Sponsored by:

Higher Turnover Websites

the #1 Provider of Car Salesman Websites and Dealership Sites

Please note that comment moderation is being used on this blog. This means that you are free to comment on any posts, however they will be reviewed prior to being posted on the live site. We welcome any legitimate comments, but comments including links to your own sites (i.e. "link spamming" or "comment spam") will be marked as spam and will not be published. If you have comments that will be useful to other readers, feel free to post them, otherwise go spam someone else's blog!

Monday, December 18, 2006

The Impact of Changing Your Dealership Website

Most sales in any company result from only a handful of customer situations. Frequently a prospect is simply dissatisfied with their current situation. At Higher Turnover we seem to get a lot of car dealers calling us because they’re unhappy with their current provider. So what actually happens when a dealership changes their website provider? What are the implications if they just change the look of their dealership site? The simple answer to these two complex questions is that a lot can happen. Let’s take a look at each one:

Changing Your Website Company: Think about it from a search engine perspective. If you decide to change providers, it’s important that you choose a reputable one who understands search engine optimization and marketing. Sometimes your old site may have elements that are favorable to search engine placement, and some elements may hurt you. Knowing the difference is key, and if you don’t know the difference, trust the experts. We have done redesigns recently for clients who really liked their previous design but were just victims of poor customer service. Some of these designs may have looked OK years ago, but 8 or 9 years on the internet is an eternity. I suppose it’s part of someone’s comfort level; if a website has worked in the past they may not be comfortable changing it – they just want to change who manages it. What these dealers typically don’t realize is that the “look” of a website is a small part of how well it performs. I know other industry professionals getting ready to comment on that already, but hear me out. Looks are important as they can project a level of respectability and professionalism, but things such as overall structure can be much more important. Our sites are designed to quickly funnel customers from the homepage, to the cars, down to one car, and ultimately to pick up the phone and call the dealer. Content and structure are most important, and this helps in the search engines as well. Dealers are amazed when we show them how their current site looks to the search engines, and even more amazed if a small change jumps their site up toward the top of the search results.

Changing the Look of Your Dealer Website: I know I just said looks aren’t the most important aspect of a dealer site, but they are definitely important. Radical changes to overall design can sometimes confuse customers that visit frequently, unless you brand your site in a way that makes it instantly recognizable as your own. Design changes from time to time can be good and help keep interest of your customers, much like dynamic content. Look at Google for example. Although their homepage is extremely simple in design, they make subtle changes to their logo from time to time depending on the occasion. If you’ve ever been to Google around the holidays you’ve probably noticed their logo “dressed up” a little with Easter Eggs, Thanksgiving themes, or Christmas trees. This is a good example of subtle changes to keep interest of repeat visitors. The overall look and feel of the page doesn’t change at all. Changes are something that should be taken into account when shopping around for website providers for your dealership. Some companies charge additional fees if you want to add or edit pages on your site down the road. If you think you’re getting a good deal on a website, make sure you really know what you’re paying over the long-term. If you’re thinking of changing providers for your site, be sure to ask the companies to evaluate your current site and determine what the strengths and weaknesses are. Sometimes dealers want to change for the wrong reasons, and as a straightforward company we’ll tell it like it is. If it doesn’t make sense to change things up based on your objectives, we recommend against it.

Friday, December 15, 2006

Dealers Responding to Online Leads Faster

Digital Dealer has just released information from there latest survey. It looks like dealers are starting to respond to online leads faster.

I hope this trend continues because online leads are valuable, but you must respond to them quickly before the potential customer moves on to the next dealership.

Thursday, December 14, 2006

Where is the Auto Marketing Industry Headed?

