The social network says acquiring Gnip will help companies better understand what consumers and other brands are saying across Twitter.
Driving car sales into the 21st century
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Their enterprise software or dealer management systems-by such companies as ADP Dealer Services, Reynolds and Reynolds, EDS Automotive Retail Group and Universal Computer Systems-handle core IT functions such as accounting, purchasing, inventory management, sales and service.
Some higher-end software includes web-enabled customer relationship management and business intelligence modules or makes them available as an upgrade. ADP Dealer Services, for example, sells DealerSuite, a software suite that uses a browser and portal applications to web-enable a dealership’s fixed operations and business office. The suite includes sales management, finance and insurance management, and infrastructure applications.
And in September, Reynolds and Reynolds rolled out the Reynolds Generation Series Suite, a Windows-based system that includes web-enabled CRM tools such as a lead management tracking system and real-time access to customer demographics, vehicle service histories and accounting data.
However, Friedman-Swift points out that many dealers operate older information management systems and aren’t updating their web sites with newer personalization applications. The result is a web shopping experience that isn’t meeting buyer expectations.
Each year, in conjunction with the National Automobile Dealers Association, Friedman-Swift interviews up to 1,000 Internet buyers, asking them to rate their online shopping experience and rank how helpful they found dealer web sites in pricing vehicles and checking inventory. Based on what they’ve experienced at retail sites and exhibiting the phenomenon of expectations outstripping reality, Internet car shoppers want a lot. They want sophisticated dealer web sites that allow them to calculate monthly payments, apply for credit, search through available inventory by make, model or option package and find the most competitive price.
Missing the basics
But the Friedman-Swift study found that only 23% of car buyers in the study rated their experience as very satisfied. Overall, about a third of those surveyed ranked the dealer web sites average or below average on such basics as speed at which pages opened, organization of information and ease of navigation.
Any below-average rating means dealers need to upgrade their web site or risk losing business to dealers who have, says Judy George, chief operating officer and lead researcher for Friedman-Swift. “Buyers know that if one dealership site doesn’t have the data they want, they are only a click away from another who does,” George says.
Like many dealerships, the Bob Baker Auto Group in San Diego used to get by with relatively simple web sites that advertised each dealer’s address, phone number and hours.
But now that the Internet is generating 375 leads per month, and helping Baker sell more than 1,000 new and used vehicles each year, the dealer is rolling out a new web strategy with a heavy emphasis on personalization.
Today, customers can visit nine newly redesigned web sites and access a variety of customized features, including new and used vehicle locators. Through the web sites, they also can schedule an appointment with an Internet sales representative or search an interactive version of the Kelley Blue Book to find trade-in values and compare their trade-in price to those of similar cars with the same age and mileage.
Also in the works are new applications that will let Bob Baker customers schedule service appointments, apply for credit, shop for parts and accessories, and book a rental car when their vehicle is in the service department. “We already know that 70% of prospective buyers coming to our site are looking for detailed information such as calculating a trade-in value,” says Michael Baker, Bob Baker’s vice president of operations. “If they are coming here, we want them staying here by customizing each and every visit.”
Personalization pays off
Personalizing the online shopping experience is paying off for Baker. The company says the value of new and used vehicles purchased as a direct result of Internet leads is just under $20 million a year. These sales place Baker in the top 50 Internet dealers as ranked by Ward’s.
But while Baker may be doing all the right things to build a successful web selling strategy, other dealers aren’t following suit. To be effective Internet merchants-and offer inventory, pricing and customer service that outperforms the competition-dealers need to understand first how the web is changing the car-buying process.
With the information playing field now leveled between buyers and dealers, it’s easier than ever for shoppers to solicit multiple prices and pick the dealer nearest them with the best available inventory at the lowest price. Dealers also need to realize that they must be extremely fast in responding to customer inquiries.
Even compared to other Internet retail segments, where up to 25% of e-mail queries go unacknowledged and unanswered, dealers’ response to e-mail queries is dismal. They reply to less than 50% of all incoming correspondence, according to some mystery shopper tests, and when they do answer, they can take up to a week to provide an online car shopper with information.
A recent study of 100 car dealers and their e-mail response rates by EDS and researchers eMarketer Inc. found that only 22% of dealers answer e-mail within 60 minutes, while another 18% take as long as 24 hours. That’s down from 28% within 60 minutes and 25% within 24 hours in 2001.
“It is not surprising that response times to online customer inquiries have been worsening,” says Noah Elkin, senior analyst with eMarketer who analyzed the EDS results in another recently published Internet report. “Many dealers are still ambivalent about the quantity and quality of leads they receive over the Internet.”
This despite the fact that dealers are receiving substantial e-mail traffic that can generate serious leads. For instance, United Auto Group, one of only two automotive chain retailers listed on the New York Stock Exchange, notes that e-mail generates up to 1,000 serious leads per month at many of its 200 stores in the United States and overseas. “Upper-range foreign car buyers are big Internet users and like to make very specific e-mail inquiries,” says Joe Czarnecki, United’s e-business manager.