While many automotive dealers are using off-the-shelf software to meet the challenge of selling cars in the digital age, Bill McClure, together with Fitzgerald’s IT and Internet distribution departments, has ambitiously met that challenge head on using Fitzgerald’s own constantly-evolving homegrown systems. Fitzgerald has built its own CRM, handles its own search engine optimization (SEO) for its e-commerce site, and sees no need for pay-per-click or search engine marketing (SEM).
The dealership’s success, with this strategy, is phenomenal. With 29 franchises at 10 different locations in Pennsylvania, Maryland, Florida and metropolitan Washington D.C., the Fitzgerald Auto Mall is one of the top 10 dealers in Internet sales nationwide. Fitzgerald’s Internet sales topped 13,000 units for 2010 and Bill is projecting a 6% increase in Internet sales for 2011.
Fitzgerald Auto Mall is also a leader in process-based management. Fitzgerald is the only multi-franchise dealer in America that is ISO 9001 Certified for continuous improvement in its operational processes, Bill said.
Bill recently shared with Digital Dealer magazine how he and his team have created and fine-tuned the engine the drives Fitzgerald’s Internet sales success.
How did you get into the automotive retail business?
I never had any intention of being in the car business. Twenty-one years ago, I had been working for a Washington D.C. area contractor, helping the U.S. Department of Commerce focus on international trade. Our contracts were about to expire.
I happened to be at a local dealership having my car serviced and was amazed at the poor quality of the sales associates there. As I was talking to the owner’s son, he suggested: ‘Why don’t you try car sales, yourself?’ I thought: that might hold me over for a couple of months until we get new contracts. So, I tried it. I never went back to government contracting.
I started with a small, family-owned dealership for five years; then, I worked at another dealership for six. Then, I met one of Mr. Fitzgerald’s senior people and he invited me to visit the dealership. I did and after discussions, I was offered a job. That was 11 years ago, and I’ve been here ever since.
I drive 80 miles round trip every day to work for the Fitzgerald organization and I assure you there are other dealers I could work for closer to home, but there’s only one Jack Fitzgerald.
What do you mean?
Mr. Fitzgerald is a unique individual — one of the smartest people I’ve ever met and very much down to earth. Mr. Fitzgerald came into the business as a sales associate, worked his way up and bought a franchise. He’s done it all and, in my viewpoint, he’s a visionary for our industry.
How did your job as Internet director come about?
I wasn’t hired here as an Internet director, but I had started the Internet department where I worked before. I was one of the early adopters of Internet sales technology and saw that would be the future. So, I was asked to set up the Fitzgerald department, and was an Internet manager for a couple of years. Over time, my role evolved and now I direct all Internet Sales efforts for the company.
What is your biggest challenge in growing Internet sales?
There’s not one single challenge; there are several.
The days of the traditional sales associate waiting for the fresh ups to come through the door are few and far between for us. So we’re constantly working on developing new skills for our sales associates, so they are effective on the phone, and also answering Internet leads by e-mail.
Our sales associates have to be able to turn a lead into an engagement. The first sale they have to make is the sale of an appointment. Our sales associates need patience and need to be self-starters.
We’re redefining the role of what people think of traditionally as a sales associate. In a sense everyone at our dealerships can be an Internet sales associate.
Another challenge we face, because of the diverse, multicultural markets we’re in, is staffing a sufficient number of multi-lingual sales associates.
We’ve got interesting data from the latest census. In Montgomery County, MD, where we are headquartered, the total sum of the minorities’ population is now larger than the so-called majority White/Caucasian population. It’s a real mix – Spanish, Korean, Japanese, and German — and often, English is their second language.
So, we need to have at least one person at every dealership that can handle that location’s majority of non-English speaking customers. It’s a challenge to find these people, but we constantly are trying to seek them out.
Yet another big challenge is finding and training new sales associates that can fit into our business model — the way Mr. Fitzgerald does business — which is different than most dealerships.
How are you different?
We are a true posted price organization. Mr. Fitzgerald has always felt that the negotiation process traditionally used in selling cars can make for inequities. The single mom trying to negotiate a car deal is probably not going to get as good a deal as what we call the Philadelphia lawyer. Mr. Fitzgerald wants everybody to have a fair deal, so we post our prices on the Internet for every vehicle in inventory, and that price includes everything. We don’t play games.
You can go to our web site: www.fitzmall.com and see the manufactures’ MSRP, and the invoice cost and then we have two purchase prices. One, the value price, offers customers many benefits, including: free loaner cars, and $140 dollars per year in vouchers to be used in our service or parts departments, etc. for as long as they’re with us. The other, the Internet price, does not include extra benefits. People will travel a long distance to purchase a car for a good price, but that distance makes it inconvenient for them to be part of our value price program and service their car with us. It’s the customer’s choice as to which pricing model works for them.
How far do people come to buy a car?
For the right used car, people will come from hundreds of miles away. For new cars, the distance depends on the area. In the DC metro, it’s common to see someone driving 40 to 50 miles, because we have a great selling system, we’re customer-friendly, and our prices are hard to beat.
