Steve Finlay
Steve Finlay has covered the automotive retail industry for decades, and is respected for his deep knowledge of virtually every topic that matters to dealers: Internet, F&I...more
Eric Miltsch holds a college degree in communications, which suits him as the Internet director of Auction Direct USA, a 4-store chain of self-proclaimed “super stores” selling used cars.
For three years now, he has used his communication skills to connect with people online, using social media in particular to create brand trust, enhance the customer experience and increase the number of consumers ready to buy.
Many franchised dealers, especially big ones, do that, too. But few strictly used-car dealerships run with that pack of innovators.
Auction Direct is using the Internet to help change the pre-owned retail market and the way consumers buy used cars, Miltsch says at the 2010 Automotive Social Media Summit in Los Angeles. “The automobile business will never be the same.”
He blogs, tweets and chats online with customers. He also oversees such Internet activities as website optimization, email marketing and customer-relationship management to systematically keep in touch with buyers and prospects.
Auction Direct has hosted a social-media breakfast at its store in Raleigh, NC.
“We didn’t sponsor it; we had it at our store because we have the space,” Miltsch recalls. “It was a great gathering. We sold three cars because of it. Online stuff can translate to offline stuff.”
Here’s an example of that. A customer somewhere in the store was on Twitter complaining about Auction Direct.
“We did something to make her mad,” Miltsch recalls. “I tweeted, ‘Where are you? Raise your hand.’ She did. I went over and we resolved the issue.”
In the Internet world, it’s important for dealerships to address complaints readily, lest they take on lives of their own.
“The power of the Internet is that instead of someone talking to four people about a bad dealership experience, they are talking to 4,000 on Twitter,” Miltsch says.
In a fun but useful endeavor, he has done hundreds of Twitter interviews in which participants answer 10 questions, such as:
“What’s your favorite car?”
“What’s parked in your driveway right now?”
“What’s a must-have car gadget?”
“What’s your favorite Hollywood movie car?”
“What car would you buy if money were no object?”
Miltsch says: “The interviews are a great way to get to know followers and customers. People really get into it. Some of the interviews are reposted.”
I overheard a guy from a Detroit auto consultancy giving a new hire his take on dealer-auto maker relations.
“They hate each other,” he told her.
Well, it’s more complicated than that. Sometimes, the two groups see eye to eye. Sometimes they don’t, especially when money is involved. Each side looks out for its own best interests, and those can coincide or collide, depending on the situation.
Take a subject as simple as websites. Auto makers and dealers each have their own versions. All are designed to get people to buy cars. But the similarities sometimes end there.
Auto maker websites cultivate the brand image. Dealer websites tend to skip that intangible and cut right to car-selling: inventory selection, financing and drawing the customer to the dealership. They also focus on used cars and service, things auto makers show little interest in.
Dealership and auto maker panelists got into a lively exchange about their respective websites at a J.D. Power and Associates conference a while back.
The discussion at times hit a “my-website-is-better-than-yours” tone, such as on the subject of lead conversions.
“Our site always outperforms the OEM websites,” says Alan Krutsch, director- marketing for Walser Automotive Group, a collection of dealerships in Minnesota.
“There is not much traffic going to your site; it’s going to our site,” Vincent Micciche, dealership chain Group 1 Automotive’s director-Web marketing tells DeLu Jackson, Subaru of America’s national manager-digital and direct marketing.
Jackson replies: “If you focus all your efforts on the family site, yeah, the conversion rate is better.”
Auto makers’ and dealers’ websites should achieve some level of consistency, says Jerry Winder, ecommerce director for the Larry H. Miller Management Co. with dealerships in seven states.
“If consumers land on a dealer site and it’s inconsistent with the manufacturer’s site, that’s a problem,” he says.
It should resemble a chain of evidence, says Mike DeCecco, Dealer.com’s director-industry relations. If an auto maker’s site mentions a 2.7% financing special and a dealer site doesn’t, “the chain is broken.”
