Advertising budgets are among the first to get trimmed in economic downturns but many U.S. auto dealers, turning to new technologies, are refocusing some of those dollars online.
Jim Behar, general manger-Phil Smith Acura in Pompano Beach, FL says he predominantly leverages his marketing dollars on the dealership's websites, in addition to advertising with Google and eBay.
“We just couldn't compete head-to-head in traditional marketing (in Florida),” says Behar, who moved nearly 100% of his marketing budget online a few years ago. “It's just not cost effective and can drain a marketing budget in no time flat, without any noticeable return.”
The return has been Phil Smith Acura selling nearly twice as many vehicles. Dealership websites continue proving to be a great source for leads and high conversion rates.
“I jumped out of the box in January, and turned up all of our websites with some ‘Google,’ as well as having (a chat tool) on each site,” Behar says. “I was No.22 in the nation in January, with a total of 80 (Acuras sold).”
The live-chat on the dealership's websites, known as ActivEngage, “is a two-way communication with the potential customer as soon as they get on the (dealership) site. It keeps them from bouncing around,” he says.
ActivEngage gets immediate communication with the potential customer, and a dealership employee or someone from the chat provider can obtain information, such as e-mail or phone number, and send it to the dealership's customer-relationship management system and Internet department within minutes.
“We'll continue to be heavy into websites, I have one for every new-car model we have, with ActivEngage on each site, too,” Behar says.
“ActivEngage has helped out quite a bit. When people go to a website, normally they have to scout around to find what they are looking for.”
Phil Smith Acura has an Internet specialist on duty 24 hours a day, and with chat, “the whole key is to get them while they're still at their computer,” Behar says. “If someone makes an inquiry on a website, with firewalls and servers, a lot of times there's a time lapse, but with this, it's instant.”
Many dealers don't pay attention to the Internet traffic to their websites, says Todd Smith, president and CEO of ActivEngage.
“To me, your virtual showroom is where all of your customers are landing, well before they actual step foot into your physical showroom,” says Smith. “Having a website is great, and dealers spend a lot of money driving traffic to the web — with things such as Google, television, radio, newspaper — but they don't have people there to answer their questions.”
Smith says the chat services helps to proactively engage every website visitor, by “trying to get them into a conversation, and then collecting information and pushing it into the dealer's CRM application, whatever that is.”
Prior to co-founding ActivEngage with Ted Rubin, Smith worked as a general manager at a Chevrolet dealership. ActivEngage moved up to a commercial application in the end of 2007. It test ran in early 20008 with about 15 stores before a full launch.
At the Chevy dealership, Smith focused on having a “really big web presence.” Although the site had approximately 12,000 unique visitors, it only generated a 3%-4% conversion to some point of contact, such as a submitted lead form or phone call.
Smith realized the conversion rate was low because those Internet visitors weren't being “engaged” enough. That realization led to the founding of ActivEngage featuring low-pressure chat to build relationships with prospects.
Since Behar took over the store in 2006, selling those 80 units in January — 50 new and 30 used — has been the best month.
“That's our record, and we keep getting stuck there,” Behar says.
“We've been maintaining the 60-70 range,” he says. “We took a little bit of dip when the market really went down, but we tweaked up our ‘Google’ and shined up our websites and we just kept plugging along.”