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Thursday, November 29, 2007

Best Used Car Classified Site #9

Previous post on this topic
Which Classified Site Works Best to Sell Cars #8

Lead #10: It's been a while since I've updated this topic because the leads seem to have dropped off. The person in Lead #9 followed up with a couple of phone calls and set an appointment to come see the car but was a no-show. A lead came in today through the dealer's website from someone who found them in a Google search. No questions about the car, no phone calls, just submitted a credit app. Usually when customers submit an app and don't even ask about a vehicle, that tells me they're shopping around for someone who will approve them with bad credit. Seemed to be the case here, as the dealer told me they had a 380 beacon. Guess the car isn't getting sold today.

Autotrader.com - 1
CraigsList.org - 4
Cars.com - 2
AutoExtra.com - 0
Google Base - 0
A Dealership Website - 2
Kijiji - 1

Friday, November 09, 2007

One Thing a Dealership Can Do to Increase Web Leads

I wrote a post back in the summer comparing two similar dealers in the same market to illustrate the impact of web design on lead generation. One dealer was doing a lot better than the other in generating web leads despite similar traffic numbers. After listening to a year of complaints about how bad business is, I finally convinced the dealer with the "worse" website to take my advice and redesign it according to my recommendations. The site content was not changed much at all, only the page layouts, some graphics, etc. It's amazing how small changes can impact business so much. Here are the actual numbers from the three-week period immediately before the change compared to the three-week period immediately following the change:

Site Visitors: 1452
Pageviews: 10,212
Contact Forms Submitted: 7
Credit Apps Submitted: 9
Overall: 1 lead for every 91 visitors

Site Visitors: 1599
Pageviews: 10,716
Contact Forms Submitted: 24
Credit Apps Submitted: 41
Overall: 1 lead for every 25 visitors

The site statistics have not changed much at all, but by making some adjustments to the site layout, this dealer has increased his conversion rate to 4 times the amount it used to be. We run into these sort of problems on a daily basis. A dealer may want to do something on his/her site that they think is a good idea, but I wish more dealers would listen to those of us who have been in the online media industry and have seen how much business these type of "mistakes" can cost. Going off the last 3 weeks stats, let's assume this particular dealer had 27,716 visitors for the last 52 weeks. If they had the same conversion rates they see since the redesign, that would be 1108 leads. With the old conversion rates it would only be 304 leads, a difference of 804 for the year. As a dealer you know your closing ratios, so would it be worth it for you to make a small change and have a crack at an extra 804 car shoppers over the year?

Tuesday, November 06, 2007

Best Used Car Classified Site #8

Previous post on this topic
Which Classified Site Works Best to Sell Cars #7

Lead #9: Another lead from Craigs List came in yesterday. This shopper said they ready to buy immediately but had a few questions. They want to know the VIN, location, maintenance records, financing ability, and "more information". I supplied them with the info they requested so we'll see what happens.

Autotrader.com - 1
CraigsList.org - 4
Cars.com - 2
AutoExtra.com - 0
Google Base - 0
A Dealership Website - 1*
Kijiji - 1

* Denotes the lead originated from an affiliated site not listed above

Friday, November 02, 2007

Autotrader Producing Smaller Returns, Raising Rates

Once a year there is a post that comes up on Dealer Refresh about Autotrader.com raising rates again, and it always causes a lot of dealer discontent to surface. I've made it clear in the past that I'm not a dealer, and I also worked for Autotrader.com for about two years. There are always people who think dealers should stop complaining about the constant rate hikes, but I am not one of them. Some dealers say the ROI from Autotrader.com is flat at best. Nothing speaks louder than facts and figures, so I decided to take a look at three random dealerships and compare a five-month period from last year to the same five-month period this year, and the proof, as they say, is in the pudding.

The three dealerships chosen at random are in different areas of Virginia between Virginia Beach and the Washington, DC area. Since each has a different number of vehicles on the lot and use different packages with Autotrader.com, I've tried to break everything down to a common denominator: leads per vehicle per month. Here's what I found for these dealerships:

June through October

Total Emails:
Total Calls:
Credit Apps:
Total Leads:
Total Vehicles:

Big difference? Not really, but over the course of the 5 months examined it does add up. For a dealer with 50 vehicles on the lot each month this translates into 12 less leads over the same period last year. A dealer with 100 vehicles on the lot would see 25 fewer leads over that period. Like I said, not huge numbers, but fewer nonetheless. The important thing to consider is that with fewer leads from the previous year, how is a rate increase justified by Autotrader.com? I submit to you that it is NOT justified, but as the 800-pound gorilla they're doing what they want until the 900-pound gorilla shows up. Is the 900-pounder a Googlerilla? A Cars.comorilla? Time will tell, but it will happen.

Friday, October 26, 2007

Best Used Car Classified Site #7

Previous post on this topic
Which Classified Site Works Best to Sell Cars #6

Lead #8: Another lead from Craigs List today. This shopper was definitely looking for a deal. They supposedly drove 100 miles to look at another one yesterday - same year/make/model with similar miles. They asked me if they could buy mine for $5500 which is about $2000 below asking price. The justification: they didn't want to drive 100 miles back to conduct the transaction on the other one.

Autotrader.com - 1
CraigsList.org - 3
Cars.com - 2
AutoExtra.com - 0
Google Base - 0
A Dealership Website - 1*
Kijiji - 1

* Denotes the lead originated from an affiliated site not listed above

Thursday, October 18, 2007

Traditional Media Generates More Buyers than Online?

I received my usual newsletter this morning from Auto Remarketing and one article really caught my eye. It says that according to a recent study, traditional media translates into more buyers than online advertising. These results are shocking to me, so I'm curious about the details of their research methodology. What cities/towns did they conduct their research in, and how exactly were certain markets weighted differently?

"Art Spinella, of CNW Research, found that used-car dealers are spending more money on the Internet than ever before. However, overall, most of the marketing funds are still going into traditional media, such as newspapers, spot TV and local radio". This makes sense to me based on cost alone. Traditional media has been losing market share for years while online media has been gaining. The newspapers, TV, radio, etc. have had to combat this loss using significant rate hikes just to maintain flat revenue gains.

What surprises me is the finding that "more than 44 percent of people who entered a dealership and purchased a car or truck indicated traditional advertising methods were what drove them to a store".

I'd like to learn a little more about this research, because frankly, I can't believe some of the claims.

Sunday, October 14, 2007

Best Used Car Classified Site #6

Previous post on this topic
Which Classified Site Works Best to Sell Cars #5

Lead #7: The first lead from Autotrader.com. This lead came in as a credit application. The person who submitted the credit app clicked over to the dealer site from the dealer's "specials" page. Since my vehicle isn't listed on the dealer's specials page, this illustrates one of the benefits of Autotrader.com driving traffic to the dealer website.

Autotrader.com - 1
CraigsList.org - 2
Cars.com - 2
AutoExtra.com - 0
Google Base - 0
A Dealership Website - 1*
Kijiji - 1

* Denotes the lead originated from an affiliated site

Next Post on this Topic

Thursday, October 11, 2007

Best Used Car Classified Site #5

Previous Post on this topic

Another day, another lead. I think I just found a vehicle for a third experiment so I'd like to get this one off the "lot" soon.

Lead #6: This guy was looking at the vehicle on the dealer's website and called me direct. Of course I asked him how he got to the dealer's site (which most dealers fail to do) and he said Cars.com. He was looking for a Jeep in the $7000 to $8000 range, had bad credit, and didn't want to put a penny down on the purchase. Perhaps I should become a bookie with all these people calling who can't get financed.

Autotrader.com - 0
CraigsList.org - 2
Cars.com - 2
AutoExtra.com - 0
Google Base - 0
A Dealership Website - 1*
Kijiji - 1

* Denotes the lead originated from an affiliated site

Best Used Car Classified Site #4

Previous Post on this topic

Pricing has been reduced across all sites to $7599 to see what that does for leads.

