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grant.cardone Lower Volume + Lower Profits = Disaster

Posted by Grant Cardone  |  Saturday, April 4, 2009  |  Posted in Best Practices

Guest Posting by Grant Cardone

Price is always a very sensitive issue, especially during times of contraction when money is tight; consumers are scared and more selective with their money. The first response (incorrectly) is to reduce price in order to make up for less volume. It is a myth that a lower price will sell your product and in fact, a formula for disaster and guarantee of failure for most.

Unless you are Wal-Mart or the Dollar Store whose entire business model is built around very small margins and high volumes, the lowest price model will fail the individual and the company. Selling by price is an indication of a weak-minded and poorly trained individual or organization that looks for squirrel-like solutions to their challenges. I can show you an almost endless list of companies that have used the lowest price model that have filed for bankruptcy or closed their doors this year alone!

Do the math. Lower Volumes + Lower Profits = DISASTER. If you reduce price 50% you would have to sell twice as much product to be even, which during a period of economic contraction replacing loss volume would be more difficult than just learning the skill of holding price.

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alex.snyder Integration? What’s that and what do I do with it? What about my DMS?

Posted by Alex Snyder  |  Friday, March 13, 2009  |  Posted in Best Practices, Search Engine Marketing

Integration as defined on Dictionary.com:  an act or instance of combining into an integral whole. Okay…that doesn’t really help.  How about Wikipedia?  Awesome – they have an entry for “System Integration”:  is the bringing together of the component subsystems into one system and ensuring that the subsystem function together as a system. There’s a lot more here.

That’s the web-technical definition, but why the hell am I writing about it?  Jeff and I get on the phone when one of us is taking a long drive because we have longer phone calls than most friggin’ women do!  Yesterday evening Jeff was on the road and we had a few things to discuss about DealerRefresh.  After we got some house keeping out of the way, we started discussing the various things we’ve been tackling at work lately – no bosses – we’re not sharing information (for those of you who don’t know, Jeff and I actually have some competing stores).  We were discussing the different problems we have in diagnosing inventory issues and somehow that led to the integration topic.  After debating over who is currently dealing with more BS around getting systems to cooperate, I ended up volunteering to write this article (is that what happens when you deal with a ton of BS?).  Anyway, that’s how we got here.

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The Biggest Deficiency in the Dealership

Posted by Guest Poster  |  Wednesday, March 11, 2009  |  Posted in Best Practices

Guest Posting by Dale Pollack

As of late, I’ve come to understand that the biggest deficiency in the dealership today is the lack of expertise in sourcing used vehicles.  For years, dealerships have relied on a steady stream of trade-ins. Only a small percentage of dealers actually developed strong wholesale sourcing competencies. Sure, most dealerships knew how to send their used car manager to the auction now and then to pick up a few cars here and there, but that’s a far cry from having true wholesale proficiency.

I’m particularly struck by the lack of developed talent and process around the wholesale sourcing of used vehicles at some really large dealerships and enterprise groups. In fact, it is these dealerships that have the greatest deficiencies. Really large stores and enterprises historically needed wholesale sourcing competency the least because they had the most trade-ins.

I’m still not prepared to declare a “shortage” of used cars, because I believe that this term engenders the notion of a crises, and crises often evoke irrational responses. To be sure, there is not presently a shortage of used cars, but they are getting harder to find for reasonable prices. I think that it is incumbent on every dealership to assess its wholesale sourcing competency as we move through a year that will have a tightening supply of used vehicles.

The wholesale sourcing position does not need to be staffed by a full-time employee, as it can often be handled by a local wholesaler.  Regardless, however, whether you use a wholesaler or full-time employee, there needs to be a lot of thought around how they are compensated and the criteria that they use to decide what to purchase and how much to pay.

I would strongly urge you to think about compensating such individuals not based on how many cars they buy, but rather on how quickly the cars they buy turn. This keeps your buyers focused on purchasing the right vehicles at the right price. Everyone should remember that it’s better to be light and right in inventory than long and wrong even in today’s used car wholesale marketplace.

About the Author: Dale Pollak’s career in the automotive industry has spanned more than two decades. He is the author of Velocity and founder of vAuto. Be sure to subscribe and read his blog DalePollack.com.

