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ffective Online Automotive Sales: Interview with Ralph Paglia of Courtesy Chevrolet

ecember 2006 Effective Online Automotive Sales VOLUME 5 ISSUE 12

HOME

ONTENTS

nterview with Ralph aglia of Courtesy hevrolet

hird Party Auto ites: the Trusted ource for Online Car uyers

Want to Sell More ars More Efficiently?

sk Gilbert: Getting uy-In from the GM

What Drives “Dealer atisfaction”?

he Annual “Bad eads” List

Metro Areas with the astest Close Times

f Q3 2006 nternet Training and ndustry Reminders

reviously in the ealix Dealer ewsletter

iew a Movie to See ow Dealix Can Help ou Sell More Cars

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Interview with Ralph Paglia of Courtesy Chevrolet The Intelligent Approach to Challenges Big and Small

The Dealix Dealer Newsletter recently satdown with Ralph Paglia, CRM/e-businessdirector at Courtesy Chevrolet, consistentlyone of the top Chevrolet dealers in thecountry. A well-known expert in onlineautomotive sales, Ralph shared so many bestpractices with us that we decided to publishhis advice over the course of two issues. Inthis first installment, Ralph talks aboutadapting to market trends and competing withthe imports.

D e a l ix D e a le r N e w s l e t t e r (DDN): Thanksfor taking the time to share some of yourexperience in online auto sales with ourreaders, Ralph. According to a recent survey by Cobalt and RL Polk, 56% of newcar leads wound up as sales; but only 8% of these sales took place at thedealership where the lead was first submitted. On top of this, 34% of thesebuyers wound up with a different model - and frequently a used car. In your

opinion, why is this happening? What can dealers do to make that original sale? Ralph Paglia (RP ): At Courtesy Chevrolet, we handle over 5,000 leads permonth, and we get those leads from a wide variety of resources - so we areuniquely positioned to spot trends in the nature of these leads. What we’ve seenis an evolving landscape of lead generating business models and strategies thathave contributed to the “Fickle Prospect” syndrome.

My explanation of why so many leads wind up elsewhere is simple. Over the past10 years, shopping online for a car has become mainstream, and so manycustomers are submitting multiple leads to multiple dealers simply because it’s soeasy to do. If a single customer submits five leads to five different dealersrepresenting five different brands, then 80% of those dealerships will experiencea perceived failure to close the sale. However, we still need to keep in mind thatwith Internet leads, the cost per sale is generally lower than with traditionaladvertising. Where before, we could assume that car buyers were viewing manydifferent ads and different brands in newspaper ads, with Internet leads – we canactually measure that behavior. Consumers love choice.

On the other hand, seeing new car leads ending up as used car sales is nothingnew. It’s just that the explosion of Internet leads is making it much more visible.Those of us who grew up selling cars have long known the value of switching anew car buyer to a used car. “Switch to get rich!” we used to say - referring to

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the greater gross potential on the sale of used vehicles. Now let’s look at the question of lead defection to competing products. Thenumber of cars sold each year in the US has been holding steady at around 17million. With lead volume increasing at the same time, it’s inevitable that the rateat which dealers lose leads to other brands will increase. Don’t think my point is that dealers should be comfortable with high loss rates.But you have to look at the causes behind these rates and figure out where you

can have an impact. For example, at Courtesy Chevrolet we’ve recently modifiedour lead management processes to acknowledge the reality that most leads windup buying a different car from the one they initially said they wanted. We’re nowfollowing up with a second round of price quotes for certified pre-owned vehicles -quotes selected based on the lead’s original inquiry and any information collectedby the Internet sales specialist. DDN: Given the huge array of choices buyers are presented with online, it’s easyto understand a certain amount of fickleness. But one thing we’ve learned in ourresearch is that a dealer’s ability to connect with online buyers exerts a powerfulinfluence over where and what they wind up buying. As a very successful dealer, you’ve no doubt developed some really effectiveways to make this connection. This is probably all the more true, since you’redoing very well selling a domestic brand at a time when domestics are a toughersell. What advice would you give to domestic dealers who are struggling toimprove their Internet business? RP : At the risk of giving away the secret sauce, I’ll tell you that one of the mosteffective ways for domestic dealers to increase sales is to aggressively pursuebuyers who are considering Asian brands and competing domestic brands. Wetake great pride in convincing Toyota and Nissan buyers to consider a Chevy. Weuse search engine marketing to target customers shopping for competing brands.We bid for keywords related to these brands, and we place our ads on sitesdevoted to these brands. Targeted campaigns of this kind can push Corollabuyers to consider a Cobalt, Sequoia buyers to consider a Tahoe, and so on. Something else we do that makes an enormous difference is using a “triage” leadmanagement process. Instead of making random or round-robin assignments, weassign leads to a specific Internet sales specialist based on the leads’ characteristics and that sales specialist’s historical strengths. Then we have acustomer service representative in our BDC contact every unsold lead 72 hoursafter it comes in, in an attempt to get the customer to visit the dealership. Then,a third person follows up three days later, if there is still no appointmentregistered in our CRM system. Multiple interactions early in the process ensure