Lead #4 Update: The person who I spoke with the other evening did finally submit a credit application through the dealer website, however it was for a different vehicle. Not surprising since a large percentage of shoppers end up in a different vehicle from the one they first inquired about.

Lead #5: Another Craigs List response. This woman called yesterday and told me her entire story about why her credit was bad and that she needed financing. I referred her to the dealer site for an application just like I did for Lead #4, so we'll see if she gets sidetracked into another vehicle too. So far she has not submitted an application, but from what she was telling me it sounds like she should be approved (significant down payment, no repo's, $45k annual salary).

Autotrader.com - 0
CraigsList.org - 2
Cars.com - 1*
AutoExtra.com - 0
Google Base - 0
A Dealership Website - 1*
Kijiji - 1

* Denotes the lead originated from an affiliated site

Tuesday, October 09, 2007

Best Used Car Classified Site #3

Previous Post on this topic
Which Classified Site Works Best to Sell Cars #2

I haven't got around to changing the price yet or reposting on Craigs List, but I received another 2 leads today.

Lead #3: Someone found my vehicle on InternetAutoGuide.com, which is apparently one of the affiliates of Cars.com. I wasn't aware of this site in the Cars.com network, but apparently others are. This person thought the price was a little high (no surprise there) but said he would like to check out the car on Friday when he's in my area. We all know how "be-backs" usually turn out, even though he's technically not a be-back, but I am changing the price and re-posting anyway.
My thoughts are that I'm getting some looks, and with a more competitive price it should sell fairly quickly. I'll classify this lead as a Cars.com lead since it wouldn't have come in without Cars.com, just like a Yahoo! Autos lead would be considered MSN. I'll note the lead with a Barry Bonds asterisk as well.

Lead #4: Another person called this evening who saw the ad on Craigs List. Seemed to be legit, but had some credit issues and wanted to finance the car with $400 down. I told him to submit an application on the dealer site I also have the vehicle listed with. If he's approved I'll consign it with the dealer and let him make his money on the back end.

Autotrader.com - 0
CraigsList.org - 1
Cars.com - 1*
AutoExtra.com - 0
Google Base - 0
A Dealership Website - 1*
Kijiji - 1

* Denotes the lead originated from an affiliated site

Monday, October 08, 2007

Best Used Car Classified Site #2

See the Previous Entry in this Series about
Which Classified Website Works Best to Sell Cars #1

Well, it's been about 2 weeks since listing the Jeep on the various classified sites, and so far, only 2 responses. That's actually better than I expected, considering the price is $7850, well above what it probably should be.

Lead #1: Kijiji sent a lead my way, someone who wanted to trade a motorcycle for the Jeep straight up. There's a reason I don't own a bike (30+ speeding tickets over the years) and I'd like to stay out of trouble.

Lead #2: The second lead came through the website of the dealer who allowed me to list the Jeep on his site. Someone applied for financing and was willing to pay $375/month for it. I was a little excited since there was room to work a deal, but the dealer pulled the person's credit and they've had 2 repo's (one in the last month), a bankruptcy, and an existing car loan. I was curious where the lead #2 originated from, so I did a little digging. This person didn't actually see the Jeep prior to visiting the dealer's site. He found a link to the site from another third party site, basically a local directory of car dealers.

My original plan was to feel the market out by starting high. It's been two weeks and I think I should have received more than 2 leads for this vehicle, so I'm going to drop the price to $7599 and see what happens. I'm also reposting on Craigs List since I have a hard time even finding the vehicle on there after 2 weeks.

Autotrader.com - 0
CraigsList.org - 0
Cars.com - 0
AutoExtra.com - 0
Google Base - 0
A Dealership Website - 1
Kijiji - 1

See the next post in this series
Which Classified Site Works Best to Sell Cars #3

Thursday, September 27, 2007

Happy Birthday to Google - What Can Your 9-Year-Old Do?

Today is Google's 9th anniversary. Even though they've only been around for a short time, Google is one of those companies that has changed the world already. They are a perfect example of what success and innovation can accomplish. When Google products aren't accessible all hell breaks loose. No ads to click on, no videos to watch on YouTube, no way to see your appointments for the day on Google Calendar, and you can't even read our blog with your Google Reader. Oh yeah, and you'll have to use another search engine like Yahoo! or MSN to find that recipe for bread pudding you like so much. What's the real difference between Google and your auto dealership? The world would come to a screeching halt if you were closed for a day, right?

You probably only have a few revenue streams like wholesale and retail sales, parts, service, detailing, etc. Google has so many things going on it's hard to keep track at times, and a lot of these generate significant revenue for them. They have billions of "inventory units" (pages indexed), and they do business on a global scale. How about your little dealership in Anytown, USA?

I believe there is no reason a car dealer can't change the world as Google has. I'm sure that comment will elicit a chuckle from several readers, but I really believe it. The problem lies in the fact that car dealers are inherently "old school". Sure there are a few that are ahead of the curve, but it's common knowledge that most have the mentality that change is bad, especially when things have worked for 100 years. Would the world survive if Google wasn't around? Sure. Does Google make life easier for everyone? You bet.

The auto industry needs to have a few people step up with some forward-thinking ideas. So many dealers and vendors are concerned with money from current opportunities above all else, but sometimes a focus on making the industry better is the logical first step. If you can accomplish the successful deployment of a new product or business model, the money will fall into place. Just ask anyone that has been with Google for 9 years.

Saturday, September 22, 2007

Which Classified Website Works Best to Sell Cars?

I wrote a post a while back which chronicled my experiment to determine if Autotrader.com or Craigs List would work better to sell a budget car. Craigs List generated more leads than Autotrader, but ultimately I ended up dumping the car on eBay after 6 months. The experiment was informative for me (and hopefully our readers), but it did leave some questions behind. The biggest question I have is that I'm curious if my instinct is correct in assuming Craigs List will do better for the lower budget cars. I've decided to tackle this question through Autotrader vs. Craigs List, Round 2.

This time around I've included a few other classified sites to look at the broader picture. The sites the vehicle will be listed on include:

Google Base
A Dealership Website

The vehicle is a more desirable vehicle than the last one, and in the "sweet spot" as far as pricing (between $5k and $10k). For this experiment I've purchased a 1999 Jeep Grand Cherokee. After a couple hundred in parts to fix a couple minor details, sales tax, registration costs, etc., I'm into the thing for about $6000. More than what a dealer would have paid, yes, but I'm a private party so I think I did fairly well.

Vehicle Details:
Total Cost Basis: $6000
108k miles
4.0 Liter, 6 cylinder
4 wheel drive
Fully loaded with all options except sunroof
Brand new tires

I'm listing the selling price at $7850 to start. Sure it's a little high, but if I don't need to sell it quickly, why not start there? Worst case scenario I don't get any action and have to drop the price. I'll be updating this post periodically, so be sure to check back and see....

Which Classified Website Works Best to Sell Cars

See the next post in this series about
Which Classified Site Works Best to Sell Cars #2

Friday, September 07, 2007

Fantasy Auto Dealership Contest

A little "off-the-wall" post from the right side of my brain:

Football season is finally upon us, and for thousands of people including myself that means fantasy football. In case you're not familiar, fantasy football is a competition among individuals who choose NFL players for their team, and earn points based on the performance of those players each week. Each week you go up against other team managers in your league. At the end of the season, the person who has the most wins is crowned the season winner.

Football is the most popular, but if you like hockey, baseball, golf, Nascar, etc. you can join leagues in any of those categories. I got to thinking the other day...there are fantasy sports leagues for so many different categories. Why limit it to just sports? Wouldn't it be great to have a fantasy car dealership competition? I mean, most car dealers and salespeople are highly competitive.

The way I see it, this could be done one of two ways. First, from the principal's perspective. So many salespeople think running a dealership is as easy as selling the cars. A competition among these aspiring dealers would be fun. Something that took into account all of the day to day operations that normally aren't thought about by the employees.

The other way that would probably be more interesting is a head-to-head matchup where points were given for number of deals, net profit, back end earnings, etc.

