Chief Marketing Officer
At MileOne, David Metter enjoys a unique perspective on the range of tactics dealers can leverage to drive sales success in their internet departments. As the chief marketing officer for the Middle Atlantic States dealer group, he emphasizes the importance of both flexibility and established processes at MileOne’s 64 dealerships. The idea is to allow individual stores the latitude to implement the staffing structure that aligns with their culture and customer base without leaving to chance the proven steps to a sale. Let’s take a look at how Metter’s internet marketing strategy drives success for MileOne, a group representing 28 marques with an inventory of more than 15,000 vehicles.
Metter, 38, joined MileOne in 2004. After beginning his automotive retail career nearly two decades ago as a floor salesperson for Dave Dennis Chrysler Jeep Dodge in Dayton, Ohio, he quickly worked his way up through the ranks. Building on subsequent assignments as a desk manager and in the F&I department at other dealerships, he soon found himself promoted to general manager.
“I loved the business so much,” he said. “I was a fairly young guy when I became a GM – which is a good thing and a bad thing. A good thing in that I got a lot of opportunities to learn the business early on, but a bad thing in that I got to the point where I didn’t know what was next and chose to leave the business.”
After five years with a customer relationship management vendor, Metter said he wanted to return to retail. When the opening at MileOne presented itself, he was looking for a position with a large dealer group that would leverage his prior retail experience and the perspective he gained in his previous role with the CRM company.
“It gave me a great opportunity to not only see the world through one dealership’s eyes, but I had the opportunity to go into upward of 1,000 dealerships,” Metter said. “I saw the great things they were doing, and I saw the bad things they were doing.”
That perspective gives Metter an excellent overview of what’s working to drive success in today’s dealership environment. DealerADvantage sat down with Metter to learn more about MileOne’s internet strategy and his thoughts on internet marketing.
DA: Where does online advertising fit into your overall media mix? How has that changed in the past five years? How do you see it changing in the next five years?
Metter: We’ve seen our advertising mix change dramatically. Interactive marketing, for us, includes all of our internet lead management pieces, contextual advertising, behavioral targeting, search engine marketing and good used-car marketing sites such as Cars.com. You’ve got to go where the people are. If you look at media consumption over the past couple of years, it continues to grow on the interactive side with online media. This year, our interactive spend is going to exceed 30 percent of our advertising budget. Nothing shows me that it’s going to decrease.
DA: How does MileOne manage internet sales (e.g., staffing structure and number of salespeople)?
Metter: We run different models because of our size – we have 64 dealerships. We have not locked into one set process or model; we’ve been testing different models. At our Hall locations in Virginia Beach, Va., we have a dedicated business development center that handles all internet leads and pushes the hot leads to their internet salespeople out in their stores. You would think that would be a successful model – and it is. But our most successful model is a hybrid of a BDC and our internet staff in our Heritage Auto Park, where we have one internet manager that pushes leads to the proper people based on the lead information and the product. They have unbelievable success with managing it that way, so we don’t want to mess that up. Then we have other models. We have just internet salespeople who are set up in a round robin, and then we have a small BDC set up with our Saturn stores where all leads come into one central location and get pushed out by the location of that lead to the proper Saturn manager.
DA: What percentage of your sales is attributed to the internet? How do you determine what constitutes an internet sale?
Metter: We average more than 26 percent of our overall sales through the internet, with an all-time high in January of 31 percent. We only count what we can absolutely quantify as an internet lead. On new cars, it’s almost 100 percent perfect. When leads come into our CRM system, we remove duplicate entries, and we make sure we have great information. They then go into our lead-scoring platform, and we work those leads. When we go to sell a customer, because of the integration with the dealer management system, it’s super easy. We know that customer is an internet customer.
Where it gets a little blurry is on the used-car side. It’s tougher to really watch that lead because if customers submit a lead through Cars.com, that’s easy. It goes into our system, right through just like a new-car lead. If they call, we have tracking numbers that are integrated into our CRM system, and, for the most part, that’s a pretty foolproof system. There are a few that go between the cracks, but typically on used cars people don’t submit leads. People will either call to verify that the car still exists, or they’ll just print something out from our home site, Cars.com or AutoTrader.com, and they’ll come into the dealership where the car is located. That’s where it gets really fuzzy.