that we win our fair share of deals with buyers who are deeper in the salesfunnel. Involving additional people in those interactions serves as a safety netthat keeps leads from slipping through the cracks. Dealers have to stay focused on a basic fact that’s part of everything we do atCourtesy Chevrolet: anytime you can replace randomness with a process that’sgeared to a desired outcome, you have a greater opportunity to optimize salesresults.

We’ll continue our conversation with Ralph Paglia next month.


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ublished by Dealix Corporation opyright © 2006 Dealix Corporation. All rights reserved.he Dealix Dealer Newsletter is sent to Dealix membersnd anyone who has expressed interest in our services.o unsubscribe, enter your email address in theubscription box appearing within the newsletter andhoose the Remove option. Or, just click one of the linkselow.

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ffective Online Automotive Sales


NSIDE


hird Party Auto Sites: he Trusted Source for nline Car Buyers

Want to Sell More Cars More Efficiently?

sk Gilbert: Getting Buy-n from the GM


he Annual “Bad Leads” ist

NEWS


The Dealix Dealer Newsletter recentlysat down with Ralph Paglia, CRM/e-business director at Courtesy Chevrolet,consistently one of the top Chevroletdealers in the country. A well-knownexpert in online automotive sales, Ralphshared so many best practices with usthat we decided to publish his adviceover the course of two issues. In thisfirst installment, Ralph talks aboutadapting to market trends andcompeting with the imports.

[FULL STORY]

Third Party Auto Sites: the Trusted Source for OnlineCar Buyers Interview with KBB’s Manager of Automotive Partners SherrellKovach

There’s no doubt about it: with the Internet, today’s carbuyers have a wealth of options at their finger tips. OEMwebsites, dealership sites, and independent, third party autosites all promise the quintessential “user experience” to enticecar buyers into their worlds. While having your own websitehas become a necessity for today’s dealerships, and no one isgoing to say no to subsidized leads from their OEM, the bestthird party auto sites continue to win the hearts of consumersas a “trusted source” for information - and a great source of leads for dealers. We spoke with Kelley Blue Book’s managerof automotive partners, Sherrell Kovach, who talked aboutwhy this is, and how premium third party auto sites continueto be on the cutting edge when it comes to consumerexperience and lead generation.

ttp://news.dealix.com/index000152060.cfm?x=b8ylmVJ,b4bG84ht,w (1 of 5) [1/11/2007 9:34:12 AM]








Metro Areas with the astest Close Times of 3 2006

nternet Training and ndustry Reminders

reviously in the Dealix ealer Newsletter

iew a Movie to See

ow Dealix Can Help ou Sell More Cars

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ubscribe to the Dealixealer Newsletter . Enterur email address in thex below and we'll addu to the list:

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RCHIVE

ffective Online utomotive Sales ovember 2006

ffective Online utomotive Sales ctober 2006

ffective Online utomotive Sales eptember 2006

ffective Online utomotive Sales ugust 2006

MORE]

Visit us at:

www.dealix.com to see how dealers

rank the new carlead providers

and to get moresuccess strategies

from experts inonline auto sales.

[FULL STORY]

Want to Sell More Cars More Efficiently? Check Out this Movie to See How You Can

What’s the remedy for the sales

challenges that dealers arefacing today? Connecting withas many car buyers on theInternet as possible. Dealixhelps you do this by bringingyou the Highest Quality Leads inthe industry, Superior Service,and Dealer Control Features SM

Now we have even more great

ways to help you sell morevehicles more efficiently. Clickhere to see a short movieon Dealix's award-winning NewCar Leads Program, and learnmore about the provider that

dealers rated Highest in Overall Dealer Satisfaction in the2006 J.D. Power and Associates Dealer Satisfaction withOnline Buying Services Study SM . View the Flash movie.

Ask Gilbert: Getting Buy-In from the GM How to Save Your Internet Leads & Your Departmentby Gilbert Chavez

Gilbert Chavez is Internet directorfor the Phil Long dealerships of Colorado, the largest privately-

owned dealer group in that state.Many dealers turn to Gilbert foradvice about their dealerships andhow to be successful with Internetsales. Gilbert frequently shares hisresponses with the Dealix Dealer Newsletter . Here's the latest.

