Selling Online to Sub-Prime Customers
By Steve Hall
I am sure it is no surprise to any of us to see the number of sub-prime customers who are looking to purchase cars online. The Internet offers them the chance to view inventory, get pricing information and even schedule a test drive without being mistreated due to past credit problems. Over 40% of car buyers used the Internet in some capacity last year in the purchase of their new vehicle. This figure is expected to grow to as much as 80% by 2004. Dealers, therefore, will have to learn to interact online with their sub-prime customers as they are learning to interact with their conventional customers. The expectations of the sub-prime customers will be no different than those expectations of the conventional customers. They will expect a quick response, accurate and complete information up front, and a fair price for a vehicle. The Internet will enable these customers, who have in the past relied on the dealer for sub-prime financing, to actually obtain financing online, without dealer assistance. Even more so than today, if dealers do not handle them correctly, they will go somewhere else.
One of the biggest values the Internet brings to a dealership is the ability to dramatically increase its market area. The Internet will not sell one more vehicle, but it will change the distribution of which dealers sell the vehicles. Those dealers who learn to meet the expectations of all Internet customers, prime and sub-prime, will gain the biggest benefits. Dealers must understand that it is not just about having the technology to sell more cars. You must have the proper training and processes in place to leverage the power of the Internet. Dealers need to invest as much money in training how to handle Internet leads as they invest in technology and advertising. The automobile business is based on sales, not leads. We can have all the leads in the world, but without the proper training and the right processes in place at the dealership, sales will not take place.
Therefore, I encourage dealers to invest in training not just your sub-prime managers and Internet managers, but your entire sales staff on developing the correct processes to ensure that sub-prime leads from the Internet are handled in a way that meets customer expectations. Prime or sub-prime, Internet customers have the same expectations and also have other options. The Internet has given the customer powerful information that allows them to regain control over the buying process. We must recognize this and develop systems that turn leads into sales.
Steve Hall is CEO of PriceDrive.com, the leading provider of B2B Web-based applications which help automobile dealers manage and turn their used vehicle inventory more efficiently. Mr. Hall is also founder and Chairman of Custom Finance Services (CFS), a management and consulting company that develops and manages sub-prime finance departments for automotive dealers.
