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By Nick Zulovich, Staff Writer April 29, 2009 RALEIGH, N.C. — Close to 900 dealerships closed their doors last year, prompting Urban Science to state that it was the largest drop in the number of franchised stores since 1991. As the stock market fluctuates and national unemployment levels continue to creep higher, dealers keep looking for any new ways not just to increase sales but to survive. More and more dealers are finding an oasis in the midst of this severe sales drought — the Internet. The dealers who turn themselves into a Web business, not just a presence, are having the greatest success. It's the message that Don Crawford with eBay Motors spreads as he criss-crosses the country with dealer training seminars. Part of eBay Motors University, these seminars bring together multiple members of management from a single dealership or group. Some dealer attendees shared with Auto Remarketing how Web efforts have the potential to generate more than 30 sales per month. Meanwhile, some other dealers are in the incubation stage of entering the online marketplace with greater energy and resources. Future Success for Entire Industry While Crawford was here to promote the sales capabilities of eBay Motors, he hoped the strategies he shared for online business development could help dealers sell used vehicles no matter which Web strategy they chose. "An online business is more complicated," conceded Crawford, who is senior manager of project development with eBay. "It is the pictures. It is the descriptions. It is much harder, and it should be. That's how you make your money. "Don't be surprised when you don't make a lot of money on the Internet with just a presence. A business has to have a return, and it is more difficult," he continued. "Doing those things will be better for AutoTrader.com and Cars.com and eBay Motors and the whole industry if people move toward that trend. Get better pictures. Make better descriptions. Take the Internet as serious as ups walking on their lot," Crawford added. With many franchised dealerships facing the most difficult sales conditions ever, Crawford has seen many high-level management executives and even owners at his seminars. He travels throughout the country sharing these ideas multiple times per week, a stretch that's gone on for the last several months. Crawford considers the Web the key to any dealership. "That's what makes us very timely because 2009 is going to be tougher," Crawford pointed out. "I'm not Pollyannaish about this, but I think we're saving stores because 20 cars (sold) is a big difference to most dealers. If we can get them an extra 20 cars (sold), that's the difference in them making it." Current Economy Drives More Web Traffic Nowadays, dealers aren't just trying to get customers to enter the store through the driveway. They're trying to bring in consumers who are quite adept at using their laptops or iPhones. "There's no more drive-up traffic anymore. It's all by phone or all by the Web," explained Chris Smith, general manager of Baker Chevrolet in Red Springs, N.C. "We're changing with the times." Besides convenience, Brian Boyd, general manager of Charles Boyd Cadillac in Henderson, N.C., mentioned another possible reason for the greater use of online avenues by shoppers. Today's turbulent economic times have made some possible customers gun-shy of even coming onto a lot because of the apprehension of credit availability. "I believe more people are scared to come in because people don't like rejection," Boyd said. "They'd almost rather stay behind a computer screen rather than come in face to face." Sunny Chauhan often is faced with calming customers' fears about whether they might obtain financing. Chauhan is the lead Web salesperson for Lee Nissan in Wilson, N.C. He stresses to customers who have weathered the current economic recession that credit is available to make a purchase. "The customers who pay their bills and do things right will qualify for the same financing they could have two or three years ago," Chauhan noted. "The ones who barely qualified before, they're the ones who are having a tough time right now." Online Presence versus Online Business To reel in more sales, dealers need to learn how to best to use online capabilities. Crawford put it in relatively simple words — a dealer needs to not just have an online presence, but push further and develop a true online business. "It's been no secret for a long time that a good Internet presence is something that you have to have," said Ed Scarborough, who serves as the information technology director for David O'Neal Chrysler Jeep Dodge at Westgate in Raleigh. "In the beginnings of the Internet ... the guys on the golf course said, ‘I need to get a Web page.' And their Web page was a brochure of their business," Scarborough continued. "In the car business, it's now about how far are they pushing the envelope. How far are they going to get customers in? We all know that the Internet is a tremendous communication tool and therefore a tremendous selling tool," he added. Dealers at a recent eBay Motors seminar were at varying stages of tackling online sales. For instance, Smith mentioned how his sales staff is training regularly to handle online leads and communication. Boyd, meanwhile, has recently been developing a new business development center at his store specifically to handle online sales. "We're looking to jump in the pool with a new market," Boyd pointed out. "It used to be that a lot of stores' people would come in on Saturdays and ride from lot to lot to find their exact car. Now in most cases before they leave their house, if you don't have what they're looking for, they won't come. "Your inventory needs to be accessible and current," he suggested. "You've got to have appointments set because your lot drive-up traffic has diminished significantly. You've got to be good on the phone and good at e-mail and prompt in both cases." Scarborough concurred with Boyd's point about being quick to respond to an online inquiry. "I'm a firm believer that when you get a lead and it's an inquiry, that the first person who calls back is going to have the best chance of getting that person's business," Scarborough explained. "If you wait 45 minutes, that's not good." Potential of Web Sales Success Ted Welpott has been in the industry for 19 years and now serves as the general sales manager for Rick Hendrick Toyota in Fayetteville, N.C. The dealership's well-established business development center has reached a point that the store sells 30 to 60 new and used vehicles monthly through its online operation. "The Internet, a lot of people say it's a negative, especially the people who have been in the business for a long time," Welpott noted. "When you look at from the whole perspective, it's been a big benefit to dealerships, especially the ones that embrace technology. "I think some are afraid that the Internet takes away the salesmanship, but it doesn't," Welpott continued. "Most people still want to have someone tell them it's a good purchase or to help them along the process because it's a big purchase." He also mentioned that his dealership plans to ramp up its online business strategy even more in the coming months. Along with the usage of eBay Motors' listings, Cars.com and AutoTrader. com, the dealership is about to launch links via Facebook and Twitter, popular social networking sites he hopes will broaden the reach of the store even more. "The Internet certainly is going to be a key going forward," Welpott noted. What to Put on the Web During his seminar, Crawford showed a newspaper classified advertisement that many dealers used when he started in the industry during the late 1970s and 1980s. The ad had abbreviations for the type of transmission the used vehicle had as well as other features. The capability of the Web certainly expands that classified listing exponentially. Crawford stressed many times over that the most critical part of used-vehicle listings are pictures. Researchers from eBay found that used-vehicle listings with 24 or more pictures have a 115-percent higher chance of successfully landing a lead and possible sale than listings that contain 12 photos or less. Taking the methodology even further, eBay pointed out that listings with 40 or more photos have a 235-percent higher chance of being productive for a dealer than listings with fewer than a dozen pictures. The quality of the photos is just as critical as the quantity, Crawford said. He listed what he called the "money shots," including views of the lumbar, dash, odometer, VIN, owner's manual and keys. He also stressed that the images of the used units should either be taken during a sunny day or in a clean staging area at a dealership. "I know 40 pictures can be hard and expensive," Crawford told the dealers. "But it's not about being cheap. It's about using your expenses to get you more successes." Welpott agreed with the strategy of more vehicle photos. He's seen customers arrive with printouts on a mission to find that exact vehicle. "With lots of pictures, you get the feel for the vehicle," Welpott explained. "Going back 10 years ago, we didn't have that option because technology wasn't there. A guy would be there all day trying to upload 100 pictures. Now you can upload those pictures and a file almost instantaneously." With the need to harness the Web's capability so paramount, Crawford gears his eBay Motors presentations to help dealers take a team approach to mastering an online sales strategy, especially for used vehicles. "They need to go back as a group and think about how they can make changes to make things better. You have to look at this as a team," Crawford concluded. |
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