While automakers' marketing staffers harp on dealerships to perform better, few have mastered the art of successfully handling online leads. The stakes are high and the time is now.

The Internet is a car shoppers' paradise. To find the car they need, people pore over reviews, prices, videos, specs and accessories.

And when they are ready to buy, they type their contact information into a box and become an Internet lead. Then the lead is sent to dealerships -- and the trouble begins.

Some salespeople ignore online leads, preferring live human beings in their showrooms. They complain of the flood of leads that they must baby-sit, often for two or three months. Many online prospects are virtual tire kickers and never buy. And salespeople are not paid until they make a sale.

Few dealerships have mastered the art of handling online leads. Even diligent dealerships have trouble keeping up.

Meanwhile, the automakers' marketing staffers, aware that the Internet is the starting point for nearly all auto shopping, harp on dealerships to do better -- with mixed results.

The stakes are high: Internet leads account for 15 to 20 percent of new-vehicle sales, reports Urban Science of Detroit, an automotive research and consulting firm that has studied the Internet's impact on car sales.

"These are real buyers," says Jody Stidham, Urban Science's global practice director. "Every customer deserves a response."

Burke O'Malley, the 45-year-old president of Sterling Chevrolet in Sterling, Va., knows Internet leads are important. After dropping newspaper advertising a decade ago, he stopped using radio and cable TV advertising over the past two years.

Seventy-five percent of his advertising budget now goes to Internet marketing, and the rest goes to direct mail. Part of that budget buys leads -- requests from Web shoppers for price quotes or information. The dealership's own Web site also generates e-mail inquiries and requests for price quotes.

O'Malley's store sits on bustling Route 7, close to the Tyson's Corner shopping district and Dulles International Airport, and his customers tend to be tech-savvy. Northern Virginia, the home of America Online, has been called the Silicon Valley of the East Coast. The store, built in 1989, sells about 95 new and used vehicles per month.

Consumers often shop on the go from their smart phones and iPads. They browse the Internet in the wee hours, long after bricks-and-mortar dealerships close.

But while customers like the Web, many salespeople and sales managers prefer chatting up customers who walk into the showroom.

"They hate change," says O'Malley, brooding from an armchair in his large office.

Veteran staffers struggle to learn software programs, while their younger counterparts can depend too much on e-mail, losing the personal touch that often closes sales.

Moreover, the immediate goal with Internet selling has changed: The goal these days is turning a lead into an appointment, not making quick sales, O'Malley says.

Stephen Stauning, a sales trainer and consultant in Coeur d'Alene, Idaho, says dealerships close about 5 to 8 percent of Internet leads, which are generated from manufacturers' Web sites, their own Web sites and third-party lead providers such as Autobytel and Edmunds.com. For comparison, dealership consultant Joe Verde says dealers typically close 20 percent of walk-in customers within a week.

But dealers say that if the Internet prospect makes an appointment and keeps it, the close ratio jumps to 50 to 60 percent. So there's a premium to work e-mail constantly to coax leads into showrooms.

Bob Taylor, in his mid-60s, has sold cars for O'Malley for more than 20 years. With his firm handshake and down-to-earth manner, he used to sell 20 cars in a good month. Now he might sell 15. He says the economic downturn and online price competition have slashed his pay by half in the past few years. And he believes the Internet has created a cold sales environment.

"I don't like to look at a screen," says Taylor with a frown. "I like to look at a face."

Fielding Internet leads also can take a toll on the staff. Nick Katsarelis, a sales manager with O'Malley, spends long hours hunched over a computer screen. Sterling Chevrolet receives 500 Internet leads a month, and Katsarelis, 51, is one of three managers who monitor leads after hours.

Katsarelis points to the screen, showing eight leads from the previous evening that came in after 9 p.m., after the store closed. One lead landed at 2 a.m.

The quick fix is auto-responder software, which the dealership installed recently. The software instantly e-mails prospects a price quote and a detailed vehicle description. But automated responses can be cold and generic, so the staff still needs to follow up quickly with a personal e-mail or phone call.

And the software requires monitoring, so Katsarelis is still on the hook. And it sometimes sends prospects information on the wrong model, he says.

O'Malley's team responds to most Internet leads in less than an hour, and he aims to get the average down to 15 minutes. He has restructured his staff several times in the last few years to manage the flood of incoming leads.

"I'm on my fifth try on how to do this and still haven't perfected it, and I don't think we ever will," O'Malley says. "You go six weeks and you're OK, then suddenly you're behind."

Since 2007, he has tried having his eight salespeople handle online leads from start to finish. He has installed a business development center, a call center consisting of three appointment-setters paid by the hour and by appointment volume.

