President, General Manager
Ask Adam Simms about the year he’s having at Sunnyvale Toyota, and you might be surprised by the answer. Despite the challenges confronting many of his colleagues around the country, he reports running on all cylinders.
“Our business is up 20 percent this year versus last year,” the president and general manager of the Silicon Valley-based store says. “And we’re continuing to grow.”
Simms attributes his California store’s success to several factors – among them an affluent market that avoided the secondary credit crunch and an urban customer base interested in hybrid and fuel-efficient vehicles that spared him a collapse in truck sales. Monthly sales of new and used vehicles currently total between 500 and 600 units, he says, noting half of them go to internet buyers.
Simms began his career in automotive retail in 1984, when he joined a Honda store in Jacksonville, Fla., as a salesperson. He worked his way up through the ranks to become general manager before venturing on to other dealerships. In 2003, Simms left AutoNation, where he worked as a senior vice president of operations, to open Sunnyvale Toyota with partner Tom Price.
“We’ve been building that business ever since, so we really leveraged all our expertise on used cars, obviously, and our expertise around the online side of the business. Today, we’re one of the top 25 Toyota dealers in the United States,” Simms says. “The auto business was an immediate hit for me. I really liked the emotional connection between people and their cars.”
DealerADvantage recently spoke with Simms about Sunnyvale Toyota’s internet strategy and how the program performs.
DealerADvantage: What percentage of your advertising is online? How has that changed in the last five years?
Simms: We spend approximately $120,000 a month in advertising. Of that, approximately 50 percent is online. As our sales capacity grows, we have to spend more money on consumer demand to continue to grow the business. Our online ad spend has continually gone up, but the amount of demand that we’ve been able to get from that ad spend has also gone up. We just make sure that we build the capacity to be able to meet that demand.
DealerADvantage: How much do you think you’ll be spending online five years from now?
Simms: We were probably spending 10 percent when we first bought the store in 2003. We’re spending 50 percent now, so we’ve had an increase of 40 percent. I would see our online ad spend growing to 70 percent to 80 percent some point.
DealerADvantage: How do you manage internet inquiries?
Simms: If a customer’s calling in on the telephone or sending an internet lead, it’s going to go to our internet department, which we call our direct sales department. Those leads are going to be distributed amongst our team on a rotation basis. If customers walk in, they’re going to be dealing with our physical sales team.
But, really and truly, we don’t want our people working on the computer. We want our people on the telephone making appointments. So when customers send us an inquiry, we’re going to get back to them in six minutes or less with a transparent message that will be specific to the car they’re looking for. We will respond to 100 percent of our leads, 100 percent of the time with an availability message and a pricing message. A lot of dealers get hung up in that area. They really struggle with being able to get that done. So when the lead gets to our internet salespeople, per se, it’s already been responded to. The team’s job is to get on the telephone or send an email, get that appointment set and get that customer into the dealership.
DealerADvantage: When does a salesperson start contacting the customer by phone or email after the initial automated response is sent?
Simms: Immediately. Our salesperson’s going to be on the telephone, hopefully within five or 10 minutes, with the customer, saying, “We got your inquiry. We sent you the information. I just want to see if you’ve got any other questions about the car.” We track that, and we get key metrics around how many phone calls were made to that customer and how much time they were on the telephone with that customer. There’s a big breakdown, and most dealerships don’t track that. What happens is this: They get an internet lead, they send an email, but they don’t call the customer unless the customer calls them. Well, we expect at least three phone calls back to that customer, at a minimum, and we track that per salesperson.
DealerADvantage: How is that process working out for you? How often do you actually get the person on the phone?
Simms: We probably get customers on the phone a third of the time on the first call; another third of the time, it’s the second call. It’s working out fine for us.
DealerADvantage: How have your internet tactics and strategies evolved in the last few years?
Simms: They really haven’t evolved at all. You know, a lot of dealers that are trying to build an internet department are looking for the person to build that business for them. We built ours around process and a theme of transparency. Once you have the processes in place, you can incrementally add the people as you grow the demand. I talk to a lot of dealers who say, “We lost our guy.” You know what I mean? We’re more for organizational strength versus individual strength. We’ve got a process, and we stick to it. We haven’t changed it; we’ve added functionality when functionality becomes available — like live chat. But the basics are the basics. We really haven’t seen that change.
