As consumers get more comfortable shopping for vehicles online, dealerships are using more sophisticated Web strategies to attract their attention.
Auto retailers are using Internet search engines to market their dealerships. They are hiring online firms to generate leads. And they're updating their own Web sites to build traffic.
About two-thirds of consumers in the market for a new car or truck do some online research, estimates Jupiter Research, a technology analysis firm in New York.
Dealers are taking notice. The average new-vehicle dealership boosted the share of its advertising budget that it spends on the Internet from 6.7 percent in 2004 to 9.9 percent last year, the National Automobile Dealers Association reports.
Vehicle sales are still "all about relationships," says Dennis Colome, director of dealership training for Autobytel, an Internet marketing company. But more consumers are beginning the relationship online before they visit the dealership, he says.
Colome told Automotive News that Internet sales efforts have a 20 percent closing rate - that is, one of every five online leads ends in a sale. Once that milestone was achieved, he says, "it became a priority for everyone. We have seen more interest in the last six to eight months than ever before."
Dealerships routinely partner with automotive Web sites such as MSNAutos.com, Edmunds.com and Cars.com to gain access to vehicle shoppers.
The sites turn some inquiries into sales leads. They include use of features such as dealer locators and requests for price quotes, as well as specific questions about options and financing. The sites sell those leads to local dealerships for about $20 to $25 apiece.
Increasingly, though, dealerships are focusing on upgrading their Web sites to generate their own leads.
"In the absence of our Web site generating the leads on its own, using Internet lead generators has been an excellent second option," says Jerry Winder, director of Internet operations for the Larry H. Miller Group of Cos.in Sandy, Utah. "But actually, we are trying to get away from this."
Says David Butler, general manager of the Suburban Collection in Troy, Mich.: "We've chosen a strategy where we try to drive as much traffic as possible to our corporate Web site to generate sales."
Search engine competition
Like many other dealerships and groups, the Suburban Collection is tweaking its Web site to make it rank high on search engines such as Google. The higher a site's ranking, the more prominent it is to Internet users.
Techniques include inserting relevant keywords, such as specific brands and locations, into Web site content that consumers would be likely to include in their search. Search engines scan these keywords to determine how and where to rank a site.
"We've had great success with it," Butler says.
Ali Amirrezvani, CEO of DealerOn, an Internet marketing company, says search strategies are "low-cost, measurable and profitable."
"How much good does a beautiful, functional automotive dealership site do for sales if it lays dormant and unnoticed on page 431 of the search engine results?" says Amirrezvani, who says his company works with more than 500 dealerships.
Design is key
Dealership Web sites that offer no more than basic vehicle information, stock photos and a contact address won't satisfy Internet-savvy shoppers, Amirrezvani adds.
"Gone are the days when a Web site is just an online billboard," he says. "Properly designed and optimized, it can be the most profitable center of a dealership."
A good Web site is easy to navigate, Amirrezvani says. It includes accurate and up-to-date inventory information and a user-friendly form to contact the dealership.
Dick Malaise, NADA's chief information officer, says dealerships have several options for enhancing their Web sites.
"It can be done in one of three approaches," he says. "Self-managed, by partnering with a third party who handles everything, or by having a third party complete the initial design and letting the dealer handle things like home page updates and inventory."
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