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A dealership’s online business endeavor must be evaluated regularly

November 17, 2010

By Becky ChernekChernek Consulting


It’s one thing to have an Internet site; it’s another to have an effective Internet site.


Internet sales and leads must be evaluated regularly with the dealership’s overall finance performance. What percentage of the advertising budget is devoted to the Web site compared to newspaper, radio, and television ads? What is the sales return percentage for each?


The Dealix Corporation wrote a white paper in 2004 on the case for Internet sales leads. Dealix stated that dealers spend an average $550 on traditional advertising for each one car sold, but only $200 on Internet advertising.


It’s a figure that should cause you to take action. Figure out your own return on each form of advertising and make the proper adjustment to get the most for each dollar spent.


Take time, too, to evaluate the effectiveness and efficiency of your Internet and finance managers. Do they treat each other with respect? Do they support each other’s methods and share information about product sales? Or do they bicker continuously about turnover?


Cooperation is required. They work for the same company and for the same ultimate goal of raising profits through more sales. Especially in the sale of products, they must work together. Even though the new breed of customers comes into your showroom after spending quality time investigating details on the Internet, your managers must still use every opportunity to present your financing and products.


Be flexible. Any of the many Internet resource providers will be happy to provide your customers with financing and product options. And, of course, that is exactly what they are doing!


Why? Because finance and insurance products represent big money! Know what other sites offer and at what cost and then plan to be adaptable with your own. Serving the customer’s needs means pulling your head out of the sand of stagnancy!


There are many other issues to discuss and evaluate with your Internet manager. How many leads are being generated each day of every week and month? Out of these leads, how many are coming to the dealership showroom? How many leads are closed each month? What is your front end profit and backend profit? Does your manager establish the lead, structure the sale, close the sale, and provide other alternative finance and product options? Does your manager know how to present a menu proficiently?


Does he or she offer a third-party entry, online financing arrangements, a resource center for understanding the alternatives of leasing versus financing? What is your policy regarding the discussion of rates and pricing over the phone or through an online message?


When potential customers visit your Web site, they should see full compliance and a user-friendly environment. Provide them all the tools to find answers to specific questions. Let them build their own car. Take them on a virtual tour of the manufacturing plant and of your dealership. Introduce them to your owner, your sales and Internet and finance managers, and to the managers of your service department.


Provide an online clinic regarding the how and why to properly maintain vehicles. Provide incentives to come to the dealership. Give certificates for free or lower cost service and even more for referrals, if they bring a friend to your showroom. Provide a service contract online, with a clearly suggested retail price and offer both the manufacturer’s guarantee and a generic warranty for comparison purposes.


All product options should be available with pricing and description. Financing should also be introduced to these potential customers, with an encouragement to ask any questions they may have regarding leasing or financing of a new vehicle.


Don’t be afraid that such candidness will send your customers packing. The new wave of customers will shop around on the Internet. But they will buy from the dealership that is the most credible and that offers the best service. Make yours that dealership!


About the author: Becky Chernek is a professor at Auto Dealer Institute and president of Chernek Consulting.