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jeff.kershner Before You Sell that Used Car, SELL that Used Car!

Posted by Jeff Kershner  |  Monday, March 2, 2009  |  Posted in Best Practices

Are your sales representatives skipping right past that 112 days in stock vehicle like it’s the plague?

05 BMW 335i – days in stock 93
06 Toyota Sequoia – days in stock 123
03 Jaguar X-Type – days in stock 154
07 Ford Explorer Eddie Bauer – days in stock 112

Why are these cars sticking around?

I can’t tell you how many times I have seen sales professionals tiptoeing around a vehicle ONLY due to the perception that the vehicle was priced too high or for some reason or another felt as if the vehicle was not worthy of being on the front line.

Where do they come up with these conclusions?

I’ve seen it arise from something as simple as 1 or more potential customers telling the sales representative “you’re asking too much for this car” or “wow, I thought this car would have been equipped better”. Many sales people, after hearing this more than once, actually start to believe it’s true.

The car is just sitting there, it’s not being demonstrated nor test driven and now the sales team seems to be avoiding this vehicle like it’s the plague. Before you know it, that same vehicle is 112 days in stock, sucking up your floor plan and messing with your churn rate.

The problem; your sales team is not SOLD on this vehicle. You, as a sales manager have not SOLD the vehicle to who you need to FIRST. If your sales department is not SOLD on the vehicles you have in stock, how do you ever expect them to have the confidence and enthusiasm it takes to sell a car to a customer while also retaining gross?

Before you can sell that used car, it’s imperative you SELL that used car to your sales team first.

  1. Be transparent with your sales staff on the price of your inventory. Explain and include them in on the pricing. Show them how it compares to like models in the retail market and/or competition.
  2. Build value in your inventory with your sales staff. Review the CarFax, any history reports or stories that go along with each vehicle. Review the options and specifications that make this vehicle worth the asking price.
  3. DEMONSTRATE the vehicle to your staff. Do a detailed walk-around while explaining the feature and benefits just as your sales staff would do with a potential customer.

Get your sales team on board and educate them on the inventory. You’ll be surprised by the lack of knowledge and information your sales team has on each used vehicle you have in stock.

I recommend doing this as soon as the vehicles comes out of the reconditioning department OR better yet, have a morning inventory walk with your sales team reviewing the fresh inventory.

Before you sell that used car, SELL that used car.

Side note: If your used car sales manager is too lazy to do this, get it done yourself!

Another side note: If you have a days in stock issue, well then you have a whole ‘nother issue.

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mat.koenig Automated Request For Quote Auto-Responder

Posted by Mat Koenig  |  Wednesday, February 18, 2009  |  Posted in Best Practices

Guest Posting by Mat Koenig

I read an article on another automotive website regarding a tool for responding to RQF (Request for quote) consumers. It would be a type of auto-responder affording the consumer the opportunity to work their own payments, etc. to find out if the car is truly right for them.

I have to say at first glance I got excited about the possibilities of what could be done with this automated system like this and how great it could potentially be for me as a consumer. Then, after stepping back I realized that that this system could possibly perpetuate some of the perceived problems that dealers have with the internet. Allow me to explain what I mean.

As I travel the country talking to dealers I have heard, on many occasions, phrases like: “consumers aren’t loyal anymore”, “the internet has made my business harder”, “customers just shop everybody and use me to keep their local dealer honest”.

As someone who works for a large online classified company I’m going to say this: all of those statements are true. However, the reason they are true isn’t because consumers have the internet as a vehicle for communicating. It’s our fault as dealers.

Consumers aren’t loyal because many of us, as dealers (myself included after spending 12 years on that side of the desk) have forgotten about the importance of follow up and prospecting – how many years has Joe Verde said to ask “how many, how many, who’s next?” My sales team in a little Nissan Dealership went from last to 1st in our region by making sure our 3 simple salespeople did that prospecting script 5 times a day before 11 A.M.

We made phone calls to our customers every 90 days to say hello and catch up on a personal level. Our customer were loyal. As a dealer can you say that you do that type of follow up? Do you know how little Jimmy’s baseball season went or are you just relying on your CRM to fire of a form letter a few times a year?

If you aren’t following up to that level, why would your customers be loyal?