Several calls and emails over the last week have really got me thinking about where the industry is headed for auto dealer marketing. One word comes to mind for me: saturation. Look at one part of our particular product offerings for example: website solutions for independent dealers. A quick search of dealers in your local area is sure to pop up at least a few horrible websites. Some have been designed by the dealers themselves, and some have been designed by a local company for that dealer. I use the term company loosely, because most of these “companies” are nothing more than a computer and some local kid whose dad knows the dealer. I’m not knocking this situation, because sometimes it does work, but more times than not it ends up hurting the dealership with an unprofessional image. Dealers need to take online marketing as seriously as their offline marketing. Would they trust a 6-year-old with his box of crayons to work up the art for the magazine ad? It’s an extreme example, but a valid one judging from what I see out there.

So basically there are thousands of people in your local area who know how to build you a dealer website, but the important question is do they know how to do it right? Dealers are getting smarter. Some are slower than others, some I would definitely consider hard-headed, but overall they’re becoming more informed about their choices. I believe we’re in a transition phase in this industry. There are so many choices, and some companies are really going to stand out above the others. The market is so saturated with people or companies that claim to be capable. As we reach a critical mass in the marketplace, dealers become more informed and there will be a lot of consolidation taking place.

Taking it to the next level is the natural next step. Website companies may begin to consolidate, some may merge, some may disappear. Why stop there? A lot of companies are already broadening their skill set to help dealers. We’re getting ready to launch an eBay listing manager. We’re starting to offer pay-per-click campaign management and press release services to dealers. We’ve also been approached by several companies to act as resellers of their technology, again, keeping everything under one roof. As a dealer, if you could have one company handle your website, your inventory management, photos, window stickers, lead management/CRM, and several other things, wouldn’t it be better to have that one company instead of 7 separate companies? A one-stop marketing shop of sorts. I had the pleasure recently to speak with Eric Gidney of Next-Level Automotive who has built his business model on this principle. Eric and I actually both worked for Autotrader.com for several years (among other auto industry jobs individually), so to say we know the industry is an understatement. While we at Higher Turnover are broadening our services, we’re still staying focused on web development and applications. Next-Level Automotive is currently taking a more hands-on approach with the dealers in a focused area (Philadelphia, PA). They’ll actually go to the lot, take the photos for the dealers, work with them on print/direct mail campaigns, and generally do some of the things that someone like us isn’t able to do without having 2,000 field reps across the country.

Next-Level Automotive’s existence and the speed at which they’ve grown in the Philly market are perfect examples of where this industry is headed. It's already starting on the local level, and I think it’s a good thing for the dealers.

Tuesday, December 12, 2006

Importance of Having a Secure Credit Application on your Auto Dealer Site

Most people are aware of the identity theft threat. In case you’re not, here’s a crash-course: Any time you submit information over the internet, it is possible for a third party to intercept that information. This is true for almost any information someone submits, whether it’s ordering flowers online, booking a plane ticket, or applying for financing on an auto dealer website. What can someone do with the information they collect? Well that depends. If the site that is supposed to receive the information has a security certificate (also known as an SSL certificate), there’s not much the “bad people” can do. The SSL actually encrypts whatever is being sent so it’s no use to anyone other than the intended recipient. Anyone with a website can obtain an SSL, and the issuing companies do extensive checks to ensure the person/company purchasing the certificate is legit. Essentially you’re paying for a trusted name that vouches for your own business legitimacy.

We recently ran into an issue with the latest release of Internet Explorer from Microsoft, IE7. Several of our dealers did not use SSL certificates because they only collect information that isn’t sensitive in nature. For a short “credit application” they chose to only ask customers for info such as name, address, email, and phone number. This information is public for most people anyway, so there really wasn’t a need to encrypt it on the website.

With the new IE7 it seems to be more important to secure any contact forms or credit applications, no matter how public the information may be. Not important because you need to protect information that’s probably public anyway, but important because it can actually deter customers from entering their info in the first place. Even with a “shared” SSL certificate which still encrypts info, customers are being told to be extremely cautious. Take a look at a warning screen someone sees now when they go to a page that is encrypted by a shared SSL:

Even if someone isn’t giving up confidential info, it’s pretty strong to see Microsoft telling you that you should leave the page. If you didn’t know the technical specifics of why you were seeing that message, would you enter any information? What if it was a more in-depth application that asked for your Social Security Number? I know I wouldn’t, even if it was a reputable car dealer I’ve done business with in the past.

