Digital Dealer Q&A
Jerry Winder
Director of Internet Development
The Larry H. Miller Group
What is your background, Jerry?
Twenty years in the computer business, mostly mainframe companies. Then I went to work for Oracle Corporation, a database company. I have been with Larry Miller for three years.
In what capacity were you hired at the Miller group?
To run the Internet functions for all of Larry's companies, automotive, sports and entertainment.
How much of your time do you spend on the automotive side?
Probably 60% automotive, 40% sports and entertainment.
How long has the Miller group been online in their dealerships?
We first came on about two years ago with individual Web pages for each of our stores.
How do you generate your leads for the Internet departments of your dealerships?
We use lead services.
What are some of the lead services that you use?
The ones that we have currently used are AutoByTel and Car Point. We have quite a bit of Auto Web. We have Stone Age. Also Autovantage.
How do you generate traffic to your dealership web sites?
Up to now we have done a pretty poor job of it. Other than just leaking through the manufacturers or registering through certain sites, we just haven't done a lot of it. We have done some advertising. Some of the stores will send out all their literature with the Web site URL on it.
We are undergoing a major change in that direction right now.
What are you doing to change that?
A whole new direction with an emphasis on the push/pull strategy. You push customers to the Web as much as you can and then have the Web pull them into the store.
So what is the difference from a year ago and what it is going to be six months from now? What are you going to be doing to push the people to your Web sites?
The Web sites will become very, very visible. All of our Web sites will encapsulate under the Larry Miller Group. They will have total search capability. We will advertise and say, "We have got 800 to 1000 cars. You can search."
That will be included in all advertising?
Absolutely.
So you are going to try to make it that anybody who comes across anything having to do with Larry H. Miller will be presented an opportunity to visit the automotive Web site?
Absolutely. Keep in mind that we also have the sports and entertainment side. People will come to check out the Delta Center schedule, find out when the next Jazz game is, buy tickets, stuff like that. If they enter through the LHM portal, they will be exposed to car opportunities as well.
Beautiful. So you will be getting the people who are not only in the market today, but those who will be at some point, but not necessarily right now.
Right. We also have our Fan stores, which is sports apparel. We have k-jazz television. All of these Web sites are being re-done as we speak to get a very cohesive look and feel. It makes us look like we are one company and then again, everything points every other direction so that hopefully the entire group benefits from whatever they are shopping for today. They get exposed to a lot more than just what they are shopping for.
Now that is great in Salt Lake City and in Utah, of course, but what about your stores in Phoenix?
Well, Fans has 29 stores throughout the west.
Now tell me what Fans is.
It is a sporting apparel store. Jerseys, T-shirts, that type of thing. It is a very successful chain. We are in Arizona, California, Colorado, Utah and Idaho. It maps fairly well with what dealerships we have already. As far as the other areas of the Web, the rule of the Web is alliances. We have got to be finding what works today. What works today doesn't necessarily work tomorrow. The buying service is kind of proving that out. We are always having to stay on our toes, looking for the next opportunity to get exposure.
Do you have a consistent process in your dealerships as far as handling the Internet customers?
It is not consistent today. It will be. We have pretty much let each store handle it the way they have wanted to. Some of them are very good and some of them are not very good at it.
Jerry, you now have two years worth of experience to try to decide what it is you want to do. Can you share with me some of the processes that are going to be put into each dealership to handle the Internet customer?
First of all, the No. 1 process, the thing that is the toughest about dealing with an Internet customer is deciding if they are real or not. Two is understanding that this person is out there and then finding out if they are willing to engage over the phone, face-to-face, or are they hiding behind a keyboard and a screen. We are going to have to deal with them virtually anonymously. That is a very difficult thing to deal with because we really don't have any control over that at all. The goal is to get it back to as much of a traditional model of buying and selling a car as possible, as quickly as possible. Which means that as soon as they request something from us we immediately send them back a response thanking them, telling them that we are on it and we will be back to them in a specified period of time which will hopefully be an hour or less. Use of auto-reply is critical for us.
Auto responder?
Auto responder. Providing the capability of tracking the leadshow the follow-up has been, are they real, are they not? A process of seeing if we can normalize that transaction as quickly as possible into a face-to-face deal.
So am I to take it that each store will have its own Internet Sales Manager?
Right now that is the plan.
They work with the services and they handle all of the leads.
Right now we know that Lithia and a couple of others have gone to a more centralized process. We watch them to see how that goes. It certainly has crossed our mind.
We try to give the General Managers as much autonomy as possible.
What have been the biggest hurdles so far in putting this all together, Jerry?
The biggest hurdles are just putting a design, a process, everything together that would be fairly universal across 36 different stores.
