car dealers are increasingly using the Internet to make the car-shopping process more convenient for their customers," says NADA chief economist, Paul Taylor. "As more consumers organize their daily lives using the Internet, franchised new car dealers have made researching, buying, and servicing a car online readily available and easy."
Having an Internet presence for most franchised new car and truck dealers is not only about building an effective lead generator, but is also about arming themselves with another tool to add to their marketing arsenal. "A well-run Internet department can account for 20% of the dealership's total sales volume," says Gabriel Krajicek, president of DealerSkins, Inc., a website solutions provider located in Nashville, TN. His company, in business since 2000, has developed websites for some of the top dealers in the U.S., including the number one Honda and Chevrolet sales volume leaders in the U.S. He says the Internet offers a unique opportunity to grow the dealership's market area and bring in customers from outlying areas. "Consumers that find the right vehicle on a dealer's website will often drive hundreds of miles to save a few hundred dollars."
"It's all about the results," says Sean Wolfington, owner of BZ Productions, a digital marketing company that builds websites for some of the largest dealers in the U.S, including the Automotive News "Best Website" award winners, Tasca.com, Herb Chambers, and others. "Most successful dealerships have learned that the Internet is not just about having an Internet department that sells incremental units," he says. "But it is also about marketing the entire dealership." He believes that the Internet is one of today's most effective marketing mediums, generating more quality traffic to the dealership at a lower cost than traditional marketing mediums and it is measurable.
One of the first questions dealers ask when considering updating, changing, or building a new website is: What are the steps to building and branding an effective website?
Gabriel Krajicek believes the first step is to understand that the online buying process can start 6 months or even a year before the customer sets foot on the lot. "With 7 out of 10 shoppers browsing online before buying, the importance of providing information that customers need for their research is essential." He adds that a good dealership website should "presale" the consumer by providing the same information that the dealership's best salesperson would. "It should do so in an organized, process-driven fashion that maximizes the probability of generating a lead."
Brian Cox, president of Dealer Impact, a website marketing company located in Urbandale, IA, believes there is still dealer confusion about the habits of Internet customers. "For many dealers, their website is out of sight and out of mind," he says. "They simply do not take the time to cater their site to their customers, most likely because they fail to understand how an Internet shopper operates."
Cox also believes that one of the fundamental concepts dealers need to understand is that their dealership website should "mirror" their physical dealership in both style and content. "You want the dealership website to have the brand identity of your physical dealership so people immediately recognize you," he says. "An effective website should be designed to bring traffic into the showroom and include content that would normally be included in their traditional marketing, such as newspaper ads, radio, and television," he continues. "Internet specials, pricing, coupons, and most importantly, inventory, must be on your website--updated and easily accessible." The key, according to Cox, is to put yourself in the shoes of the customer.
With 89% of consumers searching the Internet before buying, it is essential that dealers provide information they need. So what makes a dealer website functional and effective?
* Simplicity and Ease of Use: Ease of navigation and not overloading the page with excessive content will determine how easily consumers maneuver through the site. "Consumers are becomingly increasingly Internet savvy and will know when a dealership does not take their website seriously or if the site is too confusing to navigate," says Cox.
* Overall Design: Good dealers have always taken pride in the appearance of their stores, says DealerSkins Krajicek. "Their website should be every bit as beautiful, exciting, and welcoming as the physical rooftop." Research has proven that rich content such as vehicle 360- degree spins, interior panoramic views, color changers, video, etc. attract consumer attention. "The closer the website can replicate the experience of actually test-driving the car, the more effective it will be." Dealers should also consider how "rich" they wish to make their sites without forcing long download times on their online shoppers. Some web developers have "bandwidth detectors" that recognize which version of the dealer's website will work best, depending on the consumer's connection. "This way," Krajicek explains, "users on high-speed get all the exciting sound, motion, and video they want, while those on a dial-up don't have to wait 5 minutes to view the site."
* Customer-centric Tools: Dealers should focus on engaging customers in order to keep them on their site longer by making their experience exciting and different from what they see at their competitor's sites. According to many in the industry, one of the most important customer-centric tools dealers should include in their website is inventory. Most shoppers know what vehicle they are looking for before they visit a site, so it is essential to have up-to-date inventory, with multiple color photos, clear features/option information, and pricing. "If shoppers drove by a dealership and saw a car that interests them, and then looked for the same car on the dealers website only to find the car was not listed, shoppers would quickly lose faith in the accuracy of the inventory on the site," says Brian Cox of Dealer Impact. BZ Productions Wolfington offers a different perspective, "If a customer cannot find what they want and your site does not have the vehicle they are looking for, they will likely leave and shop elsewhere." He adds this can largely be avoided if dealers design an easy to use site, provide information the customer needs, and provide the tools to build any car they want. "By keeping it simple, you will keep them on your site and eventually lead them into your showroom."
