Eva LaGrace runs the internet department for the Brandow Group, which averages over 80 units per month in sales through the internet. In this interview, Eva tells Todd Smith how they do it.
Q: Give us a little background on your store and tell us how you got involved retailing on the web.
Eva: We started on the internet probably about two and a half, three years ago and actually just started playing with it, tweaking it, trying to figure out how to make this thing work. We had some decent success. We were able to actually sell some cars over the internet. We know that, at the turn of the century, this is going to be the wave of the future. The dealer principal gives full support. All I have to do is say "I need it" and we get it, basically. So, I think that's probably the biggest key to our success, the dealer principal support.
Q: How did you personally get involved?
Eva: I started with the company just over fifteen months ago, just building the business, you know, doing a little bit more each month. Our best month was 94 units and typically we're selling about 80 cars a month over the internet. I have six salespeople. We do nothing but internet sales and they are the busiest piece of the sales force of the dealership, I believe. If you walk into our department, it's rocking, all the time, every day. These people aren't doing the traditional things that car salespeople are normally doing. So it's exciting and they have great enthusiasm, great energy and they just love it when things are rocking.
Q: Fantastic. How do you get your leads?
Eva: We use buying services as well as our site. Our site is under development. When I started fifteen months ago, we didn't have a website. My first priority was to just get a website up, make a presence on the web so at least I could send my consumers somewhere to say, "yes, we're a real dealership" - 90% of our sales are sight unseen. We never meet our customers. It's our full-time drivers who deliver the vehicles, go over all the paperwork and deliver the car. We needed something that my customer could go to and say, "Oh yeah, this is a real dealership with their address and their phone numbers and a little history." In the last four months, I've applied a lot more effort to enhancing it, bringing it into something that we're really excited about and proud of. It's starting to have the feel of who we are.
Q: How much of your sales and traffic do you get from your own site?
Eva: We probably sell three cars a month from our own site, but that's a lot in comparison to a year ago. We do know that we need a balance between the lead service providers and our own website. That's why we're turning the website into a one-stop place. By putting MSRP invoicing and Kelly Blue Book on there, consumers are not going to need to go anywhere else and the idea is that we're going to capture them and be able to generate our own leads, rather than depending so heavily on our lead service providers.
Q: What buying services do you use currently?
Eva: Currently we use Auto-by-Tel, AutoVantage, CarPoint, CarSmart and AutoWeb.
Q: How have you worked to build your staff?
Eva: Well, initially we went out and hired people who had no automobile experience. Our concept was, if consumers were looking for something different, they did not want the traditional automobile salesperson, so we went out and hired some people with great energy, enthusiasm and good driveambitious people. What we found is that a good strong automobile salesperson who's got those same qualities is equally critical to the team, so I currently have three people who are non-traditional salespeople and I have three people who came from the automobile industry. They are all generating about the same numbers each month. This combination of traditional and non-traditional salespeople serves us well. I really believe that the consumer is sending us a signal by avoiding the showroom. We get anywhere between 800 to 1,000 leads a month. That's a strong signal. It's a very strong signal from the consumer that, "Hey, I want to be treated differently and I'm going to take control of this." What we have found is that they will pay a fair price for the vehicle, over the internet or in the showroomif they are treated well.
Q: JD Powers released a study that said, and this is not an exact quote, but about 74% of people who go online to shop expect a different experience but once they arrived at the dealership, they were put through the same old three-ring circus. Expectations were not met.
Eva: Right, absolutely. And certainly the online shopper has a very, very high level of expectation, but what we're trying to do is over-deliver. That's always our goal. We deliver 90% of our cars to our customer's homes or offices.
Q: So they never even touch the dealership.
Eva: They never touch the dealership. We email and fax trade appraisals for them, sight unseen trade appraisals.
Q: How does that work?
Eva: Well, we have a three-page form. It's very clear that you respond honestly to this questionnaire and we are going to give you a price and we're not going to walk away from that price. You misrepresent your vehicle and we'll be back to you, we'll unwind the deal.
Q: How many have you had to "unwind"?
Eva: We've had two problems in the fifteen months that we've been doing this.
Q: Amazing.
Eva: It is amazing. One problem trade was solved when we took the car to auction and we were able to get what we put into it. After the other problem trade, we changed our trade appraisal form. The question was, "Has the car ever been in an accident?" To which the customer answered "No". We get the car back and it's obviously hit something. "Ma'am, you said on your form that it wasn't involved in an accident" and she said, "No, it wasn't. I hit a wall". We are very concise now in our questionnaire. So the consumer loves it and we're not overpaying for our used cars. If they are uncomfortable with our trade offer, we tell them, "put it on the web yourself. Do it on your own. If you want us to buy it from you, that's great, we're going to be more than happy to handle all of that for you." If they give us a hard time, we tell them to walk away from the trade and say, "Look, you can still buy your car here, but sell your car somewhere else."
Q: So you remove the trade as a barrier. What have been your customers' reactions to the way you've been selling cars?
