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Autobytel ACQUIRES AutoUSA - Automotive Internet Sales - 3rd Party Lead Source Provider

- Transaction Significantly Expands Autobytel's Dealer Network;
Expected to Deliver Meaningful Increases in Revenue and Cash Flow -

IRVINE, Calif.--(BUSINESS WIRE)-- Autobytel Inc. (Nasdaq: ABTL), pioneer of the automotive Internet and the company dedicated to connecting automotive consumers with dealers and manufacturers, today announced it has acquired Ft. Lauderdale-based AutoUSA, a longstanding, premier Web-based auto leads and services provider, from AutoNation, Inc. (NYSE: AN).

The purchase price included $10.0 million in cash, a $1.0 million, 6% convertible note payable in one lump sum in five years and convertible to Autobytel common stock at a conversion price reflecting a 20% premium over the price of Autobytel's common stock on the date of closing, and warrants giving AutoNation the right to purchase approximately $1.0 million of Autobytel's common stock at an exercise price reflecting a 5% premium over the price of the stock on the date of closing. The transaction was financed by Union Bank, N.A. through a newly established $9.0 million senior secured term loan, and by drawing on Autobytel's existing secured working capital revolver. Both the term loan and the revolver carry interest at a rate of LIBOR plus 2.5%. The term loan is amortized over a period of four years. AutoUSA generated 2013 revenues of approximately $30.0 million, with positive operating income and cash flow. The company believes that the transaction will be accretive to Autobytel's 2014 results.

Autobytel said the acquisition expands its reach and influence in the industry by increasing its national new and used car dealer network to more than 5,200 from approximately 3,800, while boosting its business with auto manufacturers. It also enables the company to offer its new mobile and SaleMove products to a larger customer base, while continuing to build on relationships with OEMs and large dealer groups, including the AutoNation family of dealers.

Autobytel, which was founded in 1995 by former Southern California car dealer Pete Ellis, has again grown to become one of the most influential automotive services organizations, providing high quality leads and innovative marketing and mobile services to dealers and OEMs. The company serves a critical role in the industry in helping car buyers find the right vehicle while delivering highly relevant consumer purchasing information to its industry partners.

Phil DuPree, President of AutoUSA, has joined Autobytel as Executive Vice President, President of Dealer Services. As an inducement for joining the company, DuPree was granted an option to acquire 40,000 shares of Autobytel common stock at an exercise price equal to the closing price of Autobytel's common stock on the acquisition closing date. The option will initially vest based on certain financial performance criteria related to Autobytel's dealer services group and then on DuPree's time of service with Autobytel.

"AutoUSA brings a new, high quality client base to the Autobytel family and strengthens our existing relationship with AutoNation, which is the largest U.S. automotive retailer," said Jeff Coats, Autobytel's president and CEO. "The transaction solidifies our leadership role in the industry, enabling us to offer an even larger base of dealers and automakers top quality products, including leads that convert to sales at nearly three times an estimated industry average, and a wide range of mobile products designed to sell more cars.

"AutoUSA represents an outstanding fit with Autobytel. In addition to its core leads business, AutoUSA's suite of complementary third-party, Web-based services includes payment-based pre-qualification tools, incentive programs and other products and services designed to help dealer customers and manufacturers increase their sales," Coats added.

"Since 2000, AutoUSA has developed very strong relationships with dealers across the country. The combination of Autobytel and AutoUSA adds strength to both organizations and represents an opportunity for consolidation in an industry segment that remains fragmented," said Mike Maroone, president and chief operating officer of AutoNation, Inc. "This combination benefits automotive consumers, dealers and manufacturers, alike."

As previously announced, in addition to AutoUSA, Autobytel also recently acquired Advanced Mobile, LLC, now known as Autobytel Mobile, which provides a full lineup of auto industry mobile products and services such as mobile apps, mobile websites, Send2Phone capabilities and text message marketing, and TextShield, a web-based portal that allows dealers to centrally manage text communications. Also as previously announced, the company recently made a strategic investment in SaleMove, which enables auto dealers and manufacturers to enhance the online shopping experience by interacting with consumers in real-time. These new services will be available to Autobytel's expanded network of automotive dealers and manufacturers.

About Autobytel Inc.
Autobytel Inc. provides high quality consumer leads and associated marketing services to automotive dealers and manufacturers throughout the United States and offers consumers robust and original online automotive content to help them make informed car-buying decisions. The company pioneered the automotive internet in 1995 with its flagship website www.autobytel.com and has since helped tens of millions of automotive consumers research vehicles; connected thousands of dealers nationwide with motivated car buyers; and helped every major automaker market its brand online.

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Stop Stressing Credits, Focus On Selling Cars

 

I am seeing a disturbing trend happening in our industry. A lot of dealers are focusing way too much on getting credits from 3rd party providers instead of focusing that energy on selling cars. Now, before you react. Please read the rest of this article.

