e-Dealer 100

Despite being almost 10 years old, the world of selling cars online, in many ways, is immature and volatile. Many dealers still have not seized the revolutionary change occurring around them, and leveraged it to their advantage. A web site and psuedo-Internet departments is not enough. When more than 80% of all car shoppers are going online at some point in the buying process, Internet marketing and

Cliff Banks

April 1, 2004

24 Min Read
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Despite being almost 10 years old, the world of selling cars online, in many ways, is immature and volatile.

Many dealers still have not seized the revolutionary change occurring around them, and leveraged it to their advantage. A web site and psuedo-Internet departments is not enough.

When more than 80% of all car shoppers are going online at some point in the buying process, Internet marketing and selling stops being a novelty or a hare-brained scheme of an overly enthusiastic Internet manager. Instead, having a viable Internet department becomes a necessity. Because that's where the customers are.

“Believe me, we make mistakes every day,” says Jay Gubala, Internet director for the Herb Chambers dealerships in the Northeast. “But it's amazing how much business we capture just because we're responding to customers online.” Many of Chambers' Internet customers are from outside the dealerships' marketing areas.

Consider that when Ward's Dealer Business began its annual e-Dealer 100 in 2001, the dealers on the top-100 list sold 61,356 vehicles online. This year it's 125,198 units.

The dealerships that are aggressively going after the business are finding the Internet sales are taking a much bigger slice of the pie.

“E-Commerce is 25% of our business,” says Gary Marcotte, vice president of new vehicles and e-commerce for AutoNation Inc., the nation's largest dealership chain. “It's a powerful way for us to gain market share and do it at a reasonable cost.”

Other dealer groups are starting to make some headway.

“It is going to be common next year for dealer groups to be averaging 20-25% of their total new retail sales coming from Internet leads,” says Dean Evans, vice president of marketing for Dealix Corp.

A Hendrick Automotive Group's Honda store now has 47% of its sales generated by the Internet, according to Matthew Belk, e-Business director for the group.

Dealer Ken Smith of Dave Smith Motors in Kellogg, ID, is far ahead of the rest of the pack and with his 5,300 Internet transactions, is in no danger of relinquishing that top spot on the Ward's e-Dealer 100. In fact he's putting distance between himself and the others.

But it's still only a few dealerships that are making it work. For a store to become successful selling cars online, the dealer needs to get a vision of what's possible. A lot of dealer principals have embraced the Internet in word but not necessarily actions. There are many stories of people getting the position of Internet manager thrust upon them, only to be given little resources or money to make it work.

It's not long before that employee is working somewhere else. The average time an Internet manager stays in one store is short, seven months by one estimate.

Success starts at the top. The sheer technology may be hard to grasp, but the dealer doesn't need to become a wizard in technology. How many dealers fully understand the parts business or the service business?

Holding the people in the store accountable and giving them the tools to succeed is critical. Otherwise, potential sales will be lost to the dealerships that are doing it right.

One year a dealership can burst on to the Ward's e-Dealer 100 ranking with great numbers, then be gone the next. More often than not, the fluctuation can be attributed to a savvy Internet manager who is no longer at that the store.

There are other dealers who are frustrated by the lack of a standardized process for determining what actually is an Internet sale. Much about this industry still needs to be defined and standardized.

The processes for handling Internet customers are starting to be standardized. But when almost all customers are Internet customers at some point during the process, it becomes difficult to discriminate between them and regular customers.

Steve Henson, executive vice president-sales and marketing for Kelley Blue Book, suggests industry discussion on standardizing what are good quality leads. There still is disagreement among all of the industry parties as to what constitutes a good lead.

Henson points to manufacturers who say that if a lead doesn't close in two weeks, it's not a good lead, even if it closed within 15 days. That's unrealistic to hold Internet leads to such high standards, he says.

“We need the online world to mimic the offline world as much as possible,” Henson says.

The best practices and processes are being developed by those dealers and Internet managers who are pioneers into the cyber world. Now, other dealers are beginning to pay attention. Gubala says a week doesn't go by when he doesn't take a phone call from a another dealership asking for advice on how to set up an Internet department.

