Digital Dealer
Digital Dealer Q&A
Gilbert Chavez, General Manager, Burt Automotive Network, Denver, CO
- · 8 stores
- · 14 lines
- · Internet sales, 280 units per month (average)
- · Winner Automotive News/Ziff Davis - Most Innovative Web site, Best Interactivity Category
Gilbert, what's your background in the automobile business?
Well, actually my background is in the military. I came out of the Army in 1995 as an infantry officer and began selling on the floor at a Ford store as a green pea. My cubicle was across the hallway from the lady who was doing secondary finance. She would get a lead in on a fax and then call it up, do a credit app and give it to a secondary finance manager. At some point we signed up with Autobytel and both leads were coming in on the same fax. She went on vacation and she asked me if I would work the secondary leads and handle Autobytel for her.
And you didn't even know what that was at the time.
I had no clue. I had some experience with computers and e-mail in the Army, but that's about it. So it progressed from there and eventually I went to upper management and said, "Hey, we need to e-mail these people" and they said, "What?" So I brought in my own PC and I had like a 9,600 baud modem, so the higher-ups and I made a secret, under-the-table deal to put a 14.4 modem in for me. Then I needed another phone line so I could be on the phone and the Internet with my customers at the same time. And then
You kind of nickled and dimed them into it.
Yes, and then the selling process developed from there. I'd be on the phone and on the Internet, I would take a deal to a manager and he'd pencil me back. Eventually it evolved to where I was given more authority to the point where I was managing my own deals and giving quotes and working payments from leases and regular conventional loans and getting things approved. Then I brought in another guy and then another guy until now I have a 25-person department.
And in reality, you just kind of backed into it.
Yes. I've been with Burt for six years and we've been on the Internet since 1995 and if we weren't the first dealer group with a Web site, we were probably the first or second. Today, I sit on a couple of boards; I sit on the Steering Committee for Toyota and I'm on the Advisory Board for Cars.com, but even today it takes a lot for dealers, even guys within our group, to realize just what an impact the Internet is going to have on selling cars, the impact it's having on us today and how it's really going to severely impact the future of how we do business.
What are you doing today to generate your leads?
We're no longer with Autobytel. What we've done is we've gone through a very intense process of evaluating leads. Back then, the online buying services were saying, "I can get you 100 leads a month, I can get you 200 leads a month." But what we discovered early on is that it doesn't matter the number, it's the quality. I would rather have 25 quality leads than 200 junk leads and we've had to discontinue with several online buying services just because of that. We were paying money for junk leads.
What are some of the services which you currently use?
The buying services that we are currently with are cars.com, through our local paper, the Denver Post, CarPoint which is through Microsoft, and Carsmart. Autovantage, we're probably gonna start with them in the next couple of weeks. We're going to be doing greenlight.com and then, of course, the factory sites. But burt.com is our mother lode.
What percentage of leads are generated through your own site and what percentage are generated through these services you've mentioned? It's about 50/50.
How do you generate traffic to your burt.com site?
Our URL is on everything. Business cards, invoices at our parts department, all of our print ads, we've had special television commercials just for burt.com, we've had bus benches throughout the city with burt.com on them.
So you incorporate it in everything you're already doing plus you promote it on it's own.
Yes and we're going to do that a lot more in the future, too.
Gilbert, give me a ballpark idea of how many leads you get in a month.
We get anywhere from 1,000 to 1,500. It fluctuates every month. Then there was a point where we were getting over 2,000, but then we cleaned it up.
Going for higher quality?
Yes, we're going for the quality and we've purchased two new dealerships within the last year, so our leads have increased just because of the new lines we have. Plus the manufacturers have been sending us some leads.
Take me through your sales process from the moment you receive a lead.
Basically, it's a pretty simple process. We have all of our sources come to one e-mail address, autos@burt.com and I have an administrator who brings those e-mails in and she screens them real quick. She'll make sure it's not barneyrubble@pebblesroad or a bogus lead that comes in. Then I have managers delegated for every brand, so if it's a Ford lead it goes to the Ford guy. Then he or she immediately responds to the customer's request and then follows it up with an e-mail.
So when they immediately respond do you mean they call them?
The first response is e-mail and then the second is a phone call. The customer sometimes will request, "call me" or "e-mail me" and we do what they ask.
Alright, so let's say the customer responds back that they're interested, then what?
Well, for example, if the customer on the request is saying, "I want a $2000 Expedition, $1000 down, I want to do a 36-mo lease, I want to have 15,000 miles a year and I have a '97 Explorer that I want to trade in," we give them everything upfront, we don't hide anything. But we have to see the trade-in to give them a real number. They have to come in.
Do you ever go to them?
We do. It depends on what the customer wants. If he needs to have somebody go pick his car up and bring it in and have it appraised, we do that as well.
Okay, so the trade-in is appraised, they want to do business. What's next?
Everything is taken care of by one guy, he does everything from A to Z. He does all the financing, does all the quotes, he does everything except the appraisal on the trade.
This guy works under you?
He works under me. And the delivery takes about 30 minutes and that's just to sign the paperwork, do the walk-around and show how all the bells and whistles work and stuff like that.
Have you had many people want you to deliver the car to them?
Yes. We've delivered everywhere, from Cheyenne, down to Pueblo, over to Vail. We've delivered them everywhere. We've had people fly in from out of state, we pick 'em up at our airport, we do the paperwork on the dashboard and they drive it home. We've done just about anything you can imagine in terms of delivery.
