WardsAuto e-Dealer 100 Players Up Their Games

Dealers on the 15th annual list tell what works digitally, and what doesn’t.

Tom Beaman, Contributor

April 15, 2015

9 Min Read
ldquoWersquove tried lots of thingsrdquo says Ussery
“We’ve tried lots of things,” says Ussery.

“We are an Internet-centered store. The Internet is what made us successful.”

Those words from Mario Murgado, Jr., general manager of Brickell Mazda in Miami and former Internet sales and marketing manager at Brickell Motors, represent the spirit of the dealerships that make up the 2015 WardsAuto e-Dealer 100

That group is keyed into the fact customers demand more online car shopping options even though an A-to-Z car purchase on the Internet remains a rarity.

Dealers on the 15th-annual top 100 list posted 2014 Internet-based sales of 175,745 new vehicles and 122,455 used units for a total of 298,200. This is an increase of 4.2% over 2013’s total of 286,138 (167,496 new and 118,642 used vehicles.)

For the list, an Internet sale is defined as one in which the initial customer contact is online as a submitted lead and completed by a dedicated Internet salesperson.

While this a small part of overall vehicle sales of 16.5 million last year, it’s more than triple the 81,705 Internet sales reported on the 2002 WardsAuto eDealer 100.

There are almost as many dealer digital strategies as there are dealers, with varying opinions about third-party lead providers, how a dealership Internet department should be structured, and how advertising dollars should be allocated between digital and traditional media.

But the one constant is that the prospective buyers whom dealers want to reach are shopping online at some point in their shopping. 

Three-fourths of automotive research time is spent online, according to Polk’s latest Automotive Buyer Influence Study.

“Auto shoppers on average will consult 24 different research touchpoints, 21 of which are digital,” says Peter Leto, an automotive strategist for Google. “They also find these digital resources to be the most influential in the shopping process, with dealership websites, OEM websites, and search engines being among the most leveraged digital resources in the shopping process.”

Murgado bases his marketing strategy on his own shopping preferences.

“I look at myself and the way I like to be contacted and marketed to,” he says. “Whenever you’re going to make a shopping decision, not just automotive, you go to the Internet first to find out more about the product and make an informed decision. I try to be where the customer’s at and right now the customer’s on the Internet.

“Our job is to be there, to be relevant, to assist the customer and make it easy for them to come in and visit our store.”

Brickell Motors operates Honda, Buick-GMC, Mazda, Cadillac, Infiniti and Audi franchises and employs 13 business-development center employees that specialize in each brand.

Brickell Luxury Motors’ stable includes Ferrari, Mercedes-Benz, Land Rover, Porsche, BMW, Maserati, Bentley, Jaguar, Aston Martin, and Lotus. Customers can use the dealership’s mobile website to search new and used inventory, see special offers, get a trade-in value, do a “30-second credit application,” and schedule a service appointment.

The group ranks No.48 on the WardsAuto e-Dealer 100. “Sixty percent of all our sales, new and used, are trackable through a phone call or Internet lead,” Murgado says. “Ninety percent of all customers have visited one of our websites.

“We’re not afraid to disclose that information. Customers can go on our website and get a ballpark idea of what they’re looking for before they even come to the dealership. It’s about being transparent, giving the customer information and providing them with the content they’re looking for.”

Internet Dept. or No Internet Dept.

An ongoing debate centers on whether a dealership should operate a separate Internet department or consider all employees responsible for walk-ins and online leads alike.

“The most progressive dealers are saying there’s no need for an Internet department because my entire dealership is now an Internet store,” says Jared Hamilton, founder of DrivingSales, a dealership research, training, and analytics firm based in Sandy, UT, and a Honda dealer.

“We all know that over 90% of consumers use the Internet to shop today, which means that they are coming in with a different set of expectations than the traditional buyer,” he says. “Dealerships that have Internet departments that are anything less than 95% to 100% of their staff are behind the times.”

That’s a popular sentiment, but translating it into reality isn’t always easy.

“Everyone in the industry, including me, would love to have an ‘Internet dealership’ where every sales and service representative can handle prospects from every possible source of business,” says Peter Deiser, director of eCommerce at the Ed Morse Automotive Group in Delray Beach, FL. “Some in the industry have gone so far as to have that same person handle the vehicle financing, service contracts, and other F&I products.

He doesn’t get it. “How realistic is this utopian dealership? Why have we become so insistent on the idea that one individual should be able to handle the entire sales process regardless of the source of the prospect?”

Deiser says some of his dealership group’s best face-to-face showroom sales representatives may not have the necessary writing or computer skills to communicate effectively by e-mail.