The dealers on the ranking are figuring it out and they're the ones who are defining how the industry will take part in the cyber age.

e-Dealer 100

Lead Management Tools

WebControl (Autobytel)

25

Net Trak (Internet FX)

14

Reynolds Web Solutions

4

Cobalt

3

SalesCenter (Cars.com)

2

SalesPoint

2

Top 100 Dealers

Rank

Dealership

Owner

City

State

New Units

Used units

Total Sales

Total Units

1

Dave Smith Motors

Ken Smith

Kellogg

ID

4,200

1,107

$158,712,202

5,307

2

Tyson's Toyota

Jim Koons Automotive Companies

Vienna

VA

2,729

366

$76,511,752

3,095

3

Turnersville Auto Complex

United Auto Group

Turnersville

NJ

2,389

505

NA

2,894

4

Burt Toyota

Burt Automotive Group

Engelwood

CO

2,089

592

$69,710,681

2,681

5

Bob Howard Automotive

Group 1 Automotive

Oklahoma City

OK

1,092

1,368

$54,675,960

2,460

6

Capital Ford

Timothy W. Michael

Raleigh

NC

1,140

1,290

$47,340,000

2,340

7

Conicelli Autoplex

Dominic Conicelli

Conshohocken

PA

1,962

362

$51,965,600

2,324

8

Hudson Toyota

United Auto Group

Jersey City

NJ

1,719

382

NA

2,101

9

Red McCombs Automotive

Red McCombs

San Antonio

TX

1,428

612

$34,884,000

2,040

10

Power Toyota Irvine

AutoNation, Inc.

Irvine

CA

1,689

225

$41,975,039

1,914

11

John Elway Toyota

AutoNation, Inc.

Englewood

CO

1,379

488

$44,290,898

1,867

12

Earnhardt Ford Sales Co.

Hal J. Earnhardt III

Tempe

AZ

1,080

765

$39,563,505

1,845

13

Jim Ellis Atlanta

Jim Ellis Auto Dealerships

Atlanta

GA

1,504

337

$46,933,000

1,841

14

Tempe Toyota

AutoNation, Inc.

Tempe

AZ

1,658

151

$42,283,098

1,809

15

Herb Chambers Honda/Saab/Infiniti

The Herb Chambers Companies

Somerville

MA

1,497

176

$54,697,525

1,673

16

Power Toyota Cerritos

AutoNation, Inc.

Cerritos

CA

1,335

275

$34,486,281

1,610

17

Earnhardt's Gilbert Dodge

Hal J. Earnhardt III

Gilbert

AZ

970

593

$34,433,459

1,563

18

Checkered Flag Motor Car Corp.

Ed Snyder

Norfolk

VA

779

423

NA

1,556

19

Maroone Toyota

AutoNation, Inc.

Davie

FL

1,339

173

$32,357,332

1,512

20

Bill Collins Ford

W. Kevin Collins

Louisville

KY

1,105

396

$33,876,879

1,501

21

Tyson's Chevrolet Chrysler

Jim Koons Automotive Companies

Tyson's Corner

VA

1,452

315

$45,524,325

1,467

22

Earnhardt Glendale, Inc.

Hal J. Earnhardt III

Glendale

AZ

863

601

$30,971,409

1,464

23

Gwinnett Place Honda

Hendrick Automotive Group

Duluth

GA

1,339

114

$24,792,200

1,453

24

Maroone Honda of Hollywood

AutoNation, Inc.

Hollywood

FL

1,147

245

$27,552,723

1,392

25

Carr Subaru

Wally Preble

Beaverton

OR

864

504

$31,311,792

1,368

26

Landmark Honda

Rosenthal Automotive/Robert Rosenthal

Alexandria

VA

1,051

317

$27,712,551

1,368

27

Prestige Toyota

Prestige Motors/Joe Dockery

Ramsey

NJ

1,177

176

$31,128,000

1,353

28

Classic Chevrolet

Tom Durant

Grapevine

TX

720

624

NA

1,344

29

Bill Heard Chevrolet Sugar Land

Bill Heard Enterprises

Sugar Land

TX

765

566

$42,150,000

1,331

30

Cheryy Hill Triplex

Foulke Management/Charles Foulke

Cherry Hill

NJ

658

666

NA

1,324

31

Russ Darrow Honda, Nissan, Suzuki

Russell M. Darrow III

Milwaukee

WI

687

591

NA

1,278

32

Ira Toyota

Group 1 Automotive

Danvers

MA

1,071

155

NA

1,226

33

Libertyville Toyota

AutoNation, Inc.

