Dealership Marketing

The death of the Internet Director

The time has come to promote the Internet Director into a much larger role

It was announced yesterday that America went into a recession in December of 2007. We have now reached a full year in a down market. By now, all of us in the automotive industry are feeling it on some level. I’ve heard some people saying they just want to break even and hope things will get back to at least 50% of what it was before 2010. A lot of businesses are trying to save their way into a profit. I’ve taken Econ 101 and even some 200 level classes, but I’m not an economics expert. I do think the notion of saving your way into a profit is silly. If you down-size, you down-size everything. So the real question is, where should investments be made in this recession? Where can a dealership get the most bang for the buck?

To everyone on Dealer Refresh, there’s a very simple answer when it comes to marketing: the Internet.

However, let’s take “the Internet” in a different direction. We all know online advertising has further reach than traditional media and costs much less than traditional media as well. However, traditional media is still a very viable marketing tool. Television, radio, and even the newspaper still have a place in the marketing mix. The mix has just shifted.

There are a few hang-ups in dealerships right now when it comes to truly utilizing the new marketing mix:

  1. People who do not know how to use a computer are still pulling the major strings – the “HIPPO”
  2. Internet marketing is too cheap to be taken seriously
  3. People spend so much time online that it is taken for granted as an advertising source – customers don’t mention it like they would a newspaper ad or radio spot
  4. Online measurements are different than traditional media and so precise that some people cannot comprehend them
  5. Online marketing changes too often
  6. Online dealer marketing is also internal – it is a CRM system and it can be IT driven

Some of these points are obvious. Let’s look at number 6 for a minute, “Online marketing is also internal – it is a CRM system and it can be IT driven.”

Yes, your internal software usage is part of your marketing mix. Before I expand on that, I should say that if you’re not using your CRM to direct your sales staff’s work days, you’re wasting your money on that fancy CRM. Did you ever think you could use your CRM to direct the message your sales staff is delivering? You can, and you should. If you’re doing that, sending email blasts, automatic emails, scheduling follow-up calls, printing letters, or doing some sophisticated data mining through your CRM, then it is a marketing tool. What about products like vAuto, Auto Exchange, Manheim, ePencil, HomeNet, or any of the other tools you’ve probably invested in? Guess what, they’re part of your marketing mix too. If one of those systems is a chore to use because your IT department has strangled bandwidth for security or blocked useful websites with Websense then your people are probably not using those products. Guess what, that makes IT part of the marketing mix too.

If you’re a large dealership or dealer group, then you probably have a hard time getting all of these elements working together:

Traditional media message + Online advertising displays + Internal software usage to drive the message

Are all of these areas spouting the same message? Are they pushing your clearance sale this month? Are they helping to let the public know you’re giving away a free Garmin with every car purchase this Christmas?

If not, here’s why…

I’m making a major assumption here, but I assume your dealership has someone (or someones) who decides what the marketing message is going to be this quarter/month/week/day. Then that message is passed to the creative people (ad agency perhaps) who will turn it into a PDF for the newspaper, a recording for the radio, and video for the TV…and maybe even a banner for a website. After the creative is done and scheduled for this weekend it is shown to the sales staff in the Saturday morning meeting…where it is forgotten 5 minutes later in lieu of a Starbucks run and the toughest question of the day: “what’s for lunch?”

Maybe you’ve got someone proactive in the Internet department who decides to turn this message into an email blast. Maybe you’ve got someone proactive with the CRM who sets up calls for the sales agents to make informing recent customers of the new specials. Maybe…maybe…maybe…

Why wait till Saturday morning to do all of this?

Wouldn’t it make more sense to have a central person who understands how all of this stuff works? Someone who can put an internal software campaign together with a television ad? Someone empowered to get through all the red tape with the vendors, General Managers, and IT departments to get that marketing message out. I believe the time has come to promote the Internet Director into a much larger role. And it will need to be the Internet Director because the most crucial part of the whole mix is the technology/online side. This Chief of Marketing needs to know how all these systems work. We need some glue.