 

Remember that I was an Internet Director (5+ years) before I started my company. Now for almost 10 years now I have been building Internet Sales departments and Business Development Centers. I say this just to show that I am not “pro vendor or anti-dealer”. I am a Car-Guy and all I care about is selling cars. And it seems that there is a trend with Dealers that are so focused on getting credits with leads. Some dealers spend so much time trying to track down credits it diminishes the amount of time following up with actual prospects. I am NOT suggesting that you should not be compensated for leads that are invalid or duplicates. I am just expressing my concern with Dealers that spend so much time focusing on trying to get credit for leads. Actually grinding their reps for more credit(s). I have clients that do it sometimes for sport. I said clients, so I know it’s a fact. Some dealers demand credits because they know that most lead source providers will concede rather than argue with a dealer or possibly lose a client over something as silly as a credit. There are dealers that sometimes not choose a particular lead source provider because of their “Lead Credit Policy”, or worse even cancel a 3rd party lead source provider or aggregator because they didn’t get a credit or the amount of credit back they thought they were owed. 

 

This blows my mind because the average cost per lead in the United States is only $20 (give or take a couple of dollars).  The upside is off the charts. If a dealer buys 100 leads at $2,000 and sells 10 percent (10 units) with an average Front and Back, total gross of $2,000 per copy. That is $20,000 Gross. The Return On Investment (ROI) is SICK!! We are talking about a Net profit of $18,000 from 1 lead source provider. Especially when you compare it to traditional advertising. NADA says that the average cost per sale in advertising is $640+ per car. In the model I just mentioned, 10 units sold out of 100 leads at $2,000 per copy means that the 3rd party lead source provider model is ONLY $200 per car sold. That is less than 1/3 of what the AVERAGE dealership in this country sells cars for.

 

Here is the problem; most dealers forget that leads are NOT magical beans or silver bullets. They forget that they have to work at these leads. And when I say “work”, I mean WORK and work them hard. Dealers need to have the following:

 

  • A Follow Up Process – Dealers need to have a realistic follow up process for email, phone and social media (Yes, I said social media. Social Media is the #1 form of communication on this planet).  They need to not just say “we need to follow up via email, phone and social media”. There needs to be an EXACT formula mapped out. The formula needs to be realistic and logical and take into account that the average buying cycle is 45-90 days. NOT 37 days. Also, the follow up process needs to be tailored to the fact that the average Internet sales prospect is also engaging 5-8 other dealers or websites… 

 

  • Content – Dealers need to have a powerful library of content. Email Templates, Phone Scripts, Word Tracks, Objections / Rebuttals, Value Package Proposition (Why buy from us message).

 

  • People / HR – Dealers need to have the right amount of people in the department or the right amount of people in the dealership that are working the Internet Leads. A lot of dealers have too many leads and not enough people or the opposite… too many people and not enough leads. Both are bad problems (That can be fixed). But its not just not having the right amount of people. Dealers need to have the RIGHT people in the right positions. The right scheduling and pay plans are also imperative for success within an Internet Sales Department or BDC.

 

  • Training – Dealers need to train their people with what to do, when to do it, how to do it and most importantly why they are doing it.

 

  • TO protocol- There needs to be a 100% “TO” process in place with ALL Internet prospects. Just like most dealers and all successful dealerships believe in a 100% TO protocol for showroom prospects. So should the Internet department. Too many times dealerships “burn” through Internet Ups without any accountability.

 

  • Culture – Dealerships that instill a culture that ALL leads are good leads. ALL 3rd Party leads are AWESOME will be tremendously successful. It’s the dealers that allow Internet or BDC reps to “pre-qualify” leads or allow reps to say that a certain lead “sucks”… those dealerships will be inundated with “bad leads” that suck.  Dealers that teach their Internet / BDC teams that a lead is ONLY a “lead” it is an opportunity to sell an automobile. NOTHING MORE. It is a name, sometimes a phone number, sometimes an email address. BUT if you receive a lead without an email address or phone number instead of worrying about a credit (at first). FOCUS on trying to ascertain that contact information. For example dealers can:

 

  •  Open up the original lead within the ILM /CRM and see if the lead didn’t parse
  • Reverse look up via 411
  • Reverse look up via www.anywho.com or www.whitepages.com
  • Thorough reverse look up with www.spokeo.com
  • Reverse look up via social media (cut and past prospect’s email address into Facebook, Twitter, Linkedin etc…

 

Bottom line is that 3rd party providers have tremendous value. To realize that true value, dealers need to be prepared for these leads and have a proactive mindset that leads are gateways to opportunities to sell an automobile. Its not a guarantee, only an opportunity to do business. It is up to us how we maximize that opportunity.

 

If you have any questions about this article or if you would like me to review your Dealership’s Internet or BDC lead follow up process. Please email me at sean@dealersynergy.com or call me on my cell at 267-319-6776.

