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The Digital Dealership: Internet Casts Wider Net
CANFIELD, Ohio -- Steven Silvestri’s job didn’t exist 10 years ago. At least, not in its current form.
Silvestri is the Internet sales manager for Haus Auto Group in Canfield, a position that only recently became a prominent part of the sales team at the dealership. Now, as best he can tell, 80% of Haus’ customers have researched a car on its Web site before stepping foot onto the lot.
“It’s gravitated toward this in the past two to three years,” Silvestri says. “Now more than ever, it’s so important that we advertise online. Dealers that aren’t advertising online are either missing the boat or they’re nonexistent.”
And dealerships here are taking full advantage of the digital medium.
Online sales are up 20% to 30% over last year at Haus Auto, Silvestri says. Boardman Subaru has seen similar online sales growth from 2011, with most coming from out of state, says its Internet sales manager, Dan Roberts. Both Ralph Gilpin and AJ Balog, Internet sales representatives for Apostolakis Honda and Fairway Ford, respectively, have met customers at the airport with the vehicles they just bought online and let them drive them back to their dealership to complete the paperwork.
Selling vehicles online isn’t a novel concept. In 2004, Silvestri started E-Z Auctions to help dealerships sell their vehicles on eBay. He and a business partner served 24 dealerships from Pittsburgh to Akron, taking pictures of the vehicles, writing descriptions and posting them to the auction website. That lasted until 2010 when dealers realized the value of having an online sales manager on staff, he says. Silvestri took a full-time job with Haus earlier this year.
With dealerships and manufacturers putting more information online, Silvestri says customers are more educated on the vehicles they want to buy before ever setting foot on a lot. In some ways, he says, it makes the salesman’s job easier.
“You no longer have to qualify the customer like you used to as far as, ‘What kind of car are you looking for?’ ” he says. “The customers know exactly what they want, and they know based on other vehicles for sale within their region about what they should pay for those vehicles.”
It also makes the business more competitive, he’s found, because customers are willing to drive farther to get the best deal on the car they want. In 2002, customers drove an average of 20 to 30 miles to make a purchase. Today, customers drive up to 100 miles on average, regardless of gas prices.
“It’s not unheard of for people to drive two to three hours to buy a car, just based on what they’re looking for, if it’s a specialty vehicle or not,” he relates. “Even to get a better deal – a few hundred dollars less than a local dealer.”
Not only do customers drive from outside the county, but from out of state. Boardman Subaru’s Roberts says 35% to 40% of his online business comes from Pennsylvania, with most other online sales coming from even farther away. In the two years Roberts has handled Subaru’s online sales, he’s sold cars to customers in California and North Carolina, for which the vehicles are usually delivered after the customer has returned the completed paperwork. Most others who are closer stop in the dealership, he says.
“You’re trying to get them to come in and earn their business,” Roberts says. “They need to walk through the door for us to sell them a car, so my job is to get them in.”
That means responding to the customer’s initial inquiry as soon as possible. For all the inquiries he gets every day, Roberts says he has about a one-hour window during regular business hours to respond before the customer moves on. Roberts gets about 500 inquiries a month.
“It’s a speed thing. You’ve got to get back to customers fast,” Roberts says. “It’s quite a bit to monitor and keep up with.”
A major challenge is keeping the communication personal and answering exactly what the customer has asked, Roberts says, because some of the inquiries are “a little vague.”
Fairway Ford in Canfield tries to deal with that issue by putting as much information on its website as reasonable, says its Internet sales associate, AJ Balog.
Some information customers acquire in their research is inaccurate and can leave them with misconceptions about vehicles, he says. While some general websites provide good guidelines that help customers narrow their searches, individual listings could have the wrong photo posted, he says. Others instruct customers to “call for price.”
“Information is key, and we try to provide them with the most information possible on our website,” Balog says. “Every vehicle we have is priced. Myself and Jaison [Brant] take pictures of actual vehicles and put them on there so you can see the vehicle.”
Balog and Brant (Fairway’s second Internet sales associate) update the website daily to ensure customers know exactly what Fairway has on its lot, he says. Some customers call ahead and work out the price with the dealer before meeting him in person, and the dealers have the car ready when they arrive. What used to take about two hours can take 20 minutes, he says.
“How many people five to 10 years ago would come to the dealership on Sunday to see what they have because they didn’t have to deal with somebody?” Balog says. “Now, you don’t have to. Sit at home and do it.”
Using social media sites such as Facebook and Twitter are just as important as maintaining a website, says Apostolakis Honda’s Gilpin. While customers go to company websites to get information about vehicles, “They come to our Facebook page to get relevant information” about the dealership, he says. It also puts positive reactions from customers out for other potential customers to read. Even unfavorable reactions are good “because now they can see how we respond to that,” he says.
About one sale in five at Cortland-based Apostolakis results from a lead on the Internet, up from one in 20 when Gilpin became Internet sales manager. Of the vehicles sold to online customers, 30% to 40% are used, he says, and the Internet is helping to sell the used cars faster. Gilpin says it takes 14 to 17 days on average for Apostolakis to sell a used car after it arrives on the lot.
“Six years ago, it was a long time for a car to be on the lot for 90 days. Now, 30 days is a long time,” he says. “Used cars aren’t like new cars. There aren’t 20 of a certain car at a dealership. They’re very unique, and now you can search 100 car lots before you even leave the house.
“Ultimately, there’s only so much you can do online,” Gilpin says. “One thing you can’t do on the Internet is drive the car. Until you actually come out to the dealership and drive that car, you’re not going to know if it’s the car thing for you.”
EDITOR'S NOTE: This story was first published in the MidOctober edition of The Business Journal. CLICK HERE to subscribe.
Copyright 2012 The Business Journal, Youngstown, Ohio.