In a recent survey, 66% of all future new vehicle buyers stated that they would use the Internet during their next purchase. Since only a third of all dealers have an Internet site today, there are many dealers that will be left out in the cold. How do you get started on the Internet without committing years of your time and thousands of dollars?
I like to think of the Internet in three easy steps:
Step 1 - Have a corporate
presence on the Internet.
This would be just a simple site that has your dealership's name, location, hours of operation, franchises that you carry and an e-mail address for customers to contact you for more information. An e-mail account would cost you between $9.95 a month and $19.95 a month. This simple site should cost between $1,000 - $2,000 to setup and about $25 a month to keep on a server. Many local companies can perform this service for you or you can create the site yourself, by using one of the many products available like Microsoft's FrontPage. When selecting a provider, ask how much it will cost if you should need to change your company information. Try to keep the site simple and timeless (in other words, don't put specials that expire or seasonal information that will require regular updates until you're ready to commit to continual support of the site.)
Step 2 - Provide vehicle inventory information on the Internet.
This is the next step in the Internet process - letting customers browse your inventory and view information about vehicles that you have in stock. The cost of setting this up is about the same as step one, but the monthly maintenance cost is much greater. NADA was full of exhibitors that provide this service including most of the major computer vendors and some manufacturers. The big question to ask is, "How will my inventory get on the Internet and who will update and purify it daily?" This requires your Internet provider to have the technology to access your in-house computer system and "download" the inventory to their site. Someone at the dealership needs to be responsible for ensuring that this process is working and provide additional information when necessary that might be omitted from the in-house record such as color, cylinders, transmission type, etc.
Step 3 - Use the Internet to
perform the sales transaction.
This is the greatest commitment that you can make to Internet marketing, often without immediate returns on your monthly investment. This means setting up an Internet selling process at your dealership that operates outside of your normal payplans and document flow. According to Pete Ellis of Auto-by-Tel, the selling costs of an Internet sale can be less than $50 per unit compared to NADA estimates of over $800 per unit. For a simple exercise determine your commission, advertising and marketing costs for your existing retail sales for last month. This will probably be close to the $800 per unit estimated by NADA. Now take 40% of your sales (if you sold 200 retail - that's 80 units.) Multiply 80 units by $750 dollars saved by using an Internet department - which is $60,000 a month! This might be a system worth investigating. During a recent CFO Roundtable discussion sponsored by Auto Team America, industry leaders agreed that using the Internet allows a lower gross profit margin since their costs are less. Regardless of your level of commitment, I think the time to get started is now - at least with step one.