 

I look forward to seeing you at the upcoming www.internetsales20group.com that AutoUSA is a Platinum Sponsor in Los Angeles, November 12-14 

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http://www.internetsales20group.com

 

Automotive Internet Sales Interviews TrueCar & Responds To Joe Webb & Brian Pasch...

 

It seems that there was a negative post about TrueCar recently, http://www.dealerknows.com/is-this-the-beginning-of-the-end-for-truecar/ Joe Webb of Dealer Knows published the post and then a lot of people in the industry started to jump on the band wagon of the negativity. One of those people was Brian Pasch of PCG.
I have a problem about what was said and the people saying it. Especially when TrueCar is the TITLE sponsor for AutoCon... How can you tell dealers that they are great and good enough to be a title sponsor and then say they are wrong or bad out of the other side of your mouth...

 

So, I wanted to set the record straight. The first part of this video is ME and MY opinion of the situation. And the second part (the majority) of the video is the ACTUAL GoTo Meeting interview with Ken Potter, VP Of Dealer Development & Mike Timmons, Executive VP of TrueCar. Automotive Internet Sales.cm had the opportunity to sit with TrueCar and get their feedback and official position on the situation.

 

I normally DO NOT get involved in these situations BUT... Ken Potter has been a friend for over 12 years now and I do not like people attacking him unfairly. He is an integrity based individual. And I do not feel that TrueCar is doing ANYTHING wrong with their policy for "Write Offs" on their leads...

 

I am ALWAYS open for conversation if you want to reach me. Please email me at seanb@dealersynergy.com or call me on my cell 267-319-6776

 

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http://www.internetsales20group.com http://www.dealersynergy.com

Sean V. Bradley & Internet Director, Matthew Sears Discuss Autotrader & Conventional Marketing / Advertising...

Automotive Internet Sales recently had Internet Sales Director, Matthew Sears at corporate headquarters in New Jersey. We sat down with Matt and answered some of his questions about "Traditional" Marketing and Advertising. Sean talked about the importance of Internet advertising. When 92-99% of prospects are going online BEFORE they step foot into the dealership... It becomes a no-brainer and combine that with the fact that Internet advertising is LESS than $200 per car, where as traditional is over $600 per car in advertising as per NADA.

For more information and training videos, goto http://www.automotivedigitaltraining.com

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http://www.internetsales20group.com
Autotrader Account Executive Gives Secrets, Tips & Advice On How To Maximize Autotrader For Your Dealership

Secrets, Tips & Advice On How To Maximize Autotrader For Your Dealership - Automotive Internet Sales...

Joe Cala is a Top Autotrader Account Executive and an 11 year Automotive Sales Veteran.
Before joining Autotrader.com Joe was the Internet Director of a Penske Dealership (Gateway Toyota). Joe delivered 150+ Internet Deals per month!

Joe gives some POWERFUL advice on how to maximize Autotrader for your dealership!

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Dear Valued Partner,

Autobytel is pleased to announce some enhancements to our Used Car program!

•  Autobytel is now able to post your Used Car listings on Craigslist. This will provide additional exposure for your inventory. There are a variety of benefits to this new display even if you are already posting your inventory with us.Please click here if you do not wish to post your inventory to Craigslist.

•  We have updated our Dealer Extranet to provide you with the ability to view your current Used Car inventory and to update and make changes with a few clicks. Below is a sample of what the online tool looks like. Click here to login to the Dealer Extranet and view your live inventory!

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http://www.internetsales20group.com

Jim Ziegler and Tim Martell Talk Cars.com Controversy | Wikimotive Podcasts #1

Jim Ziegler and Tim Martell discuss the Cars.com controversy. When a consumer submits a lead on a paying dealer's inventory, is it wrong for cars.com to feed the consumer the competition's inventory too?

facebook.com/jamesaziegler
facebook.com/wikimotive
twitter.com/wikimotive

Citations:
http://www.carpricesecrets.com
http://www.whypaysticker.com
http://www.carsguru.com

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I truly belive in all my heart that CARS.COM is trying to do the right thing!!

THANK YOU to all of the dealers, Trainers/Consultants/Advocates, especially Jim Ziegler and Sean V. Bradley that made noise about this new program that was launched.

As of today here is a message from them :

http://dealeradvantage.cars.com/da/2013/05/moving-forward-testing-new-ways-to-drive-exposure/

He did also refer to a 23 minute video from Brian Pasch FOR the idea, which I have personally NOT watched.  I think overall, this "test" was a good and bad one.

Good - we are engaging customers more and following up, and anything that does slip through the cracks on the dealership level, we can find out if the customer is still on the market with another automated email process. This does increase value to Cars.com to me as a dealership....ONLY if we fix the BAD!