Now he's trying a hybrid, keeping the appointment-setters but letting salespeople field some of the leads. He's also considering outsourcing calls to an independent call center as well as hiring college students and stay-at-home moms to help with phone follow-up.

O'Malley also promoted his Internet director, Stan Hale, to general manager. When O'Malley hired Hale, now 52, he was managing the Internet operation for an Indiana dealership. Even in that small-town environment, Hale says the Internet was pulling in customers from outside the state.

Hale agrees that handling Internet leads is labor-intensive. Some prospects are 90 days from purchasing a vehicle, which means they should be contacted every few days for up to three months.

Dealers obtain leads from three main sources:

1. Third-party Web sites such as Edmunds.com, Autobytel.com and KBB.com. Last year, Autobytel says it generated 2.9 million leads.

2. Manufacturers' Web sites.

3. Their own Internet marketing efforts, including their dealership Web sites.

The National Automobile Dealers Association says leads from dealer Web sites close at a rate similar to walk-ins -- about 1 in 5. Consultant Stauning says one of the reasons the overall rate is far lower is that factory and third-party leads are sent to multiple dealers.

He says third-party Internet leads are cost-effective. With a close ratio of 5 to 8 percent and average cost of about $20 a lead, the dealer spends $250 to $400 per sale.

Of course, people who sell other advertising, such as direct mail, argue that Internet leads are pricey. David Morton is vice president of technology for Tacito Direct, a large direct-marketing agency in Dallas.

The follow-up to Internet leads "requires a lot of time communicating with prospects," Morton says. His clients can expect about 40 sales for a $20,000 investment, or about $500 a sale. But prospects just show up at the dealership within 30 days holding the mailer and don't require Internet baby-sitting, Morton says.

Manufacturers are shifting more of their marketing budgets to the Internet. Many have strict standards for handling Internet leads, and some have rewards and penalties tied to response times. Automated responders generally don't count.

"A lot of leads aren't even opened," says Mike Sachs, general manager of customer relationship management for Volkswagen of America. "This should be no different from someone walking into a dealership. You walk up and shake their hand."

In 2010, Internet leads accounted for 12 percent of the new Volkswagens sold, says Sachs. He says fast and proper handling of leads is essential for winning sales. If the response time is more than an hour, the close rate averages 11.5 percent; if the response time is less than 30 minutes, the close rate grows to nearly 15 percent, he says.

Sachs says his biggest challenge is getting dealers to take leads seriously. Volkswagen is unveiling a dealer incentive for quick response to Internet leads. The goal is a personal response within 30 minutes.

Ed Vogt, General Motors' director of retail, digital support and dealer systems, says a prompt response is critical because Internet leads are looking at multiple brands. If dealers drop the ball, GM could lose sales, he says.

Dealership Internet managers must be trained and certified for the store to receive Internet leads from GM. The automaker also advises dealerships to maintain contact with prospects who haven't made a purchase yet for at least six months.

"That Internet manager is like an air traffic controller, assigning leads and making sure they're followed up," Vogt says.

Before joining the Lima Auto Mall, a Chevrolet-Cadillac store in Lima, Ohio, Joe Shaw was Internet director of another dealership group. As Lima's general sales manager, he's showing the benefit of effective follow-up to Internet leads.

In his nearly two years at Lima, sales of new and used vehicles have doubled to 160 a month. About 60 percent of the sales are from Internet leads.

The growth "is all Internet and process-driven," Shaw says. "Our response time is in minutes."

When he arrived, none of the salespeople had computers. There was no customer relationship management system in place to track leads.

Shaw installed Autobase lead-management software because it was easy to use. It helps monitor incoming leads and responses of the sales force. Ideally, he says, the software would also flag when the prospect opens the e-mail, but he wanted to keep the process simple.

"You've got to walk before you run," he says.

With support from the owner and general manager, Shaw hired a salaried Internet manager to field leads and divide them among the salespeople. He also divided the 13-member sales force into two groups -- one to handle phone calls and walk-ins and the other to field Internet leads only.

Each is paid according to what he or she closes, which is typical at dealerships. They are paid a commission on gross profit as well as bonuses on unit volume, gross profit and customer satisfaction scores.

Lima Auto Mall has made progress, but Shaw says the company must make more. Like other dealerships, Lima is restructuring the staff to keep up with incoming leads. Shaw says he will experiment soon with a new pay plan for two sales candidates he's about to hire.

He's concerned about quality as well as speed and wants to encourage salespeople to keep in touch with customers who may take months to make a purchase. So in addition to a commission on the vehicle sale, he'll pay a bonus for each appointment set up and for each appointment that shows up.

Shaw's business philosophy explains his determined pursuit of Internet leads: Change or die.