Jackson says Subaru will strives for intramural elements of consistency, such as its logo appearing on all relevant websites, but then some dealers replace the logo with their own on their sites – hardly aiding the cause of integration.
“The consumer is going to get confused if we don’t clean this up,” Jackson says. Consumers don’t know the differences among auto maker, regional dealer association and individual dealer websites, “they just know what they are looking for and trying to find.”
But integration efforts are more internal in nature for a big dealership chain, such as Group 1 with 95 stores selling various brands.
Group 1 isn’t “trying to bash manufacturers,” Micciche says, but it just rolled out a new inward-focused slogan called “One company, one solution.”
The Walser dealership group’s Krutsch wants auto maker websites to create more passion for their products.
“That makes the job of selling easy for us,” he says. “It is more difficult at the retail level if the customer hasn’t fallen in love with a vehicle at the OEM level.”
The lingering question is how can auto maker and dealer websites co-exist and play to their respective strengths, says auto consultant Raynard Fenster.
“Right now, that’s an unknown,” he tells me. “They’ve got to get the sites right. There’s no need to fight.”
There’s also this. Considerably more car shoppers visit third-party automotive websites anyway, according to a J.D. Power and Associates study.
Let’s play deductive reasoning. Mel Gibson abuses his girlfriend. He’s an actor. Ergo, all actors abuse their girlfriends.
Sounds flawed? How about this? A slim shady bamboozles a customer. Mr. Shady works at a car dealership. Therefore, all dealerships employ crooks.
Yet that’s the apparent logic of many critics who are throwing tantrums because Congress exempted dealers from a reform bill aimed at financial institutions.
Some misguided people fervently think dealerships belong in that group. Considering the level of righteous indignation over the dealer exemption, you would have thought Congress renamed July 4th as Bernie Madoff Appreciation Day.
Here’s some logic that works. The financial-reform bill addresses lenders. Dealers aren’t lenders. So, the bill should exclude dealers.
To say the legislation should include them is like holding BP service station operators responsible for the Gulf of Mexico oil leak.
Critics apparently are stuck on the fact that dealers help some of their customers get car loans. But dealers don’t dole out the loans. They simply connect car buyers with lenders.
Regardless, miffed bloggers and the like are putting their anger on record, distorting the record and sounding like broken records.
Some of them write for respectable publications. In the New York Times, Ron Lieber goes down a list of dealer wrongs he claims the new legislation might have righted had not dealers won that exemption.
One cited “tactic” is “the yo-yo problem” that he says “will probably escape oversight by the new (oversight) agency because auto dealers, not banks, perpetuate it.”
At issue is the sometimes risky business of spot deliveries. Those occur when a lender tentatively approves financing terms, the dealer hands over the keys to a new car and the customer drives off.
Most of the time, everything ends up fine. But sometimes, the customer gets a call from the dealership saying the lender, upon further investigating submitted credit information, has hiked the interest rate.
The customer is then asked to returned to the dealership (or, as Lieber puts it, is reeled back in, “hence yo-yo”) to sign a revised contract with a higher interest that is more in line with the borrower’s true financial situation.
Lieber admits it is “rare” for a dealer to intentionally pull some sort of bait-and-switch involving a loan rate.
What he fails to note is that the auto-retailing industry shuns such malice aforethought and state laws forbid it. Luring in customers like that is a good way to land a state attorney-general investigator at your door.
So if willful yo-yoing already is outlawed, why do we need a new federal law banning it?
Dealers who intentionally pull fast ones on their customers deserve punishment. But in the vast majority of cases, a spot delivery that goes bad has nothing to do with dealer trickery.
Instead, it has a lot to do with consumers fudging information on credit applications. If banks discover such misrepresentations, of course they will want to adjust loan terms.
If dealers are guilty of something in such situations, it’s not conning customers, but aiding and abetting them in dubious truth-stretching ways to improve their credit scores.