BAD - ...which really should be "horrible"!  Bottom line, a company we are paying for a car buyer...is now turning that buyer into a shopper with other suggestions.  They are also providing financing options and other 3rd party validations, and that part is OUR JOB as the dealership to do! 

**(Please refer to Robert Wiesman article EXACTLY about that written a few days ago!)

We can ALL work together (aka Synergize!!) to make this a HUGE WIN/WIN/WIN situation for us as the dealership, Cars.com as a trusted vendor and advertiser, AND the customer looking for the best deal!

 

Andy Fedo

Director of Internet Sales, Lithia Nissan Hyundai of Fresno

afedo3@yahoo.com

 

 

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http://www.automotiveinternetsales.com 267-319-6776

Here is the thread on the Cars.com situation...

http://automotiveinternetsales.com/profiles/blogs/double-cross-or-not-a-double-cross?xg_source=activity

Automotive Internet Sales Reviews Jim Ziegler's Concerns About Cars.com & Brian Pasch's Response...

The subject of http://www.cars.com has been getting pretty heated lately. It has achieved over 6,000 views on the local blogs like:

http://www.automotivedigitalmarketing.com/profiles/blogs/double-cross-or-not-a-double-cross?xg_source=activity

http://www.dealerelite.net/profiles/blogs/double-cross-or-not-a-double-cross?xg_source=activity

Brian Pasch, CEO of http://www.pcgdigitalmarketing.com/company/meet-our-team/brian-pasch/ has come out and said that Jim Ziegler is wrong and he thinks that Cars.com is NOT doing anything wrong. As a matter of fact, Brian has created a blog post

http://www.automotivedigitalmarketing.com/profiles/blogs/jim-ziegler-has-the-cars-com-marketing-strategy-all-wrong?xg_source=activity

That basically says that Jim has it all wrong...

I shot this video to explain why I support Jim Ziegler's point of view on the Cars.com situation.

If you have any questions, please feel free to call me or email me-

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http://www.internetsales20group.com

The first Internet Sales 20 Group in Chicago was a HUGE Success!

One of the MOST exciting workshops was conducted by Sherry Hale of Dealix.

Sherry did an awesome job explaining in detail, EXACTLY how a dealer goes and sets up a POWERFUL 3rd party provider strategy

.

Sherry Hale Of Dealix, Speaking At The Internet Sales 20 Group in Chicago (Part 1) - Automotive Digital Marketing from Dealer Synergy

Sherry Hale Of Dealix, Speaking At The Internet Sales 20 Group in Chicago (Part 2) - Automotive Digital Marketing from Dealer Synergy on 

 

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Automotive Internet Sales (.com) Interviews Kevin Hunt, Vice President of Dealix (A Division of ADP) At NADA 2013 from Dealer Synergy on Vimeo.

http://www.internetsales20group.com

Automotive Internet Sales (.com) Interviews Kevin Hunt, Vice President of Dealix (A Division of ADP) At NADA 2013

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I’m sure some car buyers have the same skepticism trusting a dealers websites reviews like I do the Mayan Calendar. If I did then we both know the world is toast on December 21st.

I’ve heard some ORM vendors advise that the first step to increasing positive reviews is to capture your own customer reviews in a “testimonial spotlight” page on the dealership website. I’m pleased to see the wave of dealers requesting feedback in tandem with CSI requests and yet perplexed by the notion of a first step, directing them to the dealers testimony review page in the buying moment or after the purchase. I’m all for requesting reviews from the customers I.P after they leave the dealership, but posting on the dealerships site as the first step? Forget the first step logic for a moment and lets resonate in reality that customers will be suspect of any company’s site testimonials in the coming days to measure credibility. They already are.

For the dealers who spend all day everyday pushing customers to post reviews on the dealerships site, what happens when Google starts the slap claiming the reviews are not valid. The dealers are not a 3rd party review authority. Isn’t it Google’s power to make sure your found as the authority based on you being a more credible, honest, and candid source for both customers and search engines?

Yelp and Google are far more credible than a dealerships website.

Consumers know you can control the content on your site. The overall consumer sentiment senses that the dealer website does not have bulletproof credibility like peer-to-peer reviews do on 3rd party review sites.

Some dealerships are only populating positive reviews with 0 negative. This is hardly believable, and not aligned with what consumers will start demanding of dealerships in the future. The public demands and respects what their peers say about a dealer on highly ranked review sites much more than what is being said about the dealership on a dealer’s website.

My Uncle John’s opinion and review is be much more believable than any article I can read in the Wall Street Journal or a dealerships testimonial page on the dealer website. In a world where small is big, authority review sites, bloggers, relatives and friends are more influential than the American institution or media establishment or for the sake of this example, the dealership.

I also think most of us want less overlap between CSI requests and requests for reviews on 3rd party sites. I see firsthand how customers get befuddled considering which customer feedback mechanism to use and dealers thwarted by which ones we push.