So how would all of this be done? I have no clue, but I think it would be entertaining and popular with the number of auto sales reps across the country. Maybe have a draft, and instead of drafting individual players like football, each person would draft a particular make/model. Each participant could submit deals for the week which outlined all of the metrics, and the points drawn from that. For example, say there are 20 dealers in the league. Dealer A has "Chevy Malibu" as one vehicle on their team and is going against Dealer B who has "Ford Focus" on their team. All league members would submit their sales for the week, and averages would be tallied for all deals including Malibus and Focuses. Dealer A would earn points based on those Malibu deals. Same for Dealer B with the Focus deals. When the points for all makes/models on the teams are added up, one team wins and one loses for the week.

Something like this would be good to gauge what other dealers are doing on gross, plus it would help build encouragement to/from one another. "C'mon Dealer A, push a few more of those F-150's out the door this week and help me beat Dealer C!" It would certainly provoke a lot of trash-talking among colleagues, and that's half the fun of fantasy sports.

If anyone has ideas or decides to put something together, I'd love to hear about it! Jeff Kershner at Dealer Refresh seems to have enough time to run 26 blogs, keep up with 18 social networking sites, and still run the internet dept. at MB of Hagerstown, maybe he'd like to take on one more project?

Wednesday, August 29, 2007

Comic Relief from Working in the Auto Industry

I typically try to post informative information for car dealers here, but our days are all filled with people telling us how to do things, how to do things better, and so on. That can get old after a while and we all need the occasional break from the norm. Here is that break for you...

I enjoy looking for the worst-ever car dealer commercials. It's always tough to pick the worst, because once you get below a certain level of professionalism, they're all pretty close. Here are a few links to the worst of the worst:

Big Bob's Used Cars

Eagle Insurance

And a local commercial for me (Auto Connection) that is best summed up by a comment someone posted on YouTube: "I have seen only one car commercial worse than that. This is more low budget than the other one I've seen, but this one lacks the ability to make you want to murder people." The sad thing is that this dealer has upped the ante even more with their most recent commercials.

Sometimes when you wonder if you're doing a good job on marketing, you just have to sit back and be thankful you don't work for another dealership!

Monday, August 27, 2007

Getting the Best Customer Service from Auto Dealer Website Vendors

Jeff Kershner at Dealer Refresh recently authored a post on his blog about customer service in the auto industry. For some reason many of the auto industry vendors seem to have substandard customer service once the contract has been signed and the customer has made their payment. Jeff makes some great points about what constitutes good service in our world of auto dealer products/services. I'm proud to say Higher Turnover passes the test on all 5.

1. Don't over promise and under deliver: It's important to be straight forward with customers. If you aren't able to do something, don't promise you can do it. Personally I feel it's better to be up front in the beginning. If you over promise certain things it's starting off a business relationship on the wrong foot when the customer sees it's not what they had in mind.

2. Answer your phone: We get calls at all hours of the day, and most of the time I answer the calls personally. If I'm in the middle of 3 different projects I'll still drop what I'm doing to answer the phone, because when I'm the one calling some customer service department, I don't want to leave a message. That increases frustration, and I may be busy when they call back. If we are on the other lines when a customer calls, they will receive a call back immediately when we're available. Our customers tell us on a regular basis how much it means to them that someone always answers the phone when they call. During off-hours I have support calls forwarded to my personal phone. This past weekend I took a call at 11pm Friday night, two on Saturday, and two on Sunday. Car dealers have hectic schedules and we try to accommodate that as much as possible. Other companies should do the same.

3. Have skilled tech support highly trained and familiar with your product: Nobody is more familiar with our product than myself, which is why I prefer to field support calls instead of using a customer service department. It's not easy to hire the right people for support who can learn the ins and outs of a product.

4. Call Me Back: Nothing is more frustrating than sitting around with a product that isn't working properly and not being able to talk with support right then and there. Sometimes it does happen unfortunately. We view our current customers as the most important asset of our company, therefore any support calls which we can't answer immediately are returned promptly, generally within 5 minutes or less. I don't see any legitimate reason why other companies can't do the same, but I've had support calls go for days without a return call.

5. Check in and see how I'm coming along: This is one that we are careful on. We do make it a point to check in on customers regularly, but this has to be done according to the customer needs. Some customers want check-up calls every couple of weeks, while others don't want to be bothered by phone unless you're buying a car. Our practice is to check in more frequently in the beginning as the dealers are learning our products. While we do this we try to get a feel for that particular dealer as far as how often they want us to check in. We have some customers who we speak with several times a week and we have others who we speak with once every 10-12 months. The important thing is that we're available as much as needed.

All of these items above may not be possible for the typical bigger company. No matter how big of a company we are or how much bigger we get, we have made it our mission to maintain our small-company style of customer service. Maybe it stems from my own need to have everything done "right now", but from what our dealers tell us, other companies aren't able to provide the same level of service. For now I guess that's just one more thing to elevate us above the other website providers in the auto industry.

Tuesday, August 21, 2007

Cost vs. Value in Auto Dealer Websites

I've tried to post a couple of comments on a blog recently that were not approved/posted by the moderator. Perhaps they don't approve of my comments, or perhaps their blog is only being used to help with driving traffic to their business website and they aren't concerned with generating a dialogue. Since there are no comments from anyone on the entire blog I'd have to assume the latter, so I thought I'd speak my opinions here.

The blog I'm referring to may be authored by a competitor of ours on some level, but I'll be the first to admit, they do offer decent web solutions. The latest blog post that caught my eye was about car dealers in the Midwest not wanting to spend money on internet marketing. It's a good topic because it's typical of the dealerships we work with on the independent level. I happen to disagree with certain portions of the post however.

The author equates a website cost with the number of leads received. According to him, the more money a car dealer spends on a website the more leads they will receive.

I have to say I disagree most with their comment that "If you are not spending a minimum of $700 per month on your website, your website is probably not attracting the leads necessary to really be effective". They're assuming cost is correlated directly with value, which if you've taken a look at some of the other providers out there, is clearly not the case. Sure there are some companies that develop great sites for $700/month, and the author's company may be one of them, but there are others that are capable of generating the same amount of leads for the end user at a fraction of that cost. A website should match the dealers needs, and if they don't need a $700/month site, there are other options that may be equally as effective.

Unfortunately a lot of consumers (including car dealers) fall for the trick that more expensive means better product. A friend of mine just bought a brand new car. The identical car was at two dealerships, and they really were the same, even down to the colors/options. One dealer had the car listed higher than the other dealer. If you were buying a car that two dealers each had on the lot, and each one was identical, would you buy the higher priced car? Is it a better car somehow?

The point I want to make is that cost is not the same as value. Our company offers some of the cheapest rates available for car dealer websites. I feel our products are far better than any other company that charges similar rates, meaning we have a similar cost but a better value. As a dealer your focus should be on value. Without it, cost is nothing more than an arbitrary number.

Friday, August 03, 2007

Some Selling Problems Seem Worse on eBay Motors

A while back I did an experiment on Craigs List vs. Autotrader.com to see which fared better when selling economy vehicles. The experiment dragged on for about 6 months, so the vehicle was finally listed on eBay Motors to "wholesale" it. Six months of traditional online advertising with no sale, and then 7 days on eBay and it's gone. All good, right? Not necessarily.

The first problem with selling cars on eBay is that you shouldn't expect to get a high sale price unless it's a unique vehicle (classic, exotic, etc.). eBay says it themselves that their marketplace is intended to be a wholesale arena where dealers can sell cars that they would normally run back over the auction block. A dumping ground. That's what I used it for in my experiment so I didn't expect to make a lot of money on the sale. I say this is a problem because a lot of dealers expect to get retail price for their eBay units and it doesn't happen all the time. As long as you go into it knowing what to expect, it's really not a "problem" per se.

