Sub-Prime and the Internet
By Paul Snider
Dealers who are not paying attention to the sub-prime customer on the Internet are often caught up in the entire dot-com frenzy created by auto-related Web sites that mainly target prime credit customers, and stand to lose a large potential market share.
As CEO of an Internet company that focuses on providing cost effective leads for automobile dealers across the nation, I am constantly researching material that will assist dealers grow both their prime and sub-prime market share. I have found very few auto-related Web sites that offer opportunities
for the credit challenged. A recent article in the Wall Street Journal announced a joint venture between two large Internet companies that will allow consumers to "deal" online as opposed to going into the dealership. At the same time, Reuters published an article that included a study by CNW Marketing/Research stating that it is better to trust a car dealer than believe everything you read on the Internet, because in many cases Internet prices are wrong. Now NADA has announced it will launch a new site next month, which will include invoice prices and create the definitive source for automotive shoppers. Again, sub-prime customers are not targeted-and they represent better than 50% of the buying public.
Building Internet Strategies in Sub-prime
Dealers should offer all types of financing and align themselves with Internet lead services that promote prime and sub-prime.
Managers must put procedures in place to follow up with every Internet lead. The latest article I read claimed that dealerships contacted less than 40% of Internet leads.
Your staff should be trained to understand the sub-prime Internet buyer. By that I mean, just because a person has credit problems, it does not imply they cannot surf the net and make car-buying decisions or apply for credit. Consumers have access to the Internet at both work and home!
When using Internet lead services insist that the same lead is not sold to multiple dealers or finance companies in your market.
Encourage customers to apply online by linking with secured Internet credit application sites that will forward the lead directly to the dealership.
Capture e-mail addresses on all references sub-prime customers provide you for funding. This allows you to build a database of customers who can be target marketed later via Internet mail.
The Internet will play an important role in dealership marketing plans going forward; however, just like other lead generation methods such as toll-free numbers, nothing happens until a customer is contacted and appointments are made to establish proper financing to meet their special needs. The sub-prime sector is on the 'Net and cannot be ignored! Rethink your Internet strategy and build a model that includes this important and growing segment of the buying public.
Good selling.
Paul Snider is President/CEO of CreditIQ.com Inc./VOISYS Systems Corporation of Clearwater, Fla., specializing in lead-generating services including 800 loan-by-phone and Internet applications. psnider@dealeronline.com