“It’s easy for a short-order cook to become a ‘chef’ (on a loan application) and for gross pay to become net,” Peter Brandow, a dealer veteran and Ward’s Dealer Business columnist, tells me. “All of this information could lead to a shared responsibility for the credit application that can be problematic.”
The dealer transgression is in helping the customer too much. It’s something lenders and dealers need to address between themselves. And they are.
These days, lenders are demanding veracity in credit-application information that dealers forward them. They’ll drop a dealer who jams them on behalf of a customer.
It’s illogical to think this country needs a consumer-protection law to fight that.
Ninety percent of social media is showing up. The tricky part is the remaining 10%.
So says Mark Kleis, an auto enthusiast whom Ford selected as one of its 100 Fiesta “agents” to scoot around the U.S. in that new compact car and blog about their experiences as part of Ford’s active social-media marketing efforts.
As a big company, Ford pretty much has figured out how to use social media. eMarketer Inc. names the auto maker among the top 10 big firms doing the best job with the booming online phenomenon that is Facebook, MySpace, Twitter and the like.
Knowing what to do and what not to do in that virtual world is vital, Kleis, an editor for LeftLaneNews.com, says at an Automotive Social Media Summit hosted by Thought Leadership Summits in Los Angeles.
Here are some of his dos and don’ts for companies trying to connect with customers through Internet social sites:
• Be transparent. “If you aren’t going to be open with people, they will figure it out.”
• Be authentic. “If you are pushing baloney, millennials will pick up on it and tear you apart. They will blog you and destroy you.” (Talk about the power of the Internet.)
• Don’t argue. Some people will say negative things about you online. “Provide positive alternatives.”
Ford’s goal was to within two years become the dominant auto company using social media. “They did it in six months,” Kleis says.
Even Ford CEO Alan Mulally communicates with customers on Twitter from time to time.
There’s this one, too: A guy tweeted Ford, saying, “I’m test driving an Edge Sport for the second time this week. Can you have Alan Mulally call to tell me I’m not crazy?”
Mulally called. The shopper bought. “How cool,” Kleis says. “And the guy is sharing with his social-media friends that Alan Mulally called him.”
Some detractors claim newspaper advertising is as archaic as putting sandwich boards on bums and having them walk around town trying to drum up business.
Well, first off, lately I’ve seen a lot of guys carrying signs touting specials and such at local businesses. So, that quaint form of advertising still has legs, figuratively and literally.
Secondly, it always seems the people who warn that the end is near for newspaper advertising are Internet marketers. They hardly are neutral parties on the subject of potential ad-budget reallocation that may help them.
Sure, Internet advertising is here to stay. But that doesn’t mean everything else must go.
Auto dealers are well-advised to partake in the likes of search-engine marketing and optimization, online banner ads and interactive websites that draw customers to the store.
But to dump all other forms of advertising – on the advice of Internet lobbyists, no less – seems like emptying out the refrigerator because you bought more food.
Auto dealers, who spend a lot on advertising, use different approaches for different markets. They are smart enough to know what works well and where. Sometimes it is the Internet, sometimes newspapers and sometimes neither.
For example, Gordon Stewart, who owns dealerships in metro Detroit and southern states, does 100% radio spots in the Motor City and 100% TV below the Mason-Dixon line. Why? Because he has found that is what is most effective for the respective markets.
Another multi-point dealer, Ed Bozarth, who has five stores in various cities, notes that 400,000 newspapers are distributed daily in one of them, Denver. He wants his message in a medium with a local reach like that. So look for him in the Denver Post.
Chuck Basil, another multiple-franchise dealer, is a force in the Rochester, NY, market. Something else: “We are the biggest print advertiser in our market,” he says.
A lot of his competitors have moved their advertising from newspapers to more modern media. Does that make Basil feel like an endangered species? No. “As more dealers abandoned print, it makes our print ads more effective,” he says.