Libertyville

IL

839

376

$26,407,080

1,215

34

Bill Heard Nashville

Bill Heard Enterprises

Antioch

TN

664

550

$20,866,000

1,214

35

Town & Country Chrysler

Ralph Martinez

Milwaukie

OR

576

588

$23,916,228

1,164

36

Maroone Honda of Miami

AutoNation, Inc.

Miami

FL

972

189

$23,723,175

1,161

37

Bill Heard Chevrolet

Bill Heard Enterprises

Sanford

FL

749

403

$23,300,500

1,152

38

Courtesy Toyota

AutoNation, Inc.

Winter Park

FL

888

253

$23,601,227

1,141

39

Central Florida Toyota

United Auto Group

Orlando

FL

997

137

NA

1,134

40

Falls Church Ford Dodge

Jim Koons Automotive Companies

Falls Church

VA

889

235

$25,159,546

1,124

41

David McDavid Honda

Asbury Automotive

Irving

TX

841

257

NA

1,098

42

Gresham Nissan Subaru

Nick Smit

Gresham

OR

420

672

$20,409,984

1,092

43

Fairfax Honda

Rosenthal Automotive/Robert Rosenthal

Fairfax

VA

934

245

$24,216,803

1,079

44

Maxwell Ford

Group 1 Automotive

Austin

TX

682

391

$24,780,563

1,073

45

Friendly Ford

Edward J. Olligas

Las Vegas

NV

802

262

NA

1,064

46

AutoWay Toyota

AutoNation, Inc.

Pinellas Park

FL

879

171

$20,937,767

1,050

47

Maroone Ford of Margate

AutoNation, Inc.

Margate

FL

712

330

$23,326,145

1,042

48

Steakley Chevrolet

AutoNation, Inc.

Dallas

TX

710

329

$25,405,890

1,039

49

Honda of Nanuet

United Auto Group

Nanuet

NY

885

148

NA

1,033

50

Annapolis Toyota

Jim Koons Automotive Companies

Annapolis

MD

827

206

$21,127,260

1,033

51

Bankston Ford of Frisco

AutoNation, Inc.

Frisco

TX

653

376

$25,160,784

1,029

52

Bill Heard Chevrolet Columbus

Bill Heard Enterprises

Columbus

GA

490

531

$18,786,000

1,021

53

Holtz House of Vehicles

John Holtz

Rochester

NY

865

148

$12,511,764

1,013

54

Sterling McCall Toyota

Group 1 Automotive

Houston

TX

689

323

NA

1,012

55

Power Nissan Irvine

AutoNation, Inc.

Irvine

CA

909

100

$24,967,425

1,009

56

Pleasanton AutoMall

Hendrick Automotive Group

Pleasanton

CA

916

92

$36,445,600

1,008

57

Champion Toyota Austin

AutoNation, Inc.

Austin

TX

830

177

$23,061,128

1,007

58

Autowest Honda Roseville

AutoNation, Inc.

Roseville

CA

924

79

$20,002,511

1,003

59

Power Toyota Buena Park

AutoNation, Inc.

Buena Park

CA

818

183

$21,361,188

1,001

60

Right Honda

Wilson Group/Dareen Tass

Scottsdale

AZ

NA

997

61

Goodson Honda North

United Auto Group

Houston

TX

771

225

NA

996

62

Palm Beach Auto Mall

United Auto Group

West Palm Beach

FL

804

189

NA

63

Miller Toyota and Honda

Miller Automotive Group

Culver City

CA

882

105

$23,835,000

987

64

Autowest Honda Fremont

AutoNation, Inc.

Fremont

CA

922

60

$21,495,720

982

65

John Elway Honda

AutoNation, Inc.

Westminster

CO

821

158

$20,961,461

979

66

Penske Honda

United Auto Group

Indianapolis

IN

650

328

NA

978

67

Baltimore Ford

Jim Koons Automotive Companies

Baltimore

MD

803

166

$21,215,934

969

68

Tempe Honda

United Auto Group

Tempe

AZ

918

47

NA

965

69

Hansel Honda

Henry Hansel

Petaluma

CA

847

117

NA

964

70

Gillman Honda Southwest Houton

Ramsay Gillman

Houston

TX

829

128

$19,777,484

957

71

Sterling Ford

Jim Koons Automotive Companies

Sterling

VA

734

215

$21,253,886

949

72

Simmons Rockwell Automotive

Dick Rockwell/Dick Simmons

Hornell

NY

247

702

$15,853,214

949

73

Pacific Honda

Sunroad Automotive Group

San Diego

CA

800

146

NA

946

74

Westbury Toyota

United Auto Group

Westbury

NY

793

109

NA

902

75

Bill Heard Chevrolet

Bill Heard Enterprises

Las Vegas

NV

630

270

$21,240,000

900

76

Hayward Toyota

AutoNation, Inc.