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Professor Snyder, you again are so eloquent in your writing and hitting the nail on the head, the cover off the ball, and assuredly, a home run. It’s time many dealers pull their head out of……..the sand and see what they are doing is wrong. The only way out is online, CRM, etc…..exactly what you have described. Guys like us are kindred spirits when it comes to this stuff because we know if works. I hear these stories of woe every day, from all parts of the country. It is coming from huge metro markets to the little tiny single point stores in the middle of BFE. Sound the trumpets! You want to save your ass and your store? Read the words that Professor Synder has put down and heed the hell out of them. Great job my friend as always.
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    Bill Playford
  • December 2, 2008
Well put, as always. I totally agree it is time for "the ownership" to embrace ecommerce, and accept that it is hear to stay. Customers are speaking every single day, and no one at the top is listening. An owner needs someone to be in charge, and make the crucial decisions that are necessary to get the job done. An owner needs someone not to ask, and just do.

However, I think some of the hard working folks in the trenches need to look in the mirror, as well. ISMs know their customers, and what it takes to get the job done. They don't need the "four-square" to make it happen. Why do they let someone who knows little to nothing about what they do tell them what they can and can't do? They need to stand up for themselves! Fire up Excel, and create a spreadsheet that shows why it makes financial sense to create such a position. Show the ownership that by fully utilizing the existing systems that the dealership could save, or dare I say, make more money. Speak to the ownership in their terms! The worst that can happen is that one gains the respect of those who sign the checks.
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Alex what a great post for 90% of the readership to get a promotion, or get fired:)

You're right on tho. Obviously to any ISM in any given dealership, they know where the dealership strengths will transform into sales.

The dealership website will be the ONLY medium in the future needed. Maybe 10-15 years away, but let's face it, eventually people will be buying cars from a dealership website without meeting anyone. Interactive online sales/shopping applications are already here, and will only continue to be more accepted and adopted by dealerships. Not to mention service, body shop, and parts being absorbed online too in some capacity.

The dealership ISM today will become the GM of the near future.
<strong>Thanks Gilbert</strong> - my long lost brother from another mother.

<strong>Bill</strong> - most ISM's are of a different breed than their bosses. They're much more open to the customer's needs and wants. The problem isn't in that portion though. The problem is that most dealership personnel are 30 day visionaries. I can't say that I'm not guilty of this myself, but when we get too wrapped up in the now we forget to strategize for the future. Not gluing the Internet department to the marketing department is a single example of that short-sight.

<strong>Stew</strong> - yes, this does speak well to most of Dealer Refresh. However, I'm not sure a lot of folks can handle what I'm proposing. I'm not even sure I can. I just know that marketing messages need to be congruent and there is a lot more to it than just the regular mediums we think of around the term "advertising".

Selling is the passing of emotions. It is purely relationship based and does not have anything to do with product knowledge or demonstration skills....but those help. I don't think it is possible to have car sales without that human-to-human relationship. I do believe the dealership website is just as important as the brick and mortar that make your showroom and should be treated as such. But I don't believe it will ever replace the brick and mortar.
M
Alex:

I couldn't agree with you more... If only the Internet Manager wasn't perceived as a "throw-away" position in so many operations!

Believe it or not, we have seen many dealerships ditch their internet management to cut "extra costs" which is absolutely INSANE! Meanwhile they have a dinosaur or "hippo" as you put it running the desk and unfortunately in many cases the marketing efforts of the dealership.

With the revenue generating power and marketing reach that the internet department can have on all departments within the store, cutting these resources is simply a knee-jerk reaction to what many dealerships unfortunately don't understand as well as they should...

Move more money and dealership resources to trackable media like the internet and see your profits soar and your understanding of your competitive landscape grow!

Alex, as always... you inspire ;)
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Has anyone ever used FOCUS INC?
Cliff Banks touched on this same subject not that long ago: http://wardsdealer.com/internetmarketing/columns/ideas_becoming_modern_dealer/
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    Pete
  • December 3, 2008
It is unfortunate that it has come to this at the dealership level to recognize the importance of the ISM.

I will go one further, in the Chicagoland area I know of several ISM's that got fired in about that less than 18 month cycle.

A few just could not do the job but most because of being too smart.

Say it for what it is. Most GM's will park your butt on to the curb when feeling threatened to losing their job.

I started in the business in 1986 and have been out of the retail end for a few years now and can most certainly can tell you that the mindset of most "old school" GM's is that to increase sales its a numbers game. Bad math I say. 15 salespeople x10 cars per month= 150 cars or that the business is about managing/controlling sales people and working deals to closing.