Validated content is genuine, without manipulation

There’s no perfect answer to any of this, however, our statistics show customers are more likely to post the most authentic, honest, natural sounding review, once they get home or back to work. Bottom line is search engine algorithms are running bots and give higher ranking for validated content. Validated content is genuine, without manipulation and soon enough the public and Google will deem a review as valid when the review positions (filtered/unfiltered) cannot be bought to hide the bad and lift the good, that they are unchangeable from the inception and post live in real time.

Furthermore, one of the largest missed opportunities is the complaint. From my analytics, dealerships who welcome complaints from follow up communication are amazed at the uptick of unsatisfied customers and welcome the opportunity to understand underlying issues and then resolve. High class problem, right? The good news with follow up emails after the customer visit is you avert some of the most visceral slander that once online pretty much damages the dealers bottom-line.

It's a great time to look at partial automation of reputation building. Send a video email after the car sale or R.O. with what I call “organic drip” reputation review requests. This means a natural, day-by-day follow-up program with your customer after they make a purchase. Automating the process pulling from your DMS nightly, building reviews on review sites can work in tandem with your CSI survey requests whether you present a customer survey during or after the purchase.

Jerry Hart
President
Schedule a 5 minute
Demo of eReputationBUILDER

Ask a Question: jerry(at)erepbuilder(dot)com
LinkedIn: http://www.linkedin.com/in/jerryhart67
For more information, visit http://www.eReputationBUILDER.com

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The Truth About 3rd Party Lead Source Providers, Aggregators & Online Classifieds

I hear all the time that “these leads suck”, “those leads suck” etc… The truth is that most of the times it is NOT the 3rd party provider, aggregator or online classified that “sucks”. It might be several other issues such as:

  • People
    •  There might be too many leads and not enough people to work the leads. If this is the case your dealership won’t be able to put the proper amount of time, energy, focus into cultivating that prospect into an in store appointment. Remember, Internet prospects have a 45-90 day “gestation” period.
    • Or reverse, you might not have enough leads…
    • “Cherry Picking” of leads…
    • You might not have the proper schedule in place. For example, the “prime time” to connect with prospects is between 6-8pm and if there is no one working the leads during that time or if the department or the dealership is closed at that time then you obviously miss out and this will affect the “connection ratio” with your prospects
    • Process –
      • This is a BIG ONE! I see over and over again dealerships that have a BAD process. They ONLY email, or they ONLY phone call, or they ONLY follow up with the prospect for a certain amount of time and assume this lead “sucks” and then they “dead” the lead.
      • Dealers assume leads with “No Phone Number” or “Wrong Phone Number” are “Bad Leads” but that is NOT true! What do you expect for $20? A closed deal? A guaranteed commission? No, what you get for a $20 “lead” is an OPPORTUNITY… That is all. There are no magic beans, there are no silver bullets. It is up to the dealership to cultivate that opportunity into an in store appointment. So, if you have a “lead” with no phone number or a wrong phone number then you should:
        • Open up the original lead in your CRM / ILM because sometimes the prospect info doesn’t parse
        • Call 4-1-1 and do a reverse look up
        • Go to www.anywho.com
        • Utilize Social Medial to find additional contact information. Some CRMs have Social Media integration just for purposes like this!
        • (Sites like Facebook, Twitter, LinkedIn etc…)
        • Technology –
          • I can NOT stress this enough… technology is one of the biggest culprits for mistakes, poor numbers, the illusion of “Bad leads”. What happens is that the dealership might not have set up the CRM / ILM the right way or they set it up but it wasn’t managed or up kept the right way so it might get congested, it can become a mess. The best analogy is a file cabinet that has only one drawer, no folders and no color tabs for the (non) folders… CHAOS!

With all of that being said, there is a HUGE value for having 3rd Party Providers, Aggregators and Classified Listings. But before I get into that I do want to stress that you should never put all your eggs in one basket. A dealership should diversify their marketing and specifically their digital marketing efforts with SEO, VSEO, Video Pre-Roll, PPC, Social Media and 3rd Party Sources.

If you are going to utilize 3rdy Party Lead Source Providers, Aggregators and Classified listings make sure:

  • You know what type of “leads” you are looking for. Each lead source provider has its own “specialty” some 3rd Party Sources specialize in New Car Leads, some specialize in Used Car Leads and others specialize in Special Finance Leads. I know that a lot of these companies offer both. I suggest you identify what your wants and needs are and find a 3rd party provider that fits your exact need and wants.
  • Do your research investigate all of the “Major” 3rd Party providers and ask them to do a “Market Analysis” on your market for the last 30, 60, 90 days. How many leads did they generate or were available through their network. Also ask for them to provide those numbers on different radiuses.
  • Remember that the farther out you go from your dealership, the lower the closing ratio. I am not saying don’t go too far. I am just stating a fact.
  • What you can do is secure a radius that is close to your dealership. Maybe you use your PMA given to you from your OEM or a certain mile circumference around your dealership (20, 30, 40 miles etc…) And then surgically creating smaller perimeters around your direct and indirect competitors. For example, lets say you secure a 35 mile radius around your dealership that generates you 100 new car leads. Lets also say you have 4 direct competitors within a 75 mile radius. Instead of just securing a “blanket” 75 mile perimeter around your dealership you secure that 35 mile radius that is yielding you 100 leads and then you can secure maybe a 5-10 mile radius perimeter directly around YOUR COMPETIROS, using their zip codes. This way you are focusing your energy more surgically.

