To Todd Smith‘s way of thinking, too much is left to chance in dealerships’ internet departments. Rather than asserting control of the sales process as they do in the showroom, salespeople all too often allow online car shoppers to drive the conversation. “We’ve been reacting ever since the phone was put into our stores,” the CEO of Orlando, Fla.-based Lear LLC says. “Customers call, they make their demands. We’re either very good at overcoming their objections and getting them in the door – or we fall down and don’t get them in.” Regaining control, Smith contends, begins with providing clear direction and process from the top and holding people accountable for results. Let’s look at how taking a tighter hold of the reins can drive the results you want.
Smith, a long-time retail automotive consultant, recently raised the question: Is your internet department a bust? To help dealers assess their programs, he laid out the 10 most common telltale signs of trouble and shared his thoughts on how each should be evaluated. The indicators include:
- Poor or underdeveloped sales process: “Consistent sales results come from a clearly documented and rigidly followed process that engages your customers, keeps them moving toward the sale and builds rapport and value along the way. To be the best, define your process clearly without leaving anything to chance.”
- Limited or no accountability for the internet department staff, besides the number of sales: “Some of the items I feel are crucial to track include live contacts, number of outgoing phone calls per representative, number of appointments, number of shown appointments, time from initial lead to appointment and gross profit per lead type.”
- Poor lead-management campaigns: “I have been in a lot of dealerships that think a couple of calls and emails are all they need for the first 30 or 60 days. Exceptional results in this business are achieved by calling until you make live contact with at least 70 percent of purchase requests.”
- Untrained and poorly supervised staff: “To be the best, you must invest in creating a continuous training program designed to help your staff execute your sales process and business practices with consistency.”
- Limited or underperforming technology: “Work with your existing technology to maximize what it can do for you. Invest in additional training if necessary to fully understand how the technology can enhance your sales process.”
- Lack of a strong phone follow-up campaign for unsold leads: “Success selling vehicles solely via email is almost nonexistent. A strong phone campaign must be established to build rapport and to provide value and product information to make setting an appointment a possibility. Focus on developing strong phone scripts that can overcome common customer objections to setting an appointment at your store and watch your sales go through the roof.”
- Low-hanging fruit syndrome (i.e., cherry-picking leads): “Every lead has value when it comes into the store. The problem is not all leads are treated equally. Also, try to make sure leads are not falling though the cracks by actively managing the number of leads per rep closely. For example, when you go to more than 125 to 150 leads per rep, you are definitely losing sales, but when you fall under 70 leads per rep, there will be a lot of wasted time.”
- Disconnected staffing between the internet department and showroom floor: “Your CRM system must identify customers no matter where they shopped within the dealership. You should keep a daily eye on who is visiting and submitting leads to your store. The biggest issue we always face with disconnected departments is sending mixed messages to customers or miscommunication of information, all of which leads to customer distrust.”
- Dealership leadership has very low involvement in the internet department: “Internet performance should be covered in all meetings. Having internet department managers present sends the clear message that you are not dabbling in this type of business. It shows your commitment to the success of the internet within your dealership.”
- Lack of clear business strategy with written tactics to implement: “I believe Sun Tzu said it best: ‘Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.’ “
“We have to stick to the fundamentals of our business,” Smith says. “They’re critical, and they’re things we just miss, day in and day out. Focus on the phone, focus on setting the appointment, and focus on getting the customer excited. Ask questions. Stay in control.”
So – Is Your Internet Department a Bust? Knee-Jerk Reactions Are Not the Fix
Do Smith’s telltale signs of a failing internet department ring true in your store? If the list hits close to home, it’s a good time to take stock of your process. Smith warns, however, not to make a knee-jerk evaluation of your program based on recent sales numbers. He contends that “30-day thinking” will undermine your efforts to get a handle on process and regain control of your internet success.
“We’re only thinking about this month and this month’s production, so we end up changing processes because we’re just looking for a faster fix instead of taking a slow-and-steady business approach,” Smith says. “Most dealers don’t want to hear that, but that’s the reality. If you want to be successful in business, if you want to do it over the next five, 10, 15, 20 years, you need to build a strong, repeatable process. You need to have people that follow the process on a daily basis with the highest level of commitment on the planet.”