Wrong Mr or Ms GM IT'S ABOUT MANAGING BUSINESS PROCESSES that leads to SALES!

Isn't that what an ISM does folks?
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    Jeff Kershner
  • December 3, 2008
@Pete "most “old school” GM’s is that to increase sales its a numbers game. Bad math I say. 15 salespeople x10 cars per month= 150 cars" OMG I hate that. I have seen go many GM's try to use this formula and it get's me fired up.
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Great Article on the death of the internet director, I couldn’t agree more! There seems to be two types of thought processes out there now, the one of paralysis by fear and the other of seeing this as an opportunity to gain market share.

I guess that the “old school” GM’s and or Principles thought that the article written in Ward’s on April 1st was an April fool’s joke…

“Now is the time dealers should focus on building an Internet culture in their stores. No longer can the Internet department remain a mere department. Dealerships are going to have to become Internet dealerships — if they want to survive the next 10 years”.

http://wardsdealer.com/reports/2008/edealer100/auto_power_web/

Keep up the great work!
J
I am going to watch this post build before coming out of my shell.

With the non shyness of speaking my mind I will stand back for a bit.

As you know I am a huge supporter for IM's.

Be patient I will be posting soon.
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In not too distant future (2010?), it is my prediction that there will be only two kinds of dealerships left:

1) The digitally literate, digitally effective and digitally profitable

2) The bankrupt

Okay, maybe that is only one kind left.

Does the ISM have an increased role to play if that is the path ahead?

Likely, since the ISM is probably the only person in the dealership who is functionally literate in the issues of digital marketing, and effectiveness.

Nice post Alex. Hopefully you can use it to get the raise you deserve.
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Pete,

I like your response because even thought I am not in the Chicago land market. I am in the New York/New Jersey Market and as sad as it sounds. I am one of those internet managers that could not last more then 18 months for the same reasons that we are discussing here. One GSM was scared that I was on track to make more then him, cried to the owner and my pay plan was cut 50% so I left. Another GM saw that I took 25 cars per month and turned it into 70 cars per month with a higher gross profit then his floor sales managers would produce. He saw that I was being smart and he eliminated my position where he demoted me to be a sales consultant. I would not go for that so I left. Lastly, another GM saw me take a dead BDC from 30 to 65 cars in three months. He liked me. However, the GSM knew that I was working harder and showing results while he was not and he did everything to make me look bad. So the GM demotes me to be assistant BDC Manager while he puts his old buddy, one of the floor managers to run the BDC. I was on my to quit until we had a training session and I put my 2 cents in with a lot of wealth and knowledge to the point where I embarrassed everyone with how much they do not know about running a BDC/Internet department that I got fired that night. I was going to quit two days later but it worked out for the best. Now last month they begged me to come back and I refused. I refuse to take a lower position at the store that I was a manager at and I refuse to help someone clueless be successful and take all of the credit for my work. I worked too hard to have what I have. The other guy does not even know about this site or ADM or even NADA. What a clown!!!

Alex,

This is a great article and I enjoy it very much because it simply discusses the important of an internet director. When I first started out as an internet director I thought it was all about being just another sales manager and closing deals for internet sales people. I did not know what a third party lead was or a vendor was. I learned a lot of things over time as I discovered sites like these and I would read dealer magazines. I actually goggled the words "auto internet sales training" and found this site. I would read all the articles and interact with vendors and build relationships. When I left that job I had contacts and relationships with people. At a newer job I utilized what I knew and would build on it. With every newer job I would build and learn more. If Cory Mosely had a free seminar I would go. If cars.com did a free seminar I was there. My dealer would not pay and it was pricey to go so I went to the ones that I could afford. I got to network with all of you fellow industry professionals and friends. BDC and internet sales became a passion because I knew that I was helping to take it to the next level. The problem is that my dealers never respected that because they feared me. Managers were afraid that I am too young and too smart for my own good. If I had a suggestion, it would be ignored most of the time. Now I know that there is a lot of marketing involved. There is website management, reputation management, knowledge of the cars, inventory, be able to desk and close a deal, work a CRM/ILM, train staff and be the go to guy when it comes to everything internet except for IT work. This position is evolving and large dealer groups that are getting it are doing the right job just like the one that Alex, David, and Jeff represent. An internet director should be of the same caliber as the GSM. If you are better then the GSM and you know it just play humble and keep it to yourself because the GSM will eat you alive. Also, if you are making over $120k please make sure that no one else but the person paying you and/or assigning your pay plan knows. Let the GSM know you are making as much, they will push to get rid of you. Trust me I know, it happened twice.
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Jeff,

