Germain Motor Co.
Internet Sales Director
When Shaun Kniffin talks about his “5 to 9” days as the internet sales director for Columbus, Ohio-based Germain Motor Co., the envy you feel is short-lived. “That’s 5 a.m. to 9 p.m.,” he says, laughing.
As the hours he keeps suggest, the job involves a lot of hard work. During the past year, Kniffin has led the charge to revamp Germain’s internet advertising operations. Projects include: new websites for each of the nine stores he supports, new phone and CRM systems, new call-tracking tools and a new, centralized BDC network to support online operations.
Already, the Germain initiative is producing results. Kniffin cites the example of a Ford store where internet sales as a percentage of the dealership’s business nearly tripled between August 2007 and February 2008. “We helped that store succeed because we worked closely with the management and staff, implemented a process and discussed results and strategies with everyone involved.”
Kniffin joined Germain in 2005, developing BDC internet applications for the Lexus stores until he was called up to the corporate offices in 2007. He began his career in automotive retail 15 years ago at another Columbus dealer. There, Kniffin worked fleet and commercial sales for four years before leaving for an opportunity in the recruiting industry that kept him away from retail until 2000.
What got him back in the store?
“Some days I ask myself that same question,” he quips. “You know how it just gets in your blood.”
DealerADvantage sat down with Kniffin to learn more about Germain’s internet strategy and his thoughts on internet advertising.
DA: What percentage of your overall advertising mix is online? How do you see it changing in the next five years?
Kniffin: We are, right now, approximately 25 percent of the total ad budget. A year ago, it was less than 10 percent. I think that it will still be 20 percent to 25 percent – or the total budget will be less, and it will be a larger percentage – but I don’t see us spending more money to get more at this point. We are diligently working to optimize all of our interactive resources, and we believe in a very strong marketing mix. Our online presence is tied in with our newspaper presence and radio. You’ll find our TV and radio spots and our newspaper ads on our websites. Of course, our dot-com address is in all of our advertising as well. It’s a good blend.
DA: How do you manage internet sales?
Kniffin: We use what’s called a blended BDC model. We have a BDC rep that’s located in every store who responds to the lead in a timely fashion. I think I have some of the best in the industry, and I am very proud of their accomplishments. They work hard to ensure that our response times are less than 20 minutes, and they are great at building relationships with our customers. Most of the time, we are averaging 5-to-10-minute response times; we are very much on top of that game. The BDC representative’s job is to send out the initial response. We do not use autoresponders because most customers aren’t reading them. The BDC representative also places the first phone call into the customer. Because our CRM tool and internet lead management tool (AutoBase) are the same, this allows us to schedule follow-up activity, whether it is electronic or phone, for the salesperson and for the BDC rep.
All appointments that the BDC schedules – most reps schedule upwards of 50+ appointments a month – are with managers and sales associates. The BDC reps are focused on what we refer to as an enhanced dealership experience. We want our customers to feel special when they get here, and we think that the best way to do that is through a manager. This process takes time to develop because of the cooperation needed between the BDC and the sales teams, but now that it is in place, it is outstanding, and customers really enjoy it.
DA: How many vehicles, on average, do you sell online each month?
Kniffin: Typically, Columbus averages more than 1,000 cars a month. In some stores, we have as much as 49 percent of the total business coming from online. Overall, 31 percent of our total business this year to date is attributed to some sort of internet source.
DA: How do you track your internet sales? How do you determine what is an internet sale and not a regular sale?
Kniffin: Because our stores are all tied in with the same AutoBase system, when we see a lead come in, all the history is there. We track all of our emails, so we’re able to track floor traffic that stems from those inquiries. We have appointments that are scheduled via internet sources. We also manage all of our own toll-free numbers instead of using third-party calling services – which saves us money. We record all of our sales campaigns, and we measure those on a daily basis. We look at our phone call traffic that’s coming in. We have a pretty good idea of what’s going on in the market. Every night, we provide a report to our general managers that tracks the traffic and leads our from our internet advertising.
DA: Your GMs see that information every day?
Kniffin: Every day. We used to do it weekly and we said, “You know what? This is probably good enough just to send them every day.” Ultimately, it allows us to put some quantitative data behind all of this advertising that we’re doing. It is important that the managers responsible for running our stores know what advertising is working, whether it is internet based or not.
DA: Do you find that having your GMs that involved is a good thing?
Kniffin: Yes, and I’m fortunate be a part of this organization. Steve, Rick and Bob Germain run a great business, are outstanding leaders in many aspects and really understand the automotive industry. They have developed a great management team that makes it much easier to support and accomplish all of our goals. As a unit, we expect more and set higher goals, so we accomplish more.
I’m in one to two of our stores here in Columbus every day for a couple of hours, and the GMs want to know what’s going on. Typically they used to look at the front door and ask how many times the door was swinging open. Today, they ask, “How many emails and phone calls did we get?
If the market is off 10 percent, we want our unfair share of the 90 percent. We’re focused on that and we think that’s what makes us the No. 1 automotive group in Columbus and 21st in the nation. We’re going to better our 21st position by continuing to recognize where our opportunities lie. Some of our best are the phone calls we receive. Customers aren’t just calling in to get basic general information. Most callers are saying, “Hey, I saw this car online. I’m interested in it. Tell me more about it.” Because there’s immediacy there, that’s what the GMs are focused on, and they’re very aware of what’s happening. They want to know how we can help improve their operations using the internet and our new phone system, but we aren’t finished yet by a long shot. Our next project is going to take us to an even higher level.
DA: Do you think that more GMs are starting to understand that they have to pay as much attention to internet sales as they do floor sales?