Popular opinion is that newspapers wept at the shore as they watched Internet marketing set sail.
But one of the biggest and most ambitious Internet-marketing initiatives is Cars.com, owned by a consortium of newspapers. They launched Cars.com as a digital rendition of their automotive classified ads. It has become much more than that. Cars.com is a major player in the online marketplace. Not bad for a bunch of alleged dinosaurs.
Then there is this from the academic front:
I interviewed Keith Pretty, the president of Midland, MI-based Northwood University, which has a strong dealership-management studies program. He told me of his students doing customer surveys at dealerships for AutoTrader.com.
“The students learned interesting things, sometimes unexpected things,” Pretty said. “For instance, one student said she was amazed at how many customers came in with newspaper ads.
“We’re teaching – as many are – the importance of a strong Internet marketing presence. She’s saying the marketplace is more dynamic and varied, if customers are holding print ads.”
The Missing Persons, a 1980s rock group, recorded “Walking in L.A.” that, despite the song title, is about not walking in Los Angeles.
“Nobody walks in L.A.” go the lyrics; not cops on the beat, kids bound for school and certainly not commuters going to work.
But the song acknowledges rare pedestrian sightings in the city of cars, such as “lame joggers,” homeless people pushing shopping carts and “somebody who just ran out of gas, making his way back to the pumps the best way he can.”
And then there’s me.
I spent four peripatetic days in the Marina del Rey area of Los Angeles this month. I figured I didn’t need a car because everywhere I wanted to go – from the automotive conference I was attending to restaurants and such – was within walking distance.
My short cab ride from the airport to the hotel cost about $25, and the chatty cabbie told me of recently taking a guy from LAX to San Diego, a 121-mile drive. That had to cost a lot, I said. “Yeah, it was a good fare,” the taxi driver fondly recollected.
Not so warmly do I recall my hoofing time in Los Angeles. It is a pedestrian-unfriendly city of 3.5 million people with seemingly as many cars plying the roadways.
For the carless, crossing an intersection becomes a challenge and an exercise in patience as waves of vehicles keep on coming and the “Don’t Walk” signs stay steadily lit.
Push the pedestrian-crossing button and eventually – after green traffic signals for vehicular left turns, right turns and through traffic – the “Walk” sign briefly flashes on. It’s like: “Oh, yeah, the pedestrians. You have 10 seconds, nine, eight…Come on, pick it up!”
Then it’s on to the next intersection to repeat the process of waiting, waiting, waiting for the light to change. Linger at the curb like that anywhere else and you’d get arrested for loitering.
Walking in L.A. is so uncommon, a native who strolls around different neighborhoods dedicates a website to that offbeat activity. Every town harbors oddballs; this guy is the Los Angeles version.
Last week, I returned there, this time with a car, heading from LAX to Orange County. Traffic was so bad, it almost made me want to get out of the car and walk.
If one thing is worse than walking in L.A., it is driving there. It baffles me why people subject themselves to the frustrations of interminably sitting in traffic or creeping along at speeds that barely nudge the speedometer needle.
The traffic jams seem around the clock. Four years ago, I was interviewing someone at Volvo headquarters in Irvine. Preparing to leave, I mentioned to a PR guy that I was next driving up to Pasadena, about 35 miles away.
“You better head out now, or you are going to hit a lot of traffic,” he said at 1:45 p.m. (And, yes, I did hit a lot of traffic.)
En route to Orange County on my most recent California visit, I encountered excruciating delays on I-405. Turns out, there were two multi-vehicle accidents in separate locations. That one-two combination easily turns a congested L.A. freeway into an open-air torture chamber.
Driving I-405 during “normal” conditions a few years ago, I topped a crest in the roadway south of Long Beach and looked upon an awesome sight: 12 lanes of freeway packed with vehicles as far as one could see in the L.A. haze. I don’t think I’ve ever seen so many cars in one place at one time.