The internet has made business harder because we don’t use it for what it is: one more way to connect us with a consumer that will eventually buy from the dealer that treats them the best and gives them the options that are closest to what they want and need. Instead, many of us look at consumers who use the internet as a bunch of ’strokes’ and we don’t treat every one of them them like buyers.

Last I checked, if people aren’t too old to drive, they are a buyer. If people aren’t too young to drive, they’re a buyer. To quote Joe Verde again, doesn’t that mean everyone is a buyer eventually? If that is true wouldn’t it mean that the only questions are when will they buy and who will get the commission?

If you aren’t treating internet consumers as well as your walk in customer (who also went online but didn’t tell you), is it the internet that made your job harder or is your lack of professionalism making your job harder?

Finally, as far as consumers using the internet to keep their local dealer honest all I can say is “duh”.

Everyone wants to make sure the dealer is honest. Let’s face it gang, we aren’t ranked very high on the ethics surveys no matter how hard we try.

This isn’t new though is it? Before the internet was the primary vehicle for information people used to use the little gas station rags like AutoTrader Magazine and AutoMart Magazine or they would get the paper from the next town over to do the same thing; keep us ‘honest’.

If we as dealers would build relationships better couldn’t we have more repeat & referral business that pays higher profit anyway?

If we would just focus on learning how to use a phone better when that customer calls couldn’t we set more appointments when the shoppers from the town over do call?

If we’d just sharpen our sales skills by practicing every now and then instead of complaining about the economy and the internet, couldn’t we possibly convince a customer that we’re worth the drive to do business with?

What does this have to do with an automated RFQ program. I’d say everything.

I think the idea would be fantastic if as dealers we were prepared to pay attention to the consumer requests, if we cared enough to follow up and if our sales skills were sharp enough to give the consumer the experience that comes with a true sales professional; the experience that they deserve.

Unfortunately, as it sits with far too many of us I believe this tool could just add to a lazy entitlement mentality and further worsen the consumer experience lending to even less consumer loyalty and more excuses.

About the Author: Mat Koenig is a 12 year veteran in the Automotive industry and is currently serving as a Sales Training Manager for Cars.com.

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grant.cardone Seven Ways to Sell Value – Differentiate Yourself

Posted by Grant Cardone  |  Tuesday, February 17, 2009  |  Posted in Best Practices

Guest Posting By Grant Cardone

Learn to Sell Value by Differentiating!

The reality is your prospect sees your product to be very similar, if not identical, to others offered and then places much of his/her decision on the price rather than the value. The salesperson, unable to differentiate between price and value, will not successfully handle the difference between the two.

Unless you can create a powerful and distinct difference between your offer and the competition’s offer, the customer will be left to make a decision on who is lowest. How do you separate yourself and your offer is what distinguishes you from the competition? You’ve just got to be different and price is the most costly way to make you different!

Seven Ways to Sell Value

1. Product Differentiation
You must come up with ways in which your product is different than the competition. Even when the product is identical your product presentation is what will separate the perceived differences in the buyer’s mind. You have to know your product knowledge and combine that knowing with what it is the buyer wants to accomplish.

2. Price Differentiation
Untrained sales people believe price is the deciding factor but this is not true. Price is a myth when a true sales person builds value and desire and urgency. Thin margins and sales people that believe price is the only solution has put more companies out of business than any other single factor. If your company elects to be the low-price provider, your company better have every expense category cut to the bone, including sales commissions, and better be able to make it up with large volumes, which is highly suspect in this environment, or you will perish in short order!  I can give you an almost endless list of companies that have failed using this strategy.

3. Relationship Differentiation
If there is a solid relationship between you and your clients based on high trust, you have an inside track on the value presentation. In my book Sell To Survive I discuss how to identify and utilize each individual employee’s powerbase. People would rather do business with people they know than people they don’t know. This dependence upon who we know and these relationships have not been correctly farmed over the years and we must get back to it.

4. Process Differentiation

Companies typically get into a rut about how they handle customers, with management assuming that the processes of yesterday will continue to work today. While the basics never change you have to accommodate a changing market and buyer expectations so your processes do differentiate your company. The Mac Daddy Rule with processes today is make it easy, friendly, fast, different than your competition and lastly make sure your process is consistent with your marketing message.