Kniffin: I talk to a lot of vendors, and we talk about what it’s like out there. I see a lot of head shaking going on. So many dealers just don’t understand what we know. I think the job for internet sales managers in the next five years is to educate the dealer body about where customers are and what brings them into the store. To focus just on floor traffic misses the full scope of the opportunities that are out there. Some of the floor traffic is a result of what we’re doing online and the phone. It’s so important, that Cars.com gives us a number for tracking purposes.
DA: How do you measure online advertising partners?
Kniffin: This is really where we get detailed. We decided to get down to business and do some nitty-gritty analysis about how we would want to measure the effectiveness of a Cars.com. Cars.com sends us some great information every month. For example, in March, we know, from Cars.com, that we had a total of 66,970 customers in our market and the total number of searches conducted in our market. We know there were nearly 370,000 different searches that were conducted in our market and how many times our vehicles actually appeared in those searches, and we were like, “Whoa!” We had quite a few vehicles showing up in those searches. We get information from Cars.com that says how many times our customers view the vehicle details, how many times they clicked to our websites from Cars.com, how many times they looked at printable maps and so forth.
With everything that you have been sharing, we have been asking ourselves, “How can we use this information to the best of our ability?” What we started doing is asking how many times did people view in-stock vehicles? How many views did we get for every vehicle in stock? We came up with a number that says, “These are the total number of exposures that we received in the month.” What we can tell you is that in the month of March, for example, in our Columbus-based stores, we received nearly 1.5 million exposures on our inventory. That information gives us what we call the cost per view. What we’re doing now is we’re looking at an analysis of what it’s costing us for a customer to look at our inventory the same way that you look at how much it costs for a car to be in a radio spot or on TV where you do basically price for points. Now, we are looking at some trend analysis that says that it is very smart for us to do business with Cars.com because we get a high exposure rate for the least amount of money. What that does is keep our cost per lead down – which ultimately drives down the cost per sale. We are going beyond cost per lead. That’s where we feel like we have separated ourselves from the rest of the pack and helps us spend money wisely.
DA: What do you look for in a partner for online advertising? What matters most to you when evaluating performance?
Kniffin: What they’re in control of: exposure. Vendors like Cars.com don’t have control over our closing percentages. We can control what we do with the email and the phone call, but we can’t control the fact that not all customers are getting to us – that’s what we rely on our partners to help us with. We rely on sites like Cars.com to help expose our inventory and help drive traffic to our sites. Cars.com is exposing it and converting the traffic into emails and phone calls. That is what makes this such a great partnership!
DA: How do you drive profitability and maintain growth with your internet customers?
Kniffin: We tried focusing on gross profit, but we believe that nearly all customers are internet customers. Even our repeat customers still use the internet to enhance their purchase decision. Even though we measure profitability, it’s not our main focus because, technically, the BDC is not allowed to quote a price; that has to come from the sales managers. Profits on internet and walk-in customers are within $50 of each other. When you compare internet profitability to regular floor traffic profitability that isn’t sourced back to the internet, the profits are practically identical because it’s really the same customer.
DA: So do you think it’s a myth that somehow has persisted that internet customers are …
Kniffin: No profit? I think you have some no-profit deals out there. I think you’re going to have leads where the customer wants your best price and is shopping 20 different dealers. For every customer that does that, we focus on our process and it usually becomes a matter of the relationship, ownership and dealership experience, and they’re happy. Our CSI is tied to our compensation plan, and it has improved dramatically this past year.
DA: What are you doing with social media sites such as Facebook and MySpace?
Kniffin: I think that those things are cool, but I just follow the principle of DISC: does it sell cars? There’s a lot of stuff out there that you could do, but the question is whether you should. You could be over here trying to figure out how to make MySpace work and realize that you’re losing sales on Cars.com because you’re not responding quickly enough to leads. You’ve got to manage the manageables.
DA: How do you manage your search engine optimization and your search engine marketing campaigns?
Kniffin: We are currently partnered with Auto Dealer Traffic. We are currently working on some cutting-edge ideas with them and spend about 9 percent of our total ad budget on search engine marketing. It was zero percent a year ago.
DA: What emerging trends are you seeing in online automotive?
Kniffin: Enhancing the customer delivery experience by being able to get from a click to the customer front door as efficiently as possible. I think eventually our customers are going to say, “We prefer a home delivery.” Dealerships will do online transactions, including paperless bank contracts, online customer verification, accessories, extended warranties and trade appraisals. That’s where we’ve got to use the internet. I think that’s where we are heading. In the interest of saving time and money, the customer wants it all finished when they pick up their new vehicle or when it is delivered.
DA: What are the greatest challenges that you see in online automotive?
Kniffin: The biggest challenge that we have is education. I think so many dealers out there are coming to the realization that they have to do something with their internet sales operations. The problem is many don’t know where to start. I hear stories from some of our reps like, “I’ve got a store, and it still gets faxes for its email leads.” Are you kidding me? It’s a challenge we’ve got to figure out; how to get dealers to use the tools that are available to start selling cars online – because that’s where the customers are. Those that don’t probably won’t be here in five years.
DA: What advice would you give to an incoming internet sales manager?
Kniffin: Whatever you’re doing, make sure you’re measuring it because that which gets measured is managed. We can’t do it all, so, whatever you’re doing, make sure it’s working. If it’s not working, kill it or find out why it’s not working – and then fix it.
As a last thing, and probably the most important: Behind all the technology are people. It’s not our internet that has made us successful, it’s our people and it still comes down to relationships. The internet is content, commerce and community. The content part, we leave that up to development. The commerce part is our job to respond to the customer to help create a transaction, but the community part, the human element, is by far, most important part.