The Continually Evolving BHPH Operation
The average buy here pay here (BHPH) dealer operates his or her business quite differently than the traditional retail dealer, so naturally, as the World Wide Web gained popularity throughout the ‘90s, BHPH dealers approached it differently than other dealers.
Typically, a BHPH dealer’s first online initiative – whether in 1995 or as recently as 2005 – was a basic website that simply served as a way to get pertinent information out to customers. Nowadays, some BHPH dealers maintain online presences that rival or even outdo those of their traditional retail counterparts. Many BHPH dealers have learned that the Internet offers more than static informational websites; it can generate leads, aid collections and skip-tracing, and help create brand awareness and loyal customers through savvy advertising and marketing.
At the heart of most dealers’ online presence is their dealership website. Matt Ghazal, president of Express Auto in Kalamazoo, Mich., said, “Early on, our website was a simple brochure [that included] who we are, what we do, our telephone number, our address and directions to our store.” Today, his four-store BHPH operation has a much more robust and interactive website. “Now, [the website] is geared towards starting a conversation with the customer as early as possible … while they’re [on our site]. We consider a Web visitor just like a customer on the lot.”
The Express Auto site includes several points that engage customers, including a chat module, credit application and service scheduler. Ghazal said that while lead count fluctuates some, the website generates about 500 leads per month, with the credit app typically generating the most leads.
Similarly, many other dealers are revamping their websites to offer BHPH customers a better experience. Regal Car Sales and Credit, a 13-store BHPH operation based in Wichita, Kan., launched a redesigned and more robust site in late 2010. Chris Lottman, the social media and Internet manager, spearheaded the effort and evaluated 10 different Web providers to determine the best fit. Ultimately, he decided to stay with their current provider, Dealerskins. Instead of updating the original site Regal had when Lottman began working at the dealership in May 2010, however, he wanted to start with a clean slate.
Throughout the redesign process, Lottman focused on improving navigation so that more people would fill out credit applications and provide leads. He cringed when mentioning how the old site was lacking, and stated the new site is “a lot more user-friendly, has a lot less clutter and is simple on the eyes.” He added, “Redesigning [the site] and making it more efficient has helped in capturing leads and credit apps online. We’ve noticed a pretty sizeable increase.” The new site went live in the fall of 2010 and is now producing anywhere from 500 to 750 leads per month, which is a nice uptick from the average 350 leads the old site generated. Currently, about 40 to 45 percent of the site’s leads are credit applications.
"The Internet has noticeably changed on-the-lot traffic. While our sales have steadily increased over the years, our lot traffic has steadily declined. People shop from the convenience of their home or workplace ... I think a lot of BHPH dealers have finally realized that the Internet is essential, even for our customer base."
Regarding what figures they put next to their cars, both Barrett and Lottman’s sites include the sale prices of vehicles, while Ghazal’s vehicle listings include figures for the weekly payment, required down payment and length of the term. Ghazal said, “Generally speaking, we don’t advertise price because our customer is really not looking for a price. They’re looking for a down payment and a payment.”
Another aspect Ghazal and Barrett have incorporated into their websites is the ability for customers to make online payments. Ghazal charges customers a small convenience fee to make a payment online, and encourages them to instead sign up for direct debits from their accounts. Barrett’s online payment service allows customers to see account balances and payoff information. Lottman said Regal hasn’t instituted online payments yet, but hopes to soon. They’re currently considering switching CRM tools, which would allow the dealerships to accept online payments from customers.
While the dealership website is a big chunk of online marketing for dealers, things like search engine optimization (SEO), search engine marketing (SEM), online reputation management and social media are also important.
One of Lottman’s undertakings at Regal Car Sales and Credit is SEO. The dealership’s new website contains a lot of Flash, but he will soon have it converted to HTML, which will greatly improve the “searchability” of the site and eliminate some of the more tedious tasks required to ensure the Flash site is properly optimized. He explained, “When you have a Flash website, there are a lot of things you have to do to tweak how your cars get indexed in the search engines.” The Flash-to-HTML conversion will allow him to create a site map, which he can submit to search engines. Submitting one site-map file a week rather than multiple URLs will be a significant time savings for him.
Lottman has also implemented SEM to drive traffic. “We have a Google pay-per-click [campaign] right now. Initially, it was really just kind of a big ‘spray-and-pray’ campaign, until I figured out that it really wasn’t getting me anywhere. So I really went in and tried to nail down a lot of the nuts and bolts and target [our customer base].” He said when Google released new features for better targeting, he began drilling down on keywords he “wanted to lock down.”