To add to what you said. The mentality of 10 cars to each sales consultant shows the need to flood the sales floor where people have less chances to sell more and make a living. While it looks good to the dealer because they have the bodies to move the metal it is also a very terrible thing because it shows for lack of care and support of employees and then it gets worse because we hit the economic times that we did now and the dealerships downsize and get rid of half of their staff because they need to cut expenses with insurance and pay while keeping the top performers on staff. You got stores that did 500 cars per month with 40 sales people cutting down to 25 because they only did 280 cars last month. This is a real life example, Open Road Honda in NJ where I live. I just got the stats from a friend a few hours ago. Managers are losing jobs the same way. Now is the time for dealers to really look at which managers and sales people really bring money to the table and retain the right people.
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Alex,

First, allow me to applaud you on my favorite sentence in your article:

"I do think the notion of saving your way into a profit is silly."

I was recently in Florida working with our Sales Managers and visiting many of the Dealers in the Tampa area. As we met with these very seasoned and very intelligent men and women we heard them one after another say: "We're just trying to survive so we've really cut back on our advertising everywhere..."

Roughly translated: "We've cut every bit of our exposure, have somehow managed to rationalize this as being a wise decision and believe for some unknown reason that we'll end up more profitable than we were when we had our name in front of 20,000 shoppers."

Let's face fact; there are really only two reasons to advertise online:

Reason #1: To protect the hundreds of thousands of dollars that a Dealer has invested to build their current customer base. Advertising online with the sites consumers visit most is the best way to PROTECT YOUR PRIOR INVESTMENTS.

We all know, and Joe Verde has preached it for years, that your current customer is your best prospect because they like trust and respect you already - otherwise they wouldn't have purchased from you.

If a dealer isn't keeping their name available on the sites that most consumers visit - they are handing their customers over to the competition on a silver platter.

Reason #2: To go after the business that your competition is either too lazy, or to ignorant to protect.

This may sound harsh but as far as I knew we're all people in the car business in a down economy so there is no time to patty-cake the situation.

If your competitors aren't smart enough to protect their current customers you need to go after them yourself.

Getting back to my Florida visit I met with one Dealer who absolutely blew me away. This man is in his 60's and we all know that many Dealer's who are that age are typically a bit more old school and not as online savvy.

When we stopped to visit this friend, and I do consider him a friend as I always grow from our conversations, he validated everything I just shared with you.

When I asked how business was going his exact reply was: "We are doing excellent."
When I asked how he was doing excellent when everyone else on his street was crying he said to me: "Mat, while everyone else is pulling back their advertising and trying to save their way to a profit I have increased mine substantially....If they're to ignorant to protect their business I'm going to take their customers..."

He is truly doing an excellent job of running his VERY successful dealership in spite of the economy. Oh, did I mention that he is an independent who stocks about 50% of the inventory that his large franchise competitors stock and he blows them out of the water?

I applaud you all for your thinking and I would encourage you to keep tracking well so you can prove that your dealers are getting a good return from your efforts.

I also want to recognize that it is NORMAL for the GM, Owner, GSM to blow off everything that you recommend - and it isn't your fault.

Being a guy that started in the business before the internet took off I have to accept partial blame for the issues that ISMs face today.

When the internet became big, most of the top salespeople didn't understand how it worked and many still don't understand that EVERYONE is an internet customer.

Truth is, at many dealerships the guy or girl who understood the internet best was usually the weakest salesperson in the dealership.

Let me say that I don't believe this is always the case today, however, this is still the mentality of many of those 'old school' folks that some of you referred to earlier. I too was one of them at first.

If we had a salesperson who was "nice" and could "write an email" we made them the 'internet manager' and they got all the email leads.

In those days there weren't too many leads and the top salespeople thought internet folks were just 'tire kickers' so they wanted nothing to do with email customers.

Owners and Managers at that time thought to ourselves: "What the heck, if this kid can get lucky enough to land a couple appointments from this email stuff we can go in and close for them. If they can't no big deal because it isn't enough of our business to worry about."