Of all the states, California makes the most noise about proposed stricter regulations against vehicle emissions. I understand the state’s cause for concern, considering nearly 34 million vehicles are in operation there, according to the Federal Highway Admin.
But it’s ironic, perhaps even hypocritical, for Californians to drive so much, and then complain about pollution from their cars.
Everyone is for a cleaner environment. Auto makers are mindful of that as they look for new ways to make cars greener.
But if agencies such as the California Air Resources Board are so utterly worried about tailpipe emissions, they might, in addition to haranguing auto makers, tell the citizenry to stop driving so darn much.
California needs more pedestrians and fewer motorists.
I told the audience at the Automotive Customer Centricity Summit that I had vowed to stop making industry-related predictions. Then, about 30 minutes later, I broke that promise.
The reason I had decided to stop predicting the future is that my crystal ball has a habit of malfunctioning. I cited some early examples of my errant forecasting.
One was when I had said Hyundai’s days in the U.S. market were numbered. That was back in 1998 when the South Korean auto maker was in a sales free-fall and dealers were turning in their franchises faster that Hyundai could award new ones.
A desperate Hyundai Motor America named a new CEO, Finbarr O’Neill. A group of Ward’s editors had lunch with him shortly after he got the top job at a company at a low point.
I asked him about his background. He said he had been Hyundai’s general counsel. What? An auto company’s house attorney suddenly becomes its CEO? Good luck with that. This company is a goner, I thought.
But O’Neill managed to bring Hyundai back from the brink. One way he did that was to offer an industry-leading warranty. Another way was to visit dealers, one by one, to restore their faith in the brand that they quickly had been losing interest in.
Today, Hyundai and its sister, Kia, are hot brands with good product and healthy sales. Who would have thought? Not me. OK, I was wrong about Hyundai.
Then I told the group how I had entertained serious doubts about the future of Nissan back in 1999 when the Japanese auto maker was $35 billion in debt and looking for a savior.
When the French auto maker Renault stepped in to fill that role, I thought, “Oh no.” I predicted (on a TV talk show no less) that on the first rainy day, when nationalistic Renault faced the prospect of laying off French auto workers, Nissan would go down the drain.
Well, that didn’t happen. In fact, Renault has been good to and for Nissan, which is in pretty good shape today and no longer deep in debt. OK, I was wrong there, too.
But as I moderated a panel at the conference, a topic came up and I couldn’t resist proffering another prediction. The discussion had ventured into how the Internet and social media can pose a danger to the reputation of a business, such as a car dealership.
That’s because Internet users hold the power to trash a dealer and reach a huge audience. It’s one thing if the beefs are legitimate. But what if they are fabricated?
Tom Vann, a Michigan dealer, tells of a dealer who got slammed by a conspiracy of scoundrels using an Internet rating site.
Here’s what happened: A disgruntled customer, vexed that a Dodge Ram pickup conked out shortly after he purchased it, got even madder when the dealership wouldn’t give him a new vehicle.
So he organized today’s equivalent of a poison-letter campaign. He, his relatives and friends all went online to give the dealership horrible reviews, bringing its rating down to 1.4 of a possible 5.
“Most people look at a low rating like that and quickly move on,” Vann says. “I didn’t.” Instead, he clicked on the reviews and figured out the bogusness of what was going on.
“It can be dangerous out there,” Dave Zuchowski, Hyundai Motor America’s vice president-national sales, says of the way some people abuse the power the Internet affords them.
I liken it to a wild-west environment. It is wrong. And it should be illegal. So here’s my prediction after saying I wouldn’t make any more:
Years from now, people will look back at our no-holds barred Internet world of today and wonder, “What the heck was going on?” Their amazement will be like us today unable to fathom how Old West disputes were settled by gunfights in the dusty streets at high noon.
This isn’t a free-speech issue. As a journalist, I believe in giving lots of latitude to that cherished right. But the U.S. Constitution does not guarantee the freedom to lie.
