Why every dealership needs an Internet Manager!

Probably one of the most important positions in a dealership today, and yet one that isn’t easily understood.

The Internet Manager

Why isn’t the position easily understood?  Simple, there is no position in a traditional dealership to compare it to.  The reason why the Internet Manager position is so unique, is because of the primary focus of the Internet Manager, and that is to generate revenue for the dealership using the Internet as a tool.  Dealerships must consider  their Internet Operations, as a separate location for them.  If you have two physical locations, then you really have three locations.  Why is it important to separate?  Just like with your physical locations, your Internet Operation should have their own books.  By doing this, you can measure the profit/loss your Internet Operations generate.  Just like a physical location, you need someone to be responsible for the location.

I recently encountered a dealer that had Internet Sales personnel, however no Internet Manager.  This is like trying to compete in the America’s Cup without a captain, and a rudder.  There’s no course plotted, and nothing steering you in the right direction.  Sure you get leads (a gust of wind), however you don’t have sustained winds.  On top of that, every other dealer in the world has a boat in the race.   When I inquired about their monthly Internet sales, website traffic, the response was “no one knows”.  Being responsible for a $200k yearly Internet budget, and answering directly to the dealership owner, you better believe I knew all the numbers.  If your dealership isn’t paying attention to the Internet numbers, you are throwing money out the window.  You’ve built your yacht, not only does it not have a captain or rudder, but you’re throwing money at it without any idea what you’re getting in return!   

Consider a recent article in the Dallas News about the impact the Internet is having on auto dealers. 

“The three [Internet salespeople] we have now generate as many sales as the seven traditional,” said Thomas, a member of the D-FW New Car Dealers Association’s executive board. “In three years, the Internet department will be the primary way we sell cars.”

In a seven month time frame, a Ford dealership in Arkansas’s Internet Operations  gross profit went from $37K a month to over $233k a month.  How?  They have a captain, and I’d say they’re creating some serious sustained winds.

Combine the two examples from above.  One Internet salesperson generating as many sales as seven traditional.  Monthly GP, just from Internet Operations goes up over $200k.  For dealers that aren’t realizing these results, it comes down to an underutilized resource.  The value an Internet Manager brings to your dealership represents millions in untapped revenue!

Finally Boating Industry Magazine is focusing on the right area!

I received the October issue of Boating Industry Magazine, and the only word that I thought of was “Finally!” 

     Over two years now I’ve been telling everyone, including them, it’s the Internet.  If you want to survive, and thrive, you have to focus on the Internet Operations part of your dealership.

    Last year when they came out with the MDCE schedule.  I emailed Matt Gruhn, and expressed concern that there were not any Internet operations focused educational tracks offered.  His reply was that they did cover Internet Operations.  Fast forward to the announcement of this years conference.  Boating Industry stated that based on the feedback from last years conference, dealers wanted more Internet Operations education offered.

     One of the frustrating things to see is the focus on Internet provider companies.  Such as Channel Blade offering training services for dealer Internet Operations.  What is their core business? Providing websites for boat/RV dealerships.  The question to ask is, how many boats/RV’s has Channel Blade sold?  My point exactly, they haven’t been in the trenches, having their paycheck dependent on selling boats or RV’s.  It reminds me of when I was in college majoring in Criminal Justice.  My favorite teachers were the ones that were either current or previous law enforcement officers.  They have, or had real world experience, not book experience.  Sure, Channel Blade or any other dealer Internet provider could go around to their customers, gather information, and create a training program based on the information.  Does that really make them an expert on dealer Internet Operations?

Dealer territories, and the power of the consumer!

“Mr Gorbachev, tear down this wall!”- Ronald Reagan

I’ve yet to find anyone talking about the obvious change that’s going to happen in the boat and RV industry.  My opinion is that it may have to do with the leading trade publications trying to stay on the fence between dealers and manufacturers.  Just like with what is going to happen, I’m opting to kick the fence down!  It is in regard to dealer territory, and the incessant need for control by the manufacturers.

The Internet, wow what a beautiful thing it is.  Consumers, wow what a beautiful thing they are.  Do you know what these two things have in common?  They both have power, and I’m not talking a little bit of power.  I’m talking power beyond anyone’s imagination.  I’m talking like imagine mother nature at her worst.  We’ve all seen pictures, and video of entire towns/cities leveled, people killed!  Here’s the scary part, the Internet and consumers each have that power.  I would say obviously not to kill, however there’s been death where the Internet has been a factor.  If you combine the their power, now we’re talking the same as a nuclear blast!  Together, they also have that pin point accuracy, so there’s no mistake.

