If all boats rise with the same tide, things are looking good for automotive Internet departments.  For this issue of the Dealix Dealer Newsletter, we spoke with Amy Miller, business development manager of Harr Motor Companies in Worcester, Massachusetts and Mark Carlone and Mike Lucente, Internet sales managers for the Crowley Auto Group in Bristol, Connecticut.  All three are at the top of their game and are great assets for their dealerships.  Both Harr and Crowley are prime examples of successful Internet departments, however, you’ll find that the two differ in their operating structures.  One thing they both have in common is their reliance on high caliber support staff, which is a key factor to their success.

Kristen Stanton:  Thanks for taking the time to speak to our readers and share your experiences.  One of the hurdles we hear that many Internet professionals face is getting support from their owners and GMs for their departments.  How did you accomplish this?

Amy Miller, business development manager of Harr Motor Companies: Our owner and group president were committed to creating this department, so there already was a level of buy-in.  They had the foresight to put this into play, knowing how important an Internet program would be.  They’ve made sure we have designated areas in the dealerships and the tools we need to get the job done.  Of course, what that means for our department is that we have very lofty goals - there were very high expectations from the beginning on what we would accomplish.  Building this department has been a yearlong effort and in the past six months we’ve really seen results.

Mike Lucente, Internet sales manager of Crowley Auto Group:  We do have the support of our GM and owner, but everything is results-oriented and the department must substantiate itself for credibility.  We have to have a game plan – to demonstrate what we plan to do and how it will benefit the organization.  We know what our goals are and we can back them up.  With every success, we get more and more support from our owner, but we still have to continually demonstrate results.

KS: How are your Internet departments’ operational budgets wrapped up with your dealerships’ overall advertising and marketing budgets?

AM:  We are part of the overall advertising budget.  I sit in on our advertising meetings, which take place every week.  We look at every expense and the results of every program.  Based on these results, we make the next month’s decision.  Everything has its own performance goals.

ML: Crowley’s Internet department is a separate entity from the advertising and marketing budget.  We deal strictly with the Internet.  We have our website, which has its own marketing purpose for local traffic.  However, it could be cost prohibitive for a dealer to depend only on that kind of traffic, so the website works in conjunction with the leads we get from our third party providers.

KS: It sounds like you have different models for your departments.  How would you describe the structure of your Internet departments?

AM: We tried many models and have gone through about three iterations before coming to our current structure.  The key is that we’ve been flexible enough to change.  First we had just one appointment setter; then we had our sales representatives doing everything; but for the third generation, we brought on more appointment makers for each store.  Our appointment setters also do follow-up until we get that customer into the store.  We don’t have ISMs; we have Internet sales associates that support our floor sales people.  With the current structure, our traffic is really up and we book at least five appointments a day.

ML: We succeed by teamwork.  Mark (Carlone) and I work independently, each handling different franchises, yet we work as a team by sharing strategies and ideas.  This has really enhanced our performance.  We also share an assistant who handles all administrative paperwork flow, drivers’ licenses, delivery of cars, etc.

Mark Carlone, Internet sales manager of Crowley Auto Group:  Because we have someone who is handling things on the back end, we have more than doubled the number of cars we sell, from 20-25 units a month with no help, to over 60 now.  That would have been impossible without our Internet coordinator, Karen Duffy.  As Mike says, having someone who keeps everything moving is essential.  You wouldn’t believe all the problems that can occur that can distract you from selling – the customer can’t find the driver’s manual, the paint is chipped, a tire needs air, they need insurance cards.  It’s unbelievable!  Now, if I get up from my chair to deal with this sort of stuff, Karen’s job is to say, “Hey! Where are you going? Stay there,” so I don’t leave my seat. (laughs)  She handles all the backend work so Mike and I can focus on selling.  We couldn’t do it without her.

KS: In terms of your lead follow-up processes, what is important?

AM: My department focuses on setting appointments.  We do not give up on leads easily.  We know that of the leads that will close, on average, about one-third will close within two weeks.  The next third will take about three-to-eight weeks and the last third will close within 12 weeks.  Thirty days is just too short a cycle to reap the real rewards; we do not disregard prospects after 30 days, we keep after them.

The dealer must demonstrate to the Internet customer that they want their business.  Whether it’s offering special incentives like “Tires-for-Life”, more services or benefits, we let them know we want their business.  We qualify customers and determine very quickly what their needs are and we play to that.  We use a script, everybody does; but it is knowing when to move away from the script that makes our appointment makers successful.  Net customers are comparing oranges to oranges – they’ve done their research.  We’re not afraid of Internet customers that have a lot of information.  We welcome them. 

ML: We don’t withhold any information from our Internet customers on the phone.  They can get MSRP and invoice at the OEM site.  We’re forthright and honest.  If they sense this in a person, they’ll come back to us even after shopping around.  A quick response is as important as how you handle the customer. We use an auto responder.  We really try to close a sale in one week, 14-days max.  After four to five weeks, we will no longer actively pursue that customer.

MC: Response time is the ultimate.  Internet customers have less patience.  They’re used to things being quick.  So we must be quick and we must know the product.  Many of them know as much as I do about the particular vehicle they want! (laughs) So it only makes sense to be up front.

There are two kinds of customers.  The first group knows what they want and we can close them over the phone.  They’ve reviewed every option and incentive. Then there are those that need to come in, they have a trade-in, complicated questions, etc.  For the first group of customers, we can do everything over the phone, faxing the contract, etc.  For 30% of our customers, the first time I meet them in person is on the day we deliver the car.

KS: When measuring the success of your departments as well as individual performance, what metrics do you use?

AM: Volume is really our goal.  We look at grosses and lead-to-close ratios, but we also look at the percent of sales that occur on the showroom floor that were generated from the Net.  And this number is growing exponentially.  Our goal was 20% of sales to originate from the Internet, and we’ve hit that, so now it’s more.  In our department, we have to continually prove ourselves – there is pressure – it’s “what have you done for us today?” (laughs)

ML: Many ISMs focus a lot on volume. For us, it’s a combination of revenue and volume. They're equally important. Our front end over invoice averages $700 per unit.  It’s a combination of great volume and maintaining the profit margin.  So, really, the focus is on revenue, gross profit and units.  We pay less attention to appointment sets and close ratios.  We don’t get caught up in steps or superfluous statistics that don’t matter. We just pay attention to results.

KS: In this competitive environment, how does your Internet department differentiate itself?

AM: We sell the Harr Experience.  We make it a convenient process because Internet customers want a pleasant experience.  The Net allows them to shop in a very non-confrontational environment and we realize this.  We offer a lot of perks, incentives, etc.  In the end what makes us different is we don’t give up on a lead… like a dog on a bumper we don’t let go! (laughs) We don’t make it feel overbearing, but we don’t let go.

MC: This is tedious work.  It’s for type-As who are always on the go.  Our computer monitors are our door, where we greet the customers.  This is not a 40-hour a week job, it’s an 80-hour a week job.  We are always online, even at home.  We treat our Internet customers very well, letting them know they’re special.  They get special pricing, etc.  They know it’s a different experience to be Internet customers and to work with us.

ML: We don’t pay too much attention to what our competitors are doing.  We just keep our focus on our process, which we know works for us, and we sell a lot of cars.  It still boils down to getting the customer to commit to purchasing a vehicle from our dealership.