We know that we capture a good portion of what we do, and we’ve tracked it that way now for three years. What we also know is that there are a number of customers who come through these different portals for used cars that may not get marked exactly the right way. So when I say our internet sales are 31 percent, could it be 34 percent or 35 percent? Who knows? We know the web influences more than 80 percent of our sales, so we’re not going to sit there and over-analyze this. What we’re going to do is track what we know we can track and track it consistently.
DA: How do you measure the success of your internet program and your return on investment?
Metter: The three core components of our success with internet performance management have to be around the percentage of cars sold to the overall sales for that month and that year, our closing percentage and, last but not least, our cost per sale.
DA: What is your process to manage a lead from the time it is received until a vehicle is sold?
Metter: We have the philosophy that “first in wins.” You don’t sit on a lead. If you are the first to respond, you have a much greater chance of winning the sale; however, dealerships have a tendency of cherry-picking leads. They tend to think that they know which leads are the best leads – which aren’t necessarily the best leads. That’s why we built our lead-scoring platform in a partnership with R.L. Polk more than a year ago. That gives us the ability through great data, predictive modeling and wonderful training to really look at a lead for what it is – no matter what lead generator it’s coming from. Every lead gets a response. We’re not scoring leads to not respond to them. We have platforms that have lead response times below 15 minutes. I can tell you also that we rank among the highest among a number of manufacturers for lead response times. We have leads in our BDC system that can be worked upward of a six-month process. We have others that are in an active mode for six weeks and then go into a passive mode with an automated response piece that’s timed within our CRM system.
DA: What practices are working for MileOne to help your stores improve internet lead conversion?
Metter: The one thing that we’ve tried to do is create as much sticky glue as possible when it comes to our own home site. Something that helps us, hopefully, with lead conversion is our DealerCentric online credit application. That allows us to have a little bit more of an intuitive process for capturing a customer’s credit application. If customers submit a lead on a car and then fill out a credit application, we know that they’re just trying to speed up the process for buying a car. If they don’t submit a lead on a specific piece of inventory and go right into the credit application, they have questions on their credit, so we can handle that lead a little differently.
Things like our KBB Lead Driver give us the ability to provide a trade evaluation online but also be able to acquire information. Live chat is something we’ve had for three years. It’s not the end-all-be-all for lead conversion, but it captures the customer who probably was about to leave the site without converting. They want to get a little information without giving up a whole lot. What we try to do through live chat is to warm up the customer to not only the manufacturer brand but also the MileOne brand. Hopefully, they’ll give us a little bit back so we can convert them into a lead. What we see month-over-month is between a 10 percent to 12 percent conversion of the leads we acquire.
We also love our partnerships. Partnerships with Cars.com and AutoTrader.com are somewhat essential. For us to be able to leverage a platform as large as Cars.com is in our best interest. We have some stores that close as high as 24 percent of their internet leads. We have some stores that are under $100 cost per sale. Our overall cost per sale is below $200.
DA: How do you measure online advertising partners? What matters most when evaluating their performance?
Metter: When it comes to used cars, you have to take everything into account. You can’t just look at internet leads and phone calls. You have to look at internet leads, you have to look at phone calls, you have to look at the way that your inventory is displayed, how many people are looking at it, how many people are clicking through, how many people are printing the ads, how many people are printing maps. You have to look at all of these things because they tell you something. If you have a lot of people viewing your inventory, but you’re not getting the same percentage of leads and phone calls as what may be normal, it means you need to change something. Are you displaying your cars correctly? Are you pricing your cars too high? Are there things there that just don’t make sense? And then you have to look at whether your percentage of your business is going up. So if you’ve turned on the switch with Cars.com and you didn’t see a whole lot of leads and you didn’t see a whole lot of phone calls, yet your used-car sales increased by 12 percent over the same time period – if you didn’t change anything else, you only changed one thing, that tells you you’ve done the right thing, you’ve partnered with the right company. However, if you do the same measurement over a three-, four- or five-month period and you don’t see an increase in your business, then it’s probably the wrong move.
Again, you have to review your process first. You have to be sure your cars are displayed correctly, that your people are trained correctly and that you’re priced correctly. If you’ve done all of those things and you still don’t have an increase, then you probably have not picked the right partner.
DA: How do you drive profitability and maintain gross with internet customers?