This was short sighted thinking but it lends perspective to why you face such a challenge today with those 'old school' folks.

We have to remember one thing: The Dealer, as Alex said earlier, is calling the shots and pulling the strings. Whether their thinking is old school or not, it's still their money. That said it would appear that we need to help them see the value that YOU bring to the dealership.

The best way that I know how to help your Dealer or GM to see value in you and to see value in the internet department is for you and your department to make them money.

Based on the posts I see on this site I'm confident that improving sales and increasing revenue should be easy for many of you.

Congratulations in advance on your 2009 successes and good luck on your future promotions!

Helping the best get better,
Mat Koenig
Sales Training Manager
Cars.com
To get more information on Mat Koenig go to www.matkoenig.com
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    Pete
  • December 4, 2008
Here is my opinion of what needs to take place. The ISM should be what a GSM is. The GM can oversee total operations. If I was an owner in these time living in Florida most of the time calling in for the store numbers, I would either get back to work running the place and let go my GM, sell the dealership or a give up say 25% ownership and pay someone 120k a year to be a limited partner. That is saving your way in to profit.

Sorry F&amp;I but that position is no longer needed. Vertical self management were as the sales rep actually doesn't do the A-R part only of the deal but to Y. I would probably hire hourly based workers to Z step deliver the vehicles.

What I also see is that to have hundreds of vehicle in stock at one time is a thing of the past and may see express style dealerships. Smaller footprint storefront what I call Demo Center and regional storage facilities that can allocate a sold vehicle to a region within a day for a schedule delivery.

I made the comment on another post about being a Costco and did you know that the only keep about a 4-6 supply of goods on hand.
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    Pete
  • December 4, 2008
Sorry, "4-6 day supply" had to plug in.
The commission structures are out of line too.

There is no incentive or focus on the efficient models and the reason why? Most reps do not get their best effort to sell a $300 profit margin vehicle.

The way it should work is that if you were to take the total gross profit and divide it by the units sold, then pay that same avg on every vehicle. There lies your incentive to sell more units.

The top people may not like this plan but nobody starves either. You then can adjust to how many reps are needed to handle the volume of customer's and pay a non draw wage to give stability to the sales floor.

What would be the average pay? I did a crude analysis and the range is $38,000-72,000 a year salesperson pay. I had some people balk at it but look at the reality of what people truly make not what they think they make. Plus bring back a demo program for the sales reps as an incentive.
S
I see some very valid points. When mentioned that dealer that is spending more to reap the benefits of what the other dealers are giving up, I was amazed that there are dealers that think like that. In all reality now is the time to invest money and make the changes that you need to survive. A shift in the economy should make a shift in how we operate our business. We cannot be so dumbfounded and keep doing the same thing over and over again. It is like trying to walk through a wall you have the opportunity to walk through a door. The problem is that people do not think. Too much old school mentality and ego involved. The owners of these dealerships are rich. So they make $1.5 million per year in their pocket on a god year. Why not sacrifice $200,000 this year and spend it right, get rid of the people that weigh your business down, take your strongest staff and make them stronger. Take a small pay cut and cut your ego and watch how business will turn. You know the internet is the way to go. So why fight a battle that you will lose?

Pete,

It is no secret that F&amp;I has always caused a problem even though it brought in extra income. I like F&amp;I but I think that it is old school as well and it aggravates customers even more. If the sales consultant does everything A-Z they will have a biller who can print the paperwork and they can sell the after sale items on their own. It should be easier simply because the rapport has been built and there is trust with the customer. Also, the delivery process is quicker. How many times has your CSI score suffered because of how long it takes to get in the box or how long the finance manager kept the customer there. I think we have all seen it and experienced it. Why not pay the sales consultant 10% of the back end gross that they can generate on top of the 25% of he front end gross that they make on a deal? No the sales person can make more money even if they sold 10 cars but you less overhead and you are not paying out $100-200k per year to a CSI assassin because they can pound an extra $200 per copy from the customer. Now that the work is done, have a delivery specialist go over the vehicle. You still make out as the dealer since delivery specialist do not make a ridiculous income.