If a dealership customer has an honest gripe, fine. But the law should not allow someone to participate in a blatantly dishonest concerted effort to maim a dealer or anyone else.
Violators should be prosecuted. I think they will be, some day, when we have finally come up with some sense and sensibilities to regulate Internet misdeeds.
That’s my prediction. I may be wrong…again. But I sure hope not.
Auto dealers do not give out auto loans, despite the odd claims of people hooked on histrionics.
Dealers serve as conduits between their customers and financial institutions that do the lending.
That is why dealers sought exemption from beefed-up rules in a federal financial reform bill. Why is it so hard for some people to grasp that, without resorting to dealer bashing and invoking tired dealer stereotypes?
Federal and state laws already subject dealers to all sorts of regulations. Part of their cost of doing business is paying lawyers and compliance experts to make sure their dealerships are in accordance with that slew of rules.
Although sometimes begrudgingly, dealers accept regulations that directly affect them. What they say about the proposed Wall Street Reform and Consumer Protection Act is that it doesn’t pertain to them any more than lemon laws apply to lenders.
Yet some consumer-rights activists are livid that dealers oppose this legislation. Asks one critic: “Why would auto dealers object to being treated like other lenders?” That’s an easy one. Because they are not lenders.
A Huffington Post blogger claims dealers used their power of campaign contributions to prod a majority of Senators to recommend exempting dealers from the finance-reform bill.
Among those Senators is Majority Leader Harry Reid who voted for the exemption along with 19 other Democrats and all the Republicans in one of Washington’s rare bipartisan displays lately.
Huffs the Huffington Post blogger: “It probably didn’t hurt that Sen. Reid received $16,845 in campaign contributions from auto dealers during the 2004-2009 period.”
Hey, they sure dropped the dough on him. It works out to $3,369 a year.
The blogger who insists dealers are lenders reaches back to 1991-2000 in citing a racial-discrimination case involving thousands of Nissan auto loans.
What he fails to mention is that those higher-interest loans originated from Nissan Motor Acceptance Corp., not dealers. The captive finance company, not dealers, settled a class-action suit.
Many people are horrified that some auto dealers make money by adding percentage points to interest rates of loans they facilitate. Most big dealers and dealership chains limit those so-called “reserves” to one or two points. Some opt to charge a flat fee for services rendered.
The Center for Responsible Lending calls these charges “kickbacks.” That’s a strong word, considering the net loan rates, even with dealer add-ons, often are lower than customers might have obtained on their own.
Here’s why: Because dealers work with a variety of lenders, they get the equivalent of a wholesale rate.
Moreover, many people with tarnished credit histories have a tough time getting car loans without dealer help. Many lenders will take a risk if a loan application originates from a dealer with whom they have trusted relations.
There is a healthy give-and-take between dealers and lenders. Lenders will tell dealers: “Don’t send us only high-risk loan applications.” Conversely, dealers will tell lenders: “Don’t approve only low-risk loans.” Third-party beneficiaries of the latter are people with blemished credit. They get loans they would not have ordinarily obtained, because the dealer includes their credit applications in a bundle sent to lenders.
It’s not wrong for a dealer to charge a reasonable fee for making such loans happen and for getting better rates than the customers would have received if left to their own devices.
Incidentally, dealers also pay for the information-technology equipment and software that leverages those lending economies of scale and connects them with many different lenders so they can get their customers financed.
Bottom line, though, franchised dealers are in the business of selling cars, not financing them. Good dealers want to give their customers a fair deal on the vehicles they sell and the financing they expedite. That way, buyers come back for more.
As for the small number of dealers who may abuse their customer relationships? Well, existing regulations and potential lawsuits will take care of them. So will the marketplace, because consumers vote with their dollars. They hold the power to vote a bad dealer out of business.
A recent National Automobile Dealers Assn. campaign seeks to educate consumers about auto financing. The effort promotes transparency, offers tips and informs the public that car loans are negotiable. It’s a well-advised initiative.