Metter: Treat them the way they want to be treated. People assume that internet business is a low-grossing business, and I would argue that is not the case. I think that if you handle it as a low-grossing business, then it’s going to be a low-grossing business. Dealerships have been doing that on the showroom floor for years. Instead of really selling from their strength, treating the customer with respect, listening to the customer and doing what the customer says, they just drop the price. It’s not selling value, it’s selling price. So internet divisions were kind of built off of that: “Let’s just sell price. Let’s just be cheapest.”
The way I see it, let’s not be cheapest, let’s give the customer a great process. Let’s listen to them. If they want to go down this path, let’s help them down the path. And I think what will happen is you’ll end up seeing that your grosses will be just as much as they are on your showroom floor. In some cases, I think they can be more than what they are on your showroom floor because you offer the customer what they want. They want a better process.
DA: How do you work with manufacturers to maximize online initiatives?
Metter: We utilize every opportunity for co-op dollars. Beyond that, we’re really trying to get the manufacturers to continue to put more money into interactive. Where we really need to align: the manufacturers and the dealers and Tier 2 have to sit down, at some point, and say, “Look, this is what we’re trying to do,” because we’re competing against each other. We have to make sure that what they want to do at Tier 1 transitions into Tier 2 and then transitions into Tier 3.
DA: To what extent are you managing your online reputation?
Metter: I think that this issue is extremely important to us in the industry, and it’s certainly very important to us at MileOne. That’s why we wanted to be first in on rating sites; to be sure we had good data on these sites, that it was going to represent our brand and represent each individual store. Just like CSI scores, if you don’t have a proactive way of handling your customers and their CSI when they leave your dealership once they’ve purchased a car or serviced a car, then you’re not going to get the reputation management piece online. But if you do, if you understand that you have to treat your customers with respect and identify the best and the brightest customers so that they, in turn, will identify you as a great place to buy a car, then I think you’ll do well. I don’t lay awake at night worrying about reputation management online because I know that if we have a good process in the store, we have a good process for follow-up and we have a good process to identify great customers who will identify us, we’re going to be good.
We’re not just aligned with one reputation site. We decided that we were going to go across the board and make sure that we have great information, great stats and, hopefully, great feedback from all of our different stores across the platforms. We think that it really is a third-party type of application so that a customer can go from one to the other and get a legitimate view of how that dealership does business. We manage that corporately, and we have one person who monitors any type of activity – positive or negative – and then passes that along to the general manager at each individual store. That works very well for us. In fact, we’ve had examples of customers who’ve not had a great experience. We’ve been able to flag that real-time, almost, and flip it to the general manager. The general manager can follow up with the customer, and the customer, because all they really wanted was to be taken care of, will go in and change what they typed in before and say: “You know what? They didn’t take care of me, but now they did, and the general manager called me. I can’t believe the response. I can’t believe how they stepped up. I really appreciate that. I’ll continue to do business with them.”
DA: What advice would you give an incoming internet sales manager in your operation?
Metter: This is the greatest business in the entire world. Too many times when you go on a career path, there are a lot of roadblocks in your way. Selling cars gives you an opportunity to meet a whole lot of different people. Your first customer of the day could be a single mom who is working two jobs, who is just trying to get a simple mode of transportation. Your second customer of the day can be a CEO of a company that is going to buy 14 cars for its salespeople. I think that’s kind of an interesting mix. I think that you’ll only get what you make out of this business. If you work hard and you work smart, if you build up your customer base and you take care of your customers, if you’re proud of what you do and you convey that you’re proud of what you do to your customers, you’re going to be unbelievably successful. If you want to be a salesperson who sells 30 cars a month and makes a great living and has a wonderful family life, you can do that. If you want to be a general manager of a dealership, you can do that. If you want to build up your portfolio and eventually buy a dealership, you can do that. There are so many cool career paths.
DA: What are the greatest challenges today in online automotive?
Metter: Dealers need to decide to embrace the internet and quit talking about embracing it. It all comes down to execution. People can say what they want to say, but if they’re not willing to execute and make it a core competency of their business, they’re going to fail. We’re eight years into this business model, and you still hear dealers talking about “Should I have a dealer website?” or “It’s too much of a hassle to update my specials.” You’ll have a dealer who’ll spend four hours lining up the vehicles in front of his dealership, but he’s the same guy who hasn’t updated his online inventory in two weeks, who hasn’t added sell copy, who doesn’t respond to a lead within three days – or at all. What’s the logic in that?