|An increase in Internet sales of almost 35 percent in 2005 earned City Auto Sales in Memphis, Tennessee the Auto Dealer Monthly 2006 Pre-Owned Internet Retailer Award just last month. Currently, they are the #1 Internet dealership in Tennessee, with projections of over $115 million in sales for this year. With such an impressive roster of honors, combined with a healthy pre-owned inventory, City Auto Sales could not make used car shoppers any happier.|
Owner David Andrews founded City Auto Sales in 1986 as a wholesale auto dealership. “I’ve been in the car business since 1973,” says Andrews, who worked for his father in auto sales before launching his own business in 1975. “When we started in 1986,” Andrews recalls, “there were 5 wholesale dealerships in Memphis. We were the smallest of the five. By about 1991 we were bigger than the other four dealerships put together.” City Auto now strives to keep 1,000 cars in stock at any given time.
City Auto launched their Web site over six years ago, at a time when large online business traffic was rare. “Even our best salesmen told me they thought I was crazy,” says Andrews when City Auto began putting their listings online. “Our most open-minded salesmen were saying, ‘This will never work. You’re wasting your money.’” Nevertheless, “It just made sense to try it,” says Andrews.
Nowadays, the entire staff has fully grasped the importance of the Internet. “Everyone here knows that the Internet is a necessity,” says John Camacho, Internet Administrator. “It’s just like opening your door to start business for the day. The Internet is something you have to be a part of.” Camacho’s team takes pictures and descriptions of each car for every salesperson, and maintains online listings for approximately 400-500 vehicles every month. In addition, Camacho (also a programmer) writes and maintains custom in-house software to track Internet leads and customer relationships. Online leads and sales are also monitored on a weekly, monthly and yearly basis, and compared with the previous year’s sales figures.
Ahead of any software, advertising strategy or Internet tool, the central goal at City Auto, says Andrews has always been “treating people right.” “Customer satisfaction is our number one priority,” he states. The no-pressure sales atmosphere and fast response time to customer inquiries (usually within 1or 2 minutes) encourages repeat business and bolsters their referrals.
Perhaps the most effective policy at City Auto is that shoppers remain with the same salesperson throughout the entire vehicle-buying experience. “Unlike a traditional dealership, where one person or one department will handle the leads,” says Camacho, “we pass our online leads directly on to our salespeople for them to take care of.” If, for example, your search landed on a particular truck at CityAuto.com, that listing will include a salesperson’s name and number and/or e-mail address. Your initial contact results in a personal reply, linking you with the same salesperson from day one.
Once a customer drives off the lot at City Auto, they never fully disappear from sight. “We have a complete customer relations department where we maintain contact with the customer after the sale—forever!” says Andrews. City Auto’s extensive follow-ups include thank-you letters and a postage-paid questionnaire “…not only to figure out how we did on that sale,” explains Andrews, “but also to gather as many E-mail addresses as we can, to maintain contact with each person.”
City Auto gathers their inventory from a large variety of sources, including PHH Arval and dealer trade-ins. From this inventory, approximately 60 percent of their vehicle sales originate online (compared with 20 percent a few years ago). Camacho explains how so many leads arrive at their door: “We have our own Web site, where you can view every car we have for sale,” begins Camacho, “We also have our inventory on third party Web sites such as AutoTrader.com, Cars.com, AutoMart.com and CarSoup.com. It makes it very easy for someone to find our cars, no matter where they go.” They also place banner ads on third-party sites, and a handful of banner advertising on other sites.
Andrews predicts that the 60 percent sales statistic may stay constant, “but, as it does, our sales will grow exponentially over the Internet.” He forecasts they will sell roughly 4,500 retail units and 9,500 wholesale units for this coming year.
“We still don’t think we have even touched the potential of the Internet,” admits Andrews. “We think it will just get bigger and bigger. I personally think newspapers are growing as extinct as dinosaurs.” Although City Auto still keeps a foot in print and television advertising, Andrews knows that location doesn’t matter to Internet shoppers. “We can put a car on the Internet, and someone in California can see it. If we run a full page ad in a local paper in Memphis, no one in California will see it.”