The solution to this is simple. We recommend all of our customers get an SSL certificate, which we purchase on their behalf and install on the web server. Certificates can be purchased for just a couple hundred dollars through some reputable and trusted companies. Think of it this way: if you get one person to fill out your online credit application and get them financed, will the money you make on the back-end of the deal offset the minimal investment? We leave the choice up to our dealers, but if I were a dealer it would be a no-brainer.

Sunday, December 10, 2006

Improve Your Auto Dealership Response to Email Leads

While speaking with auto dealers across the country, I frequently have discussions about the quality of email leads. Many dealers don't like to "waste" time on email leads, because the more serious buyers will pick up the phone and call. While this may be true, email leads should not be ignored. In fact, they should be treated as equally important, because given the right set of tools, a dealer can reduce the time spent responding to customers and become more efficient overall.

Before I get into what tools will help improve response to email leads, I need to point out some very powerful information I ran across from Dealix. The original report can be seen here, but here's the pertinent information. In their study from last year, it was reported that a huge percentage of customers who submit an email inquiry on a dealer website eventually purchase their vehicle from a different dealer. What is a "huge percentage" you ask? Out of roughly 1.16 million leads researched in this study, 56% (644,957) actually converted to a sale. Of those 644,957 sales, an astonishing 92% were sold at another dealership other than the one who got the initial lead. That's right, 9 out of every 10 leads you get are probably going to the store down the street to buy their car. How can you improve the closing ratio at your dealership? First you need to understand why they're going to your competition. According to the study, the biggest reason (other than the customer deciding on a different vehicle model) was the response from the dealership. In fact, 20.4% went to another dealership because the first dealer had poor response to their inquiry, with poor defined as "slow" or not answering the customers questions.

Seems like a simple enough problem to correct, right? So why is it that the problems have gotten worse over the last couple years? Something as simple as answering the shopper's questions dropped from 38.2% in 2004 to 25.9% last year. So only 1 in 4 dealer responses actually answers the customer's questions? That seems like a good place to start improving. I understand that as a dealer your ultimate goal is to get the customer on the lot, because that's where the selling takes place. It's my belief that customers will form a better opinion of the dealer if they're straight-forward and show that they're not trying to beat around the bush. Simply answering their questions will increase the appointment show ratio, which will in turn increase the closing ratio at the sales level. One way to help make a good impression in email responses is by using templates. Basically templates will give you a professional look rather than just a couple lines of text, and they will also have most of the information filled in already so you don't have to sit and type a response from scratch.

The biggest factor (that a dealer can control) in improving your email responses is the time it takes for a response. Imagine a customer walks on your lot and asks you about a Chevy truck parked right up front. Now imagine your salesman looks at the customer and doesn't say a word. The customer would probably go to your competitor, unless they appreciate being ignored. What do you think the customer's response would be if you called them at home 7 hours later? Well this is essentially what's going on with email responses at most dealerships. The average response time for a customer inquiry was 6.5 hours last year. When the customer takes a few minutes out of their day to write to a dealer and inquire about a vehicle for sale, treat this like they've just walked on your lot. The more successful dealerships I've worked with have policies in place such as responding to all emails within an hour. With the back-end of our dealer websites, we've added a tool that will help our dealers do even better. A dealer can set up cell phone text messages for their website leads. When a customer submits an inquiry through the dealer's site, the sales manager, owner, or whoever you set up will be notified instantly by text message that a new lead has arrived. Imagine what that says to a customer when you call them to answer their questions and they're still on your website. You've got them when they're hot, and before they start looking at vehicles on your competitor's lot. Our dealers who use this functionality tell me that most conversations start out with "wow, that was fast".

Improving the quality of your email responses and how fast you actually respond are the two most important things that are within your control that will increase sales at your dealership. They are both practices you can put into place immediately, which means your profits will increase almost immediately as well.