The main problem I've had on eBay is the buying customers. It's not too far off from the average customers walking onto a lot, but I do think it's a little worse. The vehicle I sold went for over $1000 below book price. I still made a little money on the deal, the buyer got a good price on the car, everyone was happy. Everyone was happy until a couple of days later, that is. The buyer of my vehicle flew in from about 5 hours away. I picked him up at the airport and drove him to where the car was located. He spent about an hour going over the vehicle inside and out and then was ready to make the deal. We took care of the paperwork, I got my money, and he drove the car 5 hours to his home.

A day or two later I received an email from the gentleman saying he wanted his money back plus travel/hotel expenses he paid to pick up the car. He said the car had been in an accident at some point even though the Carfax did not indicate this. Of course the Carfax does not guarantee that all accidents with a vehicle are reported and included on their reports. He said he bought the car for a 16-year-old nephew and the nephew didn't want a car that's been in an accident. The description I used when I listed the car on eBay Motors specifically said that according to carfax it had never been in an accident. I also made it clear that I was not the original owner of the car, so even though I did my best to accurately describe it, it was a used car and was being sold as-is.

It wasn't my fault for selling a car that has supposedly been in an accident. There are a lot of cars out there that have been, but it was never reported to anyone. Unless I took a much closer look at a few parts I wouldn't have been able to tell. It wasn't the buyer's fault for coming 5 hours to pick up a car that he thought was never in an accident. He did however purchase a vehicle "as-is" after inspecting it himself in person.

I got to thinking...would this situation be as bad if it wasn't an eBay buyer? The bottom line is that the buyer got a decent looking and running car for well below book value. He had the opportunity to check it out thoroughly (which he did) prior to purchase, and nobody forced him to purchase the vehicle. Would this same thing have happened on a walk-up customer? Personally I don't think so. I think a lot of shoppers on eBay are more picky than the average shopper. Part of it probably has to do with the reach of eBay. A lot of people aren't going to see a car in person because they shop outside their local area. Good for sellers, bad for buyers. No matter what you tell them, send them the photos of, etc., they still expect a new car when they arrive. I had the same thing happen years ago when I sold a '69 Mustang Mach 1. The buyer picked it up in person then called very upset the next day because he got it home and realized it didn't have disc brakes which he assumed it did. I don't know that there's anything that can be done in situations like these, but it's still one thing that I see selling cars on eBay more than on the other classified sites.

Wednesday, August 01, 2007

Can your SEO company answer these 10 questions?

SEO companies along with other Search Engine Marketing companies are becoming large in number. We recently spoke with one such company that had been trying to get one of our dealers to sign up with their company for SEO services. What we found out was that the company really didn't understand a lot of Search Engine Optimization.

SEOmoz.org just posted a good set of questions to understand if you really know how search engines work. If the people performing your SEO cannot answer these questions, you need to think about possibly changing companies. Most of these questions are pretty basic and any SEO person should be able to answer 90% of these questions off the top of their head. The Bonus question does require some thought.

Answer these Ten Questions Before You Charge for SEO Services from SEOmoz.org
What four search engines comprise 90%+ of all general (non site-specific) web search traffic?
Explain the concept - "the long tail of search."
Name the three most important elements in the head section of an HTML document that are employed by search engines.
How do search engines treat content inside an IFrame?
What resource and query can you use to determine which pages link to any page on SEOmoz.org and contain the words "monkey" and "turnip"?
What action does Google threaten against websites that sell links without the use of "nofollow"?
What is the difference between local link popularity and global link popularity?
Why is Alexa an inaccurate way to estimate the traffic to a given website?
Name four types of queries for which Google provides "instant answers" or "onebox results" ahead of the standard web results.
Describe why a flat site architecture is typically more advantageous for search engine rankings than a deep site architecture.
BONUS (Answer this one and I'll be very impressed): Name twelve unique metrics search engines are suspected to consider when weighting links and how each affects rankings positively or negatively.

I would suggest visiting SEOmoz.org and reading up on what the whole SEO and SEM game is about. The more knowledge you have as a customer will filter out the suspected 70% of bad companies out there. It seems like there are many folks out there trying to basically rip people off.

It looks like we will get the answers to the questions tomorrow.

Be sure to check out Search Marketing Education Has a Long Way to Go - 5 Examples from the Field on SEOmoz also. This is a great entry on how many of these SEO companies are not acting in the best interest of their clients. SEO is not some "trick" or black magic to fool the Search Engines. No one can guarantee a #1 ranking on Google, Yahoo, MSN or Ask. If a company gives you any guarantee, run to the next company, because the one making the guarantee is not going to be worth your time.

Saturday, July 28, 2007

What Can Be Done to Improve Website Leads?

We’ve done websites for car dealers across the country, and of course we have several clients in our local area as well. The different approaches by two local dealerships has given us a unique look into how much a website design really impacts the amount of leads generated from the dealership website.

These two dealers, we’ll call them Dealer 1 and Dealer 2, are comparable on most levels. They both spend a lot of money on marketing. Both use the same 3rd party classified sites (Autotrader.com, Cars.com, AutoMart.com, AutoExtra.com, and a couple of smaller sites). They also use the same magazines to advertise locally with similar multi-page spreads. Even the inventory and customers are similar – they both sell in the $7k-$15k range, have the same number of cars on the lot, and both do mostly sub-prime finance. When Dealer 1 seemed to be doing so much better than Dealer 2 as far as website leads, it warranted a closer look.

When Dealer 1 signed up with us over a year ago they didn’t have a lot of input into their site design. They wanted to trust our expertise and see the results. We did a very simple design, easy to navigate, always 1-click away from inventory, and a very short credit application.

Dealer 2 was the exact opposite. This dealer was adamant in the design and features he wanted on his site, even though most were against convention, and certainly against our recommendations. Their site has been more of an ongoing project – constant changes requested, seemingly new features added every couple of weeks. It’s truly become an endless pit of feature-creep. A prime example of what can be done as opposed to what should be done.

Upon a recent evaluation of leads and overall statistics, here’s what was uncovered. We literally went through every lead ever generated on each site to clean out things such as multiple inquiries and bogus leads. We wanted to do an apples to apples comparison, so accurate data was necessary. Here’s what we found:

Visitors on Dealer #1 site only spend half the time of visitors on Dealer #2 site.

Bounce rates for Dealer #2 are twice that of Dealer #1.

Dealer #1 receives 1 good lead for every 22 website visitors (4.5%). Dealer #2 receives 1 for every 91 visitors (1.1%).

So what does all this mean? One way to look at it is that Dealer #1 has a site which doesn’t confuse visitors (lower bounce rate), they’re able to find what they’re looking for easier (lower time spent on site), and the calls to action make customers more apt to submit leads.

Dealer #2 has a site which isn’t nearly as user-friendly, has a lot of content that customers don’t care about, and lacks the necessary calls to action which help generate leads.

This all goes back to what I’ve said before on other posts. Just because something can be done, that doesn’t mean it should be done. Car dealers by nature want to do things their own way, but not listening to the people you pay to help you can cost you a lot in the long run.

Friday, July 27, 2007

Car Dealers Creating Their Own Advertisements?

I ran across an interesting blog post today that I have mixed feelings about. For some car dealers it could be a great thing. For others it's a disaster waiting to happen, or maybe I should say waiting to get worse. The original post talks about the advertising we've all seen before...a dealer's kid "starring" in their commercial or other things that seem like a good idea to the dealer but are the epitome of bad advertising.

If you're a local (Virginia Beach) reader then you've probably seen one local dealer's TV commercials with his dog. I cringe every time I see that commercial. The funny thing is, I had a young couple ask me one day where the dealership was for "that car dealer with the dog". I wanted to say "I don't know" out of spite, but someone paid good money for that horrible commercial so I may as well help them get their ROI.

OK, back on topic here. There is a company website which is linked from the original blog post that enables auto dealers to produce their own advertisements. They seem to have a pretty decent idea. It looks like their advertising "experts" have created some sort of templates for different media that are customized via a web interface by the dealer. For the professional dealer who has the time or wants the extra control, this is a great thing. I just wonder how many dealers will end up using this to create their own "bad" advertising campaigns. Hopefully there is some sort of educational aspect to what they're doing to guide dealers in the right creative direction.

