How the Web was Won: Earnhardt Auto Group Shares The Good, The Great And The Ugly Of Running A Web site

“We’re not real bright; we’re just car salesmen,” said the very humble Kevin Murphy, special finance director (aka, “Mr. Ed”), who, with his brother and junior partner Terry Murphy, has been with Earnhardt since 1986. “All we’ve done is talk to our customers to find out what they want.”

The Good (or Best) Web page
In the last decade, the Earnhardt Auto Group based in Chandler, Ariz. has grown from three franchises to 11 across Arizona and Texas. Around 1994, the first Earnhardt Web site was created. The hodge-podge Web site hobbled along doing OK, but no one ever maximized it to sell vehicles. The site was mostly store contact numbers and inventory. There were no build-a-car options, online credit applications, service pages or parts pages. In the latter part of 2004, recalled Don Speen, corporate business operations director, “Kevin came into my office and said, ‘We’re going to design the best damn Web site there is.’”

Soon after, Murphy and Speen assembled the Magnificent 8, a group of eight of his “most progressive” employees from each department: sales management, service, parts, RV sales, fleet, Internet, business operations and special finance. Earnhardt already ran an ad campaign titled “The Best Damn Credit Show” which was a spin-off of the Fox Sports Network sportscast. In turn, the team was dubbed “The Best Damn Task Force.” Their mission was 3-pronged: (1) give the Web site an up-to-date look, (2) give the service, parts and other departmental pages in-depth online features, and (3) make the site more search-engine friendly.

The task force already had an idea of what it wanted to tackle first. “We definitely wanted to get our service and parts departments more involved. They had little if any significance on our original Web site,” said Speen. They also had to decide which department would get the most visibility on the homepage.

The team met once a week for a span of seven to eight months. Initially, everyone attended the meetings. As specific issues rose to the surface, Murphy and Speen narrowed down the agenda to determine who would attend next week’s meeting. For example, if the meeting was to center around the parts page, only selected parts staff would attend.

“We looked at every Web site that existed on the planet,” Murphy said, “whether auto industry, Microsoft, Apple—we looked at everything we felt a customer needed.” They also brought in customers and asked them what they were looking for (such as more online features, etc.). They also talked to employees who would be communicating with customers online. They gathered the data and compared the pieces.

Next, the task force brought in the top Web site vendors. “They made the best presentations they could,” recalled Murphy. “We had fun with them; we tore the living daylights out of them,” he joked. They discovered that every vendor had a piece of the puzzle, he stated, “But no one could complete the job the way we wanted it done.”

Earnhardt finally decided to host their site in-house. “We have a Web master working for us who can provide support internally,” said Speen.

They also have a full-time employee “who is very adept at strengthening our Web presence through organic searches,” Murphy said. 

The redesigned service and parts pages now offer a variety of online features. Customers can now schedule an appointment online, buy parts and accessories (for all makes and models at all dealerships) and download service coupons.

The biggest challenge, Murphy recalled, was “the land grab for homepage space.” The homepage has prominent links to every store and department. However, since Special Finance (the “Mr. Ed” department) makes up one-third of Earnhardt’s sales volume, they received a larger presence. The “Mr. Ed” logo link appears prominently on the homepage and all individual store sites. Through this link, both prime and sub-prime visitors can apply for credit online. Sub-prime applicants are sent to a large and comprehensive “Mr. Ed” finance Web site that allows them to continue the credit application process and even select a car online. Prime and sub-prime visitors alike can get a no-hassle Internet payment quote and interest rate quote and can process their loan from front to back all online.

The “Great” lead sources and sales numbers
By the first quarter of 2006, the Web site officially “launched,” flanked by some celebratory e-mail campaigns. The task force unofficially disbanded, having addressed most of the issues, but Speen and Murphy continue to work on the site. Most recently, they have been testing strategies for search engine marketing, or SEM. On top of their own research, they have worked with Jumpstart Automotive Media, Google and Yahoo. They also pour about 10 percent to 12 percent of their advertising budget into publicizing the Web site. The sites www.NoBull.com and www.MrEd.com get mentioned in ads almost 100 percent of the time.