Hayward

CA

800

90

$19,068,644

890

77

Magnussen Ford Nissan Mazda

Magnussen Auto Group/Bernie Magnussen

Norwalk

CA

830

55

$19,961,750

885

78

House of Imports (Mercedes-Benz)

AutoNation, Inc.

Buena Park

CA

756

128

$39,747,514

884

79

Courtesy Honda

AutoNation, Inc.

Longwood

FL

782

92

$19,391,163

874

80

Westminster Toyota Mazda

Jim Koons Automotive Companies

Westminster

MD

782

79

$17,312,774

861

81

Weston Kia

Jim Weston

Gresham

OR

480

372

NA

852

82

Chevrolet and Hummer of Bellevue

Lithia Automotive Group

Bellevue

WA

395

465

NA

840

83

Al Serra Auto Plaza

Joseph O. Serra

Grand Blanc

MI

537

298

$18,283,872

835

84

Arlington Toyota

Jim Koons Automotive Companies

Arlington

VA

705

127

$19,252,224

832

85

Carr Suzuki

Wally Preble

Beaverton

OR

62

768

NA

830

86

Difeo Nissan

United Auto Group

Jersey City

NJ

665

163

NA

828

87

Atlanta Toyota

United Auto Group

Duluth, GA

GA

766

62

$18,586,371

828

88

Texan Ford of Arlington

AutoNation, Inc.

Arlington

TX

461

359

$17,932,722

820

89

Payton Wright Ford

AutoNation, Inc.

Grapevine

TX

496

322

$18,097,879

818

90

Courtesy Ford

AutoNation, Inc.

Littleton

CO

568

235

$21,020,599

803

91

Champion Ford Gulf Freeway

AutoNation, Inc.

Houston

TX

580

219

$19,299,785

799

92

Maroone Chevrolet of Pembroke Pines

AutoNation, Inc.

Pembroke Pines

FL

495

301

$18,042,811

796

93

White Marsh Chevrolet

Jim Koons Automotive Companies

White Marsh

MD

513

280

$18,485,463

793

94

Courtesy Chevrolet

Bill Gruwell

Phoenix

AZ

577

216

$16,295,333

793

95

Bankston Nissan of Lewisville

AutoNation, Inc.

Lewisville

TX

510

280

$16,419,685

790

96

Hendrick Honda, VA

Hendrick Automotive Group

Woodbridge

VA

750

35

$13,373,000

785

97

Beaman Automotive

Lee Beaman

Nashville

TN

572

200

$44,584,000

772

98

College Park Ford

Jim Koons Automotive Companies

College Park

MD

663

125

$17,641,619

768

99

Tom Wadler Group

Tom Wadler

Greenville

MS

313

436

$12,411,123

749

100

Honda Cars of McKinney

Hendrick Automotive Group

McKinney

TX

568

180

$12,860,000

748

Third-Party Sites Strong

‘He who has the most customers wins in this business’

By Cliff Banks

Many people once predicted that auto makers' web sites would put third-party lead generators out of business.

The OEMs have a long way to go before that happens. The industry is realizing that the lead generators are here to stay.

The much predicted consolidation among the players has yet to take place.

“I've been predicting it for three years and it hasn't happened yet,” says Andrew Donchak, executive vice president and chief marketing officer for Autobytel Inc.

Industry surveys indicate that the majority of car shoppers visit third-party sites. Data from the Ward's e-Dealer 100 indicate third-party sites are still creating the majority of the leads.

They did generate less leads this year, however, 48% compared to 57% last year. But the closing ratios for those leads increased 4% from 12% to 17%.

Closing ratios for leads coming from all three channels — OEM sites, third-party sites and dealership web sites all increased this year. More dealerships are learning how to properly handle web leads and the lead generators are doing a better job of funneling better quality leads to the dealers.

Autobytel, Inc. says that 60% of the consumers that send a lead through its site buy a car within 90-100 days. Whether they buy from the dealership that received the original lead is another story. Still, these are real customers who are sending leads through the web.

