Using methods such as offering every customer requesting information on a new vehicle an alternative (that being a similar but less expensive, nearly-new, pre-owned vehicle), Dick Hannah Honda, sold 2643 used vehicles via the Internet in 2003, earning the Auto Dealer Monthly/Auto Dealer Daily.com 2004 Pre-Owned Retailer of the Year Award.
While earning the award based on their Honda location, their Automall dealership also sold 946 pre-owned units, good for 7th place in the Top 50 Pre-Owned rankings. Additionally, the Vancouver, WA based Dick Hannah Dealerships retailed a total of 6794 total units in 2003, with a staggering 4420 of them coming from pre-owned sales. Clearly, the Hannah organization has realized the benefits of taking advantage of the used vehicle opportunities on the Internet.
Being a fixture in the Vancouver, WA market since 1949, the President Dick Hannah only added to their outstanding reputation of unsurpassed customer service when they added their stand-alone Honda dealership. Since initiating a comprehensive Business Development Center, and bringing in tools from BZ Productions to assist in the processing of leads and follow-up, Dick Hannah Honda and the entire Hanna organization has flourished – increasing sales on three Internet fronts as well as becoming more cost efficient at the same time.
Matt Dorsett, the e-Commerce director for the Dick Hannah Dealerships, believes offering customers the alternative to buying new allows for both increased sales of the higher-margined used vehicles, as well as serves to separate them from the competition.
When asked the keys to Dick Hannah Honda’s success with used vehicles over the Internet, Dorsett stated that the organization built on the strong connection with the local Northwest communities through offering unsurpassed customer service and the best products to automotive consumers.
“Every pre-owned vehicle we sell is ‘Hannah Certified’ with an extensive 100 + point inspection & reconditioning process, in addition to carrying a comprehensive warranty. We also sell a number of “Factory Certified” pre-owned vehicles reconditioned to manufacturer’s specifications,” Dorsett stated. “In addition we provide consumers a free Carfax and third party reviews to give them all the information they need to make an informed decision.” It takes all the risk out of buying a used car, and allows them to save thousands in the process. Many customers had not even considered a pre-owned vehicle until we offered the option.
Dorsett also acknowledged that having one of the Northwest’s most competitive pricing policies along with an extensive inventory mix of over 1000 pre-owned vehicles offers customers both the selection and the incentives to consider a used alternative.
The final piece to the sales puzzle is an aggressive focus on Special Finance. The dealership delivers over 150 Special Finance units per month, with a high percentage coming directly from the Internet.
A consistent Internet sales process is required to achieve such a lofty sales volume. Dorsett outlined its key components and timeline by saying, “first of all we train, train and train. I am also the corporate training director, and it is a daily and ongoing process.”
“We have developed a friendly business development team that successfully utilizes phone & e-mail customer follow-up. Our lead tracking software is BZ’s Buzztrak, and with it the process, even with all of the leads, becomes quite easily administered. We start by inputting all email leads and phone calls in our lead management system.”
Dorsett continued, “After receiving the client’s information, the Internet sales representative promptly responds to the customer’s request for information. BZ’s Buzztrak is a fast, powerful and smart CRM solution. It allows us higher quality and quantity follow-up per user through automation and its simple use. Finally, the dealership incorporates a sales assistant into the Internet process to help insure adequate and timely follow-up.”
Repeated follow-up allows Dick Hannah Honda to get the appointment set, and get the customer into the dealership, both vital to the sale. Additionally, it allows the dealership to take advantage of cutting edge video e-mail to continually remarket the dealership at ultra-low cost to both its customer database, as well as to those that never did purchase. A significant number of sales take place each month from this type of marketing efforts.
With the pre-owned sales mix of the entire organization being heavily influenced by Special Finance, the BDC and Internet retailing team must be adept at handling all types of credit customers. Dorsett indicated that the dealerships Special Finance leads came from all three sources – their own Web site, those harvested through e-Marketing, and certainly through third party Internet lead providers. Dick Hannah Honda uses nearly every Special Finance third party lead provider available. Closing percentages range from three percent to 18 percent depending on the provider, but the dealership’s average ranges slightly below ten percent.
The focus with Special Finance leads remains getting an appointment set for the customer to come to the dealership. The value of a Special Finance lead, regardless of the source, depends on the ability of the customer to provide documents proving their income, residence and identity. The Internet provides two distinct tools; leads that bring “prepared” buyers to the dealership and the ability to offer immediate decision and delivery through quick and efficient processing and approval of applicants.
When queried about their choice of CRM tools, Dorsett elaborated, “We chose Buzztrak because it is very fast. Previously the Hannah Dealerships had been using another widely known provider for its CRM solution. Buzztrak is literally six times faster. Also when we were using our previous system you couldn’t run a report of more than 1,000 customers at a time without it crashing. I run reports in Buzztrak of 30,000 customers in seconds. Their support is also very reliable, competent and dedicated, so if you do have a problem, they get it fixed ASAP. Also it is one of the few CRM tools that can be used by all dealership departments- Showroom, Internet, Special Finance, Service & Parts & have them all tie together as one rooftop.
When asked what he would advise those dealerships that are just committing to developing their Internet departments, Matt Dorsett explained the importance of knowing your market, as each one is different. Research is important. He offered, “Figure out what percentage of your customers are on the Internet. Then, adjust your advertising and marketing strategy as necessary to reach them.”
Beyond that, Dorsett explains that you will need to make an investment in the business. “I would recommend investing in the best people, the best training for them and the best tools.” It is, after all, still a people business, and nothing beats good quality people that are well trained.
Well staffed, well trained, well invested and certainly committed to retailing used vehicles over the Internet, Dick Hannah Honda certainly has earned their prestigious position of the 2004 Pre-Owned Retailer of the Year. Auto Dealer Monthly and AutoDealerDaily.com congratulate their entire team.
Vol 1, Issue 3
Swapalease.com’s latest report show U.S. lease approval rates improved slightly to 70.9% in October following a 3.9% dip in September.