It was just a natural thing for me, when we had the opportunity to buy a Toyota store, to really leverage the benefits of technology and the internet to build a big sales channel. What’s happened today is that sales channel has gotten larger and larger, yet dealers are still trying to sort of shoehorn it into a small department back in the corner. I think we’d be an example of somebody that’s just said, “If this is the way people want to shop, we want to make sure we’re there and we make it real easy for them to get the information that they want.”
DealerADvantage: How do you drive profitability and maintain gross with your internet customers?
Simms: Our online customers are probably more profitable than our walk-in-the-door customers because they do more homework. They want to buy more complex automobiles. They want to get the sunroof. They want the Bluetooth. They want to make sure it has the navigation system. They understand their choices and options that they have. They’re doing homework, not just emotionally transacting or transacting over an internet or a newspaper ad that says, “We’ve got three at this price, come on in.” They’re intelligent, and they understand that we have to make a reasonable profit.
DealerADvantage: What sort of training do you provide in your internet department?
Simms: Our internet salespeople go through the exact same sales training that everybody else in the dealership goes through. They also go through some additional systems training because they have to work with a CRM tool, and they’ve got to work with a regional inventory tool. Our normal on-boarding process is a one-week course about our culture and our sales process and a little bit on product training. Internet salespeople go through an additional three days of training on systems.
DealerADvantage: Do you provide phone skills training?
Simms: Yes. We grade our people; we grade them for red, yellow and green. We bring in an outside trainer once a month to do aggressive, one-on-one training with these people on the telephone. It’s mandatory for everybody. The more advanced people get more advanced training; the beginners, they get more fundamental, basic training.
DealerADvantage: What are the key elements that you want in a call?
Simms: We want to make sure that they ask for the appointment. We want to make sure that they listen to the questions and answer the questions that the customers have. We don’t want them to go off on tangents about information that may be irrelevant to the consumer. We keep it pretty simple: It’s only three or four elements that we’re really looking for. Answer customers’ questions, don’t give them information that they didn’t ask for and be certain to set the appointment.
DealerADvantage: Do you monitor the calls?
Simms: Every call is recorded. Every call is graded, and then they get an ongoing score of how they’re doing on the telephone. We use an outside service to do that. We designed it ourselves. It was just too much work for us to do. It’s not a Big Brother thing. It’s how we help them. I want to make it easier and easier for them to sell cars; if they don’t have their information, it makes it more difficult for them.
DealerADvantage: Do you use phone scripts or word tracks?
Simms: We do, but they’re loose. We don’t want to be robotic about it. We really want them to insert their personalities. We outlined the messaging that we want to deliver in each of the calls: the first call, the next-day call, the three-day call, the seven-day call, the 14-day call.
DealerADvantage: Who maintains your listing sites on a day-to-day basis to ensure your photos and sell copy are driving sales?
Simms: Day-to-day is my used car team, but we’ve also got an agency that we use on the marketing side. We’re always shopping our own site, taking a look. We’re always looking from the outside in, and you’ve got to have some outside sources that you can rely on to help you with that.
DealerADvantage: It sounds like you really want your salespeople selling, not noodling with…
Simms: Yes. We don’t need an internet expert. That’s the last thing we need in the store. We need somebody that’s great at listening to customers and giving them what it is they ask for and following up with them, setting appointments, being properly prepared when the customer gets there and helping them get what they want to get done — which is buy a car.
DealerADvantage: How do you measure the success of your internet program?
Simms: We have four core values: how we make it easier for our customer to do business with us, how we make it easier for our people to provide our goods and services, a relentless commitment to process and a true commitment to make certain everybody around us prospers, starting with the customer. If we can align with those core values, then we know we’re on the right track. We’re always going to look for continual growth, and, to date, we’ve been very successful with the perpetual growth model working out very well for us. That’s not to say we haven’t made some mistakes and wasted some money, but we’re always trying to stay on that leading edge. In my career in the past, I have unfortunately been on the bleeding edge. I don’t want to get there again.
DealerADvantage: What advice would you give to a new internet salesperson?
Simms: Focus on just a few very basic things. Be a great listener, really understand your product and focus on satisfying customers.