ROI…Return on Investment  

We hear the term ROI all the time. It’s one of those overused “buzzwords.” Every vendor selling any product promises dealers a great return on investment. To me, that means getting the most back from your efforts. Those efforts can be economical (revenue), human capital (enhanced productivity from your employees), or your time—and most likely all of the above.  

I just attended the 2008 Special Finance Convention in Texas and was blown away. Hats off to Auto Dealer Monthly and Special Finance Insider for putting together such an amazing event. This event was top-shelf all the way, and it provided great information for the attendees.

Most dealers I spoke with, whether they were franchised or independent, seemed to be behind on their use of technology, whether it was their Web sites, CRM tools, call monitoring or some other aspect of their operations.

I was surprised more progress hasn’t been made by dealers. It’s 2008, almost 2009, and many operators are still using “Flintstones” technology. That is, they have no basic customer management program, lead tracking software or a Web site designed to convert special finance customers.

Almost everyone I spoke to at the convention did not have their own special finance Web site dedicated to credit, credit problems and credit solutions. They had their main dealership Web site, but for the most part, it did not have good functionality for special finance customers. Also, most of them didn’t offer a unique value-package proposition for customers and prospects. Quite simply, their Web sites didn’t convert properly and they were not able to generate viable traffic to their site. Additionally, the traffic to their site wasn’t converting into leads for the dealership. So, they were clearly not seeing a good online ROI.

Moderators Greg Goebel and Kevin Day provided some very good industry information for benchmark performance. The reported closing ratios for special finance departments across the United States were:

• 8 percent conversion ratio on leads from third-party providers (70 percent of those leads originate on search engines)p>
• 16 percent conversion ratio on leads coming from the dealership’s own Web site

These are about the same ratios for traditional automotive Internet sales departments. This really surprised me. I would have anticipated lower ratios for special finance customers.

As someone who helps dealers leverage visibility in the search engines, I was also amazed that there is virtually NO presence for “special finance car loans,” “bad credit car loans” or “no credit car loans” on the search engines. The convention was in Dallas , Texas . If you went to Google and typed in “bad credit car loan Dallas ,” there are virtually NO dealers on the first page in the organic listing. Actually, there was only one at the time of writing this article. This is a great missed opportunity for dealers to drive traffic to their sites.

The top bankruptcy states in the country are Tennessee , Georgia and Alabama , but when I enter “bad credit car loans Nashville ” into Google, only one auto dealer comes up on the first page. Many appear to be third-party lead provider sites. If you are a dealer in any of these states, you have a golden opportunity to drive traffic to your special finance site just by optimizing your site and investing in some microsites to promote your local special finance programs.

Many dealers have no idea about the opportunities on vertical search sites. Vertical search engines focus on specific locations, industries and other niches and often can provide greater visibility for targeted companies. Most dealers aren’t set up through Google Business Applications or the equivalent for MSN, Yahoo! or AOL. If you contact me, I can e-mail you some links to these vertical search engines.  

Many dealers and third-party providers are flocking to pay-per-click (PPC) search engine marketing (SEM). This isn’t the best use of marketing dollars, and even Google will tell you only 20 percent of people will click these sponsored links, meaning 80 percent will skip these PPC links and go straight to organic listings.  

Since many of the dealers I spoke with didn’t have a basic online strategy, it didn’t surprise me that many dealers did not have a video search engine optimization (VSEO) campaign. In fact, most didn’t know what it was. In an ever-growing online video world (think YouTube), this is one great opportunity for dealers to drive special finance customers to their stores.

I want to give a quick wake-up call to the entire special finance dealer community. Now is the time to invest in your organization and implement the tools that will help you bring more customers in the door. I encourage you to focus on getting your message to these online special finance customers.

The first step should be to build a simple special finance/credit-builder site optimized for the search engines. This will drive quality traffic to your site and help maximize conversion. In other words, you will sell more cars each month. Remember the closing ratio for leads to your sites are double that of the third-party leads you are buying now.

Once you have some success in this area, consider a video search engine optimization campaign as a solution to drive the best search engine traffic to your site.