[FULL STORY]


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What Drives “Dealer Satisfaction”? Interview with J.D. Power's Senior Analyst Min Cho

In September, J.D. Power and Associates (JDPA) announced the results of its2006 Dealer Satisfaction with Online Buying Services Study SM , and in theOctober issue of the Dealix Dealer Newsletter , we spoke with former JDPAsenior director Dennis Galbraith and senior analyst Min Cho to learn moreabout the study's findings. This month, we continued the conversation with

Min Cho to gain a better understanding of the factors that make up “dealersatisfaction.”

[FULL STORY]

The Annual “Bad Leads” List Even with State-of-the-Art Scrubbing, the Jokers Keep Coming

Since we first published our list of "bad lead names" in the DealixDealer Newsletter back in November2001, Dealix’s lead scrubbingtechnology has become moreefficient, so our real people qualityteam rarely has to deal "up-frontand personal" with questionableleads that come through oursystem. Yet, in keeping withtradition, our Dealix sales reps, andeven some of our dealers, continueto send us bad lead names, or"leads that lead no where,"throughout the year. So, withoutfurther ado, here's the 2006 list of really bad leads - and no doubt, they're all in the market for aDodge Viper.

[FULL STORY]





Metro Areas with the Fastest Close Times of Q3 2006 Top Dealers Beating the Average by Weeks

What are they putting in the water in these ten metro areas? Two weeks orless - that’s how quickly, on average, they’re closing their Internet leads. It’sthe result of a combination of factors, no doubt, including strong leads, skilledsalespeople, and finely-tuned sales processes.

[FULL STORY]

Internet Training and Industry Reminders Upcoming Workshops

Cobalt's Breakfast of Champions W orkshop Series -What to look forw ard to in 2007

Click Full Story for details.

[FULL STORY]

Previously in the Dealix Dealer Newsletter November 2006

"Ow ner Marketing” via Email Marketing

Bergstrom Automotive: United W hen I t Comes to the Internet

Holding on to Slippery Leads

Fine-Tune Y our Online Used Car Business: Generation Y

Vehicles Generating the Most Leads in Q3 2006

October 2006

Anderson Auto Group: High Sales in Ru ral Markets

2006 J .D. P ow er and Associates Dealer Satisfaction w ithOnline Buying Services Study SM

10 Best Practices for Responding to Phone Leads

Email or P hone? Don’t Let the Customer Decide


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Stop I nternet Leads from Slipping Aw ay

The Value of Trade-Ins

Dealers, Factories Spending L ess on P rint Ads, More Online

Make the Customer Come to You

Top In ternet Teams of Q3 2006

ublished by Dealix Corporation opyright © 2006 Dealix Corporation. All rightsserved.he Dealix Dealer Newsletter is sent to Dealix membersnd anyone who has expressed interest in our services.

o unsubscribe, enter your email address in theubscription box appearing within the newsletter andhoose the Remove option. Or, just click one of the linkselow.

Click here to Tell a Friend about the Dea D e a le r N e w s le t t









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The Dealix Dealer Newsletter recently satdown with Ralph Paglia, CRM/e-businessdirector at Courtesy Chevrolet, consistentlyone of the top Chevrolet dealers in thecountry. A well-known expert in onlineautomotive sales, Ralph shared so many bestpractices with us that we decided to publishhis advice over the course of two issues. Inthis first installment, Ralph talks aboutadapting to market trends and competing withthe imports.

D e a l ix D e a le r N e w s l e t t e r (DDN): Thanksfor taking the time to share some of yourexperience in online auto sales with ourreaders, Ralph. According to a recent survey by Cobalt and RL Polk, 56% of newcar leads wound up as sales; but only 8% of these sales took place at thedealership where the lead was first submitted. On top of this, 34% of thesebuyers wound up with a different model - and frequently a used car. In your

opinion, why is this happening? What can dealers do to make that original sale? Ralph Paglia (RP ): At Courtesy Chevrolet, we handle over 5,000 leads permonth, and we get those leads from a wide variety of resources - so we areuniquely positioned to spot trends in the nature of these leads. What we’ve seenis an evolving landscape of lead generating business models and strategies thathave contributed to the “Fickle Prospect” syndrome.

My explanation of why so many leads wind up elsewhere is simple. Over the past10 years, shopping online for a car has become mainstream, and so manycustomers are submitting multiple leads to multiple dealers simply because it’s soeasy to do. If a single customer submits five leads to five different dealersrepresenting five different brands, then 80% of those dealerships will experiencea perceived failure to close the sale. However, we still need to keep in mind thatwith Internet leads, the cost per sale is generally lower than with traditionaladvertising. Where before, we could assume that car buyers were viewing manydifferent ads and different brands in newspaper ads, with Internet leads – we canactually measure that behavior. Consumers love choice.