Conversely, “some of our most effective internet sales representatives and service BDC representatives may find it a challenge if they had to push a written offer across a desk and ask for the deal,” he says. “Why can’t we all accept the fact that people need to be placed in positions that capitalize on their strengths all the while minimizing their weaknesses?”

The Ed Morse Automotive Group operates 16 franchises with 10 brands at 10 locations in Florida and ranks No.7 on the WardsAuto e-Dealer 100. The group leverages its digital advertising channels to align with traditional channels and factory initiatives.

“We want to maintain one message whether online, in print, on TV or on the radio,” Deiser says. “The manufacturers will always have much deeper pockets than dealers, so we would be foolish not to take advantage of OEM spending and mirror their efforts.”

Morse uses digital channels to brand the group, individual dealerships “and even our sales and service representatives via review sites and social media,” Deiser says.

The goal: “Keep our name in front of auto intenders from their early research phases until the day that they decide to pull the trigger,” he says.

Many dealers say the highest-quality leads come from their own websites. But Deiser says third-party lead providers still play a role, especially if a dealer is looking for lead volume.

Third-party providers offer “an easy and effective way to purchase a large number of leads,” he says. “Of course, the quality of third party leads pales in comparison to prospects generated from our own websites.”

But despite efforts by some dealer groups to try to migrate all leads to their websites, “there will always be that type of customer that wants to do their research and price shopping anywhere but with the dealer,” Deiser says. “In the end, the dealer has to set the price and consummate the purchase, but we can certainly appease those customers that want the ‘third-party experience.’”

Deiser says his “showed Internet appointments” close in the 40% to 50% range compared with overall showroom traffic that may close in the 20% to 25% range. 

“Appointments from Internet leads are fought over in our organization, because they turn into deals more than the customer walking unannounced through the front door,” he says.

In 2014, the Morse group had 39,951 Internet leads and 11,324 sales phone calls from Internet advertising sources, he says. “The result was just shy of 6,000 group sales from Internet ad sources which put us at about an 11.5% overall close rate in 2014.”

On the Right Track

Tracking is an important part of e-commerce for dealerships.

 “We track key metrics in the Internet department to allow us to see where we’re weak and where we’re not,” says Shawn Flynn, chief marketing officer at Phil Long Ford in Denver and Colorado Springs, CO. The two stores rank No.77 and No.80, respectively.

“We will literally track response times, conversion rates from leads to sales, cost per sale from a whole store standpoint down to every single lead provider,” Flynn says. Between those metrics and the sales numbers themselves, we’re able to look into where we’re doing well and not so well with our different providers. It helps us analyze which ones are doing well and which ones are not.” 

When he wants the highest conversion rates and lowest cost per sale, Flynn turns to the main Phil Long website, followed by leads from OEM sites and a third-party lead provider.

Flynn targets a 5-minute response time for all digital leads and realizes lead conversion rates from 15% to 20% each month. His goal is to keep the per-lead cost at $300 or less.

Of the $400,000 Phil Long spends each month on advertising and marketing, digital takes up 35% to 40%.

“We really believe (Internet and traditional media) need to work conjunction with each other in order to have a really effective advertising strategy,” Flynn says. “I have people who sit across from each other that are both sides of the house that communicate on a daily basis to ensure those two ad medium are in sync with each other.”

Newspaper advertising still brings in business, he says. “From our customer surveys, we find we still have 30% of people who buy vehicles from us reading the newspaper. It’s definitely smaller than it used to be, but it’s still a viable advertising medium.”

To Wayne Ussery, director of digital marketing at Atlanta’s Jim Ellis Automotive Group, trial and error is the best teacher.

“I’ve been doing the digital side of this for 16 years,” Ussery says. “We’ve built processes from the ground up and we’ve tried a lot of things, and we’ve failed at a lot of things.”

Ellis ranks No.2 on the e-Dealer list. The group operates Audi, Chevrolet, Buick-GMC, Hyundai, Maserati, Mazda, Porsche, Volkswagen and Volvo franchises.

“By far, our website provides the best quality of conversions,” Ussery says. “We adopted the attitude that we need to make sure we are getting people to a place where we can control them, and our website seems to be the best.”

The dealership group is putting a lot of energy “into making sure our websites have the information from price points to specials to lease numbers,” he says. “Once we get prospects’ attention, we convert them through a phone call or email or chat and then the magic is just the magic – we go on selling.”

The Jim Ellis dealerships use paid search, display, and traditional advertising to get prospects to visit their websites.

Internet conversion rates at Ellis dealerships (defined as an incoming email or phone call) can range from 10% to 18%, depending on the franchise. Conversions to closed sales range from 8% to 12%. 

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