Bottom line, 3rd Party Providers, Aggregators & Online Classifieds are a powerful resource if and only if we utilize them the right way.

If you have any questions about this article or you would like a list of lead source providers please contact me at seanb@dealersynergy.com or call me at 267-319-6776

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We recently conducted a survey in which we asked Internet department personnel to share some key metrics. In one question, we asked:

How much total gross does your Internet department generate for every $1,000 spent on Internet leads from all sources (SEM, independent and third-party leads, classified site subscriptions, etc.) ?

Of the 183 responses, the answers broke down:

3X or less: 33%

4X-6X: 18%

7X-10X or greater: 20%

Don’t Know: 29%

 

These answers reveal there is quite a large disparity between auto dealers’ return on investment (ROI) on Internet spending, as well as a surprisingly large percentage that don’t even know their ROI.  So I wanted to know: what should a dealership target for a reasonable Internet marketing ROI?

 One of the experts we consulted for measuring this metric was David Kain, President of Kain Automotive. He suggested that 5X ROI was the absolute minimum that a dealership should strive for, and ideally Internet departments should be seeing 7X ROI on their Internet spend.

But how do you calculate your ROI? Basically, ROI is what you get for what you spend. Here is a simple formula:

(Gross Profit – Marketing Investment) / Marketing Investment = ROI

 This formula represents three steps.

 1)   Marketing investment should be simple to figure out as it is the total cost of a campaign. For instance, if you spend $1,000 per month on a Pay-Per-Click campaign, $1,000 per month on independent leads and $1,000 per month on a subscription site, then your total marketing spend on Internet leads that month is $3,000. For the sake of simplicity, I’m going to suggest here that the cost of overhead, while included in some ROI measurements, should not be included when figuring out ROI for Internet leads, regardless of source. So in this formula, don’t worry about including labor costs (for staff), web site maintenance costs, etc.

 

2)   Gross profit is the next metric you’ll need to figure (my first GM used to say, “Volume is vanity. Gross is sanity.”). If you can pull the actual grosses on all Internet deals, that’s great. If not, take the number of sales and multiply it by your dealership’s average front and back combined gross profits. So if $3,000 in marketing spend delivers 10 sales at an average of $3000 combined gross, then your total Internet-related gross profit will be $30,000.

 

3)   Next, you need to subtract the initial marketing investment ($3,000) from your gross profit ($30,000) for a total of $27,000.

 

4)   Divide that number by your initial marketing investment ($27,000/$3,000) and in this scenario you end up with 9X ROI, an excellent result.

 

Why is it important to know your ROI? Any time you spend money on anything, whether on Internet leads or a marketing campaign, it is an investment. Like any investment, it should be measured, monitored and compared to other investments so you know where you should be spending your money.

 

Also, knowing the ROI for all your lead sources gives you leverage. How many Internet marketing budgets were slashed in 2009 and 2010? Perhaps some cuts were deserved, but do you know which ones? Cutting back on a lead source that returns a high ROI is only going to hurt the bottom line.

 

Of course, our question focused on the overall Internet marketing spend, not on the ROI of various lead sources. But applying this formula to your separate lead sources is highly recommended and gives a better measurement of success than just closing percentage or other metrics. After all, ROI is what goes to the bottom line.

 

I’d love to hear some feedback: how do you calculate your dealership’s ROI on your Internet leads spend? What do you consider a good ROI? In my next blog, I’m going to give some tips on how to drive your team to improve ROI.

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AutoUSA Introduces Payment ProSM Powered by DriveItNow®, Payment-Qualified Website Leads for Auto Dealers 

 

Fort Lauderdale, FL – July 31st, 2012 – AutoUSA Internet Sales Solutions (www.autousadealers.com) today introduced Payment ProSM powered by DriveItNow®, a payment-based conversion tool for auto dealer websites. Payment ProSM is a service that provides online shoppers with instant, real car loan payments based on individual credit and inventory eligibility, generating pre-qualified, first-party leads from dealer websites.

 With Payment ProSM, consumers click on a button showing real payments on any vehicle listing on a dealer’s website. A form appears that the shopper fills out, but no social security number or birth date is required. Based on the individual’s entered criteria, the system determines their credit eligibility without impacting the consumer’s credit score, instantly displays personalized monthly payment options, and delivers the dealer a dramatically-enhanced lead.