On the other hand, seeing new car leads ending up as used car sales is nothingnew. It’s just that the explosion of Internet leads is making it much more visible.Those of us who grew up selling cars have long known the value of switching anew car buyer to a used car. “Switch to get rich!” we used to say - referring to

ttp://news.dealix.com/e_article000706890.cfm?x=b8ylmVJ,b4bG84ht,w (1 of 3) [1/11/2007 9:34:13 AM]






Add Remove

the greater gross potential on the sale of used vehicles. Now let’s look at the question of lead defection to competing products. Thenumber of cars sold each year in the US has been holding steady at around 17million. With lead volume increasing at the same time, it’s inevitable that the rateat which dealers lose leads to other brands will increase. Don’t think my point is that dealers should be comfortable with high loss rates.But you have to look at the causes behind these rates and figure out where you

can have an impact. For example, at Courtesy Chevrolet we’ve recently modifiedour lead management processes to acknowledge the reality that most leads windup buying a different car from the one they initially said they wanted. We’re nowfollowing up with a second round of price quotes for certified pre-owned vehicles -quotes selected based on the lead’s original inquiry and any information collectedby the Internet sales specialist. DDN: Given the huge array of choices buyers are presented with online, it’s easyto understand a certain amount of fickleness. But one thing we’ve learned in ourresearch is that a dealer’s ability to connect with online buyers exerts a powerfulinfluence over where and what they wind up buying. As a very successful dealer, you’ve no doubt developed some really effectiveways to make this connection. This is probably all the more true, since you’redoing very well selling a domestic brand at a time when domestics are a toughersell. What advice would you give to domestic dealers who are struggling toimprove their Internet business? RP : At the risk of giving away the secret sauce, I’ll tell you that one of the mosteffective ways for domestic dealers to increase sales is to aggressively pursuebuyers who are considering Asian brands and competing domestic brands. Wetake great pride in convincing Toyota and Nissan buyers to consider a Chevy. Weuse search engine marketing to target customers shopping for competing brands.We bid for keywords related to these brands, and we place our ads on sitesdevoted to these brands. Targeted campaigns of this kind can push Corollabuyers to consider a Cobalt, Sequoia buyers to consider a Tahoe, and so on. Something else we do that makes an enormous difference is using a “triage” leadmanagement process. Instead of making random or round-robin assignments, weassign leads to a specific Internet sales specialist based on the leads’ characteristics and that sales specialist’s historical strengths. Then we have acustomer service representative in our BDC contact every unsold lead 72 hoursafter it comes in, in an attempt to get the customer to visit the dealership. Then,a third person follows up three days later, if there is still no appointmentregistered in our CRM system. Multiple interactions early in the process ensure

that we win our fair share of deals with buyers who are deeper in the salesfunnel. Involving additional people in those interactions serves as a safety netthat keeps leads from slipping through the cracks. Dealers have to stay focused on a basic fact that’s part of everything we do atCourtesy Chevrolet: anytime you can replace randomness with a process that’sgeared to a desired outcome, you have a greater opportunity to optimize salesresults.

We’ll continue our conversation with Ralph Paglia next month.


Submit




















ffective Online Automotive Sales: Third Party Auto Sites: the Trusted Source for Online Car Buyers


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Third Party Auto Sites: the Trusted Source for Online CarBuyersInterview with KBB’s Manager of Automotive Partners Sherrell Kovach

There’s no doubt about it: with the Internet, today’s car buyershave a wealth of options at their finger tips. OEM websites,dealership sites, and independent, third party auto sites allpromise the quintessential “user experience” to entice car buyersinto their worlds. While having your own website has become anecessity for today’s dealerships, and no one is going to say noto subsidized leads from their OEM, the best third party autosites continue to win the hearts of consumers as a “trustedsource” for information - and a great source of leads for dealers.We spoke with Kelley Blue Book’s manager of automotivepartners, Sherrell Kovach, who talked about why this is, and howpremium third party auto sites continue to be on the cuttingedge when it comes to consumer experience and leadgeneration.

D e a lix D e a le r N e w s l e t t e r (DDN): Thanks for taking the timeto share your perspective on why third party auto sites are soimportant for dealers, Sherrell. Why do you think consumerschoose third party auto sites, and do you see their role changingin the coming years, as dealerships continue to improve theirown websites?