Wednesday, July 25, 2007

Search Engine Marketing Companies for Auto Dealers - Be Careful Who You Trust

I received a call today from one of our clients who has been considering a pay per click campaign for their auto dealership. Pay per click (PPC) is one form of search engine marketing and can be very effective if done properly. This search engine marketing company has been pushing them to sign up for their SEM program, and the dealer wanted a professional opinion. He asked me to contact the company as a representative of his dealership and give him my thoughts about the company. The first words that came to mind were "smoke and mirrors".

The gentleman who had been calling the dealership was a sales rep, but he clearly had no product knowledge. When I asked even basic questions, he refused to give a straight answer and kept throwing out all sorts of features like "we'll get your dealership on the first page of Google". That's all good, but do you really have to tell me that 10 times when I'm trying to ask about your contract length? Rule #1 of sales: answer the prospects question either directly or indirectly. I eventually asked about pricing and the sales rep said he would call me back in 30 minutes.

45 minutes later I was on the phone with another client and got not one, not two, not three, but FOUR consecutive calls from this sales rep. It's OK to be eager about a potential sale, but don't harass your prospects. I was able to take the 4th call and he was ready for the price quote. I'll probably never understand this, but for some reason the rep wouldn't give me the annual price. It wasn't too difficult to figure out because he did tell me that 15% was due up front and that came to $630, but I flat out asked him what it broke down to annually since I didn't have a calculator handy and he had to put me on the phone with the IT guy who was more knowledgeable about the technical questions. By this point I was trying hard to believe this whole call wasn't a joke.

Enter "the IT guy". Same smoke and mirrors, just a louder voice. He couldn't answer any of my questions, he just kept saying how many clients they have nationwide. I even asked a 5th grade question to this guy which he dodged: "You say you guarantee page 1 of the big search engines. How much of the monthly payment to you is actually allocated to the keyword spending?" Surely they must have some percent, right? Apparently I'll never know, because he just started talking about how they're the "Wal-Mart of the keyword bidders" so they get discounts on their bids. Yeah, OK. Someone bids $1.00 per click for something and you only pay $.80 per click for placement above them because you have 6000 clients?

I'm making fun of these two people I spoke with, but the reality is that they do have a lot of clients. Search engine marketing and PPC campaigns are confusing to a lot of car dealers, and unfortunately there are companies out there who make their living by preying on these customers who don't know any better. Anybody can set up their own PPC campaigns fairly easily. To manage them effectively and get the highest return on investment, the campaigns must be done properly. My advice to any dealers is to thoroughly research any SEM company you're considering doing business with. Find out what exactly they do for their clients besides simply setting up a PPC account. Some questions to ask: do they provide ongoing analysis? How much of your money goes to actual clicks and how much goes to the company for managing it? Will they create effective landing pages for your website to maximize your ROI?

Choose wisely, and don't buy snake oil just because someone tells you it's great.

Autotrader vs. Craigs List - The Results Are In...

My highly un-scientific study of Craigs List vs. Autotrader.com is finally complete after 6 months. Which classified site works the best to sell used cars? The ongoing post and final conclusion can be seen in the Autotrader vs. Craigslist results. Stay tuned for another experiment with a different type of vehicle and additional classified sites thrown in the mix.

Thursday, July 19, 2007

Latest Inventory Management on Autotrader.com

While some might think I'm a disgruntled former employee of Autotrader.com based on some previous comments, this isn't true. The fact is, Autotrader was a decent place to work, and more importantly, grow as an auto industry professional. One thing I learned during my time there was that the employees on the technical side of things (programmers, etc.) are a very talented group of individuals.

This is clear with the latest launch of Autotrader's inventory management system (Dealer Community). The old system worked well and rarely went down, however it was probably a little too basic for some dealers. An important thing to note is that different dealers have different levels of computer experience, and some just plain don't care about a lot of bells and whistles. One advantage of the new system is that the old system is still available to those who are more comfortable with it. As someone with fairly good technical abilities, the new system is a lot better.

If you're not an Autotrader dealer and don't have access to the Dealer Community, you can see the demo of the new system by clicking here. Time will tell if dealers actually use the tools provided, but they are at least there for the dealers who want to make the most of their Autotrader.com marketing dollars.

Friday, July 13, 2007

Google sued for deceptive advertising practices involving autos

The Australian Competition and Consumer Commission is suing Google for for deceptive advertising involving a couple of auto dealers and an auto classified site.

The ACCC is also alleging that Google, by causing the Kloster Ford and Charlestown Toyota links to be published on its website, engaged in misleading and deceptive conduct in breach of section 52 of the Act.

Further, the ACCC is alleging that Google, by failing to adequately distinguish sponsored links from “organic” search results, has engaged and continues to engage in misleading and deceptive conduct in breach of section 52 of the Act.

It appears that the two car dealers referenced were involved with a company called Trading Post which offers listing services to car dealers. Trading Post bought Google AdWords keywords that contained the names of the referenced dealerships. This topic has come up a few times on some of the blogs that I read. I know that DealerRefresh wrote an entry about this topic and a discussion continued about the ethical concerns.

This suit gets a little confusing, but it seems like the two dealers compete with Trading Post for automobile sales, but also list their vehicles on the Trading Post site. Trading Post actually has a listing page for one of the dealerships.

So it seems that Australia has some issues with a company bidding on keywords that contain business names (probably trademarked) and diverting a consumer that clicked on a paid listing to someone else's site. It will be interesting to see what happens to this case.

I think it will be virtually impossible for Google to monitor all of the advertising listings in AdWords. One of the benefits of AdWords is the simplicity and self-service nature of advertising. It is pretty simple for anyone to setup AdWords and run their own advertising campaign.

Tuesday, July 03, 2007

Bankruptcy and Auto Loan Approvals

Looks like the sub prime auto finance market is on a path for continued growth. I just read an article from SubPrime Auto Finance News about the number of bankruptcy filings hitting an all time high for the first quarter of this year, up about 66% over the same period last year. While this is highly discouraging for the American public who seems to be taking on more debt than ever, it must have buy here pay here and rent to own car dealers optimistic.

In my opinion, I think over the next few years we're going to see more and more of the larger dealerships tapping into the sub-prime market. We've had large franchises contact us recently to create secondary websites for them aimed at this market. I expect to see these types of requests increase, because whether a dealer wants to put up with the traditional problems of sub-prime financing or not, business is all about revenue.

The ripple effects will also be seen in related products such as RFID tracking/shutoff devices and programs geared toward dealers who want to offer financing to sub prime customers.

All in all, we've watched this market grow very fast in the last few years, and it isn't showing any signs of slowing down any time soon. If you as a dealer have the stomach for it, "All Aboard".

Sunday, June 24, 2007

Online vs. Television Advertising for Auto Dealers

So these days a lot of auto dealers use online advertising or cable TV ads. Which works better now, and what does the future hold for each? BlogPro Automotive recently posted an article to their blog and Auto Industry Startups posted their own article, both discussing behavioral targeting and how it can be applied to online advertising. I was speaking with someone a couple of days ago about a TV ad for a local dealership and asked if they had seen it. Their response was a reminder that as technology changes, so does the effectiveness of advertising. They told me that they are rarely home during the time this dealer's ads run, so they're always seeing the TV show by watching it on TiVo. As a result, they don't subject themself to the commercials by virtue of a fast-forward button. It really got me thinking....as TiVo and digital video recording becomes even more mainstream, how much will the advertisers be hit with inefficient advertising? Cable advertising, like online, can be very specific - targeting certain neighborhoods or demographics is common. How much data does that little cable box collect anyway? When will it start letting the company know things like my typical viewing habits? When will they start targeting advertising based on those habits - if I always watch comedies but throw on a sappy Lifetime movie on a Friday night will they start showing me anti-depressant ads? It's a joke, but it's also a very real possibility.

