Profitable, Professional Internet Solutions for Automotive Retailers
By Audrey Ellen Brodie
PART ONE: To Cybersell or Not, That is the Question
The Internet revolutiondot-coms everywhereconference after conference of the state-of-the-art, state-of-the-minutedon't sneeze because tomorrow it's a whole different conceptis your head (and bank account) spinning? How does a dealership target this growing customer market and advertising tool in a way to ensure the proper return on investment?
Let's approach this revolution with a different perspective. Let's term it an "evolution" and make each of your expenditures in a strategic fashion to provide return on investment plus generate the cash to re-invest as you see fit. This process makes more sense than spending $40,000 for computers, business development centers (which often have startup price tags of over $100,000), staffing, Web sites.the shopping list and "ya gotta have" stuff never ends!
After 11 years of serving the educational training needs of automotive retailers, we too have participated in the growth of the Internet's impact on automotive retailing during the last few years. There are three specific factions that are evolving as profit centers for dealerships. Be sure to integrate all three into your existing business and marketing plans: cybersales, showroom selling to the Internet savvy customer and Web-based marketing and advertising.
This segment of our two-part series will focus on assisting you in determining how active you should become in cybersales.and how to get started.
Cybersales
In 1998, 6% of the total vehicles retailed were sold directly on the Internet. In 1999 the number rose to 10%. Projections for 2001 are 20% of the total. (Statistics from Forbes Magazine). Initially, the Internet was termed a niche market that a dealer could choose to participate in. With potentially one/fifth of your total sales coming through this technology, few can afford to ignore this medium now.
To help speed your decision-making as to whether you should jump in the Internet sales race or not, just recall how only 15 years ago Chrysler had the only minivan, and Jeep was a niche vehicle only the sports-minded or young would purchase. Now look at the market. Would you have guessed 70% of total industry sales would be trucksever? I rest my case. Start studying the Internet!
Be careful not to relegate any Internet projects to the slowest showroom salesperson. Internet sales require stronger sales skills than showroom sales. It is a value sale with great amounts of third party validation and follow-up required.
The other key Internet sales strategies you will want to convey to your staff include:
Response time is critical. Auto-responders are a great tool for an initial e-mail and immediate customer contact (sometimes before they even leave your site), but the most ideal response comes from your staff within a few hours.
Customers on the Internet expect your first communication to be an e-mailNOT the telephone. If they wanted to call you, they would have done that in the first place. That is why the autoresponder is so important.
Prepare the e-mail autoresponder message to give the customer a reason to pursue your dealership as a place to purchase versus all the other purchase opportunities. Be sure to thank them for their request and describe the next steps in the process (you need to speak to them via phone), then promote your dealership as customer-friendly and hassle-free. This becomes nothing more than our usual "why buy from us" statements we have used over the decades.
Internet sales are NOT "tissue or less" sales opportunities. Most industry statistics indicate these customers are willing to pay a fair gross profit for proper, professional services. Proof is the buying advice given by Edmunds.com. Have your Internet team quote Edmunds.com frequently, since they advise customers that a "fair deal is 3% over dealer invoice." In many cases, that may represent a pay raise from showroom grosses!
Therefore, be sure your Internet sales team is armed with a detailed pricing strategy, by model, so they are empowered to quote prices. Empowering cybersalespeople to quote price has frightened many sales managers, but given the proper guidelines, shouldn't any good salesperson know what they can charge to close a sale?
Internet closing ratios are as difficult to monitor as showroom closing ratios. What do you want to hear for an answer? Hasn't this historically been the statistical strategy in the showroom? A 15% to 20% closing ratio for qualified Internet leads is a number that reflects a competent online selling team.
What is a "qualified" Internet lead? We feel it is a customer who is in the market to purchase within the next three to six months and has completed a purchase request through your lead generation service or through your Web site.
Most importantly, don't lose site of the fact that the Internet sale is a sale. The people you put in charge of answering the e-mail requests must be competent closers. You still must ask for the customer's business at a fair gross profit. Don't downplay the importance of knowing the approach-qualifying-demonstrating-negotiating-closing steps you use in the showroom.
Salespeople who couldn't close in the showroom should not be relegated to the Internet department. Those unable to sell should assume customer service roles versus sales positions.
The steps to the sale for Internet purchasers are the same steps we use in the showroom, using a slightly different process and a different medium to communicate.
Don't be afraid to dive into this market. If you have ever sold a vehicle on the phone, Internet sales are very similar to that process. After the first e-mail communication, you will find the customer is anxious to establish a first-hand telephone relationship. If the customer objects to a phone contact they will respond to the first e-mail asking for e-mail only correspondence.
From there it is a phone sale process consisting of selling the convenience of this process, discussing the customer's needs and providing them with all the information they need to have the confidence to purchase from you. Then follow up by e-mailing or faxing any additional information that may be requested. Credit applications can be faxed back and forth. Paperwork can be sent fed-ex or faxed for review prior to delivery.
Next time we will review how the Internet is having an impact on your showroom sales process and how to save on costly direct mail and newspaper advertising by communicating directly with your customer.using, of course, the Internet!
Audrey Ellen Brodie is President of First Automotive Consulting & Training Services, an automotive dealership performance management company specializing in the Internet and management education. abrodie@dealeronline.com