He’s also utilizing a more geo-centric targeting style, tailoring the new campaign to a 25-mile radius around the cities where Regal dealerships are located. “That’s proved pretty substantial because I watched our click-through ratio go from 0.19 [percent], which really isn’t too bad, to about 3.5 percent,” Lottman said. Granted, the enhanced targeting significantly decreased impressions. “We were impressing anywhere from 300,000 to 400,000 people, and that changed down to about 50,000 to 75,000 impressions.” The end result is that the website receives more concentrated impressions and more quality clicks, which has led to improved new-visitor statistics.
"You're almost playing with a double-edged sword when you start looking at avenues like Facebook to try and track people. One one hand, it may be a good tool to do it, but on the other hand, I think you're almost breaking kind of an ethics code by friending people - who you know are lare on payments - to try [and locate them]."
Ghazal also uses Google for SEM, and the dealerships occasionally run campaigns to sponsor weather, sports and news on local television and radio stations’ websites. Additionally, the operation monitors and manages its online reputation. Ghazal and his team keep an eye on Google, Yahoo and DealerRater for negative reviews. “We watch for online reviews and actively encourage our customers to write reviews on us. We have a bunch of video testimonials that our customers give us, and we post those on YouTube and link them to our website,” he said.
As the saying goes, you can’t make everyone happy, which is why the team at Express Auto keeps an eye out for negative reviews. The goal is to resolve them quickly. “We always try to engage bad reviews immediately and in a non-confrontational way. Public engagement of public criticism is critical to us,” said Ghazal. Once criticism is out there publicly, the dealership likes to remedy any issues in public as well. That way, the customer’s happy; plus, people can see that the dealership took initiative to do what was necessary to correct any issues. The Internet, he said, is “a double-edged sword.” Even though “it’s great for a lot of things, it works for us and it works against us if we are not taking care of our reputation.”
Of online reputation management, Barrett said, “Our company’s reputation is very important to me. Understanding that deals will go bad and that inevitably someone will eventually have something bad to say about our company has given me realistic expectations regarding our online reputation management. We try to encourage our customers to give us an honest review online.” He also makes a point to try to resolve any issues he happens across when monitoring his dealership’s online reputation. “In regards to negative reviews, I try to contact customers who have a legitimate complaint and try to resolve it. Some people are going to complain, and there is nothing you can do about it. I think others reading those reviews realize that and expect it to a certain extent.”
All three dealerships are actively participating in social media as well. On Facebook, Barrett Motors has about 700 fans, Express has about 200 and Regal has about 400. Regal also has a profile for “Art Flywheel,” a spokesman-like persona taken on by Lottman, who interacts with people on Facebook on behalf of the dealership; Flywheel has about 350 Facebook friends.
"We always try to engage bad reviews immediately and in a non-confrontational way. Public engagement of public criticism is critical to us ... The Internet is great for a lot of things. It works for us, and it works against us if we are not taking care of our reputation."
Similarly, Barrett is “slowly building a fan base” for his namesake company with the help of paid ads on Facebook. He’s also using it as a tool to help locate customers who are past due on payments. “When it comes to skip tracing, there are a lot of resources available to help, including Facebook,” he said, adding that he uses Accurint and MasterFiles for skip tracing as well.
Ghazal also uses social media to find customers. “We feel everyone has a trail on the Internet, and if we’re looking for someone, we try to follow a trail to find the customer—sometimes on Facebook, sometimes on MySpace and sometimes on Zaba[Search]. We use all the tools available to us for collections.”
Lottman takes a different stance on using social media as a skip-tracing tool. “You’re almost playing with a double-edged sword when you start looking at avenues like Facebook to try and track people. On one hand, it may be a good tool to do it, but on the other hand, I think you’re almost breaking kind of an ethics code by friending people – who you know are late on payments – to try [and locate them].
Regardless of how BHPH dealers are using the Internet, it has clearly made as much of an impact on their dealerships as it has on traditional retail dealerships, and the BHPH dealers who have adapted over the years are now reaping the rewards. Barrett said, “The Internet has noticeably changed on-the-lot traffic. While our sales have steadily increased over the years, our lot traffic has steadily declined. People shop from the convenience of their home or workplace … I think a lot of BHPH dealers have finally realized that the Internet is essential, even for our customer base.” To that, he added, “A lot of BHPH dealers thought for a long time that our customer base wouldn’t use the Internet to find and buy cars. It’s similar to when people thought that only the rich would ever own televisions.”
Ghazal admitted, “The Internet revolutionized our business, all aspects of it … and we seem to be using it more and more.” He added, “There’s a wide gamut [of BHPH dealers]. You’ve got moms and pops, you’ve got large dealers, and you’ve got everything in between. So different dealers use [the Internet] differently, but whoever is not using it is missing the boat because it’s here to stay.”
Vol. 8, Issue 10