We offer our 150% best price guarantee: If you find the same vehicle at another dealership for less and get that in writing, we will match that price immediately and then provide you credit for 50% of the difference in our service department.
Let’s say another dealer in our region was willing to sell you a car for $100 less than we are. I’m going to match the other dealer’s price; then I’m going put $50 in your account in our service department, to credit against whatever service bills you acquire.
How do you get your Internet sales leads?
We get a lot of our leads from our own web site www.fitzmall.com.
We also use a few third party lead providers and the manufacturers’ web sites produce a fair amount of leads for us. On the import side – just to give you a short list – we see a lot of opportunities from Toyota. We have two Toyota franchises. We see a fair amount from Subaru; we have three Subaru franchises. And we get a fair amount from Hyundai; we have three Hyundai franchises. On the domestic side, we see a fair amount from GM, and we’re starting to see some from Chrysler.
What third party lead providers do you use?
We use a number of them; some of the primary ones are AutoTrader.com, Cars.com, and Dealix.
How do you handle these sales leads?
We do things quite differently from other organizations. Because we’re a posted price dealer, many off-the-shelf software products don’t work for us. So, we have a full-blown IT department with software programmers, network people and hardware people. We have developed in-house our own lead management tool we call FILMS – the Fitzgerald Lead Management System.
Here’s how it works: All incoming leads are sent to our Internet Distribution Department (IDD). We have a small but hardworking staff that pulls all those leads into the FILMS database, gets them set up and parses them out to the individual showrooms. They do all this lightning fast. The IDD has a couple of full-time associates and a couple of part-time associates. IDD works a 13-hour day, Monday through Friday starting at 8 a.m. and closing at 9 p.m., and a 10-hour day on the weekend.
They have monitoring rules so that once a lead gets out to a showroom, it’s not sitting in a queue. If we notice there’s been no action on that lead in 15 minutes, the IDD staff is on the phone to the showroom assigned that lead to find out what’s going on.
In March, we processed over 7,000 new opportunities which means that IDD was taking raw data, putting it into our database and getting it into the right hands at a rate of one lead every two minutes for 13 hours a day – all with good quality control.
Our system also assures that when a customer comes in on different occasions and looks at different makes and models, they are helped by the same sales associate that handled the first lead, whenever possible. We want that customer to have one advocate. Many of our sales associates are cross-trained on products and they can sell anything Mr. Fitzgerald represents. The customer benefits when one person guides them through the sales process.
How do you build web traffic?
We do our own search engine optimization (SEO). Our web tools are all homegrown. We have on occasion brought in a vendor as a consultant for a specific job, maybe for 90 days, but that’s only because we needed an extra set of hands temporarily or to supply additional expertise.
Our in-house programmers are skilled and I get involved with them in developing key words for SEO, because I’ve taken Google and Yahoo certification courses in that area.
How time-intensive is developing key words?
It is and it isn’t. If you really want to understand what people are searching for, you ask them and the time to ask them is when you’ve got them in your showroom. Our sales associates are good at asking those questions and better than most in providing that feedback to us. We have a good handle on how people search for the vehicles we have in the markets we’re in.
How do you manage search engine marketing (SEM)?
We don’t do pay-per-click. There will be 200 experts who disagree with me. But I love organic results, so why pay for something you can get for free with SEO?
Dealers who use pay-per-click are, in effect, competing with the manufacturers and why indeed would we compete with our manufacturers, when they’re spending a lot of money to drive people to their sites, so they can then drive them to us?
A couple of years ago, we did a little experiment: We turned off our pay per click for 30 days and analyzed the results. There was no significant impact! So we reinvested that money in other areas that can drive customers to us.
How do you track which leads are generated by the Internet?
We code our advertising sources as either a phone lead, an Internet lead or a walk-in lead. For instance, if we get an incoming phone call on the unique phone number only found on our web site, we count that as an Internet-generated lead. If the customer walks in with a print out from our website and says: ‘Do you still have this car?’ We know the website generated that opportunity.
What do you use for a DMS?
We have a Reynolds & Reynolds platform. Reynolds doesn’t really interface with a lot of our homegrown systems. So we have to do some work-arounds, but as a DMS it functions fine.
How do you use social media?
We use social media, in part, to promote our community outreach programs.
For instance, we are using Facebook to promote our monthly free inspection service for child safety seats. Fitzgerald hosts the largest free child safety seat inspection program in the country, with 40 of our staff members trained and certified for this work. Since 1999, our trained volunteers have inspected more than 40,000 child safety seats, under an initiative by Safekids.org, the certifying body for the National Child Passenger Safety Training Program.
We also use social media to engage our customer base to talk about what is important to them. Our corporate Facebook page is located at www.facebook.com/fitzmall. As a result, we’re building a central community where our owner base and their friends who are not part of our owner database, can engage in conversation with us.
For us, it’s all about building a strong Internet community over time. When we’ve done that, we’ll have not only a loyal fan base, but a more loyal customer base too.
What are you doing with Twitter?