How do you find that your Internet buyers differ from showroom buyers?
Well, before there was a distinct line. Today, that line has blurred so much that we're having a new phenomenon coming into the businesses called the offline buyer, where somebody is going on the internet, doing all their research, comparing prices and payments and everything and then they're walking into the dealership loaded for bear. They have the printouts or they have the competition's printouts. So that line has really blurred and I think, very rarely are we finding a consumer who walks into a showroom who does not at least have some information from the credit union, from their bank about pricing, at least the options and the different things they can get on the vehicle. So I think their expectations are pretty high in terms of they want the sales representatives to be as well-versed on the vehicle as they are.
What difference do you see between the Internet buyers and the showroom buyers in regards to closing ratios?
Well, our closing ratio is 35% online. That is real numbers. A lot of people that will blow smoke up your dress and say, "We've got 50% closing ratio" or whatever. We track it in a lot of different ways. We track it per online buying service, we track it from burt.com. We also have what we call "Burt-related." We have significant repeat referrals.
Is that included in the 35%?
That's included.
Now what about the difference in closing ratio between the traffic to your Burt site and the buying services?
It's significantly greater for burt.com. Significantly greater.
You mentioned that the lines are blurring and I agree, so how is Burt integrating the Internet department with the showroom sales force?
The dealerships have their own selling systems within their particular dealership and a lot of the manufacturers have brought in Internet-type training to the dealership, to the floor sales guys. We do address at sales meetings within our stores, "This is an internet buyer, if he comes loaded from the internet with copies of the invoices, you have to educate them on what the real invoice is" and things like that. We have kiosks on all of our showroom floors so customers can compare and shop right there online. As we speak, I'm developing a training program to bring it onto the showroom floors.
What about commission? How do you determine who gets what?
That was kind of a heated subject because sometimes leads are duplicated. We'll have the same guy send in something through burt.com, through Carpoint, through Carsmart, every online buying service and it is the same guy and the same car. Since 1939, we've had a policy in our stores that's called a Burt Greeting. We do it online and they do it on the showroom floor when they greet the customer, "Welcome to Burt, my name is so-and-so, what brings you to Burt today? Sales, service, parts and have you worked with somebody here at Burt before?" If that salesman does not do our greeting then he's subject to be dismissed.
What about commmission?
Our Internet staff and our floor sales staff make the same commission.
What have been the biggest hurdles so far in putting this all together over the last six years?
I guess the biggest hurdle has been in convincing our senior managers that this is a viable way of selling cars and that we no longer can go the status quo of the way the car business has been conducted over the last hundred years. It's changing the way we sell cars. It's consumer-driven and with the way technology is evolving every day, this is something that you have to buy into- heart, mind and soul-or we're going to be left behind.
Is your department profitable and how long has it been so?
We have been profitable from day one. And we're very profitable. We've done a very good jobour last year was a great year.
You sell an average of 280 units per month. How does that compare to a year ago?
Well, last year we were probably averaging 50-70 plus or minus.
So you've increased it over fourfold?
Yes. And the year before that we were doing only about 5 a month. Those first couple of years, '95, '96 and '97 we were really struggling.
What do you think you'll be doing a year from now, per month?
Hopefully we're going to be doing 350-400.
Would you have thought two years ago you'd be doing 280 now?
No. You should have seen me the first day we went over 100. I was going crazy, because we had come close-the year before we had done 96 and we had just barely missed 100 and that was our high for the year and we were really disappointed. We didn't know what it was going to take to take us over that next threshold. So I researched what we were doing right, what we were doing wrong and basically, what we found out was we had to get back to the fundamentalse-mail response time and follow-up. A lot of the things, although online, are classical to selling cars; customer service, follow-up with your customers, getting back to them right away with their questions, having the right answers when you do get ahold of them, no BS. I think the way the internet is moving and as fast as it's moving, pretty soon the Internet is going to be a part of your television. You can surf it from your couch, real time. Who knows what it's going to be like then?
Do you have any involvement in any of the other departments' forays into the Internet within your dealership group?
We established an auto help center that customers can call and they can get virtually any car question answered. If you want to know the guidelines about leasing, if you have a problem with one of our dealerships, if you had a problem with a dealership in this market, we can be your arbitrator. If you have a ping in your engine and you want it diagnosed on the phone or on the Internet, we can do that. It's been great, we've done it within the last year
Who designed and hosts your website?
We do it ourselves. We have our own webmaster, in-house. We call him the "webmaster to the stars." His name is Dave Rumbolt and he's the guy who did all the magic on our website to earn the award.
What advice do you have for dealers, specifically dealer principals, who are trying to establish themselves online?
I'd say two things. First of all, you have to find yourself a Web developer who's going to pay attention to your needs, who's going to develop a site that you want and won't dictate to you what they want. Bring in your own webmaster if at all possible. Second, you have to shift gears in your head and you have to make your people shift gears in their heads that the Internet is not going away, it's going to evolve into something even more high-tech as we move along and it's reality. It's not going to go away. You're going to have to adapt and you're going to have to be aggressive to stay up with this type of technology and consumer-driven way of buying a car or you will be left behind.
What advice do you have for dealers who want to stand on the sidelines and see what develops?
Well, if they're going to sit on the sidelines, then they won't be part of the game for much longer.