Back to my original questions: as DVR becomes more mainstream, how will TV advertising change for car dealers? I'm sure the cable companies give out viewer numbers/reach when trying to sell advertising spots, but how accurate are those numbers when you take the "commercial skippers" into account? At this point I can't imagine internet users leaving a reputable site because of advertisements, but what's down the road? Popup blockers have already impacted online ad conversion rates. The bottom line in our present world of advertising is that online currently offers a high level of targeted advertising. The more targeted, the higher the conversion rates, in theory at least. The targeting is getting to be more and more precise (behavioral targeting being a great example of the next level), and who knows how precise it will get. So is it better to have highly targeted ads to a small group of prospects, or is it better to have a broader reach with lower conversion percentages? This is obviously a debatable issue, since car dealers use both. As someone who isn't paying the advertising bills at a dealership, I say you cover your bases with diversification.

Monday, June 18, 2007

Mercedes-Benz and the Golden Rule of Advertising: Repetition

I'll often leave a television on while I work. Sometimes to listen to the news, and other times just for a little background noise. Lately there has been one commercial that catches my attention EVERY time. Mercedes has been running this one commercial lately about their most recent sales event. They've been running it a LOT. Some young kid playing with his Mercedes pedal car and it asks the viewer how long they've dreamed of owning a MB. At first look I thought the commercial was great....a little nostalgia, a catchy jingle, etc. Now it's starting to be annoying.

The fact that I'm annoyed by a decent commercial is not the point. The point here is that Mercedes has a commercial that I'm sure EVERYONE is familiar with. Why? Because of the repetition level. (Note: No joke, I just heard it for the second time since I started typing this post.) If they only ran it once or twice a day would anyone know about this commercial? Not likely. Would it be effective at driving home the point that there's a sale going on? Nope. Repetition in (most) advertising is necessary to make it effective.

The same is true with advertising your dealership website. Even though we explain the entire concept of websites to clients ahead of time, we've had some dealers who expect thousands of customers to come the day a website is launched. It takes time to build up some areas such as search engine rankings, and the dealers who have the most success use their site as one arm of a comprehensive marketing plan. This means advertising it, and doing so on a regular basis. If you use a full page ad in the local magazine, make sure your website is listed. Using a particular graphic or font to display the URL and keeping it the same each week will help build recognition. One of our dealers does a lot of radio spots, and they end their ads the same way each time - by repeating their website address twice.

So is it worth it to run your ad so frequently that you annoy some guy in Virginia who is involved with advertising? Probably....I am writing about it, aren't I?

Monday, June 11, 2007

Your Future is in the Hands of Your Website Provider

How many car dealers really think ahead when it comes to internet marketing? My experience tells me that most dealers are right here, right now personalities. While that may be OK for right here, right now, it's inevitably going to hurt them down the road.

I spent the past weekend attending two birthday parties for family members. Saturday was a surprise 60th birthday celebration for my aunt, and Sunday was a party for her granddaughter's 1st birthday. Looking at a lot of old photos put together in a slideshow presentation which eventually moved toward recent photos, it reminded me how much things have changed in the last 60 years....the last 30 years....even the last 3 years. I found myself imagining what sort of party the one year old will have in 59 years. Some sort of virtual reality display based on home videos where guests are able to "be there" for the 1st birthday? Brain implants so they can experience being there? The way technology changes, it's probably well beyond what anyone can even imagine at this point, but you get the idea that it's going to be different than this past weekend.

As a website company that specializes in independent car dealerships, our typical clients don't need a lot of the bells and whistles that some of our competitors offer....yet. Our business model dictates that we provide only those tools that are needed by our core client base. Someone who is relatively new to internet marketing and/or technology in general does not want to be overwhelmed with products they don't use or understand. As a dealership grows and puts more emphasis into an internet department I believe the average dealer will want these extras. The way I see it, there are thousands of dealers across the country. Some are ahead of the curve and some are behind the curve. Our company's role is to get the "behind the curve" dealers up to speed. At the same time we do this, the curve continues to move, and we as a company need to evolve and adapt.

A few years ago videos on dealership websites were rare. This is a perfect example of a technology trend that's growing and becoming closer to par for the course. While our early dealers did not even consider such things for their sites, we're starting to get more dealers who are. As a reputable web design company it's our obligation to advance the technology with the times. Complacency may not kill a company, but it shortchanges that company's clients.

Whether you have an existing website provider or you are searching for one for the first time, it's important to consider how progressive the leaders of that company think. One company may fit your needs today, but if they maintain the status quo, chances are they won't meet your needs for very long. Choose a web design company wisely, and although I know most car dealers don't like to think about the future, doing so when it comes to the technology side of your business is one of the best moves you can make.

Sunday, May 06, 2007

Improving Dealership Sales by Treating All Customers Differently

A lot of car dealers operate on the philosophy of treating all customers the same. Of course this is a good principle if you're referring to the general sense of respect and courteous service. I believe that treating each customer differently will generate more sales for your dealership.

When dealing with our website customers there are dealers from all walks of life. Some are large franchise groups that keep 600 vehicles in stock in metropolitan areas, while others are small independents with only a dozen cars. The thing that makes us successful is how we work with our customers on the level they need. Many customers are in rural areas and have extremely limited computer knowledge. These customers require a higher level of training and explanation of why things are done a certain way. They need us to hold their hand through the early stages of the internet marketing process. It's not uncommon for me to get 4 or 5 calls in the same day from some of these dealers when they're starting out. The larger dealers we work with often have internet managers who have been hired specifically for working with us, therefore they have a better understanding at first and don't need as much of the attention we offer. I only speak with some of these dealers as infrequently as once every 6 months, because they prefer not to be bothered.

Knowing your customers needs is key to closing more deals and selling more cars. Take the sub-prime market for example. A lot of bad credit customers shop for cars based on two things: (1) if they can get financed, and (2) how much their weekly payment will be. The actual vehicle is surprisingly not at the top of the list of the most important needs. Someone with perfect credit is apt to be more interested in the vehicle instead of weekly payments.

Two of my family members are purchasing new vehicles this month. One (my mother) is 65 years old and the other (her uncle) is 85 years old. Of course the salespeople saw them coming and probably figured on high-gross deals right away. I'm sure they changed their opinions pretty quickly, not to mention they probably needed a bottle of Advil when they left. They both drive a hard bargain, but it sounds like before that point they didn't take the time to establish buying needs. My mother's car was her first car ever, so rather than pushing her toward the typical "old people" cars, she was actually looking for something small, safe, economical, and easy to drive. A salesman figuring this out at the first dealership probably would have resulted in a sale. Instead she went to another dealer where they figured out her motivation for buying a car, and more importantly what type of car she wanted.

Imagine you sell scuba gear. You've got the best scuba gear available on the market, and it's at a great price. You push your gear on someone and tell them how much they need it. Now imagine what the customer is thinking right up to the point they tell you that they don't swim. It starts things off on the wrong foot, and the customer quickly develops the feeling that the dealer doesn't care about anything other than a deal.

Get to know your customers before you start pushing them into a particular car. It sounds like common sense, but a lot of dealers just don't do it. If you can do this, you're sure to see higher revenue in your dealership.

So how does this relate to your dealership website? Simple - make sure your site maintains this same philosophy. Don't assume that everyone visiting your site is there for the same reason. Some people want to shop by price. Others want to shop by make/model. All customers want to be able to do this on their own time, but make sure you have different solutions for when they're ready to pull the trigger and do something. Contact forms or credit apps should be readily available, phone numbers/addresses should be prominent on all pages, and that way they'll have options for the manner in which they're most comfortable contacting you. More ways to contact you means a way that appeals to everyone, and increasing the number of contacts will ultimately increase your revenue as well.

Thursday, May 03, 2007

Pricing for a Dealership Website

Take a look around the web and you'll see an unbelievable range of pricing for auto dealer websites. It's no surprise - you get hundreds or thousands of companies and you're bound to be all over the map. Of course a small company who builds websites in their spare time is going to charge less than another company who focuses strictly on car dealers. Why? I believe the answer is a simple concept. For some reason a lot of auto dealers we talk to don't seem to get it right off.

