|How many dealers can show they’ve increased leads by more than 230 percent in just two months? More importantly, how many dealers can translate that kind of increase in leads into an additional 279 sales in one month? The answer: Not many. But wouldn’t we all like to learn a little bit from those who can. And that’s exactly what Sheehy Automotive, with 18 franchises across 13 dealerships in the Washington, D.C. was able to do while simultaneously decreasing their advertising expense. How did they increase sales while lowering ad costs? Just ask their Internet director, Roy Reutter.|
How did you do it?
“We shifted some of our marketing budget to focus on the Internet. Customers are changing where they shop so we are changing where we market. The good news is that the Web is a lot less expensive than traditional mass media and it’s easy to measure the returns,” Reutter said. “When I came on board, we were mostly relying on third party lead providers for our leads and sales. At that time, it was the right thing to do because we were able to get leads right from the start. Once we got the ball rolling we realized that the best leads came from our Web site. The closing ratios were much higher and the cost was much lower.
“The only problem was we did not have enough leads from our Web site. That is when we realized we needed more than just a Web site, so we set up a regional buying service where we could market online. As a result, we’re generating more traffic and leads to our own site and our dedicated team of people are turning those leads into profitable sales. We’ve increased our numbers by over 500 percent, and our primary source of leads and phone traffic is the Web.”
Sheehy Automotive began with a business plan that outlined what they needed to do to use the Web to improve their business. They quickly realized they needed more than a Web site and a few third party lead providers. They worked to build a complete strategy to market their site, update it, staff the team, implement a process, establish pricing and fine-tune lead management. They started by looking at what some of the best dealers in the market were doing to come up with a plan of their own. While studying the top e-Dealers in the country, they found a company that had the marketing, Web sites, tools and training to help them execute their plan.
Reutter tells us, “With their help, we built our new Web site, marketed it online and put the right people and process in place. In only two years we have increased our numbers by over 500 percent and our overall cost per sale is down to around $130 per car.”
THE WEB SITE
A Web site can look good and provide lots of content, but if it’s not generating leads, you’ve got a problem. Another trap Internet managers can fall into is spending too much time updating the site. This can become a distraction to selling cars. After switching from a template site, Sheehy increased leads from 400 to 1,350 in the first two months which is more than 230 percent. Since then they’ve continued to grow to over 2,400 leads a month from their Web site alone.
What are the key elements of a successful Web site?
“Our old site had a lot of information but we needed something that was a better marketing tool to create more opportunities. In addition, we want to create a “WOW” experience for our customers so we have unique multimedia content on our Web site that streams on low-speed dial up modems. Our site builds value in our product and dealership, and it creates more opportunities and business for less cost than our other advertising,” Reutter said. “Our new digital marketing machine works 24/7 to attract more prospects which results in more sales and gross for a lower cost per sale. And the funny part is it generates more phone calls and showroom traffic than Internet leads.”
“We aim to generate extra sales by offering things customers can’t find on any other Web site such as virtual test drives, searchable inventory, auctions, model reviews, trade-in information and so on.”
Reutter adds that it’s important to find a Web site that automatically performs daily inventory uploads from your DMS and even uploads all daily specials. The automated updates will allow the Internet team to focus their time on selling cars and making customers happy rather than playing with technology.
LEAD MANAGEMENT PROCESS
Process should be simple: clearly define your process, make sure every one understands it and is capable of implementing it and you’re set. Not quite. Understanding a process and actual implementation is the difference between average and excellent. Making the shift to implementation and excellence hinges on training.
“We use a combination of in-house training and outside training to make sure our people are highly skilled and confident in their ability to execute the process.” Reutter said. “For example, we train our people to respond immediately while the customer is still on our site, we practice using a customer friendly phone guide to set an appointment and we give them what they need to follow up for six months to eight months until the customer buys. If we quote a vehicle, we quote price on the exact vehicle they’re looking for and we always offer other lower-priced alternatives.”
Dealers are always asking what type of people to hire as Internet specialists, Internet managers and CRC staff. The next question is how to train them because without the right people, all the leads in the world could actually hurt a dealer more than help. At Sheehy Automotive, they look for people who are new to the business so they can train them from the ground up without having to correct bad habits or address pre-conceived notions of what the Internet process should be. They pay salary plus commission and offer incentives to drive targeted objectives.
Roy Reutter adds, “If you have the right people who are passionate about what they do, you can make up for a multitude of shortcomings in other areas. With the right Web site and CRM tool, we’ve found we do not need a team of technology experts. Since the main goal for team members is to sell the appointment and make sure the customer shows up, it helps to seek out people who love working on the phone and in customer service. The great thing about our current technology is it’s simple to use and most of our follow-up process is automated, which allows us to get more done with fewer people. This has been huge because our old tools were hard to use and most of the process was manual so we were using a lot more people to get less stuff done.”
Like many dealerships, Sheehy Automotive is constantly re-evaluating their pricing strategy to stay competitive. They’ve tested several different models, continually evaluating the pros and cons of each and aiming for consistency across all stores. According to Reutter, one of their lessons learned is this, “One thing I can say with confidence is that in our market, the customers expect and demand an answer to the price question, and if you don’t give it to them, someone else will and the customer will cross you off their list. That and the fact that nothing sells cars like belief in the value of what you have to offer. Our goal is to serve our customer, conduct an effective interview and build value in the product and dealership so that pricing is not the only factor in the customer’s decision making process.”
RETURN ON INVESTMENT
The best part about Internet marketing is that everything is measurable. Performance metrics can help track your return on investment so that you can adjust your strategy as you go, hang onto what works and revise what doesn’t. To make this easy for a dealer or general manager, the right CRM tool can send automated reports daily, weekly and monthly to help track and improve everything you do. Reutter tells us that the best part of their tool is it only takes a few minutes a week to get a snapshot of how things are going, who is excelling and where the process needs fine tuning. The measurability of return on investment in the Internet is unparalleled in the car business.
On the topic of marketing, Reutter reflects, “If you can’t generate traffic, you might as well not even have a Web site. It was not only important for Sheehy to have the best site available, but we needed to generate traffic. Search engine optimization in conjunction with multimedia buzz mail campaigns blended with traditional marketing strategies has enabled us to increase traffic and sales at a lower cost than ever.” As with other profit opportunities at the dealership, traffic is the secret to Internet success.
“Our technology vendor uses search engine optimization to make sure customers can find us,” said Reutter.
Vol 2, Issue 8
Auto retail veteran and F&I products expert Paul McCarthy has joined AUL Corp. as vice president of national sales.