Sherrell Kovach (SK): Third party auto sites allow the

consumer to receive unbiased information and education, notonly about the car they are interested in, but others that maycompare. Furthermore, a consumer is given the opportunity tochoose a myriad of dealers either by name, distance, etc. toaccommodate their needs. While this may bother dealers at first,the fact is that consumers love choice - just like they like to shopat auto rows or auto malls. And, choice attracts more car buyers.KBB averages 10-13 million unique visitors per month who arebrowsing new and used car value information – this is something







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dealers want to tap into.

In order to keep car buyers coming back, third party sites needto provide a superior consumer experience. For instance, weensure that what consumers get is: 1 – intelligent and data-driven, with a fresh intuitive interface focused on usability, easynavigation, dynamic content, and the latest interactive Web

applications. These include virtual showrooms, product specs,side-by-side comparisons, and third-party reviews. And, 2, wehave a customer-centric focus. Effective Internet strategies thatidentify and convert consumers are not enough. This must besupported by a comprehensive approach to service the buyerthroughout the customer life-cycle. Continually providing newproducts and services and acting as a resource helps to nourishthe relationship, which ultimately keeps consumers coming back,and increases the performance of the site and brand.

The other thing consumers like about third party sites is thatthey don’t feel a heavy pressure to buy, just the satisfaction inknowing that they, the consumer, have been helped throughphase 1 of the car-buying experience and with any luck, phase 2will go as smoothly. And, because of this no hassle experience,sooner rather than later, they’ll find themselves driving home intheir brand new car.

More and more dealers will unavoidably shift to the Internetbecause of the efficiencies it provides, and because this is wherethe customers are. They need state-of-the art websites, and theyalso need leads from third party sites.

DDN: How are third party auto sites, like KBB, able to generatesuch high quality, ready-to-buy leads? SK: In order to create a strong lead, it’s imperative to, not only

be recognized as the “trusted resource,” but to create a feelingof comfort to the consumer, so there is no hesitation whenthey’re asked to provide their personal information. As well, youneed to empower the consumer to do their own research andfurther define their own wants. Once a lead is submitted, it isimperative for both the third party site and the lead provider to

“scrub” that lead – ensuring the information is genuine andaccurate, and, most importantly, delivered to those dealers whoare ready and willing to assist the consumer to their fullest


Submit




capabilities.

DDN: From the vantage point of KBB, what constitute a stronglead?

SK: A strong lead, or a high quality lead, is submitted by an

active in-shopper buyer. The shopper has made it far enoughthrough the funnel to know what they want and where they arewilling to go to buy it. The more specific a lead is, the higher theprobability that it will close. But it’s up to the dealer to meet thechallenge of satisfying their new customer and turning a greatlead into a sale.

DDN: How does a third party site like KBB measure itseffectiveness? SK: There are a variety of ways to measure effectiveness andwhether we’re meeting consumers’ needs. Surveys are the mostcommon these days; and there is also consumer satisfactionindices, such a CSI scores, partner testing, and sharedinformation with others in the industry. For example, we getfeedback from Dealix that your dealers are closing their KBBleads. Plus, on an individual basis, through visitor feedback andsimple word of mouth, we know we’re doing a good job.

DDN: Dealers today know that Internet customers are betterinformed. Is this a blessing or a curse?

SK: Oddly enough, I find these days that many consumers try tostump the sales person. I’m not quite sure if this is a negotiationtactic, but nonetheless, with the amount of information availableon the Internet, it happens. So, it’s imperative for dealers to

know all the “ins and outs” of the cars they sell. The dealershipsI see flourish typically hold “walk-around” contests with theirsales people every month so they’re fully prepared for theeducated consumer. So, an informed customer can be aheadache for a dealer who is unprepared; or, they can representan easier sale to a dealer who is prepared, because they alreadyknow what they want.





DDN: How does KBB describe its overall purpose? You servedealers, you serve car buyers, and you provide pricinginformation. How do you sum up your mission?

SK: Kelley Blue Book has been, is, and will continue to be thefacilitator of the transaction. It only strengthens our brand andculture to understand all aspects of the industry, by working

hand-in-hand with everyone from the OEMs, to dealers, to thirdparty providers like Dealix. In the end, you have cars anddealers, and we have buyers. But first and foremost, we’refocused on benefiting the consumer.

While revenue is vital, the consumer experience is essential. Ourdata, products, and services are received by an audience whotrust the information via the source from which they arereceiving it; not only as an educational tool, but as a purchasingtool. This is why Kelley Blue Book is the trusted resource. All said and done, it’s imperative to recognize and appreciatethat the consumer is the backbone of all industries, and theautomotive industry is no different. To confirm that a consumerhas been well informed, been given the proper data, and hasreceived a superior customer experience will not only lead to asmile, but that smile will undoubtedly lead to word-of-mouthendorsements - which is good-as-gold advertising to be passedon for years to come.

















ffective Online Automotive Sales: Want to Sell More Cars More Efficiently?