At 36 different locations?
Yes. And to add to that challenge, you have 36 different Web sites, but we are one group. How do you put together one design that is maintainable? We know why people go to Web sites. Number one is the content. Number two is the timeliness of the content. Then links. Broken links turn people off, they don't come back. It looks shabby. Our goal is to maintain the quality of the Web site, to provide a design that will help us maintain the quality of the Web site, and make it a good experience each time the user comes in. It takes some doing. That has been a challenge.
It is almost a full time job, isn't it?
(Laughter) It is, yes. But it is a heck of a lot of fun! You couldn't be in a more dynamic area than this. I'll tell you the other biggest challenge. Cutting through the hype. There is so much hype on the 'Net right now and so much "gee whiz" technology that people will come and see once but they won't come back to. Cutting through that and getting to the real good business stuff that will keep people interested and keep them coming back, that is a big challenge. I get 10 to 15 calls a week on the next great idea on how someone is going to help us sell more cars. Another big challenge that we have is, you will get an Internet manager calling from one of the stores and say, "hey we did 15 or 20 deals over the net this month." You look at what they did last year and the year before and the year before and the fact is that they haven't done, incrementally, any new cars. All that has changed is, customers now go to the Internet instead of going to the newspaper.
No additional cars are actually being sold.
That's right. That is, in my mind, the farce of the lead generation stuff. We get told, "Hey, we generated this many leads for you and you sold this many," but our incremental sales are not appreciably up. Quite frankly, our car volume is up, but we can not tag it specifically to the Internet. We tag it to a lot of other good business decisions made along the way.
But you always have to keep in mind that even if those sales did not incrementally increase what you sold, if you weren't online, you might have lost them.
True. I'm not sure that the technology is there yet or if the model is there yet... if we understand it well enough as an industry to know how to drive incremental sales.
Where do you think Larry H. Miller Automotive will be two or three years down the road as far as the Internet is concerned?
I think we will be very, very visible. I think we will be doing business on the 'Net the way a customer wants to do business on the 'Net. We are not going to let technology drive us. We are going to let good business reasons drive us on the 'Net. We have traditionally been very conservative when we approach technologies like this. I think much of it is very disruptive technology, as opposed to an enabling technology. I think it has taken a lot of peoples' eyes off the ball and we are focusing very hard on making sure that we are meeting the business needs. I've got some wonderful managers that make sure that we are unfazed by pure technology and make sure that we keep our eye on the ball. The statement that I would make to you on that is, I couldn't tell you a year from now where we will be on the 'Net because the technology on a "'Net year" is 70 days right now. I can tell you that we will probably not bebleeding edge, we may not even be leading edge, but we will be visible and we will be doing business the way that a customer would like to do business with us. That is the goal.
What are you seeing and what are you taking into consideration when you are trying to plan where you are going to take this?
Again, alliances and peoples' view of the web in general are key. I think one of the biggest concerns that we have is who is going to be our real competitor down the road? Is it going to be a traditional competitor or are we going to see somebody come up like a Microsoft, who all of a sudden just because of sheer mind share, begins to occupy a fair amount of the car business? Alliances with manufacturerscan they drive directly to the manufacturer? Will we lose any clout there and end up being just a distribution facility? That is the kind of stuff that we are concerned about. But at the same time, it is also an opportunity. It comes with the diversity of our group, as I mentioned to you before. Can we drive additional fence sitters, car buying people, to LHM because they came to the Delta Center site, or because they came to the Fans site? So what we are really looking at is putting a strategy together from a very global perspective that will meet more of the community need, rather then specifically a car-buying need. I think that is where you will see the Web going. We need a lot more community-driven stuff. It creates groups of people who electronically can become part of the community. Cobra lovers, which Larry is one, '57 T-Bird lovers, things like that. Sponsor that kind of a theme in order to get some mind share out there. It is just huge. It is just absolutely gigantic. And it is a heck of a lot of fun.
What, if anything else, would you like to add that you think might benefit America's franchise automobile dealers as they ponder the Internet?
Be careful of the hype. I came from a company which was absolutely at the forefront of great technology. They drove a lot of Internet business. We saw a lot of companies arise and fall like the seasons. Why do people buy cars? What is the process in which they buy cars? Get technology to meet that need and don't get caught up in the "gee whiz" technology stuff. As soon as you get sucked into the technology maze, you are in trouble. I sold computers, high-end computers, for 16 years of my life and it didn't matter how great the technology was. It just didn't matter. It always came down to two people sitting down across a table, doing a deal. It came down to relationships and it came down to professionalism. It came down to honesty and that is what drove the deal. Nobody can convince me that that has changed.
