The death of the Internet Director

[Ron Harber]

Great Article on the death of the internet director, I couldn’t agree more! There seems to be two types of thought processes out there now, the one of paralysis by fear and the other of seeing this as an opportunity to gain market share.

I guess that the “old school” GM’s and or Principles thought that the article written in Ward’s on April 1st was an April fool’s joke…

“Now is the time dealers should focus on building an Internet culture in their stores. No longer can the Internet department remain a mere department. Dealerships are going to have to become Internet dealerships — if they want to survive the next 10 years”.

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wardsdealer.com

Keep up the great work!

 

[Jennifer Schrader (blog)]

I am going to watch this post build before coming out of my shell.

With the non shyness of speaking my mind I will stand back for a bit.

As you know I am a huge supporter for IM's.

Be patient I will be posting soon.

 

[bhoecht]

In not too distant future (2010?), it is my prediction that there will be only two kinds of dealerships left:

1) The digitally literate, digitally effective and digitally profitable

2) The bankrupt

Okay, maybe that is only one kind left.

Does the ISM have an increased role to play if that is the path ahead?

Likely, since the ISM is probably the only person in the dealership who is functionally literate in the issues of digital marketing, and effectiveness.

Nice post Alex. Hopefully you can use it to get the raise you deserve.

 

[Stan Sher (blog)]

Pete,

I like your response because even thought I am not in the Chicago land market. I am in the New York/New Jersey Market and as sad as it sounds. I am one of those internet managers that could not last more then 18 months for the same reasons that we are discussing here. One GSM was scared that I was on track to make more then him, cried to the owner and my pay plan was cut 50% so I left. Another GM saw that I took 25 cars per month and turned it into 70 cars per month with a higher gross profit then his floor sales managers would produce. He saw that I was being smart and he eliminated my position where he demoted me to be a sales consultant. I would not go for that so I left. Lastly, another GM saw me take a dead BDC from 30 to 65 cars in three months. He liked me. However, the GSM knew that I was working harder and showing results while he was not and he did everything to make me look bad. So the GM demotes me to be assistant BDC Manager while he puts his old buddy, one of the floor managers to run the BDC. I was on my to quit until we had a training session and I put my 2 cents in with a lot of wealth and knowledge to the point where I embarrassed everyone with how much they do not know about running a BDC/Internet department that I got fired that night. I was going to quit two days later but it worked out for the best. Now last month they begged me to come back and I refused. I refuse to take a lower position at the store that I was a manager at and I refuse to help someone clueless be successful and take all of the credit for my work. I worked too hard to have what I have. The other guy does not even know about this site or ADM or even NADA. What a clown!!!

Alex,

This is a great article and I enjoy it very much because it simply discusses the important of an internet director. When I first started out as an internet director I thought it was all about being just another sales manager and closing deals for internet sales people. I did not know what a third party lead was or a vendor was. I learned a lot of things over time as I discovered sites like these and I would read dealer magazines. I actually goggled the words "auto internet sales training" and found this site. I would read all the articles and interact with vendors and build relationships. When I left that job I had contacts and relationships with people. At a newer job I utilized what I knew and would build on it. With every newer job I would build and learn more. If Cory Mosely had a free seminar I would go. If cars.com did a free seminar I was there. My dealer would not pay and it was pricey to go so I went to the ones that I could afford. I got to network with all of you fellow industry professionals and friends. BDC and internet sales became a passion because I knew that I was helping to take it to the next level. The problem is that my dealers never respected that because they feared me. Managers were afraid that I am too young and too smart for my own good. If I had a suggestion, it would be ignored most of the time. Now I know that there is a lot of marketing involved. There is website management, reputation management, knowledge of the cars, inventory, be able to desk and close a deal, work a CRM/ILM, train staff and be the go to guy when it comes to everything internet except for IT work. This position is evolving and large dealer groups that are getting it are doing the right job just like the one that Alex, David, and Jeff represent. An internet director should be of the same caliber as the GSM. If you are better then the GSM and you know it just play humble and keep it to yourself because the GSM will eat you alive. Also, if you are making over $120k please make sure that no one else but the person paying you and/or assigning your pay plan knows. Let the GSM know you are making as much, they will push to get rid of you. Trust me I know, it happened twice.

 

[Stan Sher (blog)]

Jeff,

To add to what you said. The mentality of 10 cars to each sales consultant shows the need to flood the sales floor where people have less chances to sell more and make a living. While it looks good to the dealer because they have the bodies to move the metal it is also a very terrible thing because it shows for lack of care and support of employees and then it gets worse because we hit the economic times that we did now and the dealerships downsize and get rid of half of their staff because they need to cut expenses with insurance and pay while keeping the top performers on staff. You got stores that did 500 cars per month with 40 sales people cutting down to 25 because they only did 280 cars last month. This is a real life example, Open Road Honda in NJ where I live. I just got the stats from a friend a few hours ago. Managers are losing jobs the same way. Now is the time for dealers to really look at which managers and sales people really bring money to the table and retain the right people.