Thursday, December 07, 2006

Advertising for Buy Here Pay Here, Rent to Own, and Subprime Finance Dealers

Look at any of the big online advertising sites for auto dealers....Autotrader.com, Cars.com, Automart, etc. If you compare the vehicles advertised on any of these to the vehicles advertised by other media such as magazines, newspaper, storefront signage, you may notice a big difference. Drive down "dealer row" in your hometown and you'll see a million signs for "no credit check", or "everyone is approved". Sometimes you may even see the dealers who aren't trying to sugar-coat it: "buy here pay here". Buy here pay here financing isn't necessarily a bad thing for the customers. Dealers realize there is a need to serve customers with bad credit that couldn't otherwise be financed. Customers need a car, and virtually anyone can get one using BHPH or rent to own finance. Do some research however, and you'll hear what a rip-off BHPH finance is for the customers. In reality though, why should they get the same interest rates as someone who has paid their bills on time for 20 years? Credit scores are based on a lender's risk, so for me a dealer doesn't have to justify high interest rates for someone that is a high risk for default, repos, etc. Because such a large percentage of the American public falls into this Sub-Prime lending category, it makes perfect sense that several dealers market directly to these customers. Look in the print advertising media and you'll see the same things as driving down "dealer row", geared at catching the eye of the car shopper with less than perfect credit.

Since so many dealers use in house financing, BHPH, or rent to own, wouldn't it make sense to advertise cars online the same way they do in the magazines? A shiny BMW for just $49 a week and no credit check is a lot more appealing to bad credit customers than bigger retail prices, extensive credit applications, and the "normal" car dealer look/feel. Why is it then that none of the online players gear anything toward this market segment? Do they think those customers don't have internet access? If so, it's simply not true. Look at the statistics from the U.S. Census Bureau: out of the people over the age of 18 who make between $15000-$20000 a year, 31% use the internet at home, work, or school. Think any of them are car shoppers? You bet. Everyone I've talked to about internet use among sub-prime finance customers has always said those customers just don' t use the internet. Two points on this:

First, 31% of the sample income group above DOES use the internet. Of course it's lower than the higher income population, but think about it like this. Suppose you have 1000 people on your lot with high beacon scores and 1000 with low scores. 310 of those low score people are looking for your cars, and 620 of the higher score people are looking for your cars as well. Would you completely ignore the 310 customers with lower scores? That's the equivalent of ignoring 1 out of every 3 people that step on your lot. By doing that you may make money on the 620 ups, but you'll never make money on those 310 others.

The second point is this: Do you really know what a sub-prime finance customer is? You're probably thinking stereotypically as you read this: "bad work history, doesn't care about bills, and low paying job". Of course you'll have those, but the truth is that on a national scale, a majority of these customers aren't like that at all. The typical customer is truly an example of "bad things happen to good people". Two of the top reasons for damaged credit are divorce or some sort of unplanned medical event. In reality these customers have had steady jobs for several years and average income might surprise you.

So this brings us back to the original question: wouldn't it make sense to advertise cars online the same way you do in the magazines? None of the major online classifieds like Autotrader.com or Cars.com offer such services. Everything is shown to the customers as either retail or MSRP. Since these are large corporations, adding this functionality is nearly impossible given the scope, let alone convincing them it's worthwhile. For this reason it's left up to you the dealer to market weekly or monthly pricing on a smaller level. Our websites and administrative back-end have recently had this functionality added. We feel it's the dealers choice in how they want to market their inventory. If some cars are better off with retail prices, list those. If some are more appealing with weekly or monthly payments, why turn potential customers away with retail pricing? We've even developed a product that allows traditional dealerships to keep BHPH inventory completely separate from retail units and not even have them on the same website. Everyone has their thoughts on the subject. As online marketing consultants, for us it makes the most sense to maximize the efficiency of advertising, and that means not lumping all inventory into one category, even if it's all on one lot.