5. Technological Differentiation
New modes of communication encompass a wide variety of options, from using podcasts, social networking pages, the use of video online, video emails, blogs, electronic negotiating solutions, CRM’s and combining direct mail with electronic scrub campaigns to target select customers.

6. Experiential Differentiation
Provide customers with knock-your-socks-off service and experiences so that they tell friends and family.  Ask yourself, how can we “WOW” our opportunities based on what they may experience shopping somewhere else? Warning: be sure your process supports the experiential differentiation.

7. Marketing Differentiation
Gimmicks like no money down, free credit, and lowest price are lazy attempts at marketing and typically fail. Direct your marketing to potential buyers of your products in a manner that hits each of them as individuals and be sure that the process can deliver it. Remember the game is to outsell, not just out market your competitors.

Make yourself different by making the sales staff different, your processes different and the customer experience different. Don’t think in terms of sales training; think in terms of sales effectiveness. Good luck and good selling!

About the Aurthor: Grant Cardone is a speaker, author, sales trainer and CEO of Cardone Training Technologies. Author of Sell To Survive and other Audio, Video, and training programs, for more information on Mr. Cardone visit grantcardone.com.

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jeff.kershner Long Term Email Follow-up – What are you sending your potential customer?

Posted by Jeff Kershner  |  Wednesday, January 14, 2009  |  Posted in Best Practices

Engaging your customer with your long term email follow-up

A question (or 2) that I get all the time..

“Jeff, what do you recommend for long term email follow up?”

or, my favorite..

“What email templates do you have for long term email follow-up”.

According to the latest 2008 Automotive eShopper Experience Study by the Cobalt Group.

“The “traditional” dealership sales process assumes the prospect will remain “in market” for approximately 3 days. Studies reflects that a high number of dealerships are pushing prospects through a process built around customer contact for a period of 72 hours with no plan or intention to follow up longer. The dealership assumes that the prospect is out of market and gives up well before the prospect completes their purchase process.”

Three DAYS! That’s it? After 3 days, I guess there’s no need to follow-up with that customer. We’ll assume they’ve bought elsewhere or are no longer in the market and be done with it..NEXT!

I’m all about the low hanging fruit, but come’on.

What is your dealers process for long term email follow-up?

This is going to be a short post because for me there is only 1 effective answer. INVENTORY!

A customer is initially contacting you for 2 reasons, INVENTORY and PRICING. So why would this NOT be part of your dealerships long term email follow up strategy?

Quit sending “Are you still in the market?” emails. Assume they are and start sending your customers new arrival inventory. New and Used, because you never know what what the customer is going to buy. Heck, pick out something that’s been on the lot for a while and was just discounted (you know, that nice none core vehicle your used car manager decided to actually discount after 90 days).

“John, I know it’s been 3 days since I sent you an email, but I was thinking about you when we traded in this beautiful 2005 BMW 335i. It’s showcased in the metallic black over black leather interior. It’s 1 Owner and serviced here at the dealer. I have all the records and have attached the CarFax for you to review.

Would you like me to send you more information on this beautiful BMW??”

Engage your customer with your long term email follow-up and quit sending those canned bull shit template emails.

Oh, and for you Internet sales people that resend the same email template over and over and over because the customer never answered the first one, AND your being too lazy to type out another email, STOP! There’s a reason why the customer didn’t answer you the first time! AND it’s not because they’re no longer in the market.

Engage your customer with your emails. Show the customer that you are eager to serve them while willing to provide information that will help them make the right decision. Let the customer tell you “NO, I don’t want that car!”, it’s OK, you at least got a response and something to work with.

Don’t forget to read Seth Godins “How to send a personal email

What is your dealers process for long term email follow-up?

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jeff.kershner What Car Dealers Can Learn from Obama’s Campaign

Posted by Jeff Kershner  |  Thursday, November 6, 2008  |  Posted in Best Practices

Consider who Obama was going up against; a Veteran, a Maverick, the old trusty Ford that has been turning it’s wheels for a long time.

To me it resembles the dealer down the road that has been around for over 30 years, sorta doing the same thing over and over. They’re not a bad dealer, maybe family owned, their reputation is average to above but their customer base has slowly dwindled. Their marketing and lack of consistency no longer speaks to today’s consumer.