The reason is a matter of simple economics. I see a lot of web design "companies" that are nothing more than one person building and promoting all sorts of site design in their spare time. The usual situation is one in which a person has a full time job and relies almost exclusively on referrals from existing customers and also the "friend of a friend" scenario. In this situation there is no real need to grow the business; it's merely a hobby. This means no money needed for marketing, development, a sales force, an office, etc. When these typical business needs aren't present, of course the profit margins increase and voila, you have an inexpensive website product to offer. This isn't always a bad thing, but we see a lot of these providers who just don't care about having a good product. Of course there are larger companies that produce good looking sites but lack the essential features to make your internet marketing a success. I'd say the majority of car dealers still haven't been educated on what makes a good site vs. a bad site.

It all boils down to value. Suppose I go to a car dealer and ask how much his BMW costs. Let's say they quote me $25,000. If I tell the dealer that another dealer down the street has "a car" for $5000, we all know what the first question would be from them: "Well is it the same BMW?" This example sounds absurd, but we run into the same thing with a lot of dealers who call in. "Company X only charges this amount and you want to charge your amount." Car dealer websites probably have as much variety as the vehicles on the road, so we constantly have the apples to oranges discussion with dealers. We choose to work in this industry where price is everything in the mind of most customers, so taking on the value-building educational role doesn't bother us. When it comes time to make a decision on what provider you want to develop your dealership website, I recommend shopping around, determining what features you need and what features you could care less about, and then make a true apples to apples comparison between the providers who offer the features you need. Your choice is eventually going to impact your return on investment, so it's well worth your while to do the homework.

Tuesday, March 20, 2007

Best practices for marketing vehicles online

I was speaking with a dealer today, and they are completely new to the arena of online marketing. They were asking a lot of questions about best practices, and one of the tools I provided for their education was a presentation developed by Autotrader.com. If you're new to selling/promoting vehicles online, or even if you'd just like a brief refresher course, this tutorial should be well worth your while. It discusses everything from the importance of writing good descriptions to taking appropriate photos.

Monday, January 29, 2007

Will Cars Sell Better on Craigs List or Autotrader?

I wrote a post a while back comparing a few of the major players in online classifieds. I've worked for a few of these companies personally, and several of my closest friends are National level managers with the other companies, so I have some unique insight into each. One site I gave some opinions on was Autotrader.com. Another online classified site which was left out of the mix was Craigs List. If you're not yet familiar, Craigs List is a "no-frills" type of site with free auto classifieds. Their web traffic is among the highest of all sites, and continues to grow month after month. Currently they're the 9th ranked site in popularity in the U.S., ahead of even AOL.com, CNN.com, and Microsoft.com. Although they pride themselves on catering to individuals, many auto dealers have been using the site to sell cars. What better way to gauge the effectiveness (at least in my local market) than to actually sell a car.

For my experiment I purchased a 2000 Pontiac Sunfire GT for $700. After spending about $1100 to fix a few things (exhaust system, wheel bearing, radiator, power window) and a good detailing job, I was good to go. Into the car for $1900 and it books for a little over $4k retail, should be an easy sell this time of year.....an economy car at tax time.

Two days ago I placed an identical ad on both Autotrader.com ($55 "fully loaded" ad with 9 photos) and Craigs List (Free ad with 4 photos). I'll be updating this post frequently with feedback as to what sort of leads each site provides, and general sentiments.

As far as the listing process, both sites were easy to list and edit the vehicle. One area I feel is a real drawback on Craigs List is that my ad has already moved down the list considerably. Every ad that has been posted after mine is placed at the top of the list, so as time goes by I expect leads to fall off.

Leads #1 and #2
I received my first lead early Sunday afternoon. A younger sounding woman left a message saying she saw the car on Craigs List and had some questions about the vehicle. When I called her back 30 minutes later, her tone of voice told me she wasn't very serious about buying a car. She wanted to know the mileage (120k) and hung up. This brought me back to the days of selling cars and having to answer a lot of questions that I knew didn't matter in the long run.

My second lead appeared in my inbox this evening, again from Craigs List. One thing did catch my eye about this lead...the email subject. This person had somehow seen the ad I originally placed before my edit.....the ad I had up for about 2 hours two days ago before the price was corrected. Not sure how he found a price from two days ago that was fixed, but it could present a problem with negotiating price if he's a serious buyer.

2 days and 2 leads, both from Craigs List

Not much new to report on the leads. Maybe the used car market is really as bad as everyone says, or maybe just that not many people have received their tax returns yet and are ready to shop? I received one additional lead from Autotrader a couple of days ago. A gentleman called wanting to know how many miles were on the car. I told him, and he said he was shopping around for a first car for his daughter, and that he might call me back. The person who had previously emailed me sent another message saying he would check out the car this past weekend if it was still available, but he was a no call/no show. One thing that has proven a little annoying, and takes me back to the car sales days, is that I've taken the time to write a very detailed description about the vehicle, and the mileage is displayed prominently on both Autotrader and Craigs List. For whatever reason, people always ask questions that are already answered in the description. Just part of selling vehicles online I guess, but I have to wonder how many pointless calls are averted by having the detailed info on the ads. Surely I must be saving time by giving the details up front. This begs the question though: is it better to be as detailed as possible up front and weed out the non-interested buyers, or is it better to be vague and give myself the opportunity to sell more people over the phone? From a dealers point of view this depends on personal preference, but I'd rather let the car sell itself so I have time to focus on other activities.

2 leads from Craigs List, 1 from Autotrader

Well as a new twist on my experiment I re-posted to Craigs List to get my ad back to the top, and the listing on Autotrader has been cut down. I wanted to take a closer look at the impact a shorter (and more vague) description has. Sure enough, I got two calls from Autotrader shortly after modifying the description. Both people left messages, and when I called them back and left messages myself, they never returned my call. Found another car? Changed their mind? Who knows, but having SOME leads come in keeps hope alive for me that it will actually sell, and I imagine a dealer would feel the same way.

2 leads from Craigs List, 3 from Autotrader

Seems re-posting the vehicle on Craigs List has helped out. I have pretty much consigned the car through a local dealer I'm working with so interested parties can get financed on it, and also to see if Automart or Autoextra produce any decent leads. I received one call today from someone who sounded serious (off Craigs List) and actually showed up at the dealers lot where I've got the car sitting. Supposedly he'll be back tomorrow with a down payment. Another customer saw the car on Craigs List and filled out the dealer's online credit application, so things are looking good for Craigs List in this experiment. Hopefully I'll have the "dramatic conclusion" over the weekend.

4 leads from Craigs List, 3 from Autotrader

If you've been following this post for a while, you probably think I've forgotten about it. On the contrary! In the three months since first posting, there have really only been 7 total leads and the car is still sitting on the lot. Why isn't it selling? Is it a junk car? Probably. Is the market bad now? Perhaps. Am I trying to get too much for it? Probably. Am I holding out for my price? You bet! This car would not have sat in a dealer's inventory for this long unless they really didn't care about turnover rates. I'm not worried about cash flow or sales numbers, but if I were a dealer these things would certainly come into play. One thing that does surprise me is that Automart and Autoextra have not produced any leads at all. The original purpose of this post was to compare Autotrader and Craigs List, so maybe it's not fair to throw AM/AX in the mix later in the game. Time to repost to Craigs List and see if that drums up any more interest.....

