Tom Vann takes the idea of a global economy to heart.
At Team Hillsdale Chrysler-Plymouth, the dealership he co-owns and manages, the Internet accounts for 60 percent of vehicle sales; volume has more than doubled since the business went online.
Through further expansion of the Hillsdale, Mich., operation, Vann expects to be selling 400 to 500 vehicles a month by the end of the year - about five to seven times the current average.
That's significant in a city of 7,800. Of course, most of the Internet customers are from outside the community, averaging 90 miles away.
The secret is a selling process far different than the traditional approach. The focus is on making the purchase easier for the customer. Each transaction is handled through a combination of Internet and telephone contacts and ends with delivery of the vehicle to the customer's door. Most buyers never even set foot inside the dealership.
'We had the mentality to handle amazing growth, but our market was small,' says Vann.
So Vann hooked up with two online buying services - Autobytel and Autovantage, which provide the dealership with most of its on-line customer leads.
Early in the game, a large chunk of Autobytel's referral territory in central and western Michigan was up for grabs. Vann quickly latched on to it, acquiring the rights to Autobytel leads for the Chrysler brand in nearly 70 percent of the state. Albion Motors, a Chrysler dealership, run by his father, Bill Vann, gets the leads for another 25 percent of the state.
In its first month of Internet sales, the Hillsdale dealership received 27 purchase requests and sold 21 cars.
'I couldn't believe it,' Tom Vann says. 'The penetration ratio was enormous, and the cost was almost nothing.'
Through a restructuring and revamping of his Web site that he expects to complete by early February, he plans to expand sales into Illinois, Ohio and Indiana.
Vann's selling process is so successful that other dealers are clamoring to learn how he does it. He says Autobytel asked him to go on the road to train dealers. He trained more than 20 by telephone and at his dealership.
Then a year ago, Vann teamed up with Doug Waikem, the principal of Waikem Auto Group in Canton, Ohio, and Danny Alkassmi, a professional auto sales trainer in southern California. In a partnership with Autobytel, they formed I-net Training Technologies to teach auto dealers how to sell cars using the Internet.
Open both to Autobytel subscribers and other dealers, I-net has trained about 60 dealers and plans to reach another 2,500 this year through regional workshops and onsite training.
Vann says the group formed because of the perception that dealers were setting up Web sites without having any idea of how to operate them successfully.
'A Web site does not sell cars,' Vann says. 'It just provides you with customers. Unfortunately, there are dealers who brutalize their customers. People just don't want that. They don't need to be pushed around.'
Vann says he has found a better way. The system works something like this.
A potential customer within Team Hillsdale's referral area logs on to Autobytel and makes a request for a particular vehicle. Then a specially trained salesperson at Team Hillsdale calls the person to explain the purchase process. From then on, the customer works with only one person - no separate finance manager, appraiser or closer.
Trade-ins are appraised over the phone based upon information provided by the potential customer, which Vann says works just as well or better than when a vehicle is appraised on site.
'You never sign a thing until the vehicle shows up at your door and you inspect it,' Vann says.
The process changes the structure of an auto dealer's business, he says. The cost for handling a sale, even with on-site delivery, is about half that of the traditional format because of reduced staffing and advertising needs. A single staff person specializing in Internet sales could sell and deliver 25 to 30 cars a month.
Vann developed the concept because of his own dislike of what a buyer goes through to get a vehicle.
'We thought there has to be a better way,' he says. 'And if you had it your way, what would you do? Then we developed our own model.'
Vann says, 'Most Web sites are either laborious or extremely simple so they bring no credibility to the dealer. They usually are a hook for people to come in to the dealership. But the people who go on the Internet are trying to avoid the dealer so we are marketing to people who don't like going to a dealership.'
The new Hillsdale Web site will make navigation simpler, improve the buying process and create more excitement, Vann says.
'You need a Web site that generates excitement and allows people to enter the car-buying process easily. Then your process better take over or you're dead.'
He senses a lot of reluctance among dealers to utilize the Internet in the best way possible because it changes the basic business model.
'Every dealer should be on the Internet,' he says.
'Many are scared to death. It absolutely is like starting a whole new business, but it is also a new income source and has to be managed separately.'
Dealers who don't heed the call will lose most of their business within a few years, he predicts.
'You better step up to the plate. People dig this and they really want it. People want things better, faster and more convenient, and you'd better provide it with great service or they will go someplace else.'