Technology vs. Results on the Internet

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A Nicer Way to Sell a Car

October 16 , 2007
By Barry Baker

We hear from many dealerships that experience poor Internet results. They often attribute their lack of productivity to local or regional market peculiarities. Some of the most common excuses include, “… people here don’t use the Internet,” and “… they’re all $50 deals”. But while some dealers are finding ways to maintain the status quo, the leaders in our industry continue to write new Internet success stories in every market – import, domestic, rural, and metro – across Canada. Last month we discussed management’s role in implementing an Internet Sales Process. This month we focus on the Financial Statement, and its role in focusing managers on the measurement and management of a successful Internet strategy.

The Financial Statement helps all managers evaluate their performance. It unequivocally measures current results against past performance, and forms the basis for budgeting future profits and sales volumes. These projections are used by Managers to establish sales targets for their departments and team. However, given the current structure of the Financial Statement, dealerships have difficulty recognizing whether their Internet sales strategy is on-target or moving sideways.

Currently the Internet doesn’t appear anywhere on most dealers’ financial statements; rather, the costs associated to the Internet are lumped in with Advertising expenses, while the sales generated by the Internet sales team are attributed to either the New Vehicle and Used Vehicle sales departments. This lack of transparency is a barrier to the kind of scrutiny that senior management provides to other departments in an effort to help them succeed.

Without good business intelligence, dealerships are prone to making common mistakes that hinder growth. They often approach the Internet as a technology issue, which typically translates into: 1). hiring for technical rather than sales skills, and; 2). focusing on containing expenses rather than investing in the tools, assets, and training that give any department an opportunity to grow.

If we reflect upon the history of the dealer Financial Statement, it becomes apparent how much it has evolved to reflect the changes automotive retailers have made over time to survive and thrive. Historically the financial statement did not distinguish between new and used vehicle sales. Over time, dealerships recognized that employing distinct management strategies for new and used vehicles would produce better overall results.

Since then dealers have continued to capitalize upon a variety of new earning opportunities such as the Business Office, Lease, Rental, Parts, Service, Body Shop, and Detail. Most franchise dealerships today incorporate at least five discrete businesses under one rooftop, and Financial Statement reflects that. Each month senior management reviews the Financial Statement to identify trends that indicate positive and negative growth. This provides good insight into the departments that are doing well, but also provides management an opportunity to identify under-performing departments and take corrective action.

Dealerships that are truly committed to making the Internet succeed expand the Financial Statement. They invest in the Internet with an expectation of not only recouping their investment, but also earning a positive financial return.

Engaging the Internet department with business objectives forces senior managers to discover what works, rather than complaining about what doesn’t work. The Financial Statement shifts the focus from technology to financial results, which in turn empowers managers to measure, manage, and coach their Internet department to perform.

Next month we will discuss some of the non-financial metrics that will help you understand how your Internet department measures up against industry benchmarks.

Internet Sales & Marketing Training

This article is the third of a continuing series that examine how the Internet is helping dealerships deliver better results:

Internet Sales Results Start at the Top
Technology vs. Results on the Internet
Counting the Prospects on your Web Site
How does your web site compare to industry benchmarks?

We would love to hear what you think of this article. And of course, if you have any suggestions for future articles that you'd like to share with us, please send those, too!

Need some fresh, free content for your web site or e-zine? You are welcome to reprint this article on your web site or in your e-zine. We simply ask that you let us know where the article will be appearing, and include our byline with a link to the ASLInternet.com website.

Barry Baker is Director of Professional Services for ASL (Aged Stock Ltd), a company that empowers dealerships to achieve superior results through effective Internet sales process and effective Internet sales tools. For more information, go to www.ASLInternet.com/training.

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