Lee Iacocca once told his managers at Chrysler Corp.: 'Lead, follow or get out of the way.' That sentiment is echoed by Larry Cuneo, who started a dealership cooperative Web site, CarSoup of Minnesota, last year.
'The Internet is already a key component in selling cars,' says Cuneo, CarSoup's president. 'If a dealer doesn't take a position on the Net, he's going to be left behind.'
Cuneo, who has spent almost two decades in the advertising business representing auto dealers, says dealers need more than just a presence on the Net. 'They want to do research, and that's the difficult and expensive part of being on the Web.'
Cuneo started CarSoup last March with 30 dealers as partners. The number has since grown to 47, with more on the way.
Why would dealers want to buy into a Web site that might compete with their own Internet efforts? Cuneo cites many advantages, including the basic benefit of any co-op: the ability to compete with the big boys. In this case, daily newspapers' automotive Web sites. Why not support a single-point advertising resource that generates profits for the dealer, rather than a newspaper?
In its first month of operation last March, 30,000 individual users visited CarSoup. By November, that number had grown to 88,000, with a half a million individual pages viewed.
CarSoup focuses on the Minne-apolis and St. Paul metropolitan area. Cuneo says the Internet already is a major factor in the new- and used-car market there, and he expects that influence to increase to 70 to 80 percent in the next three years.
In a nutshell, CarSoup.com is an interactive Web resource site for new and used cars. It also lists employment opportunities and anything else automotive. The idea is to bring all the elements under one roof - a research database for new and used vehicles, both from dealers and private parties, and an effective sales lead and tracking system to benefit individual dealers.
One of the keys to CarSoup.com is that it incorporates individual ads with full descriptions of used cars from both dealers and private parties. That makes CarSoup a one-stop shop for locating a specific new or used vehicle. Dealers benefit by being able to market their used cars competitively, particularly those with warranties or certifications that are not available from private sales.
Yet all potential customers start from the same location, giving dealers equal access to them. To that end, CarSoup provides a search engine to enable consumers to seek out any new or used vehicle via many parameters, including body style, price, year, make, model or options.
CarSoup also carries full new-car information, specs and suggested prices, along with options and photos, for all new cars.
CarSoup.com connects consumers to dealers in several ways. Individual dealer Web sites are linked to the CarSoup home page. Consumers also can choose to click on an e-mail purchase-request form. Since CarSoup maintains that database, it also faxes a copy of the request form to the dealership as backup.
CarSoup's tracking system also surveys the consumer within 48 hours of the request to determine if, when and how the dealership responded. Dealers are encouraged to respond within 24 hours, and are provided with an administrative area within the site that has records of leads and surveys.
'The Internet is an entirely different way of selling cars,' says Cuneo. 'Many consumers aren't necessarily going to buy a vehicle today. They may be researching a purchase they are planning to make six weeks from now. So dealers must recognize that how they respond is a major factor in whether that customer will eventually purchase a vehicle from them.'
To that end, CarSoup offers to train salespeople to the nature of shopping on the Web. 'It's a different way of dealing with customers, but the average gross profit from an Internet-generated sale is within $100 of a walk-in sale,' Cuneo says.
Participating in CarSoup.com costs dealer-partners an average of about $1,000 per month. Non-partners pay about $100 per month more. CarSoup takes care of all the database updating and works with the dealer's existing inventory system for both new and used vehicles.
Cuneo is working to expand CarSoup.com into other markets, hoping to give dealers more leverage in their efforts to compete with the newspaper-backed automotive Web sites.