Then there are the third party lead providers. In the last year, Earnhardt has purchased over $1 million in prime leads and about that amount for special finance. The sub-prime department alone has about 15 different lead providers. Earnhardt’s strategy is to “test-drive” any lead provider who promises leads, whether it is five or 5,000. To keep track of all leads coming through the Internet (that is, anyone who requests information or a quote online, or applies for credit through one of the Earnhardt Web sites), the SF department uses ProMax Online. They also use ProMax as a CRM tool to follow up on each lead.

Using a combination of software (mainly DealerSocket), they track the success of each lead and gauge if quality matches quantity. Murphy said within 30 days to 45 days of tracking “we’ll know if the [provider] is giving us good value for our dollar.” While search engines generate about 1,000 sub-prime leads per month, lead providers bring in between 5,000 to 6,000 sub-prime leads monthly.

In the year prior to their Web site campaign, Earnhardt closed 1,873 sub-prime deals originating from the advertising and lead providing partners. Over the past year (with the year closing June 2007), the number has risen to 2,847 sub-prime deals. For prime leads, year-to-date sales peaked at about 7,000 deals. They expect the percentage of sales will continue to grow each year.

The Ugly
Murphy chimed in: “We’re all talking glowing, wonderful things about the Internet. Do you want dirt?” He started to dig: “The Internet is one of the most over-promised, under-delivered and incredibly difficult phenomena to hit the auto industry. The promise was that we would be able to sell cars more cars efficiently, accept lower profits and make more money... The reality is, we have had to work five times as hard to make one-quarter of the profit.” 

According to Murphy, the Internet has bred a new type of customer, one who lounges in “PC underwear,” demanding a payment, price, trade allowance and interest rate instantly online, without any specifics on the prospect’s trade or credit. Earnhardt countered this phenomenon by dealing with customers in a personal and professional way. They created training models to teach their staff how to deal with online complaints and demands without taking them personally.

The great news, said Murphy, is that all their competitors are tackling the same obstacles, “and we’re a lot better at dealing with them than they are.” Thanks to careful tracking and training, “we’re prepared to deal with them.”

Earnhardt uses DealerSocket, a Web-based solution, to track, manage and communicate between dealerships through the Internet. The daily activity of each store can be accessed online and then transferred between stores.

The dealerships employ DealerTrend technology to update inventory on all eight Web sites. The technology can add pictures to an online listing, change prices on the fly and automatically feed information to third party lead providers without redundant data entry.

Earnhardt Auto also sells cars through AutoTrader, eBay Motors and Cars.com. Though primary sales fare better than sub-prime in these market places, the results, said Speen, have been minimal compared to the aggressive presence of their own Web site through advertising and search engine optimization, or search engine marketing.

Earnhardt continues to market their site with e-mail newsletters. They also send out e-mail surveys to customers asking for comments on their buying experience. Whenever Earnhardt gets a glowing recommendation, they ask permission to use the letter on their Web site. However, most feedback on the site itself comes from customers who are upset. “But this is an awesome thing for us,” Murphy said, “Because it allows us to solve that one problem and correct the underlying cause of the problem.”

The site will always remain on experimental terrain. Speen wants to add online rewards features for members of the Earnhardt Auto Rewards Program and assemble a focus group to find out how different customers use the Web. Recently, he purchased Web design help from Izmo Cars, a custom builder and marketing house for dealer sites. The company has taken over the design for three stores: Earnhardt Ford/Mazda, Earnhardt Honda and Earnhardt Toyota. Speen, meanwhile, is weighing the benefits of working with them.

Speen said whether tweaking the look or updating Web features, the ultimate goal “is to drive enough traffic to our site, through advertising and search engines, that we no longer need third party lead providers.”

Is another big change on the horizon? In true desperado fashion, Speen said, “The answer will come, as long as we keep our ear to the ground.”

Vol 5, Issue 9