Is your Internet Business Prepared for a Recession?

Published May, 2008 by Digital Dealer Magazine

You have heard a lot of rumors circulating about a recession in the United States. Whether it is true or not is a moot point. When I sat down to ponder this question I was hit with the concept that you should always be operating your dealerships as if you were in a recession and make sure every penny is accounted for while trying to squeeze everything you can out of each and every department, including the Internet.

Today I want to focus on your Internet business, which I break down into a couple of sections for ease of analysis.

Web sites and technology
I look at this section of the business as a rock hammer to a master mason. These are the tools you need to shape our business and achieve your desired outcome. What is most important is that you have the right tools in place and you are maximizing the utilization of the tools each and every day. There are great technologies out there that do all sorts of interesting things, but as my fiancé told me when we moved in together, “If you haven’t worn it in a year, throw it out.” I thought that made good sense or maybe she just wanted more closet space; I will never know. But in our business when you are not utilizing a specific technology or tool by 75 percent or more you are not getting the most out of the technology. So maybe it is time to try to live without it or get busy increasing your utilization of the tool. A great dealer friend of mine has always brought up a good point when referencing technology. He comments that 15 years ago we didn’t have any of this stuff, yet now I have all this great technology, but wonder whether it is really helping me sell more cars or just keep pace with the local marketplace.

Marketing
When was the last time you sat down and looked at your entire marketing spend and dissected it? I mean all of it. I walk into stores so often that they tell me they are spending 25k, yet after I go through the dealership doc I find out they are really spending about 40K because things are not being put into the advertising line of the statement correctly. Sometimes I hear that it got charged to this account because of this reason or that one goes there because of that reason etc. Is it advertising? Charge it to the right account. When you can get a complete 360 degree view of your advertising expenditures you can start to really focus what you are spending and where to help you create a more accurate cost per unit retailed figure.

Also, take the time to know what you are marketing and the messages that you are using. Are they in conjunction? Do they conflict? Your business is dependent on your ability to reach people in the marketplace and entice them to take action. Is your marketing doing that for your dealership?

Customer communication processes
This is one of the most overlooked and important areas of the Internet department. I know you set up your follow-up schedules when you first set up your CRM and you don’t think you need to tinker. As consumer buying habits mature online so should how you approach and manage these relationships. I would set up and print every letter in your CRM monthly and make changes. Also, change follow-up schedule length and timing. You would be amazed at how a few key tweaks can open a flood of activity within your existing lead management tool. You would be shocked that I still walk into stores that are using subject lines in their e-mail marketing and customer correspondence that I guarantee will be triggered by spam filters. Yet all you have to do is look online to see what words are triggering your messages to get spam-boxed and make sure none of your e-mails are using any of these keywords. Get involved; roll up your sleeves and dive in. Your business depends on it.

People capital
This area is still the one most dealers, including myself, struggle with almost daily. Finding the right people to execute the vision is another key piece of this puzzle to recession-proof your dealership. People are assets and must be trained and consistently driven to improve the dealership’s bottom line. Which means involving your team with not the typical, “We don’t have enough units out speech” but a much more hands-on approach to how their specific actions or inactions are affecting the operation. When people are genuinely brought into the picture a new level of teamwork happens. It takes a while but is well worth the effort. Take stock of your team and make sure your vision and message is being transferred throughout the dealership.

Today’s dealership challenges are difficult especially in the ever-changing Internet department, but with a little extra effort and some basic analysis you can watch your Internet sales grow: rain or shine, or recession.

Todd Smith is one of the leading authorities on Internet technology and its utilization in the retail automotive industry. For the past year Smith has been the general manager of a Northeast Chevrolet dealership putting into practice all the techniques he teaches. Lear, LLC, Smith’s consulting company, is focused on leveraging technology to enable other dealerships to sell more vehicles at a higher gross profit while reducing customer acquisition costs.

Source:

http://www.digitaldealer-magazine.com/index.asp?article=1906

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