Dealer-Branded or Blind: Pros and Cons

The May 2009 issue of our sister publication, Auto Dealer Monthly, contained the 2009 Internet Achievement Awards. It was the magazine’s eighth year ranking the elite performers in all facets of automotive Internet retailing.

Curiously enough, if you were to poll auto dealers across the country and ask whether the SF market was up or down in 2008, the likely response would be an emphatic, “Down.” Yet, when looking at the rankings for the Top 10 SF Internet Retailers, the numbers haven’t changed that much from last year.

As I have been saying for months, the reporting of the death of the SF industry is beginning to sound much like infamous “Dewey Defeats Truman” headline from 60 years ago. Yes, the industry has definitely changed, but without a doubt it is still alive and kicking, and while it’s more challenging than in recent years, much can be learned from the SF Top 10 dealers.

How the Internet factors into special finance is basically broken down into two components—the leads and the process to work those leads. This month’s column will focus on the first component—creating the leads.

SF Internet leads are broken up into three streams. The first lead stream – blind third-party leads – was what my dealerships first used when we broke into SF online. Back at the turn of the century, the e-lead providers were just breaking into the scene. Average SF lead quality then was much higher than it is today, and when worked with the proper techniques, we routinely enjoyed closing percentages in the mid- to upper-20s (unheard of today). Still, the blind third-party leads remain very viable and are an important part of many top Internet SF dealers’ efforts.

Beyond third-party leads, dealers look to attract customers to their own Web sites. This is where the second and third streams of leads come from, and is also where opinions divide into two camps. One camp prefers the second stream—leads generated from a dealership-branded Web site, which is often separate from the dealership’s primary Web site. The other camp prefers the third stream—leads from their own blind site that essentially looks like a third-party entity. It is separate from the dealership site and “refers” customers to the dealership.

For me, if I had to just choose one, there is no question which stream I prefer, particularly if the company has many locations with an already well-branded name. My choice would be to create a separate, stand-alone SF Web site tied to the dealerships’ familiar name. (e.g., Don Wood Automotive Group’s DonWoodSaysYes.com or Pierre Ford’s PierreMoneyMart.com).

Three significant factors contribute to my preference. First, since all Web sites must rely on consumers finding them, the existing name recognition will allow the SF department to piggyback on all the marketing and advertising dollars spent by the dealership. This greatly reduces the cost of promoting the additional Web site.

Second, a customer making contact through a Web site tied to a particular organization is much more likely to both set and show up for an appointment since they know who will be contacting them concerning their credit application. The closing ratio of branded dealership leads is generally much higher than that of blind site leads.

Finally, due to the fact that many third-party lead aggregators aggressively work both search engine optimization and search engine marketing, it is much more difficult for sites not tied to the organization’s name to be ranked on the first page when searched, let alone appear “above the fold.” This was particularly evident when dealer-branded Web sites were compared to those that are blind. With Web site searches accounting for nearly 33 percent of the overall scoring of the Internet Achievement Awards, the number-one ranked blind site would not have ranked in the Top 10 overall, even though it won by a wide margin among the blind sites.

An ideal situation would be to have both branded and blind sites, which indeed is what Suzuki of Wichita does, with a #3-ranked branded SF site and #1-ranked blind SF site. The key to their branded site (which is actually their dealership site with a heavy finance focus) is that they make the application process very visible, simple and customer friendly. Additionally, they use both text and video customer testimonials and a slew of educational information to add great credibility and friendliness to the process.

Earnhardt Auto Centers of the greater Phoenix, Ariz., area has branded their SF credit operation as the Mr. Ed Department for well over a decade. With that, and since it is so prominently featured on the dealerships’ group and individual store Web sites, it always sets the standard for search engine optimization, nearly always placing first when searched. While it does not feature video or flash, their SF site is simple, very customer friendly, offers testimonials and, most importantly, captures the basic contact information of the consumer before asking them to complete the entire credit application, a task which can often scare a customer away. With the goal always being to capture a lead, their site stands out among branded SF sites because it’s easy to find (in a very large and competitive market) and requires little consumer input to submit a lead.

Linnehan’s Credit Now! Auto Company, the SF and BHPH dealer group in Ellsworth, Maine, that ranked second in the branded site category reinforces the idea that a site doesn’t have to be glitzy to be effective. The site, without flash or video, does a great job of making the credit application process simple, friendly and easy. Additionally, they put the customer at ease with their “Risk Free” process.

Dealers looking to create their own auxiliary SF sites should take cues from sites like these or other highly ranked sites such as DonWoodSaysYes.com and PierreMoneyMart.com, both sites of franchise dealer groups doing a great job of making the process seem warm, simple and inviting. In order to be able to set appointments that show, it is vitally important that you do whatever possible so your Web site puts the customer in a positive state of mind.

Conversely, blind sites offer two significant advantages over dealer-branded sites. They are certainly appealing to dealers who do not wish to advertise that they have a SF department (except to those customers who make contact with them). Second, there are certain customers who would not make contact with certain dealers because of particular brands they sell or because they’re independent dealers. A blind site allows these dealers to capture the lead, then have a well-trained salesperson or telemarketer work on overcoming those obstacles.

Certainly, the challenge for blind sites is their ability to generate cost-effective leads. The money used to push people to these sites doesn’t help brand the dealership; then, getting the customer to set and show for an appointment once they learn the identity of the dealership can be a challenge.

Again, the key is making the process seem simple and friendly. AutoApproved.com, Suzuki of Wichita’s blind site, does just that. It offers a very simple, four-box “starter app” on the home page, which captures the contact information of the customer before beginning the more detailed application. It explains the process well through FAQs, and backs it up with both testimonials and educational content.

Other good examples are the second- and third-ranking blind sites, CentralFloridaAutoCredit.com and PhillyAutoFinancing.com, two sites in competitive metro markets. CentralFloridaAutoCredit.com gained a small edge based on ranking slightly better in searches. PhillyAutoFinancing.com gained very high marks from the judges for its simplicity, budget calculator and three-line starter application.

One common denominator among nearly all of the top-ranking sites is the fact that they attempt to distance themselves from inventory. Some of the sites, in particular the dealer-branded sites, offer links to the dealership’s inventory and prices; however, most links are less obvious and require a number of clicks to reach.

With the overwhelming number of consumers using the Internet to both simplify the credit application process and limit their embarrassment, I strongly recommend a dealership use an auxiliary auto credit site, whether it be branded or blind.

As with the winning examples of the 2009 Internet Achievement Awards, these sites don’t need to be elaborate or expensive. Simplicity, friendliness and a short “starter application” are the keys. If you currently don’t have an auxiliary site and are looking for additional SF opportunities, I recommend you take the time to review the 2009 winners and contact a Web site provider to get yours up and running.

Until next month,
Great Selling!

 Special Finance Insider Vol. 3, Issue 3

About the author
Greg Goebel

Greg Goebel

President/Trainer

View Bio
0 Comments