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Want to Sell More Cars More Efficiently? Check Out this Movie to See How You Can

What’s the remedy for the saleschallenges that dealers are facingtoday? Connecting with as many carbuyers on the Internet as possible.Dealix helps you do this by bringingyou the Highest Quality Leads in theindustry, Superior Service, andDealer Control Features SM . Now wehave even more great ways to helpyou sell more vehicles moreefficiently. Click here to see a shortmovie on Dealix's award-winningNew Car Leads Program, and learnmore about the provider that dealersrated Highest in Overall Dealer

Satisfaction in the 2006 J.D. Power and Associates DealerSatisfaction with Online Buying Services Study SM . View the Flash movie.














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ffective Online Automotive Sales: Ask Gilbert: Getting Buy-In from the GM


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Ask Gilbert: Getting Buy-In from the GM How to Save Your Internet Leads & Your Department

Gilbert Chavez is Internet director forthe Phil Long dealerships of Colorado,the largest privately-owned dealergroup in that state. Many dealersturn to Gilbert for advice about theirdealerships and how to be successfulwith Internet sales, and he frequentlyshares his responses with the DealixDealer Newsletter . Here’s the latest:

Dear Gilbert,

I have been working in our Internet sales department for twoyears, and have been director for six months. There was

a revolving door of directors for quite some time. I was the topInternet sales rep for over a year, and they convinced me totake the helm - after I turned them down a couple of times. Tobe honest, I was reluctant at first because there is a hell of a lotof work to do, there was high turnover, and I was concernedabout the level of support for what we wanted to dofrom management.

Now, I have two other Internet reps in my department. Ournumbers have been respectable since I took over. The problemis - our owner, who is also the GM, has ordered me to cancel allmy third party leads. Our return on these leads has been good.My total cost was $500 for one lead source, and we averaged$2,500 gross. I do better with the leads from my dealership'swebsite and our factory leads, but I’ve found that having avaried diet of as many good leads as we can get is the key tomore sales. But, our store sales across the board have beendown for both new and used. However, my GM has not sloweddown his print, radio, or TV spend. He goes way back with his







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newspaper rep, and, really, I think he keeps these things moreout of fear and habit than anything. I seriously do not want tolay off my team. What can I do to save my department andconvince our GM that the Internet is the wrong place to cut ourad budget? Thanks,

Down, But Not Out

Dear Dow n, When times get tough, people tend to stick with methods they’recomfortable with. Your boss sounds a little like Charlie Brown’sfriend Linus with his security blanket, or a dateless person athome alone on a Saturday night, eating a tub of ice cream. Theblanket isn’t going to protect Linus, the ice cream won’t help alonely person get a date (probably just the opposite), andtraditional advertising isn’t going to fix your dealership’s slowsales. Your GM would resist cutting back under the best of circumstances. He’s going to resist even more in the currentsituation because traditional advertising is familiar andcomforting. It’s the only way he knows to bring people into theshowroom. You’re facing an uphill battle, my friend. You’re going to need asolid plan to win this fight and may have to pull a Beastie Boys:

“You gotta fight for your right to party!” Before you begin, lookat it from your GM’s perspective. Business is slow, and he has tocut costs somewhere. In his mind, the Internet is the easiestplace to do it – it’s still seems new and experimental. Othermanagers may be pushing him to advertise more in theirdepartments, and they may be pulling him away from theInternet to protect their own budgets.

I have always said the greatest thing about Internet sales isthat it's measurable - and the worst thing about Internet sales isthat it's measurable. In other words, you can’t hide poorperformance. On the other side of the coin, traditional media isoften difficult, if not impossible, to measure the true ROI on.

When you sit down with your boss, lay it all out in dollars andcents: what you’re paying for leads, and what this outlay is


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bringing in. Remind him that this is incremental business -business your dealership wouldn’t otherwise get – and might loseto competitors who are being more progressive. Show him thatyou can look at your budget with a cold eye: compare the ROIyou’re getting from different providers and offer to ax any thatconsistently don’t cut the mustard - just like Britney cut off K-Fed!

And don’t stop at past performance. Ask him for 90 days toprove that your team’s sales process works so well that thirdparty leads are a no-brainer. Get that commitment and thenreally crank it. If there are any kinks in the process, this is thetime to iron them out. Your team should be especiallycooperative, given that the department’s existence may be onthe line. Car guys might not like to admit it, but we like being “closed.” Your GM is a salesperson at heart, and he’ll appreciate the effortyou put into closing him. So, find your common ground, presentthe features and benefits, build value, and go for the close!Remember, most sales are won or lost in the first five minutes,so make it good right from Jump Street!