******Latest Update 5/10/07******

Well reposting on Craigs List certainly helped get some action. I know most people on Craigs List seem to browse from newest to oldest rather than search, so I guess it shouldn't be a surprise. I posted 1 week ago, and literally 5 minutes after posting I had a response. Within about 6 hours I had 3 more people who all seemed VERY interested. I couldn't believe it. After talking with the first guy he filled out a credit application and would pick up the car in a day or two. Great, it was sold.....or was it? The guy got to the dealership too late last Saturday to do anything, so he was a "be-back" for Monday. No-show, and a follow up email revealed he spotted another car that he was approved for. On to plan B. The second guy also filled out a credit app and was very serious about the car. I put him on ice for a few days until I knew what the first guy was really doing (since he was willing to pay full price). Once the second guy's credit was pulled, he couldn't get approved without a down payment which he wasn't willing to do. Poor credit, 5 months on the job, 6 months in an apartment, and more delinquent accounts than you'd believe. All those issues, he didn't want to put a penny down on the car, and didn't want to pay more than prime interest. Yup, a crazy person, but still a lead for my purposes. The other two responses seemed like good leads too, but neither wanted to fill out the credit application online so I told them to visit the dealership in person. Not sure if they did or not. Since I'm in a military area, a few of the larger ships are coming in over the next couple weeks and that means a lot of Navy kids with big checks burning holes in their pockets.

8 leads from Craigs List, 3 from Autotrader

******Latest Update 6/3/07******

Activity has definitely picked up, and to my surprise it seems to be people on Craigs List finding my older posting. If they were just browsing they would have to go through a ton of listings before they got to mine, so this tells me that people are using the search feature more. Since the last update I've received another 6 leads from Craigs List and not one from Autotrader. Yup, the car is still for sale......

14 leads from Craigs List, 3 from Autotrader

******Latest Update 7/17/07******

Not a whole lot to report this time around. One email lead came in from Autotrader.com on the vehicle and 6 leads from Craigs List. I did repost to Craigs List again which always produces a spike in inquiries. The usual pattern with Craigs List contacts - several seemed interested and wanted to meet the following day to see the car in person, however no follow up email/call was ever received. I must say I'm still very surprised at the response rates between both sites. At this point Craigs List is generating 5 leads for every 1 Autotrader.com lead, but the most important thing is sales, and neither has produced this after 6 months. I know a dealer wouldn't usually hold a unit this long, so I'm attempting to abandon this project through the only auction I have access to: eBay. eBay is intended to be, in most cases, a wholesale network, so while I may not get as much for the car as if I held on to it I'd rather just get rid of it at this point.

20 leads from Craigs List, 4 from Autotrader

Craigs List vs. Autotrader.com: Who wins? There are a couple of ways to look at this evaluation I've done over the last few months. There are advantages to each classified site. Autotrader.com boasts the highest number of vehicles, and therefore the highest number of visitors for auto classifieds. One thing that isn't known is the number of visitors in my particular area. Sure, the number of times my vehicle was looked at is available from Autotrader, but these numbers are not available from Craigs List, so it's tough to compare. The more important number that auto dealers should be concerned about is the number of sales and return on investment. Autotrader is one of the highest price per vehicle sites out there, and Craigs List is free. Craigs List produced a significantly higher number of leads, and also produced the only leads where someone actually came and looked at the car in person. At the end of the day, neither site produced a sale, but after 6 months I attribute that to poor inventory selection. eBay served its unanticipated purpose in this experiment. I eventually dumped the car on eBay for no reserve and made a few hundred bucks profit, even though it sold for well below book value.

My conclusion: Craigs List generated a lot more action than Autotrader.com, and by numbers I would have to say it would produce better results with the right inventory. The downside is that if a car sits on the lot long enough, it's going to require much more work with Craigs List, because you need to keep posting the same car to keep it at the top of the results. Posting more than once every 45 days is against Craigs List terms of use, but to be effective it has to be done probably once a week. If I made a living out of selling cars, I think first and foremost I would buy the right inventory, and second I would put more emphasis into Craigs List than Autotrader based on cost. Like most dealers out there I would still use Autotrader for its reach and simplicity, but in a limited role based on cost. Maybe only with the Select Ads they offer (pay per listing) for certain units. $80 to finally get rid of any aged units on eBay seems worth it to me too. Even though $80 is a high cost per unit, consider the alternatives: having your cash tied up in a car that's not moving off the lot or paying auction fees at the dealer auctions.

Stay tuned for part two of this experiment which might be coming up in the next few weeks.

Wednesday, January 17, 2007

Buy Here Pay Here Program on Autotrader.com

I wrote a post a while back about subprime finance and buy here pay here dealers (original post is here). It seems that Autotrader was working on a program for this segment of dealers and launched it as an available advertising option about a week ago. In speaking with a friend and past coworker of mine who still works for Autotrader.com, I have to say I don't really know what they're doing. Seems to me like they've taken one step forward and one step back to arrive where they were 6 months ago for advertising options. From what I'm told about features, a major benefit of the BHPH program through Autotrader.com is the pricing. I'm told it's a little cheaper than the similar "Featured" program for traditional dealers, but features don't necessarily address all of the issues at hand. I like to rate things with my own arbitrary scale, so we'll start with +2 Points to Autotrader.com for even venturing into the BHPH marketplace.

Instead of the 3 photos per vehicle on that a dealer would get with the Featured package, a BHPH dealer is only permitted to use 1 photo per vehicle. I hear the reasoning is that bad credit customers aren't shopping for a car that looks good, they're shopping for a car they can afford. Since most BHPH inventory is around the same payment price, wouldn't it make sense to differentiate your vehicle from your BHPH competitor's vehicle through more photos? Especially when Autotrader's biggest differentiator between packages is the number of photos you are allowed. Their dealer training stresses this fact too, and I don't think it can be disregarded just because a dealer is BHPH. (-2 Points for Autotrader.com)

I'm told the BHPH program does give the dealers a secure credit application in their package. I don't know that this is essential since almost anyone can get financed anyway, but the one thing it does do is prioritize your internet leads. Someone who takes the time to fill out a credit app is usually more serious about a car than someone who sends a quick email to ask what the down payment would be. Internet leads are all about getting the customer to show up in person, so I don't know that a secure credit app helps much, only that it lets you know ahead of time who is more likely. (1 Point for Autotrader.com)

The biggest thing I hear is that there will be minimal site changes to the customers. The most obvious need is a section on the site for customers with bad credit to shop for their vehicle. I understand why Autotrader hasn't done this, at least I think so. By separating customers from the beginning of their shopping experience, they're taking them away from virtually the entire dealer base who advertises presently. They've created a double edged sword - they've grown so big that to do something in other markets like BHPH would hurt their bread and butter. To have cars (and dealers) for the sub-prime finance market, you must have an easy way to find those cars. (-1 Point for Autotrader.com)

Total Points: 0

My overall impression of the BHPH program is that it seems Autotrader.com has launched it prematurely. I understand I don't know everything being discussed at the top level of the company, and that they're probably close to launching additional features. I think given the information that I have at this time, there is more work to be done. I'm sure they'll learn this as the sales reps start selling the product and they have some actual data to evaluate. If I were a BHPH dealer I think I would sit it out and see what new features they come out with specific to my market. They can get almost the same thing by spending $20 a car for a "Select Ad", and can get that with more photos too.

Friday, January 05, 2007

Importance of a customized website for your auto dealership

It is very important for an auto dealer to use a website provider that can deliver a customized website design. Your website is just another marketing tool/channel that will display your brand to customers. Whatever your brand image may be, needs to be accurately reflected in the design of your website.

Your website should be one part of an integrated marketing program which should consist of a consistent brand image across all channels. Use the same logo, color schemes and marketing messages on your website, newspaper advertising, tv advertising, business cards, floor advertising etc... This will ensure that every touch point with customers will send the same message and further enhance whatever brand image or message you are trying to portray. Every dealership must have a niche of sorts in the market to effectively compete in today's market. You must get that competitve differentiator message across to your customers and your website is one very powerful way of accomplishing this task. Your website will be visited by a majority of your customers, and a lot of potential customers. Make sure your website will get your message across to your customers.

Over time we have seen that customers are going online before they make contact with dealerships when they begin the process of purchasing a vehicle. This trend is growing as it is easier for customers to get online access and visit dealer's websites. Most likely your website will be the first touch point with that customer, especially if that customer is out of your target region.