It appears that most dealers have mentally accepted the fact that they need to embrace the digital age. The interesting disconnect is that many dealers are still only allocating 20%-30% of their advertising budget to the digital side of the equation. The dealers want the additional sales from the Internet or BDC departments, but they are not willing to invest time, energy and money to make this a reality. eMarketer published an interview with Kimberly Stonehouse from Google, in July, Google Identifies What Drives Auto Shoppers’ Behavior. Stonehouse reports that Google “is seeing an interplay between digital and the dealer. Digital media is used often for comparison purposes to determine the consideration set and narrow it, but it is not negating the importance of the dealer.” Stonehouse also stated that 31% of the 2010 auto purchasers visited a dealership website during the six months prior to purchase, a 50% increase from 2009!  This interplay between digital and in-dealership visits is taking place since auto shoppers are spending more time conducting online research compared to the amount of time being spent in the dealership. This is true with both new and late model pre-owned units.

Polk and AutoTrader.com conducted a survey this year that explores the relationship between online and offline (time spent at the dealerships) shopping time.  According to this study, new car buyers spend an average of 11.5 hours online and only 7.5 hours offline, while used vehicle buyers spend 11 hours online and 7 hours offline. Sixty percent of the buyer’s time is focused with online research and analysis. Decisions on which dealerships to visit are being made after the typical consumer spends 11 hours conducting Google searches, after reviewing options with third party sites, OEM sites and after reviewing dealer websites. This has led to dealers experiencing a higher closing ratio with customers visiting the dealership. After eleven hours of research, the prospect is simply confirming that the in-store visit matches his/her expectations.

In additional to these studies, we can look at the model being used by some of the more successful dealerships. It is apparent that some dealers are gaining market share at the expense of the more traditional dealerships. The dealers gaining share have a strategy that includes the following:

• Strong SEO strategy (a key requirement).
• SEM appears to be an area that is debated (some love it while others only focus on the organic side of the equation).
• Websites that are optimized (see my article last month for details).
• Coupons and incentives integrated into the site are becoming popular to generate leads.
• A chat strategy. You need to be able to staff for this or have the ability to outsource for after hour situations. It is a bad experience to offer chat but then not have sales people available.
• A video strategy focused on website conversion and organic search. The used VIN specific walk rounds is just a starting point. The real conversion comes with monthly video sales specials, service video offers, video testimonials, educational service videos and model specific video content. Many traditional ad agencies do not understand the opportunity associated with website video because it is outside of their model, so push for support or shop for alternatives. Avoid the “talking head videos” where the dealer simply talks about how great the dealership is. Prospects aren’t impressed with this. Always come from a customer perspective.
• Google Places using color (not just the black and white), testimonials (these are critical) and videos. Some dealers are tracking more visits to their Google Places pages than their own websites. Google places should be viewed as another website destination.
• Focus on dedicated sites and organic search for the service department.
• Pop-ups or pop-unders for the website for lead generation. Your sales team may not like them but they drive results. Remember that the website is for the prospect.
• Different dedicated 888 numbers for tracking effectiveness for advertising with the website, third party sites.
• At least 15 photos of each pre-owned unit taken in an inside staging area with high intensity lights and key words to describe the uniqueness of that unit (not just a VIN explosion). Each unit should have a description that makes that Toyota, Ford or Chevrolet come alive.
• More successful dealers are taking photos of their individual new cars or at least a partial sample. The importance of this is being able to display those individual photos on the website and the ability to create a VIN specific video walk around which can be linked into a YouTube channel for organic search. At the minimum, produce twenty video walk arounds each month of the most popular units to help with Google searches.
• Monthly tracking of key metrics for the Internet that includes unique visitor count, time on site, page visits, website conversion (email leads + phone ups/ unique visitor count).
• Monthly tracking of key metrics for third party sites (AutoTrader.com, Cars.com, Car Soup) – Two key metrics provided from the third party sites includes the number of SRP’s (search results page visits-how many people hit the pages where you had units displayed) and VDP’s (how many of your specific units were viewed as well as the ratio of VDP’s to SRP’s. You should make it a point to compare your dealership performance ratio to the best dealers in the area. The next step is tracking closing ratios by lead source and a cost per lead/ sold unit analysis. This third party lead recap should be distributed to the entire management team.
• Written processes for handling leads. This should include phone ups and email leads, the frequency of contact and the length of time that you will follow up with these leads.
• A strategy for Facebook.
• QR (Quick Response) Codes will become an opportunity. Only a small number of dealers are using QR Codes but this makes it very easy for a customer to walk the dealership with his smart phone and get a price, payments, a description, a video walk around and an idea of similar units at the dealership.

This is only a partial list of what I have observed with the superstar dealerships. Unfortunately I also see the other end of the spectrum in my travels. There are a number of dealers who believe the doom and gloom being broadcasted by the media. They use the negativity from the press to justify poor results. They don’t invest in understanding how the market has changed and they hold onto what they have done for thirty years. Today’s general manager has to be a student willing to expand his/her knowledge of how to leverage the pieces listed above. This doesn’t have anything to do with education or age. It is more of an attitude to embrace the digital age that we live in.

An example of one general manager who I appreciate is Pancho Diez-Rivas. Pancho’s parents moved to Miami from Cuba during the early Castro days. Pancho’s father was a successful attorney in Cuba and he expected to return home after a couple years when Castro was defeated. That never happened. Pancho did not grow up with money, but he was able to support himself through college and eventually earn a law degree. Pancho is in his early fifties, so it would have been easy for him to avoid the details associated with the points listed above, using the excuse that he needed a thirty year old specialist. Instead, Pancho enjoys taking a deep dive into understanding organic search, video search, his website, metrics and anything that drives sales. Pancho is always upbeat, engaging and fun. As you sit in his office, two framed desk quotes stare at you. One is a quote from Chuck Swindoll on attitude:

“The longer I live, the more I realize the impact of attitude on life. Attitude, to me, is more important than facts. It is more important than the past, than education, than money, than circumstances, than failures, than successes, than what other people think or say or do. It is more important than appearance, giftedness or skill. It will make or break a company… a church… a home. The remarkable thing is we have a choice every day regarding the attitude we will embrace for that day. We cannot change our past… we cannot change the fact that people will act in a certain way. We cannot change the inevitable. The only thing we can do is play on the one string we have, and that is our attitude… I am convinced that life is 10% what happens to me and 90% how I react to it. And so it is with you… we are in charge of our attitudes.”

The other desk quote on display is the title of this article.