We don’t need Twitter yet and I’m not sure we ever will, based on conversations with our customers. Part of our customer base does use Twitter, but most customers say they are not interested in hearing from us on Twitter in short little spurts.
How does Mr. Fitzgerald’s blog fit into your marketing strategy?
That is really Mr. Fitzgerald’s personal blog and he uses it to talk about things that he sees are important in the community. It really is not part of our marketing mix, at least not yet.
What is your typical day like?
My day starts with an informal meeting with the IDD staff. We delve into a number of reports that the IT Department has helped develop.
One of the reports I look at is the average lead response time for each of our auto malls. I’ll spot check 30 or 40 records to make sure our processes are being followed. Next, I do a quick check to see what generated the business yesterday. Was there a surge of leads? Where was it coming from? As the day goes on, I’m constantly monitoring our processes and talking by telephone to sales associates and the sales managers at each location. I’m also visiting our various showrooms to work with the sales associates directly.
We share the report called “Sales by Initial Contact Method” with the sales associates, so they can get a real sense of what’s going on in terms of volume of leads by Internet, phone call or walk-in and what our closing ratios are.
I also participate in the training of our new people and that can take 3 to 4 days a month, but it’s important that we give them good training upfront.
What is your overall closing ratio for Internet leads?
From our web site, we’re a hair above a 15% closing rate. From third party leads, we’re just at 7% year-to-date. The manufacturers’ leads also yield about a 7% closing rate — depending on the product.
Seven years ago, we were closing at a rate of 21%, but the clientele then was different. They were a little more committed, a little more down the funnel. What we have to look at now is the global 90-day average closing rate. For every 100 people that purchase a vehicle in a given 30-day period, only 60% actually started the process in that 30-day period.
The other 40 % may have started the process as far back as 90 days ago. The reason that our closing ratio, especially on the web site, looks good is that we follow prospects for 90 days and do not let them go. We don’t badger them, but we stay with them unless they tell us not to contact them anymore. If so, we honor that.
How is your Internet sales organization structured?
The concept of the old Internet department has changed recently. What we really have is an Opportunity Department. One of our senior vice presidents, Bill Cash, came up with this concept and we are implementing it at each location.
Before at each location, we had certified Internet sales specialists and their job was to sell only to Internet customers. We got successful at that. Then, when the Internet customer became every customer and we couldn’t put a label on them anymore, we decided to go to the Opportunity Desk Concept.
Here’s how it works:
When the morning shift comes in, we’ll post several sales associates at the opportunity desk, located next to the sales managers. There they facilitate all the new Internet leads from the IDD for a period of two hours. (These leads are not repeat customers or referrals.)
Then these sales associates go back to their own desks to do their normal follow-up phone calls and their own personal marketing. The next set of sales associates comes on for two hours, and so on.
Every month, 70 to 75% of our new opportunities come from either our Internet site or off a partner Internet site – the manufacturers’ sites, or third-party lead providers. So, we rotate all our sales associates through the Opportunity Desk.
Are there more areas where your do-it-yourself philosophy comes into play?
Yes, we take all our own used vehicle photos for display on our web site. We are absolutely convinced that the better your used car pictures, the faster they sell. We have our own people at every auto mall trained to take photos. That saves the company thousands of dollars by not having to hire a third party. We have staff available every day of the week to take the picture as soon as the cars come in and are front line ready, so the photos can go up on the web faster, and that means business can cycle faster.
At some auto malls, we have an area with a white backdrop where they take photos. In Florida, we take the photos outside with palm trees in the background. Our photographers shoot each car from 12 different angles or viewpoints for a very thorough display, and, when appropriate, we can load up to 20 photos of a single vehicle.
Monitoring this process daily on his PC is the man I call the Internet Cop, Arnold Binder. Arnold was on the original sales floor with Jack Fitzgerald back in the ‘50s. He constantly monitors what’s going on in the showrooms in terms of Internet leads. But, in addition, Arnold reviews every photo we display for every used car at every auto mall.
If Arnold gives these photos the thumbs up, they are posted on our web site. If Arnold doesn’t like the photos — say if the photographer’s shadow even shows up in a photo — he sends the photo back and asks for a re-do. It’s a fast, efficient system and it saves us a lot of money. But just as important, it allows us to improve the quality of what we’re presenting to our customers.
How do you keep your in-house Internet sales tools up to speed compared to the out-of-the-box Internet tools in the marketplace?
We go to various trade shows like NADA, and the Digital Dealer Conference & Exposition, and we sign on for webinars. We look at the functionality of tools in the marketplace and see if we can develop them in-house. So we do stay abreast of things, but we’re not going out and buying the newest widget.
Do you read any particular publications to keep current?
Well, there’s a good one called Digital Dealer. That magazine is something all of my staff read every month.
What advice would you give to someone starting out as an Internet manager?
Make sure the dealer principal fully supports you. An Internet department cannot be an afterthought. Make sure that you have the right sales associates. Take the time to find the right kind of person to work in this environment. That is not easy. And train them well.
If you are lucky enough to find a dealer principal like Jack Fitzgerald who will give you all the support and resources you need to do your job well, then you will find it easy to be a success.