“Payment ProSM is good for the dealer because it shifts the shopper’s focus from what the lowest price is to what they can afford every month,” said Phil DuPree, President of AutoUSA. “The leads generated from these inquiries open the door for immediate engagement and more seamless negotiations.”

Payment ProSM offers auto dealers the following benefits:

  • Converts more traffic on dealer websites because consumers want to know monthly payment options based on their credit.
  • Generates the industry’s first dealer-website lead that includes the customer’s credit eligibility and desired payment from dealers’ own websites, resulting in high-closing prospects.
  • Eliminates wasted time showing customers vehicles they can’t afford, as well as time spent negotiating.
  • Puts dealers in charge of setting their own prices and financing terms, unlike lead services that force dealers into price wars in order to deliver the lowest price for the consumer while lowering gross profit margins.
  • Shifts consumer focus to monthly affordability, giving dealers more flexibility in pricing and negotiations.

Payment ProSM is a new service powered by DriveItNow’s patent-pending technology.  “We chose to partner with AutoUSA because of their tremendous industry reputation of bringing best-in-class tools to the market to increase Internet sales for automotive dealers,” said Tarry Shebesta, President of DriveItNow. “The launch of Payment ProSM shows they understand the value of producing high quality leads and the need for payment quoting.

Payment ProSM is available immediately for auto dealer websites and mobile sites. To learn more, visit http://www.paymentprodemo.com or contact your AutoUSA sales representative at 1-800-243-9935.

About AutoUSA Internet Sales Solutions

AutoUSA Internet Sales Solutions brings the best-in-class tools to increase Internet sales and lower costs for automotive dealerships. Leading products include Payment ProSM, a payment-based pre-qualification tool for dealer websites; ShowProSM incentive program, proven to turn more leads into shows; Leads&ListingsSM, providing the highest quality, new and used car email and phone leads from 100+ sites; PowerListingsSM 2.0, helping dealers increase traffic to—and leads from—their social media sites; and AVA Virtual Sales Assistant, helping dealerships manage more leads at a reduced cost. AutoUSA products are currently benefiting thousands of active dealers all across the U.S.

For more information, visit AutoUSA’s web site, subscribe to our blog at http://blog.autousadealers.com, follow us on Twitter @AutoUSALeads and “Like” us on Facebook at /AutoUSADealers

About DriveItNow (http://www.DriveItNow.com)


DriveItNow is a patent pending payment marketing technology service of Automobile Consumer Services, Inc. (ACS).  ACS leads the industry with innovative proprietary technology, superior customer service, and over twenty years of auto financing and leasing experience.

 

 

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http://www.edmunds.com

http://www.automotiveinternetsales.com

Dealer Ratings & Reviews

Media Kit

Why partner with Edmunds.com?

  • Over 90% of automotive buyers use the Internet1
  • Most Research Occurs on Third-Party Sites2
    - 71% of all automotive audience visit third-party resource sites
    - 61% excluding OEM sites
  • 42% of deeply engaged shoppers use Edmunds.com3
  • Edmunds.com Audience Size4
    - Unique Users: 13.69 Million
    - Page Views per Month: 166 Million
  • Visitor Patterns: 90% of visitors who submit a lead, purchase a vehicle within 70 days5
  • Edmunds.com Demographics6
    - Male/Female: 71%/29%
    - 73% between the ages of 35-64
    - 64% have college or post-graduate degree
    - 91% own their home
    - 62% are employed full-time
    - 79% are married
    - Edmunds.com is the #1 auto site for consumers make $100K+
    - Edmunds.com is the #1 auto site for users with portfolios of $250,000

Edmunds.com is the definitive resource for in-market auto consumers. By partnering with Edmunds.com, you gain exposure to the Edmunds.com consumer.

SOURCE - http://www.edmunds.com/dealers/visitor-demographics.html

One of the BIGGEST Reasons Why Prospects Utilize Edmunds.com is because of their True Market Value "TMV" Pricing... Here is a breakdown of what it is. It is my opinion that EVERYONE in the Dealership, ESPECIALLY the Internet / BDC department needs to not only KNOW about this... but they need to understand how to use this information for their dealership's success

True Market Value® Pricing

TMV

Edmunds.com's True Market Value® gives you the opportunity to optimize customer satisfaction and maximize dealer profitability!

What Is True Market Value® (TMV®)?

  • An exclusive Edmunds resource used by consumers to calculate the price others are paying for new and used vehicles in their area.
  • A proprietary pricing system that takes into account key variables.
  • Free, no-hassle way for dealers to improve customer experience and increase the likelihood of repeat customer visits (sales & service) and positive word-of-mouth referrals.

How True Market Value® Benefits You

  • Reduces primary tension with customers during purchase process (price negotiation) while ensuring you get a fair price.
  • Decreases time spent on price negotiations, allowing you to allocate more time for additional sales or other activities.
  • Negotiations from a TMV® position are generally more profitable than those done from invoice.