“Dealer redistribution systems are more efficient and the ones that have to deal with dealers everyday — the Dealixes, Autobytels, autoUSAs — those kinds of systems are more efficient,” says Gary Marcotte, vice president of new vehicles and e-commerce for AutoNation, Inc.

“They're crisper about how they do it. If you want to get into this business, my recommendation is to partner with one of these companies.”

The industry did not hear talk like that from a dealer a few years ago. Yet, in some cases, dealers still resent the third-party presence. A prominent dealer in California says his dealerships do not use third parties. He still remembers the days not long ago, when zealous third parties bragged of how they would put dealers out of business.

Dealers, though, are starting to see that partnering with third parties can be beneficial. It's about being where the customer is, and these lead aggregators typically have relationships with the larger portal-type sites, such as MSN and AOL.

Mitch Golub, general manager for Cars.com, says one of his goals this year is to be everywhere the customer is. “He who has the most customers wins in this business,” he says.

Part of his strategy is an aggressive national advertising strategy the company will be rolling out this year. AutoTrader.com did that a couple of years and it worked fairly well for th that company.

Much of the traffic from lead providers consists of shoppers who may not have even considered that dealership. In contrast, dealership web sites are doing a better job retaining existing customers.

“Leads into the dealership web site are most likely repeat customers,” says Christine Bucklin, chief operating officer for CarsDirect.

AutoUSA, a third party of sorts, created by AutoNation, generates a million leads a year for AutoNation dealerships and another 2 million for 3,000 dealerships not part of the AutoNation family.

“We want to be where ever the customer is,” says Marcotte. “We want to have the opportunity to get that relationship started and direct that customer to one of our dealerships.”

Dealers on the Ward's e-Dealer 100 ranking reported using 447 third parties in 2001. That number increased to 528 in 2002. In 2003, the number exploded, with dealers using 860 third party sites. Dealerships aren't just relying on one or two companies to help them generate leads, instead, they are reporting using seven or eight.

Still, playing in that lead-generation arena brings its lumps. For one, the nature of the data means there is transparent accountability. The numbers don't lie. “We've created this environment with the tracking mechanisms we've developed,” says Golub. That's a reason third parties have seen high dealer turnovers.

But that is changing. Cars.com increased its dealer base more than 37% and it was able to retain 80% of its dealers in 2003. Dealix, likewise, tripled its dealership base.

The companies have to take it up notch, Golub says. “We need to get better products out there in the marketplace.”

High-Tech Tool Powerful

It's credited with boosting used-car sales and profits

By Cliff Banks

A new inventory-management tool reduces the time it takes to book-in and market a used vehicle from 25 to five minutes, according to dealers using the product.

Showcased at this year's National Automobile Dealers Assn. convention, the DigitalLot Solution was developed by CDM CDMdata and CDM Dealer Services which Kelley Blue Book acquired in January.

Dealers using the DigitalLot Solution say they are on average selling 10-20 more used cars a month and increasing profits by $10,000-18,000 a month.

Included with the DigitalLot Solution is the iTab, a handheld pen tablet that collects and manages used-vehicle data. It is the only all-in-one tablet that includes a detailed software program, a VIN scanner and digital camera with the ability to store more than 150,000 vehicle records and 32 photos per vehicle. iTab's software automatically matches photos to corresponding vehicle information, eliminating data entry errors and mismatched photos.

The photos can be uploaded to the dealership web site and any third party site it is partnering with.

DigitalLot software within the iTab captures extensive vehicle information, including VIN information; used vehicle values; standard, optional and dealer installed equipment, as well as photos.

Currently, DigitalLot includes vehicle pricing and data from Kelley Blue Book, NADA, Polk and Chrome, that is updated regularly. DigitalLot also has the ability to create numerous reports, customized buyers' guides and window stickers compatible with most manufacturer and certified pre-owned program guidelines.

“DigitalLot helped us sell 55 more used cars the first month, increasing our profit by about $130,000. In 2003 we increased our profit by well over $1.5 million,” says Mark Kanter, Internet manager at Bill Jacobs Automotive Group in Chicago. “Our dealer group was struggling to keep our online inventory accurate. The service company we were using was not providing a service that allowed us to keep our Web site and other retailing Web sites up to date.”