Take a Top-Down Approach
To instill discipline and drive the performance you want from your online initiatives, Smith recommends that your store’s senior leaders define the internet program strategy and tactics. Delegating this responsibility to a lower-level staff member may have made sense in the early years of the web, but the growing importance of the internet as a profit center and customer touchpoint now dictates otherwise.
David Kain, president of Kain Automotive, agrees, saying the internet manager has been asked to make decisions that should involve midlevel and general managers. “The goal is to make sure the sales management and the general management builds the process along with their team,” he says. “Internet managers should be intimately involved; once a decision is made, they are responsible for carrying out the collaborative actions.”
When consulting with their retail automotive clients, Kain and Smith recommend the dealer-principal, general manager and new- and used-car managers participate in every step and give final approval in:
- determining how the internet department is structured and staffed
- drafting phone scripts and email templates
- outlining how long to pursue leads before they’re handed off to automated systems.
“Too often, the appropriate level of management doesn’t create the process,” Kain says. “Senior management relies on the internet sales manager to create them – undocumented – and then those processes up and leave when the person goes to another store. That seems to be an ongoing problem. It is not the internet manager’s fault, though they are moving the operation forward. What is missing is an active involvement by sales managers.”
Like Smith, Kain also believes that many of today’s internet departments would benefit from strong oversight and strict accountability. He sees a correlation between how the internet department performs and how roles are defined and expectations set.
“If you look at the job descriptions for most new- or used-car managers, they were written several years ago, and they have no orientation to the digital marketplace,” Kain says. “It seems as though the middle management has been given a free ride on the internet. The sad thing of it is they’re the victims of it – and they don’t know it yet. Some get it, but, to a large degree, a lot of them are in a position where they don’t really understand what they’re missing out on.”
Adds Kain: “They’re still working through that transition from an environment where they were successful without having to have a solid internet marketing strategy. We’re migrating toward an environment where the consumer gets so much information online that they don’t go to dealerships that can’t effectively service them via internet communications. Many dealers are now trying to play catch up because they don’t want to be one of those dealers that don’t get visited in person because the online interaction was unfulfilling.”
Process Drives Quality Connections
Process matters, Smith says, because sales are won or lost based on your ability to consistently build rapport with prospects, sell the value of purchasing from your dealership and get buyers into the store. While these procedures do not have to be perfect, they do need to reflect your dealership’s culture and to accommodate your customers’ expectations. Absent a process, you may find that you cannot routinely establish the clear steps to a sale that allow you to qualify prospects, identify appropriate matches and move customers toward a purchase. Instead of initially working with shoppers to determine their budget and the type of car they want, you spin your wheels providing quotes for leads submitted on vehicles they likely won’t take home.
“We still have to ask those questions, and I think we’re not. We’re responding and reacting to what people send into the dealership,” Smith says. “I think we feel that we are getting more qualified people because of the internet, but there’s a flip side to that. I still think it’s the nature of people that we need to show them the car; we need to make sure it’s the right fit. It’s still an emotional purchase, it’s still meeting the needs of the customer, and customers don’t know those needs until they sit in the car. A picture and an online video are only going to show so much. To me, you’ve still got to smell the leather, touch the steering wheel, turn on the radio – hit a curve at 45 mph and see if you like it.”
Underscoring the importance of process is the difficult search that Smith and Kain say managers typically face in identifying salespeople with the skills they need for the internet department.
“If you can’t find the people, you have two choices,” Smith says. “You can hire subpar people, or you can hire average people and put them into a system where you get great to extraordinary results from them because you have a well-developed process.”
Looking for additional tips you can implement in your store today to drive more traffic with your online advertising and desk more deals with your internet sales processes? Check out Cars.com’s DealerCenter. Here, you can read previous editions of our DealerADvantage newsletter or listen to archived recordings of our DealerADvantage LIVE webinar series.