It still works out well for the sales people working on volume based pay plan that Pete mentioned in this last post because it still generates more income for the sales person now you go from $72,000 to $102,000 simply because you take a deal from start to finish and you really take control of your income.
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New School Internet Sales Manager VS Old School Sales Manager. I really like the direction of Dealer Refresh and the combination of input from what appear to be very in tune and up to date car people. I have held positions from sales to G.M and eventually owner. I'm 35 years old and started selling when I was 21. I have to admit that when internet selling started I wanted nothing to do with it and those that did were not quality sale consultants. The times have changed for sure and not just in the internet aspect but the standard of quality training at the dealership setting in general. Its one thing to understand the functions of the internet and how to use CRM tools but it takes a certain caliber of Internet Sales Manager to take control of a deal and build value. What needs to happen is that the internet managers need the tools in combination with the sales training to hold gross and create more car deals. I believe in this so much that I have created the best solution for this problem and have surpassed any and all concepts and services offered by creating VIPautoslive. I have studied all competition and not one have taken this to the level that I have. I have a true passion and desire to put the power back into the dealerships hands. My proven method can only be done with that certain caliber of Internet Sales Manager that I previously mentioned. I'm truly the old school that understands the importance of traditional success that not only have I combined but have created the best combination of solutions for the future of the new school. These are very exciting times and the one thing is for sure some dealerships will fade away and others will sell more than they ever have. I want to say again that DEALER REFRESH has done an OUTSTANDING job in creating this winning site and the car people on here are of the best of caliber. Cheers to you all and get ready for internet selling to take over completely. VIP Autos Live.

Bobby Compton
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    JIM
  • December 5, 2008
I believe that in Sales you have to serve the customer. In the years ahead the customer will totally utilize the internet as a information-purchasing medium.
Currently I am a Internet Sales Manager my territory is the entire USA. I believe you are limited only by the vision of your management.
I have turned down so called promotions as I believe this is the future. By the way I have sold for many years. It is more difficult and requires a salesperson to constantly think outside the box. Maybe that is why I enjoy it so much. JMHO
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    Audrey Knoth
  • December 5, 2008
Alex, the most important word in your post is "empowered." I agree with what you are saying, but actually disagree, too, because I believe the internet director's role is so important that it needs to be a top executive level position ... beyond the stature of what you are describing. For one thing, what you are talking about in your post is primarily how the internet pertains to vehicle sales. The reality is that the dealership's web presence and functionality are also crucial to fixed operations ... can play into recruiting, and more. The internet director position should be a top-level post that ensures consisentency and effectiveness for web operations throughout the organization. The dealers who understand and embrace this are the ones who will really thrive going forward.
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    Gerald
  • December 6, 2008
Alex-

Great post, and your comment about the not being able to save your way out is spot on, though so many dealers try to do just that. Rather than being bold, most of the time a dealer simply shrinks back at exactly the wrong time.

When do you like to buy a stock? When it is going down? Absolutely, assuming it is a viable stock and not heading to zero. Advertising is the same, but is not viewed. I don't know how many times a dealer has advertised in a newspaper for about 3 months of my advertising budget to get a pittance in return, and then complains when I only closed 10-12% of the leads we got for $2500.

When all the other dealers in your area are shrinking, step up. I have seen the results of the shrinkage of advertising dollars in the market, and we are positioning ourselves to capitalize on my competitor's absence.
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I've had this discussion at least a dozen times and come to realize the need for a true IM from my experience in the dealership as well. The element here is the internet manager is not held in the same esteem (yet) as the USM, GSM, or GM. Many ISM's are sales staff that knew more about computers that the next guy and were delegated the responsibility. So now you're in charge of the dealerships online marketing, but your compensation is based on how many cars you personally deliver. To make matters worse you just spent the time to write a nice emotional description, select the correct trim color and options, and even take some really nice photos and someone walked in and bought it from another salesperson because you were taking photos and documenting another car. Talk about frustrating. That's probably why most dealership websites are about as useful as a 4008 Screen with a stock photo. It will take a dedicated Internet Marketing director to over see the process from the macro level and plan past 30 days. It seems now that too many ISM's report to a sales manager. In reality, the ISM should report to whomever the Sales managers report to. In other words, the sales managers are asking the ISM how many cars they deliver this month rather than how many can the whole dealership do better, or how can we improve our process, or how can we coordinate our efforts. I hope to see this happen.