More Than Advertising

Web Sites Should Be Extensions of Their Dealerships

By Cliff Banks

Many dealers today consider their web sites to be only an advertising medium. Even some third party lead generators refer to dealership web sites as simply another way to advertise.

The thought process goes like this:

Sure, the Internet can generate sales, but people really can't buy cars online (when was the last time you've seen a car delivered over the Internet?). Until people can take delivery online, the Internet will be nothing more than the equivalent of a newspaper, radio or television ad, albeit, ads with greater accountability.

The reality, though, is that the web site is more than another medium to advertise — it is an extension of the dealership showroom. Research indicates that almost 70% of a customers' first experience with a dealership is through the web site.

Dealerships succeeding online use their web sites to create virtual showrooms that make it easy for shoppers to become prospective buyers.

The fundamental objective of a dealership web site should be converting lookers into leads. “Transaction is the primary key for us — getting the customer to raise a hand and say, ‘Here I am,’” says Gary Marcotte, vice president-new vechicles and e-commerce for AutoNation Inc.

Those dealerships that view the web site as being more advertising are throwing a lot of cool things up on their sites but have little focus as to what the site can accomplish, Sean Wolfington, co-owner of BZResults.com contends.

“Dealers need to recognize that the web site is not the most important part of the equation,” says Wolfington. ‘There's a mistaken assumption that ‘if you build, they will come.’ But that isn't always the case.”

Instead, the key is having a simple web site that fosters leads and a process to follow up on those leads.

Have you seen the AutoNation web sites lately? “I'll tell you this, our sites are not the slickest ones you've ever seen,” Marcotte says with no apology. “Frankly, we don't care. What we're trying to do is sell cars. We've done a lot of research with a lot of people and when they come to a dealership web site they either want to find a car or find a location. They don't want to enrich their lives.”

It's all about converting traffic into leads. But it's not rare to see a dealership's conversion rate to be as low as 1%. There are a couple, though, that are converting almost 25% of their traffic into hand raisers, says Wolfington. Most fall into that 2%-5% range, according to AutoNation's research.

Even after being a pioneer in retailing cars online and being an organization that gets it, AutoNation still is looking for answers. It has a conversion ratio of only 7 1/2 %, according to Marcotte. It's a statistic that the company agonizes over, he admits.

e-Dealer 100

Web Site Companies

Reynolds Web Solutions

52

Cobalt

7

Internal

7

HyperDrive

6

Dealerskins

4

BZResults.com

3

Izmo Cars

2

Great Web Site Tips

Stuart Lloyd of Reynolds Web Solutions and Sean Wolfington of BZResults.com offer these collective tips for web site success:

  • Design the web site around how the customer wants to buy and not around how the dealer wants to sell.

  • Design 90% of the home page to what 90% of what the customers want and 10% of the home page to what 10% of the customers want. Customers want to research pricing and product information and find the vehicle they want. They want to use the web to streamline service and maintenance.

  • Use customer language, not dealership lingo.

  • Have one click to the inventory — and include photos for that inventory.

  • Place green go buttons on the web site — “We see 5% 6% more leads because of the green buttons,” says Lloyd.

  • Don't just sell price. The department won't make money and if that happens, the Internet department gets disbanded.

  • Instead, build vehicles as being part of the product and value convenience.

  • Promote all of the profit centers on the web site.

  • Update the specials. This can be an automated process.

  • Make sure your web site designer provides you with search engine optimization.

How to Lose It

Turned off by Internet Ineptitude

By Cliff Banks

This is not a success story — unlike other stories in this Ward's e-Dealer 100 package. Instead, this story is about failure — how one dealership's dismal approach to the Internet cost it a vehicle sale and what would have been a valuable customer.

Looking for a minivan for my wife this year, I decided to conduct my entire search online. It gets cold in Detroit in January and I didn't fancy spending a lot of time and energy driving to several dealerships. Besides, I cover the space, so I should know how it works.

After doing all of my research and narrowing down the brand and vehicle my wife wanted, I began to send out leads. I used all of the third-party lead generators and had good response. Each request received a quick response and even resulted in some phone calls and serious conversations.

I also sent leads to various dealerships directly and through the OEM sites. This is where the experience took a turn.

Some dealerships responded quickly, but one particular dealership and its OEM failed miserably. I sent a lead to a dealership down the street. It had the type of vehicles I wanted and it was close.