 

[Mat Koenig (blog)]

Alex,

First, allow me to applaud you on my favorite sentence in your article:

"I do think the notion of saving your way into a profit is silly."

I was recently in Florida working with our Sales Managers and visiting many of the Dealers in the Tampa area. As we met with these very seasoned and very intelligent men and women we heard them one after another say: "We're just trying to survive so we've really cut back on our advertising everywhere..."

Roughly translated: "We've cut every bit of our exposure, have somehow managed to rationalize this as being a wise decision and believe for some unknown reason that we'll end up more profitable than we were when we had our name in front of 20,000 shoppers."

Let's face fact; there are really only two reasons to advertise online:

Reason #1: To protect the hundreds of thousands of dollars that a Dealer has invested to build their current customer base. Advertising online with the sites consumers visit most is the best way to PROTECT YOUR PRIOR INVESTMENTS.

We all know, and Joe Verde has preached it for years, that your current customer is your best prospect because they like trust and respect you already - otherwise they wouldn't have purchased from you.

If a dealer isn't keeping their name available on the sites that most consumers visit - they are handing their customers over to the competition on a silver platter.

Reason #2: To go after the business that your competition is either too lazy, or to ignorant to protect.

This may sound harsh but as far as I knew we're all people in the car business in a down economy so there is no time to patty-cake the situation.

If your competitors aren't smart enough to protect their current customers you need to go after them yourself.

Getting back to my Florida visit I met with one Dealer who absolutely blew me away. This man is in his 60's and we all know that many Dealer's who are that age are typically a bit more old school and not as online savvy.

When we stopped to visit this friend, and I do consider him a friend as I always grow from our conversations, he validated everything I just shared with you.

When I asked how business was going his exact reply was: "We are doing excellent."
When I asked how he was doing excellent when everyone else on his street was crying he said to me: "Mat, while everyone else is pulling back their advertising and trying to save their way to a profit I have increased mine substantially....If they're to ignorant to protect their business I'm going to take their customers..."

He is truly doing an excellent job of running his VERY successful dealership in spite of the economy. Oh, did I mention that he is an independent who stocks about 50% of the inventory that his large franchise competitors stock and he blows them out of the water?

I applaud you all for your thinking and I would encourage you to keep tracking well so you can prove that your dealers are getting a good return from your efforts.

I also want to recognize that it is NORMAL for the GM, Owner, GSM to blow off everything that you recommend - and it isn't your fault.

Being a guy that started in the business before the internet took off I have to accept partial blame for the issues that ISMs face today.

When the internet became big, most of the top salespeople didn't understand how it worked and many still don't understand that EVERYONE is an internet customer.

Truth is, at many dealerships the guy or girl who understood the internet best was usually the weakest salesperson in the dealership.

Let me say that I don't believe this is always the case today, however, this is still the mentality of many of those 'old school' folks that some of you referred to earlier. I too was one of them at first.

If we had a salesperson who was "nice" and could "write an email" we made them the 'internet manager' and they got all the email leads.

In those days there weren't too many leads and the top salespeople thought internet folks were just 'tire kickers' so they wanted nothing to do with email customers.

Owners and Managers at that time thought to ourselves: "What the heck, if this kid can get lucky enough to land a couple appointments from this email stuff we can go in and close for them. If they can't no big deal because it isn't enough of our business to worry about."

This was short sighted thinking but it lends perspective to why you face such a challenge today with those 'old school' folks.

We have to remember one thing: The Dealer, as Alex said earlier, is calling the shots and pulling the strings. Whether their thinking is old school or not, it's still their money. That said it would appear that we need to help them see the value that YOU bring to the dealership.

The best way that I know how to help your Dealer or GM to see value in you and to see value in the internet department is for you and your department to make them money.

Based on the posts I see on this site I'm confident that improving sales and increasing revenue should be easy for many of you.

Congratulations in advance on your 2009 successes and good luck on your future promotions!

Helping the best get better,
Mat Koenig
Sales Training Manager
Cars.com
To get more information on Mat Koenig go to www.matkoenig.com

 

[Pete]

Here is my opinion of what needs to take place. The ISM should be what a GSM is. The GM can oversee total operations. If I was an owner in these time living in Florida most of the time calling in for the store numbers, I would either get back to work running the place and let go my GM, sell the dealership or a give up say 25% ownership and pay someone 120k a year to be a limited partner. That is saving your way in to profit.