Eva: They love it. They are so excited to be treated in an entirely different manner. First three minutes of a conversation...they're getting their quote. They know what MSRP is, they know what invoice is. We're telling them right up front what we're going to quote them on that vehicle and we'll even flip it around and get them a lease right then and there. So five minutes into the conversation, we've gathered all the information that you're looking for. It's refreshing to them, it is almost alarming coming from the automobile industry. It allows us to ask for the deposit with confidence and then we move on to the next one. And we're looking for buyers, we really try not to educate the consumer, because we've got so many leads that if my folks sat down and educated consumers, we'd be spinning our wheels all day long. We refer them back to our site in gathering their information and they have been pleasantly surprised. I sold a vehicle, I'll never forget, last summer, to an executive with Bell Atlantic who was also involved in the strike negotiations that day. He negotiated the strike and we delivered him his brand new car that evening, so he bought a car while he was negotiating a strike.
Q: How are you negotiating the test drive?
Eva: Test driving is so important, but typically, most of the people who are coming through have already driven the car. They know this vehicle and if they don't, I throw one of my drivers in the vehicle and we drive it out to them. The beauty of what I do is that I'm reaching territories that we never sold cars to before.
Q: How many drivers do you have?
Eva: I have four full-time drivers who do nothing but drive for us. They do dealer trades and they do deliveries of these vehicles.
Q: What have been the biggest hurdles involved in your internet effort so far?
Eva: I think my biggest would be trustworthy lead service providers.
Q: Why is that?
Eva: We've been double-billed for the same name. There's a lot of unethical practices that are going on out there. Theoretically, you've got a territory, but lo and behold, leads sometimes go to two dealers. That's the disappointment in the business. I mean, these people who are driving for the same business, trying to make this cyberworld something so exciting and you find that you are being taken advantage of - terribly. I had one service that was double-billing me, I got a $9,400 rebate from that company - $9,400 for double leads. Had I not taken the time to audit three months worth of bills, I would never have known. That's a piece of management that I hadn't even really thought about until one evening I was driving home and one bill seemed really high. Go back through and double check them for a couple months. Then you start looking at all these services differently and you really have to stay on top of them. A year ago they were advertising or they were putting their banners on automobile pages. Today, you can go into Toys-R-Us and you're going to see a CarPoint ad. So, okay, the woman who was buying a Super Nintendo for her kid to be delivered to the house, also clicked into CarPoint and they did what they were supposed to do and gauged the consumer, but generated a lead that was six months too early. So my folks are making calls and spinning in circles because these people aren't ready to buy yet. I have one gal who I have hired for the summer who's going in behind my salespeople finding out who is a real buyer and who's not. Sixty percent are not in our first month of data - 60% of those folks are not buying.
Q: Do you have a system to tee up those "future" leads?
Eva: I have a gal who is at home with her children full-time, she happens to be a neighbor and she keeps a database for me. All the customers' names, their email addresses, what they are looking for, any notes that the salesperson puts on at the end of their first day, so that if they're not ready to buy for six months she'll put that in there and we can pull it back up. We also have this huge database now where if today we got an extra $750 on Grand Cherokees, we can put together a letter to send out to all my Grand Cherokee customers of the last 90 days saying, "Hey, we've got an extra $750 in dealer cash, it's going to you, buy it."
Q: Tell me about some of the features on your site?
Eva: I believe that the Kelly Blue Book adds a lot to our site. It tells our customers that we want to equip them with all the information.
Q: And it shows them you're honest.
Eva: We're upfront and honest. The fact that MSRP and invoice are there for all to see. Something else that I'm very excited about is the development of individual webpages for our consumers. That's going to be real exciting. They're going to be able to go on, put in their password, they're going to have to go into my site and check out my site and check out the coupons and check out all the specials that are going on, but then they'll get to go right into their own webpage and check to see what needs to be serviced. They'll be able to email their service writer and tell him that they want to bring it in and have it detailed or cleaned or the oil changed. They'll be able to check the Kelly Blue Book on their car. My hopes are that it generates more traffic to my site and starts branching out on the internet and develops a loyal customer base. So that the guy I sold in New Jersey, which is 125 miles away from me
Q: He's telling his friends, "Hey look, check out my new car I bought online"
Eva: Yeah. "Here's my picture on the webpage, I've got my own page, look at this."
Q: "This is cool."
Eva: "This is cool."
Q: My last questionwhat are your future plans?
Eva: We will continue to grow. I see that the servicing piece is the piece that we're all starting to recognize as being very big and that certainly is our goal, to develop that over the next six months. The more customers that get comfortable and hear about their friends and relatives buying car this way, the old, "you tell a friend who tells a friend who tells a friend" that, you know, this is just growing by leaps and bounds. If we can sell 80 cars a month within a twelve month period of time, hot dog, that's pretty awesome. We basically just opened up another franchise. If you go back in my pay plan that was developed over coffee one morning, our goal was 30 cars a month. We did that in the first 30 days. They should have known better.
Q: And your ROI, your Return on Investment so far?
Eva: We're working on that. Certainly we have a profit at the end of every month and because we're so excited to be in it, you have to test all of these different lead providers. It is our goal in the next thirty days really to be using two service providers, three of them are not doing what they need to do, so at that point you're taking a very lean machine and able to produce a lot of gross profit for the company.
Q: I bet you will be able to.