Digital Dealer
E-business Is Your Business: Best Practices For Best Results
By John Holt
I often use this column as a forum to talk about the latest developments in specific e-business tools and strategies for the automotive dealership such as customer relationship management (CRM), locate-to-order (LTO), and so on. But in this issue I want to step back from the specifics and take a look at the big picture: the fundamentals of using e-business technology to market and sell vehicles and improve dealership business processes. When it comes to e-business, it's not just a matter of having all the right tools in the toolbox; you also need to know how to use them effectively and knowledgeably. The dealers who are getting the most out of e-business are the ones who pay the closest attention to their processes. Here are some of the fundamentals every dealer should know:
Response time is the
deal maker or the deal breaker.
Dealers often ask me how they can get the most out of their e-business investment.
The short answer: quick response time to customer inquiries. This is unquestionably
the single most important factor in the success or failure of your online
operation. If you keep inquiring customers waiting, they'll go elsewhere and
you'll lose the lead. It is as simple as that.
To get ahead of the competition and exceed customer expectations, I recommend answering your e-mail once an hour, seven days a week. Research shows that the majority of online auto shoppers send e-mail queries to dealers in the morning before work, during their lunch hour, and in the evenings after dinner, but you need to be responsive during all normal "working" hours to be really competitive. You should consider beefing up your staff to respond to customer e-mails during these times. If that sounds like a challenge, it is. If that sounds like a hassle, consider the alternative: losing sales you could have gotten and losing customers to your competition. I also recommend finding a good lead management system and sticking with it so that valuable customers don't slip through the cracks.
E-business is not
a sideline.
Many dealers still think of their online operation as an isolated phenomenon.
But it's shortsighted to treat this technology as something that's somehow
separate from your fundamental business. E-business technology facilitates
communication and efficiency throughout all of your dealership's profit centers-just
like the telephone. Which brings me to my next point.
Consistency is a virtue.
It's absolutely essential that all members of your dealership staff understand
how your online operation works. It's not enough to simply hire an Internet
sales manager, dump it all in his/her lap and hope for the best. If your customers
experience a disconnect between the information and pricing they get from
you online and what they hear when they come into your dealership, your credibility
and your conversion rates will suffer. Never underestimate the value of training
when it comes to making consistency a reality at your dealership.
Get real with pricing.
Love it or hate it, the pricing genie is out of the bottle for good. Automotive
customers know they can find factory invoice information on new vehicles and
current market value information on used vehicles on dozens of Web sites.
Why make them leave your site to get accurate pricing information? N.A.D.A.
Used Car Guides, Kelley Blue Book, and Edmunds True Market Value are all excellent
pricing guides that can easily be incorporated into your dealership's site.
Putting reputable pricing guides with high name recognition on your site is
a significant customer service offering and a shrewd strategic move for two
reasons: 1) they provide your customers with the pricing information they
want without having to leave your site and 2) third party pricing information
gives your dealership credibility with the customer and helps build a bond
of trust-a fundamental component of customer relationship management.
Use your Web site
to drive profits in all profit centers.
Your dealership is based around five major profit centers: new car sales,
used car sales, parts, fixed operations, and finance and insurance. Implementing
e-business strategies that represent all five profit centers and making sure
your Web site's functionality is up-to-date are the two best ways to maximize
the financial potential of each individual profit center. Since the majority
of dealership profit is generated from after-sale services, using your Web
site to market your dealership's diverse profit base isn't just good e-business,
it's good business, period.
John Holt is president and CEO of The Cobalt Group, Inc., a leading provider of e-business products and services to the automotive industry. If you have specific questions or require more information about this subject, please check the appropriate box on the writer response form on page 3. jholt@dealeronline.com
