Checkered Flag Motorcar Corp.
At Checkered Flag Motorcar Corp., ecommerce director Alex Snyder has something of a, well, checkered past. He began working for the southern Virginia dealer group in the fifth grade after his grandfather, the owner, learned he’d scratched his name on a desk. “I think it was $93,” Snyder says. “He used to pick me up every Saturday morning, and I’d go into our BMW store and wash cars on Saturdays until I paid that desk off. I enjoyed making money and kind of stuck with different oddball jobs around the dealership. Eventually I worked through the fixed operations side to sales.”
Snyder joined the dealership on a full-time basis in 1999, after taking some time off for college, selling Isuzus and Hyundais. He took on his current role in 2004, overseeing day-to-day marketing and defining the group’s online advertising and sales processes. “I kind of feel like the utility guy on the baseball team,” he says.
In addition to his day job, Snyder frequently contributes to the popular DealerRefresh.com automotive retail blog. Jeff Kershner launched the site to discuss the tactics and technology he and his internet sales colleagues use to generate business.
Beyond the income opportunities, Snyder says he enjoys automotive retail for the variety. “It’s never the same day. It keeps you on your toes, and it’s always about upping your performance. If you’re good at it, there’s a lot of reward and I enjoy that.”
DealerADvantage recently spoke with Snyder to learn more about Checkered Flag’s internet initiatives and how those strategies are helping to drive sales. The southern Virginia dealer group operates 10 stores representing 11 brands and records monthly sales of approximately 1,000 to 1,200 vehicles.
DealerADvantage: How does online advertising fit into your media mix?
Snyder: It’s a huge part. All the media works toward branding Checkered Flag.com in different ways to get people to visit it. We’ve gone a different route where, instead of delivering sales messages in our media, especially television, we use the traditional ad to push people online. We tell them if they want the deal, it’s on Checkered Flag.com.
DealerADvantage: You said that your online spend is currently between one-fourth and one-third of your advertising budget. In five years, do you think it’ll be half of your budget?
Snyder: Very possibly. In our marketplace, our local newspaper is still a very effective marketing tool, even though it is so much more expensive and losing its punch. We are currently making a shift toward more television, and those commercials always have a portion about Checkered Flag.com. To answer your question a little better, it is really hard to make online spending half of the ad budget when the traditional advertisements cost so much more. Sure, we could spend/waste tons of cash on less effective internet campaigns, but what is the point in that? Even with online costing less than traditional we still re-evaluate everything every quarter. If something over that three-month period has not maintained a particular closing ratio or percentage of sales, it’s cut. It doesn’t matter if we’re just pulling dollars off the money tree or if we’re in the worst recession of all time. If it isn’t performing, it goes away.
DealerADvantage: When you make that determination, what are you considering?
Snyder: I’m looking at a closing ratio for the most part. That is especially the case with a third-party lead. Other things I look at, like SEM spending and website performance, the decision is based on our own trends. If there’s a dip, and it’s a significant dip, it might go away. There could also be something else on the horizon that looks like it will have a better return, then that venture that isn’t performing as well may turn into the next venture. We have been fortunate to be in a position to experiment. It keeps us and our vendors on their toes.
DealerADvantage: How do you manage internet sales with your internet department sales agents?
Snyder: They’re the first line of communication. Some of them have the option of being able to handle a deal cradle to grave, meaning they can do the whole thing. For others, it may be dependent on what they worked out with their general manager. In those cases they may be working to just get appointments; where they bring the customer in and hand them off to a sales manager or sales agent. Then it is the traditional sales floor to consumer approach. The internet sales agent can then continue to work the internet leads and phone calls without hurting their response time. This has been the most effective way of handling things. I hope to put all of our agents into a centralized BDC again because I’m 100 percent convinced there is no better way to handle internet leads and phone calls than through a completely dedicated BDC operation.
DealerADvantage: What is your process to manage a lead from the time you receive it until you sell the car?
Snyder: It varies by store, product and person. Everybody has their own character. Every store has its own personality. You look at our Toyota store, for example, where we have 12 competitors. We have to be very aggressive and very fast. Anything more than a 15-minute response time is death as far as we’re concerned. That first day we have the internet manager responding with a phone call, two emails and an automatic email from the CRM. And then the second day, another two emails and a phone call. It’s just hammer, hammer, hammer. There are so many leads coming in, you’ve got to bang through them quickly. Once the internet sales agent is through all those initial leads, then it’s time to start concentrating on some of the older ones. Our CRM system serves these up to him, so he isn’t saying, “Oh, I’ve got to check on who’s 45-days old today.”
We have a very robust CRM tool that affords us the ability to simply watch a screen all day to see if the internet sales agent is getting the job done. With one click, we can read all the inbound and outbound emails to make sure the message is correct; one glance will tell us whether the calls are being made. I actually spend more time watching the sales managers to see if they’re at least paying attention to what is happening with the internet leads. They’re involvement is crucial.
DealerADvantage: How long do you maintain that active follow-up? At what point do you hand prospects off to the quarterly newsletter?
Snyder: Well, again, it depends on the store. We have some customers who are hunters and other people who are farmers. The more expensive the car, the more farmers you have. The less expensive the car, the more hunters you have. So with the luxury brands, we typically go out to about half a year. With the volume brands, the less expensive ones we typically go out a little more than three months. However, this is all changing now. With consumers holding off on their purchases, it almost seems like we need to add another three to six months to each follow-up process.