In the e-mail, I explained what I wanted, told them I would put half down on the van and would buy the extended service plan. I lived close by and probably would service the van there. I explained that, if they had what I wanted, we could close a deal immediately.

I got an automatic response asking me for the same information I had just provided. I thought, “No problem, as soon as the Internet department comes in, they'll see it and respond.”

I heard nothing for a couple of days. So I sent a lead through the OEM-sponsored lead generator. This time I received 12 dealerships' automatic responses that were similar to the one I received from the dealership down the street.

The e-mails were so similar. They had the same Internet manager's name on all of them. Right away, I knew I wasn't dealing with someone at the dealership.

Apparently, an outside company handles the automatic response e-mails and fails to include the true Internet managers' names from the specific stores.

I was agitated. The dealership didn't want to do business with me the way I wanted as an Internet customer. It wasn't helping, it was making it difficult for me.

I ended up buying a different brand from a dealership several miles away.

Dealerships who do a poor job of handling online prospects lose them to other stores. For me it was like walking into the showroom and asking a question only to have everybody ignore me.

The Internet is more than another way to advertise. It's a medium to communicate with prospective customers. Dealers on the Ward's e-Dealer 100 understand that. That's why they're on the list.

Cliff Banks is the Associate Editor of Ward's Dealer Business.

Fast e-100 Facts

125,198
Internet sales in 2003

19,972
more vehicles than in 2002

16%
increase over 2002

92,314
new vehicles

32,063
used vehicles

3rd Party Sites Used

528 in 2002 860 in 2003

Top 5 States with the most dealerships

Texas

16

California

13

Florida

11

Virginia

9

Arizona

7

Top 5 brands by number of dealerships

Toyota

24

Multi

21

Honda

20

Ford

14

Chevy

9

Number of Dealerships/Group

AutoNation

28

United Auto Group

11

Jim Koons Automotive

10

Bill Heard Enterprises

5

Hendrick Automotive

4

Group 1 Automotive

4

Earnhardt's Automotive

3

Rosenthal Automotive

2

Dealer Sites Look Better

Enhancements include sharp photos, 360-degree views

By Cliff Banks

What's new for dealership web sites? People who build them say “rich media,” meaning assorted enhancements.

“Sites are beginning to get more rich today. Before long dealership sites will be giving the OEM sites a run for their money,” says Gabriel Krajicek president of Dealerskins.

Advanced photography and video capabilities are starting to find their way onto dealership web sites. BZResults.com has a remote-controlled device that can take a 360 degree image of a vehicle's interior.

Instead of having to click on several different pictures to see various parts, customers will be able to drag the mouse and view the interior just as if they were inside the car and looking around.

It's already common on hotel web sites and should be just as prevalent on dealership sites in the next year.

Another enhancement is the development of point and roll technology — a vast improvement over the point and click method used today. Imagine a picture of a vehicle with a list of potential colors along side the picture. As the mouse scrolls over the colors in the list, the vehicle in the picture changes to the corresponding color. No clicks needed.

More sophisticated features are showing up on dealer web sites.

An example is the Cerritos Infiniti web site, www.cerritosinfiniti.com, built by Dealerskins.

The Koons Automotive Group web site, powered by Izmo Cars, has videos built into its vehicle library, in addition to point and roll technology.

Intriguing stuff, but how does it help to convert web site traffic into leads and ultimately into buyers?

For starters, web site design companies are starting to package these technology enhancements into their e-mail tools in addition to the web sites.

E-mail campaigns and auto responders already have somewhat intelligent capabilities. Sales managers can design e-mail campaigns and auto responder e-mails that are model-specific. The e-mails can include photos of the vehicle and window stickers, for example.

“The people who are doing this are doing it moderately well,” says Krajicek. But he says the technology now is much more robust.

Dealerships can take all of the above technology and package it into their e-mails today,” he says. “It's like having a micro-site within the e-mail.”

An auto responder e-mail can pull up information about a vehicle, for which the prospective buyer has sent a lead, and place it in the e-mail response — this includes all of the reviews, media-rich photos, videos and anything else an Internet manager can include. This can be done automatically.

Dealers shouldn't stop there, Krajicek advises. The e-mail should have calls to action directing the shopper back to the web site. The calls to action can be vehicle-specific such as providing the shopper with an opportunity to complete a financing application or trade in appraisal information. All this can be done before the Internet department even sees the lead.

Another development is the growing popularity of dealership web sites having their own auctions. It's something BZResults.com is working on, says co-owner Sean Wolfington.

