Granger Motors is a Ford & Dodge dealer in Granger, Iowa. Tim Hommer has been in the car business since 1979. He has worked his way from bookkeeper through all the different parts of dealership operations. In 1988 Tim became the general manager and has been there ever since. The dealerships' catch phrase is that they are "Iowa's Premier Digital Dealer" and they are striving to grow their business using the Internet. Granger Motors isn't in the center of a "wired" town and they aren't on the end of a metropolitan city like New York, yet they are consistently selling cars using their web site and the buying services. Why? Because they have dedicated themselves to succeeding online and have laid a plan of action that will carry them into the future. Commitment is the first step in success online. Their web site address is at http://www.grangermotors.com.
Q: How long has your dealership been online?
Tim: One year.
Q: And how long did it actually take you to get set up and get going online?
Tim: About three weeks.
Q: What impact has it had on your dealership?
Tim: We have an internet sales department and that's changed the look and the feel of how things are done and also somewhat how customers are handled. Not necessarily just internet customers, but in some cases, people who have not shopped us through the internet, so it's made us less reluctant to deal with other customers in the same manner. Customers come in and they have the books and know the costs, the "clipboard" customers. Those people were somewhat even shunned a bit; they were looked down on. Now, because of the internet, where we are dealing with electronic clipboard customers on a daily basis, it makes it a lot easier to deal with even traditional clipboard customers that come in because now we have a method for handling them.
Q: So it changed the way you sold cars?
Tim: Not overall, but it changed the way we dealt with our clipboard customers. Now we know that a pretty good share of our customers know our dealer costs and now, it's not such a problem, especially dealing with trade-ins. In fact, we go to a website now and pull down the wholesale cost of their car and say, this isn't Granger Motors saying what the car is worth, it's Kelley Blue Book saying what the car is worth. And internet shoppers are a lot more apt to believe because the computer said that that's the case and subsequently, so are the traditional clipboard customers.
Q: What type of budget does it take to be successful online?
Tim: We're spending between four and six thousand dollars a month now.
Q: And what does that get you?
Tim: We have buying services, AutoByTel and CarPoint are probably our two biggest ones. We signed up with eight total. It also covers our website, our T-1 connections and those kinds of things.
Q: Have you seen a return on your investment so far?
Tim: We're getting there. Again, we've been online for almost a year, but we've only really been dealing with web customers since the middle of December, so we've got about two or two and a half months in the project. We've been on the web for a year, but we've only been a digital dealer for two months.
Q: What has been your biggest hurdle to being successful online so far?
Tim: Salespeople. It's a whole new selling process, a whole new level of fear and once they decide to do it, it's a huge commitment of time and it's hard to find somebody who's actually willing to commit. It changes the salesperson's job from a one-on-one "pick an up" person to a lot more secretarial. They're answering emails two hours a day, they're typing, they're sending invoices, they're doing a lot more clerical stuff trying to get Joe Internet in the door. You don't do that by saying, "Well, come on in, Joe." We had about 227 leads in January. Someone has to respond to every one in a timely manner. It's a problem, especially when you've got eight different buying services you're trying to figure out. It's such a learning process, you can't believe it, but in our first month we got a pile of papers and I have no idea if they've come in or who I talked to and I don't even know which leads are good leads and which are bad leads. It changes the salesperson's job so much. In our store we don't really make the sales staff follow-up and do all the things that salespeople are supposed to do. I've got ten salespeople and we sell 220 cars a month, so they're on average selling 22 cars a month. I don't have to worry about them selling cars, that's what they're here for, but generally in the slow time of the day you can go up and find two or three or four salespeople sitting there, shooting the breeze. Our internet salespeople, they're either with a customer or they're sitting at their desk trying to wade through their paperwork.
Q: Have you had more success by taking one of your good sales guys or by taking a fresh young person and putting them in there?
Tim: At this point I don't think this would work with somebody who hadn't sold cars. The bottom line is you still have to sell cars. In fact, in January we did not have success, which was our first full month, because the internet guys became totally 100% clerical. They forgot they're supposed to sell cars. In fact, we're now meeting weekly with them and asking, "Who have you talked to? This is your job to get them in and once you get them in you've got to sell cars." We're still so much in the learning process. I think we'll sell 21 or 22 cars on the internet this month and I think that's a success. We need to sell 15 cars to make it worthwhile. To make it pay for itself, probably 7 or 8 cars, but I'm not here to break even, I'm here to make money.