City Auto has invested in the idea that today’s customers are information-oriented and will naturally search the Internet before buying big-ticket items. “People are going online first and getting educated about the car, before coming to see you,” says Camacho. Andrews agrees, “If we can get a customer to our Web site,” he claims, “then we can get them to our lot.” And, with 1,000 used cars in stock, CityAuto.com regularly attracts both local and out of state car shoppers. “We have the benefit of so much inventory and such a wide selection,” says Camacho, “there is a pretty good chance that you are going to find a vehicle on our Web site that is either pretty close or exactly what you want.”
But the skill of attracting online shoppers is ever changing, says Andrews. Their sales team, headed by General Manager Stan Norton and Assistant General Manager Gary McCarter (also in charge of fleet sales) is constantly at work to stay ahead of changes. On top of regular sales meetings, they hold weekly meetings to incubate ideas solely for the Internet. City Auto is also a member of National Automobile Dealer Association (NADA) , the Tennessee Automotive Association, National Independent Automobile Dealers Association (NIADA), Tennessee IADA (of which Andrews is on the board of directors), and the National Association of Fleet Resale Dealers (NAFRD). These trade associations, “…help us build our business and keep up with the current trends,” says Andrews. “One thing for sure, we don’t have to look for things to do around here!”
City Auto’s Web site was completely recreated a year and a half ago. The overall layout, including design and color scheme, was updated. “Even the way the site is operated was completely redesigned,” says Camacho. “We try to do small incremental changes based on what customers are looking for.” They also actively solicit customer feedback and browse other dealers’ sites to gather ideas. These new ideas are discussed at the Internet meetings and then tested on the field. “We are constantly looking for any way to improve,” says Andrews, “no matter how small of a fraction that improvement is.”
Another example of their emphasis on improvement was the purchase of a Blackberry for every salesperson. The plan was tested over a period of three to four months, in small increments (“It was a slow process,” says Camacho) and stemmed from the company’s insistence on immediate follow-up. “We asked ourselves, ‘How can we get our salesmen to not only answer their E-mails, but answer them in a timely manner?’” To Camacho, “timely” does not mean next day, or even within the hour. It means “…instantaneous. One to two minutes, max.” He believes an automatic reply is worse than no reply at all. On the other hand, “these sales guys can’t be tied to their desks for 10 hours a day. They are on the lot, at an auction or doing other things. With the BlackBerry, they can receive their E-mails no matter where they are…and they can answer back.” The idea has generated positive remarks from both customers and salespeople.
Another idea under consideration is to give every salesperson a domain name. For example, when a prospect types in a salesperson’s domain name, the shopper is directed to that salesperson’s personal inventory at www.CityAuto.com.
“In the Internet realm,” says Camacho, “nothing is really too risky to try. The beauty of the Web is you have an unlimited amount of real estate, and it costs you the same whether you have one page or 100 pages.” Because they set short-term goals and regularly evaluate new ideas, they can determine whether or not they want to permanently adopt an idea in as little as six months. “We’re not opposed to trying anything,” says Camacho.
In their quest to completely satisfy each customer, City Auto opened a new full-service repair facility annexed next to the dealership in January of 2006. “Our service department will do anything from putting air in tires to putting motors in cars,” says Andrews, “You can’t be a full-service dealership without a service department.”
Camacho feels that used car dealers have a definite advantage online. “In our case,” he says, “the Internet benefits us…because there is no ‘used car factory.’ If we have something that a customer wants to buy, it may be the only model available in the whole country. Thus, the chances of them coming to see us for that car are a lot greater than if they were looking for a new car, and had 20 new car dealerships to choose from.” Andrews agrees. “We don’t have to sell one particular brand of car. We sell what we want to sell, and everybody drives a used car!” Andrews adds, “We feel very in control of our destiny here.”
With unique offerings on every front—a one-person sales process, instantaneous follow-up, constant Web site polishing, and a new service facility—the team at City Auto is determined to continue leading the pre-owned Internet retailers.
Vol 3, Issue 6
A record year for dealer participation programs pushed CNA National past the $500 million mark in distributions since the company’s inception.