What’s ill-advised is to call dealers something they are not. They are not lenders. A bipartisan majority of Senators got that one right, despite the squawks of jaybirds in the trees.
It typically went this way: Someone would speculate Ford was about to end its Mercury brand, then Ford would insist, “Oh no, Mercury has a place within the organization.”
Ford would deny Mercury was fixing to join all the other dearly departed divisions on automotive Boot Hill. There are Oldsmobile and Plymouth pushing daisies after losing gunfights in a marketplace without pity. In fresh plots nearby are Pontiac, Saturn and Hummer.
But that open grave over there. Who’s that for? Could it be…?
For years, Ford would wave off rumors of Mercury’s impending death. Until now.
Word is the auto maker will pull the plug on Mercury soon. Ford CEO Alan Mulally’s response on that possibility hardly gives hope for the brand founded in 1939 by Henry Ford’s son, Edsel.
“As you know, we continue to evaluate all of our models,” Mulally said. “But we have nothing to announce today.” That is auto-company speak for: “Mercury is a goner.”
As late as this January, Ford executives were claiming Mercury had life in it yet, despite reduced sales and a constricted lineup.
“Mercury is a good complement to Ford (brand) cars,” J Mays, Ford group vice president-design, said, citing the Milan as an example.
In late 2009, Mark Fields, Ford’s president-Americas, told Ward’s Mercury remains “important” but in a lesser role.
“It used to be that Mercury was the volume piece of Lincoln-Mercury,” he said. “We’ve decided Lincoln will be that now. Our focus is to winnow down the Mercury lineup.”
To what, zero?
My late father-in-law spent his entire working life at Ford. He loved Mercury cars, particularly his Cougar, which had a personality all its own. That was before Mercury models became rebadged clones of Ford vehicles.
He used to buy his cars at Diamond Lincoln-Mercury, a Royal Oak, MI, dealership that closed 10 years ago. It started out selling DeSotos and Plymouths, before those brands died the death in Detroit. Now, the former dealership sells lawnmowers and snow blowers.
Certain cars gain fame from their roles in movies. There was the DeLorean in “Back to the Future,” the Grand Torino in the film by the same name and the Ford Mustang 390 GT in “Bullitt.”
But the 1949 Mercury Coupe was considered as one of the most famous movie cars in history. That’s because James Dean drove one in the 1955 iconic film, “Rebel Without a Cause.”
Dean died suddenly shortly after making that movie. Now, it looks like Mercury may go, too, after a long, lingering illness.
The mighty Internet sure helps dealerships sell cars, but there’s an irony to it all.
That’s because as much as the Internet is ballyhooed as a great automotive marketing tool, dealers use it largely to prod people offline and into the dealership.
“The dealership website is to get people in the door,” says Todd Caputo, a New York dealer. “People aren’t going to buy a car over the computer.”
Well, some people might. But not many. AutoNation, the country’s biggest dealership chain, tried offering the utter convenience of the utter Internet transaction, a full monty resulting in a purchased car popping up in the buyer’s driveway.
Less than 1% of car consumers expressed even an interest in buying that way. A computer, yes. A car, no.
Instead, dealerships receiving an e-mail or Internet sales lead, will attempt to get the prospect on the phone. Then the salesperson will try to get the customer into the dealership for some good old-fashioned quality face time.
“The way you handle them on the phone determines if you get them in the door,” Caputo says at a recent National Remarketing Conference.
He also uses online chat to communicate with customers. But again, the essence of that online interaction basically is to get them offline and off to the races.
“The purpose of chat is to get the customer’s name and phone number, and ultimately get them in,” Caputo says.
It should be said that dealers aren’t trying to force customers to do something they don’t want to do. Automotive consumers like to shop and do research online. They like to buy at the dealership.
Some visionaries with active imaginations talk of a “virtual” dealership some day replacing the brick-and-mortar kind. But that sounds more like science fiction than modern auto retailing.