Brian Hoecht - You hit the nail on the head.

I tell dealers that it isn't the economy that's hurting your business, it's your competitor down the street that has a system in place and is marketing themselves effectively online.

Jeff K - I hate that math too.

To a dealership, salespeople are free. Either they exceed draw or they're gone.
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    Joe
  • December 7, 2008
We all forget that we're an industry in the throws of change. HUGE change.

Let's have a sit down and let's look at this Internet Director Pay Challenge, not from the bottom up, but, from the top down. Bare with me. I'll try to make it fun to read.

Let's say Mr. Big Dealer (MBD) has 1,000 units on the ground & he turns his inventory 4 times a year. MBD has an annual sales volume of 4,000 units.

As is the norm, MBD has spent years building his biz, has quite an investment in traditional media and has his branding game working. Let's assume that MBD is spending $350 p/unit retailed in ad spending.

MBD's ad budget is $1.4million dollars annually.

This next step is where Darwin's rule of nature kicks in (strong eat the weak) and now. the fun starts!

MBD has had an epiphany and now "gets it". Gone are the days when Mr. Big Ad Spender had "control" over the shopper. In days past, Mr. Big Dealer's large ad dollars spent would drive traffic to his door. MBD liked this arrangement. But, in our NEW world, MBD sees that 90 of 100 shoppers hit the web from home and work and it's here shoppers decide who they'll visit.

MBD wants confirmation, he institutes a post sale survey and realizes that 95% of his buyers visit his site prior to purchase, yet, few reveal themselves prior to purchase.

MBD says to himself:

"Oh oh. there's a new "Step" in the sales process and I am flushing precious profits down the toilet because I don't have my internet game plan rockin"

MBD asks his web IT people for visitor info to his web site and is shocked. "Look at this! Can this be right? 11,000 visitors per month and I sell 330 of them?!? Whereinthehell did the other 10,670 visitors go? 11,000 visitors and all I got were 93 emails?"

MBD gasps, "It's worse than I thought! Or. wait a minute; maybe, it's better than I thought". Just how big is my web audience? MBD now sees his website as an extension of his lot. His web site isn't there to keep his ISM busy, it fuels his entire operation.

MBD wants change. He drops his MBD ego (aka HIPPO), puts his shopper's hat on and "walks his virtual lot" like a shopper would. 10 minutes into his shopping experience, he mutters "what good is my $116,000 per month ad spend if my pics suck, the options are generic, there are no personal descriptions AND one of my most popular pages, the specials page IS EMPTY!! Arrrgggg. Hey! whyinthehell isn't my web site carrying my "sale of the month" message?"

MBD is now frustrated. "I don't know this web stuff, I know I gotta get it amped up, but whointhehell is knows the Web and selling cars, who is going to help me lead this attack?"

Enter: The Internet Director (ID).

This is my fun little exercise to demonstrate just WHO is responsible (MBD), to WHO the ID should report to and WHY it's not deeply integrated into the Auto Dealer's culture.

This new player, The Internet Director (ID), is deeply involved with all departments (sales, service & parts). ID participates in all marketing meetings, oversees and optimizes the visitor experience and the tools that all employees use to improve MBD's ROI.

Marketing is a "top down" exercise and the ID is deeply involved with the Advertising side of the balance sheet. Paying the ID can be easily offset with a reduction in spending on the traditional side. But, the ID works the web audience to produce ROI (not just shift costs from one side of the spreadsheet to another)

Every MBD's effort should be finding ways to push shoppers to their site. For every 100 units MBD has on the ground, he can expect a visitor to remain for one minute, so, our MBD with 1,000 units has his visitor for 10 minutes. To every dealership, that visit is priceless.

If the ID is given support & does their job, web metrics will improve like: time on site, pages viewed, % returning for 2nd, 3rd, 4th visit. Up counts will increase. Because 95% of buyers visit the site 1st, SERVICE APPOINTMENTS from the site should rocket.

If Mr. Big Dealer (MBD) is truly eager to leverage the efforts of the ID (better pics, options, descriptions, etc.), they both drink some vAuto koolaide and their eyes pop wide open.