DealerADvantage: Are the same tactics working with prospects, or are you just being more persistent in staying in contact with them?
Snyder: Well, it’s a totally different ball game right now. It’s a different customer. It’s still an emotional purchase to buy a vehicle, but it’s not as emotional as it used to be. Sales agents are geared to play on emotions, and right now the customer is much more logical than usual. There are so many people who want to buy a car right now, but they’re holding off due to uncertainty and the fact that the car we sold them a year or two ago is still running well. The ones who do have that older car that’s dying or have just been in an accident – or who knows what – who might have stepped up to the 5-Series BMW just because times are good and they can do it, they’re taking a step back and maybe looking at the Toyota Camry. They’re being more rational in their purchasing decision; while it’s still a lot about who you like and trust, the money is a much larger factor than it’s ever been before.
DealerADvantage: In this economy, do you have the sense that the leads you’re getting are serious, ready-to-buy shoppers?
Snyder: When I first started selling cars, I had a used-car manager who used to always yell, “This ain’t no bus stop” when a customer was not being approached by a sales agent. The funny part was that there was a bus stop in front of that store, and quite a few people would wonder on the lot while waiting for the bus, but that’s beside the point. I learned a valuable lesson from those “This ain’t no bus stop” shouts, and that was that everyone is serious. I don’t buy into lead scoring or those FICO-scoring services that try to rate every lead. Somebody does not contact a dealership unless they are seriously thinking about buying a car. We should work with everyone and get them into our showrooms – and that is especially the case in this economy.
DealerADvantage: What do you wish you knew when you started your current role?
Snyder: I got into my current role in 2004, but I was actually handling some things on CheckeredFlag.com as far back as 2001. I wish I knew more about the dynamics of search engines back then. Even though they weren’t utilized nearly as much it would have been nice to have picked up some extra URLs or embedded our own URL in a few places for indexing today. There are a lot of positioning things I could have set up then that would have paid off a lot better today.
DealerADvantage: What are you doing with social media?
Snyder: We have a blog; that’s a huge and essential part of our website, and we push those postings to Twitter. I’ve got a few employees who are doing some various things on other places like Facebook, MySpace and what-not. Personally, my favorite focus has been the car enthusiast forums. There are so many social media outlets that it is difficult to keep up with everything. It isn’t as if you can just setup a page and leave it alone – you have to stay with it. I just try to stick to the things I like.
DealerADvantage: So you’ve been leveraging your personal brand to drive car enthusiasts to your site?
Snyder: Actually, when they come off the forums, it’s not usually to the site. It’s straight to a phone call or a personal message on the forums that turns into an email or a phone call straight to the person they’ve been talking to on the forums. Checkered Flag.com usually gets bypassed on those occasions unless we tell that person to check a car out there.
DealerADvantage: How do you manage profitability with your internet customers?
Snyder: It’s really left in the hands of the sales floor, and I think we’re going to need to change that strategy. I think that we used to be very good at building a lot of rapport over the phone, through email and just doing a better job than the other guys in that area. I think that the game has changed. I think it’s changed in the past three months to be more of “I’ll buy from the devil if the price is right.” It’s happening a lot more, so we’re trying to re-strategize, right this second, to handle that kind of customer.
DealerADvantage: What are you doing with online reputation management?
Snyder: Watching it like a hawk. I’ve got a few different things set up that monitor various items on a daily basis. We respond based on where the review is. If it’s on a forum or a blog, then we sign up to go in and speak the truth and say we’re sorry – whether we’re wrong or right. The hardest thing in life to manage is another person’s perception. Perception drives everything when it comes to humans and how we interact. If somebody has a particular perception of you, it’s really hard to change that. Sometimes you’ve got to come in and just admit defeat and move on. I think other people look at you as a better person if you do that. “Sorry” is always a good start.
DealerADvantage: What are some of the trends you’re seeing in online automotive?
Snyder: Video’s obviously popping up big time, and I think it’s going to be taken more seriously very soon. It will become a bigger part of the ad budget and start finding a marriage with television commercials too. I see a combination of televisions and computers in our households in the not-too-distant future that will really provide some new marketing opportunities. I think there will also be more marriages between video and dealership technology tools as well.
I think CRM will stop being looked at as an automatic calendar for sales agents and more of a marketing tool. I also think – at least I’m hoping – that somebody will come out with some sort of DMS technology that will really marry all these things together and bring all the departments into one basket. We all need every department of the dealership to pass the same congruent message to the consumer – we are one company; not competing departments.
DealerADvantage: With that idea in mind are you making greater use of your customer database to drive business in the current slowdown?
Snyder: The biggest push is follow-up and more follow-up. Without the same number of people walking in the door, our sales agents are doing a much better job with follow-up and mining the database. Those things that just used to get lip service are now reality, and I’m loving that. We are doing things to push our CRM vendor to build better tools, and it has done a fairly decent job of responding so far. I just hope it keeps pushing as hard as we are. I guess I can say that same thing for all the vendors we are still partnered with.
To get back to your question: We are hesitant to get crazy with email blasts that push unbelievable deals. Because the media has done such a great job of spreading the message that the auto business is in desperate distress – remind me to thank them for that again – we are doing all we can to battle that perception. Things aren’t what they were, but if you start showing distress to the public, they’ll think you’re distressed for years to come. I’m watching a few other dealerships that are doing some things that add to that distressed perception, and I think it is wrong. It is a very difficult perception to shake. We live in a month-to-month business, but now is the time we have to be thinking harder about the future. Now is the time for strategic positioning.