Good luck and good selling, Gilbert

















ffective Online Automotive Sales: What Drives “Dealer Satisfaction”?


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What Drives “Dealer Satisfaction”?Interview with J.D. Power's Senior Analyst Min Cho

In September, J.D. Power andAssociates (JDPA) announcedthe results of its 2006 DealerSatisfaction with Online BuyingServices Study SM , and in theOctober issue of the DealixDealer Newsletter , we spoke

with former JDPA seniordirector Dennis Galbraith andsenior analyst Min Cho to learnmore about the study'sfindings. This month, wecontinued the conversationwith Min Cho to gain a betterunderstanding of the factorsthat make up “dealersatisfaction.”

D e a l ix D e a le r N e w s l e t t e r

(DDN): Thanks, Min, fortaking the time to speak withus. To get us started, can youremind our readers of the mainareas of dealer satisfactionthat were explored by the survey? How did you determine the relativeimportance of these areas? Min Cho (MC): The survey measured dealer satisfaction in four key areas:Business Generation, Dealer Support and Service, Lead Transmission, and Fees.Each of these, in turn, was broken down into other components. None wasassigned any particular level of importance in advance; rather, we used astatistical technique called regression analysis to calculate how important eachwas based on the extent to which it predicted dealers’ assessment of their overallsatisfaction. This technique makes it possible to determine the proper weight toassign each factor, with a very high degree of accuracy. So, dealers were able tolet us know what matters most to them. DDN: Business Generation was far and away the most important factor,accounting for 53% of overall satisfaction. According to the survey, what werethe factors comprising Business Generation?

MC: Lead quality and lead quantity accounted for 30% and 28%, respectively, in





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this particular area. The fact that online leads represent incremental businesswas a close third, with 26%. Gross profit margin accounted for the final 15%. DDN: The lesson, then, would seem to be that giving dealers as many qualityleads as they want goes a long ways towards helping them be successful. But Isee Dealer Service and Support was also important. What are the key factorshere? MC: 22% of overall dealer satisfaction derived from satisfaction with service and

support. In other words, the inherent strength of the service isn’t enough tomake dealers happy; they need technical support (40%), regular contact (32%),and training (28%) to use the service effectively and be able to perceive its truevalue. DDN: Lead Transmission was the third-most-important factor, but this and Feeswere much less important to dealers. How would you explain this? MC: Yes, Lead Transmission and Fees came in third and fourth, respectively,accounting for 13% and 12% of dealer satisfaction. As a category, LeadTransmission was comprised of two more specific factors: speed of transmission,which represented 66% of dealer satisfaction in this area, and amount of information transmitted, which represented 34%. One way to think about this is in the context of the high importance dealersassigned to lead quality, in the Business Generation category. It makes sensethat lead freshness and the amount of information leads include are two differentforms of lead quality, and that both contribute to business generation. Butperhaps dealers are more tuned in to the general concept of lead quality, andless to the specific attributes that comprise it. DDN: What can we conclude about fees? Are they as unimportant as the studysuggests? MC: Fees accounted for 12% of overall dealer satisfaction. That’s notinsignificant, but you’re correct - it’s not a huge consideration, either. Onepossibility is that fees take on more importance in specific situations, such aswhen dealers are struggling to capitalize on their third-party leads. Otherwise, if dealers get their leads at a competitive price and enjoy an ROI in line withexpectations, they’re less inclined to view fees as critical to their satisfaction. Atthe end of the day, what matters to dealers are sales and a solid return on theirmarketing investment. It’s their expectation that their online buying services willhelp them achieve those ends.





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ffective Online Automotive Sales: The Annual “Bad Leads” List


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The Annual “Bad Leads” ListEven with State-of-the-Art Scrubbing, the Jokers Keep Coming

Since we first published our list of "bad lead names" in the DealixDealer Newsletter back in November2001, Dealix’s lead scrubbingtechnology has become moreefficient, so our real people qualityteam rarely has to deal "up-front andpersonal" with questionable leadsthat come through our system. Yet,in keeping with tradition, our Dealixsales reps, and even some of ourdealers, continue to send us bad leadnames, or "leads that lead nowhere," throughout the year. So,

without further ado, here's the 2006list of really bad leads - and nodoubt, they're all in the market for aDodge Viper.

Al BinoAngie O'PlastyAnne TeakAziz Nowarranty

Barb DwyerBorden DrousyBjorn LiarBrighton EarlyColin ResponseConstance NoringDan Saul KnightHarry MouvalIona Ford







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Isabelle RingingJim ShortzJoaquin ClosetJoe KingJoy RiderLisa CarrLynn O. Liam

Marsha MellowMaude L.T. FordMike EasterMinnie Van DriverNeera Nuff Ophelia PayneOlive YewP. BrainPhil R. UppRick ShawShanda LearSue FlayTristan SchautVishnu VerhereYvonne Apeesamey

Happy Holidays to you, from all of us at Dealix and The CobaltGroup.