Sorry F&I but that position is no longer needed. Vertical self management were as the sales rep actually doesn't do the A-R part only of the deal but to Y. I would probably hire hourly based workers to Z step deliver the vehicles.

What I also see is that to have hundreds of vehicle in stock at one time is a thing of the past and may see express style dealerships. Smaller footprint storefront what I call Demo Center and regional storage facilities that can allocate a sold vehicle to a region within a day for a schedule delivery.

I made the comment on another post about being a Costco and did you know that the only keep about a 4-6 supply of goods on hand.

 

[Pete]

Sorry, "4-6 day supply" had to plug in.
The commission structures are out of line too.

There is no incentive or focus on the efficient models and the reason why? Most reps do not get their best effort to sell a $300 profit margin vehicle.

The way it should work is that if you were to take the total gross profit and divide it by the units sold, then pay that same avg on every vehicle. There lies your incentive to sell more units.

The top people may not like this plan but nobody starves either. You then can adjust to how many reps are needed to handle the volume of customer's and pay a non draw wage to give stability to the sales floor.

What would be the average pay? I did a crude analysis and the range is $38,000-72,000 a year salesperson pay. I had some people balk at it but look at the reality of what people truly make not what they think they make. Plus bring back a demo program for the sales reps as an incentive.

 

[Stan Sher (blog)]

I see some very valid points. When mentioned that dealer that is spending more to reap the benefits of what the other dealers are giving up, I was amazed that there are dealers that think like that. In all reality now is the time to invest money and make the changes that you need to survive. A shift in the economy should make a shift in how we operate our business. We cannot be so dumbfounded and keep doing the same thing over and over again. It is like trying to walk through a wall you have the opportunity to walk through a door. The problem is that people do not think. Too much old school mentality and ego involved. The owners of these dealerships are rich. So they make $1.5 million per year in their pocket on a god year. Why not sacrifice $200,000 this year and spend it right, get rid of the people that weigh your business down, take your strongest staff and make them stronger. Take a small pay cut and cut your ego and watch how business will turn. You know the internet is the way to go. So why fight a battle that you will lose?

Pete,

It is no secret that F&I has always caused a problem even though it brought in extra income. I like F&I but I think that it is old school as well and it aggravates customers even more. If the sales consultant does everything A-Z they will have a biller who can print the paperwork and they can sell the after sale items on their own. It should be easier simply because the rapport has been built and there is trust with the customer. Also, the delivery process is quicker. How many times has your CSI score suffered because of how long it takes to get in the box or how long the finance manager kept the customer there. I think we have all seen it and experienced it. Why not pay the sales consultant 10% of the back end gross that they can generate on top of the 25% of he front end gross that they make on a deal? No the sales person can make more money even if they sold 10 cars but you less overhead and you are not paying out $100-200k per year to a CSI assassin because they can pound an extra $200 per copy from the customer. Now that the work is done, have a delivery specialist go over the vehicle. You still make out as the dealer since delivery specialist do not make a ridiculous income.

It still works out well for the sales people working on volume based pay plan that Pete mentioned in this last post because it still generates more income for the sales person now you go from $72,000 to $102,000 simply because you take a deal from start to finish and you really take control of your income.

 

[Bobby Compton]

New School Internet Sales Manager VS Old School Sales Manager. I really like the direction of Dealer Refresh and the combination of input from what appear to be very in tune and up to date car people. I have held positions from sales to G.M and eventually owner. I'm 35 years old and started selling when I was 21. I have to admit that when internet selling started I wanted nothing to do with it and those that did were not quality sale consultants. The times have changed for sure and not just in the internet aspect but the standard of quality training at the dealership setting in general. Its one thing to understand the functions of the internet and how to use CRM tools but it takes a certain caliber of Internet Sales Manager to take control of a deal and build value. What needs to happen is that the internet managers need the tools in combination with the sales training to hold gross and create more car deals. I believe in this so much that I have created the best solution for this problem and have surpassed any and all concepts and services offered by creating VIPautoslive. I have studied all competition and not one have taken this to the level that I have. I have a true passion and desire to put the power back into the dealerships hands. My proven method can only be done with that certain caliber of Internet Sales Manager that I previously mentioned. I'm truly the old school that understands the importance of traditional success that not only have I combined but have created the best combination of solutions for the future of the new school. These are very exciting times and the one thing is for sure some dealerships will fade away and others will sell more than they ever have. I want to say again that DEALER REFRESH has done an OUTSTANDING job in creating this winning site and the car people on here are of the best of caliber. Cheers to you all and get ready for internet selling to take over completely. VIP Autos Live.

Bobby Compton