Q: What other hurdles have you had to overcome?
Tim: Everything we're doing is new, so everything is a learning process. The whole dealership. There's no manual out there that says "this is how you should train the salespeople and this is the step the salespeople need to do. This is how you should set up your dealership, this is how you should do this and this is how you should do that." There's no manual because there's no pattern of successful dealers to look at and say this is how you do it. If you want to be a Dodge dealer, Dodge has a manual that says this is how you be a Dodge dealer and this is what you need to do. In our accounting department we have a manual and basically this is how you set up your accounting. McDonald's has a manual and they say this is how you run your McDonald's, this is how you set it up and this is how you do this and this. But the internet departments, even if somebody's been in it a year, year and a half, they're still experimenting and they're very unwilling to share their successes. If it took me two years to figure it out, I'm sure not gonna tell everybody. In fact, I had a Cadillac dealer in town call me and he said, "What are you doing and how are you doing this and how is this working and should we do this?" and I said, "I'm pretty reluctant to discuss this with you." We've invested thousands of dollars at this point trying to figure out how to get to where we are today.
Q: What have you done to market your website?
Tim: We've worked very hard to get our used cars in as many different sites as we can. We feature prominently our web address in our major advertising, on our radio ads and in our newspaper ads. There's always a boost just after we talk about our website on the radio. We get a big boost in the number of visits.
Q: How far away do people really travel to buy a car from you?
Tim: Actually they're traveling further than we're comfortable selling, because it's very important for us to satisfy a customer. I think once you reach - I used to think it was like 50 miles, but I think it's really about 40 miles - it's harder to satisfy a customer who buys further than 40 miles away, because now they have to drive an hour to get your service.
Q: But you see you're pulling a lot of people from outside that now?
Tim: 100 miles. In fact, we asked to be eliminated from some of the leads that were greater than 60 and 70 miles away.
Q: How many visitors are you getting a month?
Tim: Well, I haven't looked at that for a while. Let me just pull that up. From Feb. 1-10, we had 799 pages used and 554 user sessions in 10 days, so I would say we're getting 1500 users a month to our website.
Q: Did you put your inventory online?
Tim: We had our used on, we're in the process of putting our new on.
Q: What are the biggest improvements you've made to your website in the last couple months?
Tim: We've put frames in and some of those kinds of things, freshened it up. We put some used car specials in. Basically we've completely redesigned it. After we became a digital dealer, we redesigned it. It's easier to get places and easier to find information.
Q: How do you see the internet affecting your dealership over this next year?
Tim: I think it will end up raising our units about 20%, we'll sell about 20% more cars because of the internet. I think we get a shot at customers that we would not have gotten a shot at had we not been an internet dealer.
Q: What are some of your future internet plans?
Tim: I think we'll probably expand our internet sales staff to three or four. Right now I've got two full time and two part time and when I make them full time I'll put a computer on their desks so they can do their own emails and pull their own leads and do those kind of things, but one person can't handle 100 internet leads a month. I think one person can handle maybe 40 or 50 internet leads a month. So we either have to weed the companies down to where we're only getting 100 internet leads a month, or we have to expand the sales force. I don't know why we would want to lower that down, but I found I've got one salesman who I only gave 20 leads to last month and he sold 5 cars off his 20 leads. People that were weeding through 100, with two of them together, only sold three cars together. We had two people that each got 100 leads and between the two of them they sold three cars.
Q: If you were talking to a dealer who has no internet access, nothing yet, hasn't been online, what would be some of your suggestions?
Tim: Well, I would ask, "What are you waiting for?" I would say search out a web designer who can do something other than a cookie cutter. Get listed in the web searches. You need to have your own URL, it needs to be easy. An example, I guess, would be a dealer in Des Moines, Stuhansons.comI can never find the thing, he's got an apostrophe "S" in his name. If you're looking for his name by my typing it in, you would never ever find it, you would never ever guess it had an apostrophe in it I think.
Q: Well, I guess I'll see you at the WD&S Auto Retailing on the Web conference in Las Vegas in May.
Tim: I'll be there.
Todd L. Smith is the President and CEO of Target Marketing Group, the leading automotive Internet solutions provider. He is the publisher of the manual "Automotive Retailing on the Internet." Todd works with OEMs, dealership groups, and individual dealerships to create Internet strategies. Visit Target Marketing Group's website at www.tmg-online.com. If you have specific questions or require more information about this subject, please check the appropriate box on the reader response form on page 3.# tsmith@dealeronline.com.