America has changed over the last 12 months. For the first time in our History we are about to have our first Black President. A true symbol of shift and adjustment across our land.

We have seen a shift in our business as well. This shift has been taking place for some time now. And of course with the economic status, we have seen a deeper change over the last 8-10 months.

As maybe a lesson for dealers (us); Is there anything we can learn from a Presidential Campaign that will mold into the history books.

1. Have a Clear and Simple Message.

Obama’s message was clear and precise. “Change”. He treasured the weakness of his opponent/s and voiced a message [slogan] that resonated with the majority. A simple message for simple Americans, a message that we all wanted to hear.

2. Keep Consistent

Obama was consistent with his message and process. He found his message early and stayed true to it, never letting off. There was no going back to the drawing board in a relentless search for the magic bullet.

3. Brand Yourself (like a rockstar)

Obama’s logo, slogan, understanding of social media and technology were considered flawless. Obama become a brand while also becoming an effective force across America. His brand and persona helped fuel his strategy.

4. Perfect your Marketing Mix

Obama and his campaign team was able to fully leverage every avenue of marketing. From traditional to online marketing, his consistent message was heard abroad. They had a true understanding of Web 2.0 and was able to touch, embrace and engage voters across America using social-media channels.

5. Build Raving Fans

Using the tools of Web 2.0, Obama was able to build a pure fan base across all 50 states. This empowered him to plant and mobilize raving fans in amongst the competition. He harnessed the power of today’s online social word of mouth, recognizing it’s impact of immenseness.

Dig deep into underlying characteristics that has fueled Obamas success. He was able to create a passionate audience by speaking, engaging and listening to the people. He had a process, a message that became apart of his “brand” and image.

What is your dealers message, what is your dealers brand, are you truly engaging with your customers?

I didn’t vote for Obama, but I have a full understanding why so many Americans did and now that he is going to be our President he has my full support (unless he effs it up of course).

Your thoughts..

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To Script or Not to Script – Using phone scripts in your Dealers BDC

Posted by Guest Poster  |  Monday, November 3, 2008  |  Posted in Best Practices

Guest post by Mike Keesee

With the right phone process and practices the BDC is your #1 weapon.

When I first took on my position as the Business Development Center (BDC) Manager at my dealership, one of my goals was to develop this stellar, non stoppable phone script that no customer could ever object to. My eyes were quickly opened when I found myself modifying script after script and re-training my BDC Representatives through every change.

Sounding like a stereotypical car dealer is hard to overcome. Consumers have a perception of “car salesmen” already. The best practices for a BDC department are, roll-playing and defining skills. Fact is the more you practice these skills and overcoming objections the more confident BDC representatives become.

A Business Development Center should be able to adapt and make people feel comfortable, at ease and excited to do business with the dealer. At the frustration of not wanting to sound robotic consider (Human Instinct). Often the script would cause conversations that almost feel confrontational with the customer. It leads to an appointment that have NO intention of showing up. They tend to agree to avoid resistance.

There have been other BDC Departments that praise scripts. I’m not saying to scratch the whole method to script. I am simply suggesting changing the process. BDC representatives should use a guide and fine tune their skills. Focus on transition phrases. “It really depends” and “By the way” are a few that I practice. For example if the customer asks “How much would I need for a down payment?” I would simply reply:

“It really depends on other factors such as which financing options you choose and if the terms meet your budget. We will do our best to ensure that you get the lowest down payment that we can offer”.

Also focus on obtaining the customers contact information and making them feel comfortable with directions to the dealership. Your goal is to always make an appointment that will show up. Another tip that I have found is before ending the call simply tell the customer that

“as a courtesy, we will call you to remind you of your appointment.”

You will be surprised in your show ratios.

Effective communication weather you are taking an inbound or making an outbound sales call is the key to any successful BDC department. The more you roll-play and train your BDC representatives the easier they feel on the call. Let their personalities shine through; it will change the perception of your dealership as being “typical”. With the right process and practices the BDC process is your #1 weapon.