Web sites allow dealerships to place as much information about the vehicle as they deem necessary. They're not constrained by space limitations as they are in print classifieds, Wolfington notes.

Having more information can help increase sales on the auction site. “Not all used cars are the same,” he says. “But dealers forget to inform their customers of that.”

The web site is a great place to differentiate those vehicles, he says.

Matthew Belk, the Hendrick Automotive Group's e-business director, is building an online auction micro-site on the Hendrick web site. Belk is taking it one step further. He's going to start running Hendrick-branded auctions on eBay Motors.

“We're starting to experiment with that,” he says.

Making It Click, Click

Hendrick Group eyes goal of 15,000 online sales

By Cliff Banks

The Hendrick Automotive Group sold 11,154 vehicles online in 2003. Matthew Belk, e-business director of the 43-dealership chain, thinks they can exceed the 15,000 mark this year.

He's one of the more technologically savvy people in the business.

To help him better keep track of what he was spending per unit sold, Belk developed an in-house revenue finder system. Basically, it's a daily log of all of the leads that come into the Hendrick stores — walk-in traffic, phone calls and e-mails.

Sales people are supposed to log all of the information, then Hendrick-built software analyzes it.

It lets him know which third parties are pulling their weight.

He's also experimenting with eBay Motors.

“Certain stores do real well with it, but it is a real labor of love because there is so much time involved,” he says. “It silently has become a monster for us, though.”

He only pushes units that may not turn as fast (ranging from expensive to cheap vehicles) through eBay. The margins aren't as good, but the dealer group is saving money by turning the vehicles faster, says Belk.

The group will be launching a Hendrick-branded auction on eBay Motors. It's just another idea he's playing around with.

But the labor of love may be the web site. While he's making sure customers click to inventory, he's working to showcase the dealerships. Several of them are high-end buildings that provide a lot of comfort for customers.

‘We're just trying to show off the facilities and our people and the culture,” says Belk. That culture gets a big boost from the Hendrick racing team, something promoted on the site.

e-Dealer 100

3rd Party Sites Used

2003

Autobytel

84*

AutoUSA (Autovantage)

68

Autotrader

49*

MSN (CarPoint)

49

Cars.com

44*

Dealix

41

CarsDirect

32*

Kelley Blue Book

30

EBay Motors

19*

Stoneage

18*

DriverSeat

10*

Vehix

3*

IMotors

3*

*AutoNation stores not included

500 Dealers Set To Go Live

The Reynolds and Reynolds Co. acquired Third Coast Media, a web site design company, in October of last year.

The deal left everyone wondering what Reynolds was going to do with its current web site product, Automark.

Both Automark and Third Coast Media names are going away. The new moniker will be Reynolds Web Solutions.

“We took the best features from both,” says solutions executive, Stuart Lloyd. The development and hosting services of the newly created group will be housed in Dallas.

Ever since the deal was announced, Reynolds has been rewriting the software for the new web sites. While Automark was based on the Java language, the new web site will be based entirely on Windows .Net platform.

Already the dealer pilots are live and Reynolds has 500 dealers signed and ready to go live this month.
— Cliff Banks

Top Dealer Groups by Internet Transactions

Rank

Dealer Group

City, State

Total e-Units

1

AutoNation Inc.

Ft. Lauderdale, FL

100,000

2

The United Auto Group

Bloomfield Hills, MI

28,869

3

Group 1 Automotive

Houston, TX

16,185

4

Jim Koons Automotive Cos.

Vienna, VA

12,724

5

Hendrick Automotive Group

Charlotte, VA

11,154

6

The Herb Chambers Cos.

Somerville, MA

6,373

7

Earnhardt's

Chandler, AZ

6,370

8

Dave Smith Auto Group

Kellogg, ID

5,347

9

Gillman Companies

Houston, TX

3,637

10

Sheehy Auto Stores

Alexandra, VA

2,503

11

The Suburban Collection

Troy, MI

2,067

12

Tuttle-Click Automotive Group

Irvine, CA

2,041

13

Holler Automotive Group

Maitland, FL

2,040

14

Piercey Automotive Group

Westminster, CA

1,863

15

Victory Automotive Group

Morristown, TN

1,598

16

Buchanan Automotive Group

Sarasota, FL

1,579

17

Ron Tonkin Family of Dealerships

Portland, OR

1,550

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