Do You Disagree with True Market Value® (TMV®) Prices Reported on Edmunds.com?

If you think our numbers do not accurately reflect transactions in your area, you can help us refine our prices by providing sales data from your dealership.

True Market Value® FAQs

 

  • What is TMV®?
    TMV® is Edmunds' estimate of the most commonly paid, current, actual transaction price for new and used vehicles — the True Market Value® in a particular region.
  • Are TMV® prices regionalized?
    Yes, TMV® prices reflect varying market conditions for new and used vehicle sales throughout the country.
  • How does TMV® benefit me?
    By providing your dealer transaction data, you influence the TMV® pricing for your region. Dealers benefit from providing non-specific dealer data (identified by Zip only) - it enables analysis of selling conditions and trends in your area which you may not be aware of.
  • Why does Edmunds want dealer vehicle transaction data?
    The data is needed to establish Edmunds' True Market Value®. More transaction data translates into higher accuracy for TMV® pricing.

    The goal is to determine the most commonly paid price in the marketplace, based on actual transaction prices, in order to give dealers a fair profit and the consumer a fair deal without lengthy and stressful negotiations.
  • Where does Edmunds get its pricing data from?
    Data is downloaded weekly from the Dealer Management Systems (DMS) of 5,000 dealerships and dealer groups across the country. Edmunds receives data from roughly 25% of all the US dealerships.
  • How is transaction data provided to Edmunds?
    Edmunds uses a contracted vendor to extract only the specific data you have approved for extraction from your DMS. This data is then delivered electronically back to Edmunds.
  • How is the data extraction done?
    It is typically done remotely via a dial-in modem through a user name and password provided by dealer. Dealers also have the option of delivering the data directly to an FTP site. This option enables dealers to bypass data extraction from their DMS by a contracted vendor.
  • What do I need to do to participate in the program? Is there any cost to me?
    Your written authorization is required. There is no cost to the dealer.
  • What does this program require of me on a day-to-day basis?
    Nothing. Once the authorization document is signed, the data is extracted without any interruption to your DMS or daily operations.
  • How often is data electronically transferred from the DMS, and how often is the data updated on Edmunds?
    Data is transferred weekly. Major updates take place on a monthly basis, minor updates are handled weekly.
  • Will information about my dealership or its operations be available to any other person or organization?
    No. Edmunds will not disclose any information that could identify a dealer. The dealer's data will be used solely in aggregate as an input to the determination of TMV®.
  • Does the TMV® price include regional marketing fees?
    They are not called out as a separate line items but, if applicable, they are factored into the overall TMV® price.
  • What items are called out as separate line items?
    National base price, destination charges, regional adjustments, color adjustment, optional equipment and any applicable incentives are called out and figured into a bottom line New TMV® price. Used TMV® prices also include condition and mileage adjustments.
  • Will any data be written to my DMS?
    No.

Source - http://www.edmunds.com/dealers/true-market-value-info.html

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http://www.dealersynergy.com 

 TrueCar, Yahoo end exclusive partnership

TrueCar Inc., an online car-shopping service, has ended after just six months its exclusive relationship with search engine Yahoo to send auto shoppers to auto dealerships.

Yahoo Autos plans to keep TrueCar and sign other sales-lead generators, Yahoo confirmed in a statement.

Under TrueCar's original deal with Yahoo, TrueCar agreed to pay Yahoo a huge sum -- $50 million per year for three years -- to be Yahoo's exclusive auto-shopping partner. Shoppers on Yahoo Autos were referred automatically to participating TrueCar dealerships.

Under the revised deal, TrueCar's payments to Yahoo will be triggered when TrueCar receives a minimum number of leads and a minimum number of high-quality leads from Yahoo Autos, according to a TrueCar source. Terms of those minimums were not disclosed.

In a statement, TrueCar said: "The new relationship has been forged as a result of a better understanding of both parties' capabilities and aligns economics and services around a vision of mutual success."

The original deal, signed late last year, said Yahoo would deliver 10 million auto shoppers to TrueCar each month. It's not clear if Yahoo delivered that total, and statements from both companies did not address the issue. The exclusive partnership began Jan. 1.

Under the new arrangement, TrueCar will appear as a button that can be clicked on Yahoo Autos. Yahoo says it is opening Yahoo Autos to "multiple dealers and third parties."

Today, though, TrueCar was still displayed prominently on Yahoo with the phrase "Y! Autos in partnership with TrueCar."

Calls to Yahoo for more information on how shoppers will navigate the revised site were not returned.

Under the revised deal signed June 29, Yahoo Autos can sign other lead generators immediately, a TrueCar source said.


Read more: http://www.autonews.com/article/20120705/RETAIL01/120709928#ixzz1zsCbUUL2

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