About the Arthor: Mike Keesee is the BDC Manager &
Internet Manager for Little Joe’s Autos

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jeff.kershner Five Rock-Star Ways to Brand Your Dealer’s Internet Sales Department

Posted by Jeff Kershner  |  Wednesday, October 29, 2008  |  Posted in Best Practices

Do you brand your Internet sales department so that every customer feels compelled to ask for you when they arrive at your dealer?

There’s nothing more frustrating then looking across the showroom floor only to see YOUR customer sitting at another sales persons desk signing the paperwork for their new vehicle. This is the same customer you had been corresponding via email and phone over the last several days. Why are they buying from that guy? Why didn’t they ask for you? This happens every day, and many times results into a heated conversation between the salesperson, sales manager and the Internet sales department.

Walk the higher road and let the sales floor have the deal. Take responsibility for the customer not asking for you, and instead find ways of branding yourself so when one of your next potential customers arrives at the dealer, they want nothing more than to work with you and your the Internet sales department. Here are five proven ways that are quick, easy and will help brand your Internet sales department like no other:

1. Sharpen your Image with Great Photos

Potential customers are initially on your site for one reason: Inventory. When the customer finds the vehicle they are looking for, the first thing they gravitate to are the photos. Use this opportunity to grab their attention and start branding your department.

Slide a photo of your Internet sales team members in the line of vehicle photos between the exterior and interior shots. Be sure your team photo radiates professionalism while also portraying that you’re easy-going and fun to work with. Don’t forget your glamour smile on the day of the photo shoot.

2. Leverage the Dealer-Rating Websites

A strong WBFM (“Why Buy From Me”) message can give you the competitive edge. Your customers love you — you hear it all the time about how great of an experience they had. Why not get them to share their positive experience for everyone else to read?

Condition yourself to ask every one of your customers to share their experience on one or several of the consumer or dealer-rating Web sites, such as dealerrater.com and insiderpages.com. As you build enough positive customer comments, you will now have a tremendously strong WBFM message that you can talk up to all of your potential customers.

3. Be Fearless and Build Transparency With Video

Video is yet another way of gaining the competitive edge, since most people shy away from the camera. Nothing builds transparency quicker then a few short videos of you and your team. Commit to filming several videos that distinguish the difference between you and the competition. Let your customers know you and your team are the solution to their vehicle-buying needs. Consumers are looking for the right car, just as they’re looking for the right dealer and the right person with whom to do business.

Video is easier then ever. You can certainly go high-end, buy a simple Flip Video Camcorder from Amazon or your local electronic store will do the trick. Check out videospin. com for free and easy-to-use video editing software that works great with the Flip camera.

Take your filming to next level and get your positive customer testimonials on video, as well.

4.  Master your “About Us” Page

What is the real value of your dealers “About Us” page anyways?

When a customer clicks on your “About Us” page, they are looking for a reason to do business with your dealership. For lazy reasons, most dealers ignore this page or use the default text provided by the Web site vendor.

Take advantage of this page and brand your Internet sales department to another level while cementing a relationship between you and your potential customer. Let customers see a more human side of your dealership. Remember, just because the page is labeled “About Us” doesn’t mean you get to talk the “Me, Me, Me” message. The key to great marketing is not what you say about yourself, but what your customers say about you. This is a great place to display those customer testimonial videos.

5. Don’t Forget Your Sensational Signature

This might seem like a no-brainer, but believe me, many sales people overlook this effective element for branding themselves. Every e-mail you send is yet another opportunity to brand yourself and your Internet sales department. Before you hit “send” one more time, make sure your signature line says all it needs to about you and your Internet sales department. Your signature line should include your name, job title, the name of your dealership, your direct phone line along with your cell phone number and your Web site URL. These are, of course, the obvious elements — but why not take it a step further? Include a photo of yourself, a dynamic tag line and/or a P.S. note linking the customer to your consumer ratings profile page or your new “About Us” page.

Many Internet sales managers are left to believe that you need special “Internet pricing,” a “Benefits Package” or a “Free Give Away” in order to get the customer to ask for you. Instead, sell something larger than the price of your vehicle. Sell your brand, sell your image and sell your customer what they are truly looking for. Be the rock star you are — take full ownership of your Internet sales department and find every opportunity to brand it to the max.

Don't be laughing at my wannabe a Rockstar photo!
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