What manufacturers need to realize, is that there’s a careful balance that must be maintained in order to survive.  We are not in China, so the Internet doesn’t need to be censored.  They need to allow the consumer the ability to freely search for a new boat of their choice.  Where ever that maybe in the U.S.  Dealer territories, simply mean that the manufacture will not put another dealer on top of you.  Understand that consumers have the choice to deal with any dealership of their choosing.  Even if it means doing business with a dealership out of “their market”  that carries the same line as a dealer in their market.  Consumer loyalty to one dealer doesn’t exist.  Consumers now have the power to dictate what they want, not what a company wants.  Manufacturers also need to lift restrictions on portal sites for new inventory searches.

Boats/RV’s aren’t like automobiles, we all know that.  You don’t build models in thousands a year.  You are aware of this, there are only so many of one new model in the dealer pipeline at a time.  You have to allow consumers the freedom of choice.  Speaking of autos, of which there were 10 million sold last year, btw.  The auto industry figured out already, whose in charge.  If you buy from your local dealer or one out of your market they don’t care.  Thus, the mindset of the consumer.

At the dealership I worked at, we had a couple from another market interested in a $170k new high performance boat.  The dealer in their market knew about their interest in purchasing from us, and called the manufacturer.  The manufacturer had tried to convince them to do business with their local dealer.  Yeah, that just pissed them off, they told the manufacturer that they were gonna buy from who they wanted to, and that was it.  Everyone almost lost the deal because the manufacturer wanted to push what they think the consumer should be doing, and not allowing the consumer freedom to purchase from their choice.  Have you ever heard the saying, “He who has the gold, makes the rules?”  The consumer is the one that has the gold.

So, what’s gonna change the manufacturers ways?  Dealers could revolt, but because of dealer agreements.  Small dealers probably won’t risk it.  Consumers could revolt, and then things would have to change.  Remember the power?  You could have the two major players in each industry, Marine Max and Camping World RV Sales revolt.  Back to the, “he who has the gold”, yeah they each have the gold.  Either way, manufacturers will have to change, or they’ll end up in the cross hairs.

I have a website, and all I have to do is take photos. Right?

“I have a website, and we take photos and put them on our site.  That’s what you mean by our dealer Internet Operations, right?  We already are doing that, so we’re good!”

This massive misconception of what’s involved with a dealers Internet Operations is mind blowing.  If I were to tell you that in order to be a boat dealer, you just need to put inventory on a location.  That’s it, that’s all you have to do, and you’re good to go!

Let me ask you, when NASA launches a shuttle, and it’s in space for a week or whatever period.  Do you think that NASA’s job is done once that shuttle takes off?  “Well astronauts you’ve taken off, so we’re good.  See you in a week, and if there’s any problem.  You know the phrase, “Houston we have a problem”, and someone will get back to you.

Your dealer Internet Operations is just like the shuttle in space.  You can’t physically see it, well alright maybe they can see it on the monitor.  They can’t touch it, alright?  My point is, even though the shuttle is physically not here, there are hundreds of individuals on earth constantly monitoring everything that is going on with that shuttle.  The operation still continues after the launch.

A dealers Internet Operations don’t require hundreds of people to monitor it, however without a concrete monitoring process.  You will never know when, “Houston we have a problem” occurs.

How much will my Internet Sales go up?

I recently had a dealer ask me this question.  They wanted to know, if they sign up for our service, what percent will their Internet Sales go up.  The simple answer to this was the one I gave, I don’t know.

Many companies out there pitch their services with promises.  How many weight loss commercials have you seen of  people who have lost a lot of weight.  Then on the bottom of the ad it says in small print, “results vary”, or even “results not typical”.  Even better when the disclaimer says, “when used in addition to a having a combination of a healthy diet and moderate exercise.”