Another useful tool for shoppers is the new car configuration feature that should also be a part of a dealer's website, explains Krajicek. He believes this is an excellent tool to help dealers communicate to customers that they can get any car they need. "The configuration helps the dealer know exactly what the customer wants," he says. "An Internet sales person can either match those wants to an appropriate vehicle on the lot, order the car, or dealer-trade for it."
* Promote Your Dealership's Profit Centers: Every dealership, according to Wolfington, should promote their new, used, F&I, service, and parts departments, while placing emphasis on the most profitable departments: pre-owned cars, sub-prime financing, and parts and accessories. "While customers are browsing inventory, dealers should provide an opportunity to view and take advantage of weekly specials including savings coupons, lease specials, and parts specials," he says. Gabriel Krajicek supports this idea, believing the best way for dealers to increase their leads-to-users ratio is to add timely specials on a weekly basis. "Once potential customers become aware that they should check back often to see what deals are hot , they are more likely to add the dealer site to their favorites for online research." Many website solutions providers offer technology to conveniently update weekly specials, even up-load newspaper advertisements in just minutes.
* Build Value: Effective and high-impact dealer websites should build value in all areas of the dealership, including people, processes and product, rather than selling price, says Wolfington. "The best dealer-ships promote their advantages over the competition, market their certified vehicles, and highlight their unique processes."
However, building and branding an effective website alone is not necessarily going to generate results. "Dealers who are selling 60-600 incremental units a month online and generating additional revenue for all of their profit centers are getting positive results because they have a complete Internet marketing strategy." Wolfington urges dealers to remember that to drive measurable results and profits from the web, there must be key elements in place. One of these key elements is a commitment from management, or what is called, "dealer buy-in". Gabriel Krajicek of DealerSkins agrees, and says that this is the biggest factor in a successful online sales effort. "When the dealer takes an active interest in seeing the Internet department succeed, when he builds reporting and accountability processes to monitor performance, and supports online efforts with judicious marketing investments, the results can be amazing," he says. His or her position of leader-ship is a powerful influence on the thoughts and behavior of staff. "Even the best Internet sales manager will struggle if they don't have the support of senior management."
Jay Gubala, e-commerce general manager, for The Herb Chambers Companies, understands the importance and value of having dealer principal buy-in. His dealer principal, Herb Chambers, first commissioned their dealership's website in 1994, during the Internet's infancy. "Our dealer principal had a choice at that time to either fear or embrace the Internet; we chose to embrace it and now consider the Internet another method of advertising the dealership," says Gubala. Between the 22 stores, New England's largest automotive group expects to sell 38,000 units this year for a total of $1.2 billion in sales. Of that total, Gubala estimates 20% of sales will be Internet derived, totaling 600 units a month. However, he is quick to point out that the 20% figure relates to emails and phone "guests", that come directly through the dealership's websites, and not through leads generated by third party lead providers. "The advantage of leads generated through our dealership website, compared to traditional advertising sources, is that all aspects of the sales process are quantifiable," he says. "We can check response time on a per lead, per month basis, and compare closing percentages and cost per sale, per lead source." He points out that with advertising media such as newspaper and radio, the true effectiveness and ROI is not always clear.
It is also important to have the right marketing mix to drive traffic to dealers websites both online and offline, including search engine optimization, email marketing, and use of the dealership's URL on all marketing materials. "The Internet is not like the Kevin Costner film, Field of Dreams : If you build it, they will come ," says Krajicek. They won't necessarily come. So you have to make your dealer website easy for your customers to find. His company offers a service that will guarantee that a dealer's site is listed in the "Top 10" most widely used search engines. "This means more traffic, more leads, and more deals," Krajicek says.
Another key element to a successful Internet marketing campaign, according to Sean Wolfington, is having the right processes in place to turn leads into appointments and sales. "The key to the process is how well dealership staff uses the phone to sell the appointment and follow up," he explains. An Internet manager working a strong process can handle up to around 75 leads per month, but no more than 100, he points out. "More than that, and they will start cherry picking leads. That is why a super-efficient process is an absolute must." Wolfington sums it up like this: "It is easier to teach good salespeople technology than it is to teach technology people to be good salespeople." Executing these processes, points out Wolfington, is the defining point for auto dealers who want an effective website that will help build sales and profits. "Most people do not fail because of a deficiency of knowledge, but rather a deficiency of execution."
Dealer Marketing Center