We're continuing our chat with Ralph Paglia, CRM/e-Business Director at Phoenix's Courtesy Chevrolet. Courtesy is consistently one of the top Chevrolet dealers in the country, and Ralph's immense success has made him a nationally known expert in online automotive sales.
In this second installment, Ralph talks about advertising budgets, common Internet sales mistakes, "skating" of Internet Sales Team customers and what the dealership of the future might look like.
Dealix Dealer Newsletter (DDN): Ralph, I can imagine that smaller dealerships would do just about anything to have the advertising budget you have at Courtesy. What advice would offer to help them make the most of their more limited means?
Ralph Paglia (RP): The most effective marketing strategies will usually scale up or down as budgets grow or shrink, and that's been proven true by our approach at Courtesy Chevrolet. Using a hospital emergency room strategy of "Triage", our first investment of marketing budget each month is to buy every available new Chevy Internet originated sales lead that we can get from lead providers we have learned to trust, such as Dealix. Despite the fact that we know several other Chevy dealers are buying and receiving these very same leads at the same time as us, we are confident in our ability to out-sell our direct competitors. There's simply no better marketing value than the ROI generated by being able to directly engage with a bottom of the sales funnel "hand-raiser" for around $20. The next best use of marketing funds is to generate used car sales leads based on merchandising our inventory online with photos, a good story and a tempting offer. The marketing strategy here is exactly the same, applied to online channels, as it has been applied in the past when we used older media such as print, radio and TV. One difference is our online inventory certainly has less constraints than the old school "Liner Ads" that we used in newspaper classifieds... Now, we can make far more compelling presentations online to prospective used car buyers with dozens of high resolution photos, even videos, with detailed descriptions and expressive stories spun from the information we got when we negotiated the trade-in allowance with the vehicle's previous owner.
After securing the highest quality new car and used car leads, we use our remaining Digital Marketing budget to advertise, promote and drive targeted traffic to our dealership's websites, campaign specific landing pages, micro sites and deep linked content within various web sites we own or control. We place massive amounts of animated display ads on major automotive websites, geotargeted so they only appear when local #Automotive consumers are visiting. We use Google site targeting to find the relevant web sites that get the most traffic within our area of. Responsibility. We love the yield we get from our search engine and display advertising, which gives dealers like us a lot of flexibility in exactly how we advertise and how much we want to spend. One of the most critically important lessons we have learned is to link our advertising directly into our relevant inventory lists or specific vehicle detail pages (VDP).
DDN: In a recent story about you in Ward's, you mentioned a growing practice you called "skating." It seems that ISMs sometimes follow up with Internet customers to see why they didn't show up for an appointment, and the customer will say, "I did, and I bought a car." It turns out that floor salespeople are stealing these prospects and making the sale. What do you do to prevent this?
RP: This has been a problem since the advent of online leads that are assigned to specific sales reople, and it's more of a political and organizational issue than a technical one. We address it in multiple ways, which keeps theft of commissions to a minimum, but doesn't eliminate the problem completely. Our Internet sales specialists are trained to insist that the customer call the ISS's cell phone when they're a block or two away from the dealership. We also have two full-time CRM administrators who work at the showroom reception desk. They're bonused based on how many customers they greet and introduce to the appropriate sales rep, so they have a strong incentive to prevent skating.
What's most effective is having our sales process tied closely to our CRM system, which is set up to prevent salespeople from creating an entry that matches the name, telephone number, address, or email address for an existing entry. Our salespeople can't work a deal without a customer number, and they can't get a customer number for an Internet lead without exposing themselves as a commission thief.
Ultimately, this problem won't go away until we develop the discipline to terminate employees who stoop to this form of payroll theft. A lot of dealerships wind up giving a half deal to someone who gets caught skating, just to keep the peace. This is the worst possible response, because it rewards and encourages the practice. I find it interesting that, with 30 people handling Internet sales, we almost never have a problem with the Internet salespeople skating each other. They are remarkably good at splitting deals, getting the customer to the right person, and even handling minor customer needs for their teammates without asking for half a deal.
DDN: What's the most common mistake Internet sales professionals make, in your opinion?
RP: Withholding information that the customer explicitly asks for or has been promised in exchange for submitting a lead. Sometimes it's laziness, but sometimes sales reps actually believe that the customer is more likely to speak with them if they refuse to email specific answers.
It never fails to amaze and delight me when I mystery-shop our competitors and, in response to a specific, direct question, am told, "I'll go over that with you on the phone." Most customers will not let you get very far with them if you play games and withhold information about pricing or anything else. If you provide all the information the customer requests, and more, they'll see that you are taking their inquiry very seriously and that you genuinely want to give them great service.
The customer's yearning for attention and great service has not changed when they go online. If you use email and phone calls to meet their needs and expectations, they will come to the dealership to meet you in person. If you're fundamentally committed to this, even your missteps can turn out well. We resolve over 70% of our lead-handling complaints with a sale. Every customer gets an email with my name, direct phone number, and email address, asking if they are completely satisfied with how Courtesy Chevrolet's ISS handled their inquiry.
DDN: What about GMs? What should they avoid doing that could undermine the success of their Internet sales efforts?
RP: Lack of involvement or genuine commitment on the part of a GM can really hurt. GMs need to understand the Internet sales process as well as they understand the dealership's other sales procesures. They also need to hold people accountable for their performance, and for meeting minimal task completion requirements which qualify them to receive online based sales inquiries (leads). That means they have to know how to pull reports from their CRM tools and evaluate the lead response activities of their staff, so they can kick butt when Internet sales reps do what most showroom salespeople tend to do - let their process execution deteriorate.
The only good alternative is to have someone like me operate at a director's level and do all this for them. Luckily, Courtesy Chevrolet doesn't have a general manager, so I get to keep my job!
DDN: Ten years from now, what are things going to be like for a typical dealership?
RP: Sales originating from various types of digital inquiries will continue to grow and represent a larger and larger portion of dealerships' total sales. Newspapers became worthless as a retail automotive marketing tool several years ago, and more dealers will discover this fact every year.
Overall, I believe the level of professionalism within the world of automotive sales will increase and managers will become savvier about everything that goes into the buyer's decision-making process. If you want to see what most dealers will be doing in five years, come to Courtesy Chevrolet and visit our multiple Internet sales departments and our brand new state-of-the-art business development center. We don't understand why it's taking so long for other dealers to catch up, but when we see some of our local competition asleep at the wheel, we are thankful for it.