Annual Bad Leads Lists, a Retrospective: 2005 2004 2003

2002[PRI NTER FRIENDLY VERSION]




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ffective Online Automotive Sales: Metro Areas with the Fastest Close Times of Q3 2006


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terview with Ralph aglia of Courtesy hevrolet

hird Party Auto tes: the Trusted

ource for Online ar Buyers

Want to Sell More

ars More fficiently?




etro Areas with the astest Close Times Q3 2006

ternet Training nd Industry eminders

eviously in the ealix Dealer ewsletter


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Metro Areas with the Fastest Close Times of Q3 2006 Top Dealers Beating the Average by Weeks

What are they putting in the water in these ten metro areas? Two weeks or less - that’show quickly dealers in these areas, on average, are closing their Internet leads. Nodoubt, it’s the result of a combination of factors - including quality leads, highly skilledsalespeople, and finely-tuned sales processes. It’s even more impressive when weconsider an industry-wide stat: of 1.1 million leads studied, 42% closed within 30 daysand 68% closed within 90 days. [1] These dealers are lopping weeks, if not months, off that figure.

The advantage dealers in these areas are reaping by closing sales fast is a big one.Studies show that closing quickly is a critical part of preventing brand, and dealership,defection. Time keeps on slipping, slipping, slipping, you know - and so do customers.

M e t r o A re a s w it h t h e Fa s t e s t Clo s in g T im e s

Q3 Rank Metro AreaAverage Closing

Times in Days1 Washington, DC - Baltimore, MD 122 San Francisco – Oakland - San Jose, CA 123 Los Angeles – Riverside - Orange County, CA 134 Chicago, IL - Gary, IN - Kenosha, WI 13

5 Boston-Worcester, MA - Lawrence, NH 136 Miami-Fort Lauderdale, FL 13

7New York-Long Island, NY - Northern NewJersey 14

8Philadelphia, PA – Wilmington, DE -AtlanticCity, NJ 14

9 Houston-Galveston-Brazoria, TX 1410 Dallas-Fort Worth, TX 14

The Metro Areas with the Fastest Closing Times Ranking is based on the average time ittakes dealerships in the major metro areas of the U.S. to close their Dealix Internetsales leads. Results are derived from phone surveys of consumers who submittedleads during the third quarter of 2006. The closing time period begins on the day thedealer receives the lead and ends on the day the consumer says he or she bought thevehicle. The smallest sample size per metro area was 100 surveys. This study wasconducted by Dealix Business Intelligence SM .

[1] 2006 Automotive Industry and Dealership e-Business Performance Study by TheCobalt Group with R.L. Polk.







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Internet Training and Industry RemindersUpcoming Workshops

The Cobalt Group P resents the Breakfast of ChampionsW orkshop Series

2006 Seminars

December 12 th Indianapolis, IN Indianapolis Marriott Downtown

2007 Seminars

January 9 th Phoenix, AZ Sheraton Cresent Hotel

January 16 th Miami, FL Embassy Suites Ft. Lauderdale

January 23 rd Houston, TX TBD

February 13 th San Diego, CA TBD

February 20 th San Francisco, CA TBD

March 6 th Seattle, WA TBD

March 13 th Nashville, TN TBD

March 20 th Westchester, NY TBD

April 10 th San Antonio, TX TBD

April 17 th Jacksonville, FL TBD

May 8 th Denver, CO TBD

May 15 th Orlando, FL TBD

May 22 nd New Haven, CT TBD

June 12 th San Jose, CA TBD

June 19 th Portland, OR TBD

July 10 th Dallas, TX TBD

July 17 th Philadelphia, PA TBD

July 24 th St. Louis, MO TBD

August 7 th Los Angeles, CA TBD









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August 14 th Detroit, MI TBD

August 21 st Baltimore, MD TBD

Click Here to register for any of these sessions. Or, call (800)557 -7915.


ublished by Dealix Corporation opyright © 2006 Dealix Corporation. All rights reserved.he Dealix Dealer Newsletter is sent to Dealix membersnd anyone who has expressed interest in our services.

o unsubscribe, enter your email address in theubscription box appearing within the newsletter andhoose the Remove option. Or, just click one of the linkselow.



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ffective Online Automotive Sales: View a Movie to See How Dealix Can Help You Sell More Cars


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View a Movie to See How Dealix Can Help You Sell MoreCars











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