I’m not pitching weight loss service, but I will say “results may vary”.  To definitively nail down a percentage is impossible, and I’d be outright lying if I said one.  Like people, dealerships are all different.  You have big dealers, medium size dealers, and very small “ma-pa” dealers.  If I walked into a small “ma-pa” dealership, and told them that they needed to increase their inventory by two million, hire seven sales people, hire two parts people, hire an F&I Manager, hire six more techs, add 15,000 sq ft to their showroom, hire an Internet Manager, completely redo their website, hire ten more people for the BDC, and four more service bays.  Then they will have a very successful dealership operation…btw, you’d also increase your Internet Sales by 100%.

I recently came across an awesome quote about consultants:

“A consultant is like a Chef who walks into a kitchen that is not his/her own. Their goal is the make the best dish possible with the ingredients available to them.”

My guarantee is that I will make the best dish possible!

Why Should You Care What 90% of Real Estate Buyers Are Doing?

According to the National Association of Realtors, 90% of home buyers search properties online.

What’s that?

Oh, that’s right your boat or RV dealerships.  Why should you care?

It’s very simple, the majority of boat owners also own their home.  With almost every potential buyer of a home searching online.  Do you think that their online shopping would stop with home buying?  They are also using the Internet to research and search for other major purchases.

In the May ’10 issue of Website Magazine they state that; “In the U.S. Web shopping will account for 8 percent of total sales by 2014.  More importantly, 53 percent of total retail sales in the U.S. will be influenced by e-commerce, as consumers increasingly use the Internet to research products before purchasing.”

Over half of retail sales will be influenced by the Internet!  Astounding figure when you look at the total U.S. retail sales figures.  According to the US Census, the U.S. in ’09 the average retail quarterly sales were $919 billion, that is $3.6 trillion in retail sales last year.  Lets round it to 4 trillion for this example.  Within the next four years, the Internet will influence over 2 trillion dollars in retail spending!   E-commerce will represent almost $320 billion worth of retail business!

Knowing those figures, where do you want your Internet Operations to be?  More importantly, how do you think you’re gonna get to the top?

That fued may just bite you in the arsss!

Yesterday I drove by the RV dealership that I worked at, and then by the one that we used to compete with.  To the ordinary person who doesn’t know the story.  There’s an important lesson to be learned.

One family owned the dealership I worked for, I’ll call them family “M”, and another owned the one that’s one exit up on the highway.  Btw, it wasn’t always at the next exit.  I’ll call them family “W”.  Someone from W had PO’d the M family years ago.  So M family put a billboard up across from W’s location promoting their dealership.  As far as size, M dealer was the big fish, and the W’s were little.  One day the W’s decided to move their location closer to M’s, and they built a brand new place the next exit down from M.  Obviously it was clear why the move was made.

Here’s where W gets bit in the arss.  So, W spent a lot to obtain a location in order to go head to head with M.  What they didn’t count on was M selling out to a much larger company.  As I drove past the dealership that I used to work for jammed with inventory, and made my way past W dealership jammed packed with inventory also.  I wonder if it was really worth it for W.  The old M dealership has incredibly deep pockets now, and could actually run the dealership at a loss to squeeze W out.  Looking at W’s lot, I wonder how long he can last trying to go head to head with the largest RV dealership company.  Time will tell, but I don’t think the owners at W are sleeping too well.

Boat Dealers Dodged a Bullet, for now!

Talk to any owner of a boat dealership about last year, and you’ll probably hear a grumble from them.  Many may tell you that it was their worst year.  What many don’t realize is that they actually got lucky, very lucky.

If I was the CEO of Marine Max, I’d be livid with the CFO and the financial analysts in the company.  Why?  Rewind to the ’08 earnings call where the CEO outlined the plans for ’09.  Their plan was to close underperforming stores, and cut the inventory level in half.  He warned of substantial losses that will be incurred due to the expense of closing the stores.  Fast Forward to the earnings call in February of this year.  Twenty six stores closed, and the company sold $250 million worth of inventory.  Reducing their overall inventory levels to more than half.  A quarter of a billion in sales, during what many dealers would say was the worst year?  So, why would I be livid with having accomplished the goals?  The simple reason is that the financial analysts, and CFO should have been aware of the downturn coming in the market.  Had Marine Max executed their plan a year earlier in ’08, they could have focused solely on what the CEO mentions a few times….increasing market share.  To increase their share, they have to take from someone else.  With dealers running scared, and massively contracting due to the downturn.  It would have been like fishing in a bucket.

Dealers shouldn’t rest easy knowing that they dodged this bullet.  Marine Max forgot to load the gun this time, but I would say that they are cocked and loaded now.