Last year, the three dealerships in the Greenville, MS-based Tom Wadler Auto Group sold 1,300 used vehicles. This year, they're on track to sell 2,600.
A big reason for the 100% jump is Wadler's foray into the Internet. Until May 2002, the group had no real Internet presence. Then owner Tom Wadler took the plunge. He hired Derek Frezzell as group Internet director.
There was skepticism at first as to whether the Internet venture made sense. Says Frezzell, “Greenville is in the heart of the Mississippi delta, which is a very economically depressed area. People don't have enough money to own computers down here.”
But they use them elsewhere. “Most of our traffic happens during the hours of 8 a.m. to 6 p.m. People are shopping us while at work and school,” says Frezzell.
A report shows 5,000 people in May 2002 went on Autotrader.com's third-party website to shop for used vehicles in Wadler's trade area. So people were online looking for vehicles. It was a matter of getting them into the showroom.
“You have to be able to break the metrics from the website down into a science,” Frezzell says. “The Internet director has to be able to educate the dealer principal with measurable facts.”
With a limited budget but an owner who allowed him to be creative, Frezzell went to work. First, he solicited Ohio-based Dealer Specialties to build and host the Wadler website.
He worked out a deal where Dealer Specialties will do the web hosting for free as long as it is able to take and place the photos of the inventory onto the website. The dealership pays a nominal fee to the company for the photography service.
The group spends a little more than $1,000 a month to list its inventory on the Autotrader.com site. Frezzell is wary of spending too much with third party sites.
He came from a Mississippi dealership that would spend $19,000-$20,000 a month for only 400 leads. “You have to make sure you're getting that return on investment,” he says.
He builds exposure by having the owner put the Wadler group's website address on every advertising piece. “He spends a lot of money on advertising each month, so it made sense for us,” says Frezzell.
The group's Internet costs are $2,290 monthly. In May, the group had 54 Internet sales with a total gross of $113,815.
“One thing to keep in mind with Internet companies is the negotiation,” says Frezzell. “The reps are sales people and are flexible.” He signs no agreements for longer than 30 days and he tries to get up-front costs waived. He uses Net Trak to manage leads.
Frezzell credits the group's management with its Internet success. “Without Bob Hummel, the general manager, I couldn't have done what I did. I talked him to death the first couple of months here trying to get everything set up.
“And Mr. Wadler has given me everything I've asked for. He made sure everyone was on board with the new venture.”