MBD works vAuto hard, sits back and waits to see what happens. After week1, the Internet Director tells MBD that call counts and email leads have exploded. By week 2 MBD is seeing a noticeable change in AutoTrader.com and Cars.com traffic (as seen from his post sale surveys). By week 4, vAuto's platform is projecting his annual turn rate moving from 4 up to 5 turns per year. MBD discovers other vAuto dealers can reach up to 10 turns per year.

Mr. Big Dealer busts out his calculator and runs scenarios on how more turns makes his dealership go into RACE MODE. His ad cost per unit will drop, his floor plan per unit will drop, his parts and service department will enjoy the windfall from all the new prep work.

Regardless of size, the Dealer's Website has now become the core of a dealers marketing efforts, and because of this, the Internet Director should be a "cabinet Level" position, involved with all departments.

IMO, smaller dealers should assign this to the GSM and the GSM gets an assistant to execute these tasks.
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    Pete
  • December 10, 2008
Bobby,nice to see some old school hybrids clicking in. You see the opportunities and I have a business not exactly as yours but somewhat similar mantra.

The whole point is prepare for the future and build towards it instead of waiting for disaster them trying to correct it.

That has been the way it has been done until now because it's do or die for each and every dealer because the factories are hoping to save themselves and there are no more free passes on to the lifeboats.

Holdback? Factory to dealer incentives? Going, going, gone. MAP (minimum ad pricing) pricing is something that could happen if bankruptcy is declared and no more franchises but factory owned stores. Never say never and I can tell you how they would do it because one of then has a Plan C in tact. I read it.

It really would not be a bad thing as far as I am concerned. Would it not be great to be given stock in the company that makes the products you sell. Heck with the lame cheesey spiffs and make people feel pride and part of the whole I say.
id and look what happened...
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    Pete
  • December 10, 2008
That was to read UPS did and look what happened, they kicked the )*#&amp; out of the USPTO with a more profitable and better service and happy long term employees.
J
Thanks for the great post Alex!

There has been many post &amp; discussions in regards to the Internet Directors position in the past and have touched a bit here and there. With this post you have provided all of us the endurance of true aspects to the new marketing formula.

The Internet Director should be right at the level of the GM &amp; GSM. Be part of the weekly Monday meetings, or however yours is set up. The Internet Director should have the authority to go right to the decision maker at the dealership. Providing the support to the IT department, that department will shine!

AKA THE GOLDEN DEPARTMENT. This is where your best bang for your buck is.

It gets very frustrating when planning a great marketing idea based upon the Internet when you cannot get to the decision maker. Work up the chain of command, for which your ideas get thrown to the side.

The Internet Director should be the individual to oversee all CRM activities, website, marketing oh yes and sales staff. You may be asking “why in the world the sales staff”?

•Providing the importance of the Internet
•Having them be noticed on the internet (I had my prior sales staff write up an About Me for each one)
•Get them on a schedule for following up with old prospects, daily work activities and mailers to their prior customers for upcoming birthdays, holidays &amp; service deals.
•Work as a team for creating marketing ideas. You can get lots of feed back when you take your sales staffs ideas into consideration. (Instead of throwing them off to the side).
•Set Tasks in the CRM tools for them if needed (depending on the size of your staff)

If there is a CRM tool that’s in place at your dealership and no one is using it….. Eeeeek! Do you realize how much $$$$$ is setting there. I am not talking about the cost of the CRM tool!

I am talking about the customers that are in that CRM tool…

I would have a field day or should I say a kid at Christmas!

Let me see, if I ran a dealership or owned a dealership my Internet Director would be right at the top level of management.

Having the Marketing Agency, Dealership, IT Department &amp; Manufacture work together with all marketing tools that are available you will succeed.

If you are missing links in the formula then you can’t ride your bike. Yeah you can sit there look cool, tweaking your little mirror, checking out your cool noisemakers you got installed on your spokes!

However it would be a lot smoother to your coolness when cruising!

Thanks again Alex for this post. I may have got a little off track but as a true supporter for all Internet IT Departments &amp; Business Development Centers I speak from past experiences.
L
Hi Alex,
Great article and spot on. I've been involved with Internet marketing at many levels since 1999, but working in the automotive space for just a few years now.

I'm still amazed at some of the basic things that auto dealers miss such as ROI, poor lead management, and too many HIPPOS. Sometimes some of the best local Internet marketing is free or minimal cost, but most auto dealers won't pay attention unless it cost $500 or more per month.
L