Automotive News Canada - April 2018 - 5

5

* APRIL 2018

Dealership visits are way
down, but the qualified
[customers]
are way up.
J.P. OSTIGUY

Alta Automotive Group
of Toronto-area Nissan
and Infiniti dealers
I L L U S T R AT I O N S :
ISTOCK.COM

ONLINE INTERFACE

Customer tracking,
more leads from
serious buyers, higher
conversion rates and
building the bottom
line are the practical
incentives for dealers
to embrace online tools
By STEVE MERTL

VA N C O U V E R C O R R E S P O N D E N T

Buyers on average make two dealer visits, compared with a half dozen
a decade ago, according to analysis of
Google data, says J.P. Ostiguy, senior
manager retail operations at the Alta
Automotive Group of Toronto-area
Nissan and Infiniti dealers.
And one of those two visits likely is to pick up the new vehicle, says
Ostiguy, who also consults on sales
and training for other dealers and
advises the Automobile Protection
Association, a consumer watchdog
group.

EDUCATED SHOPPERS
NEW ONLINE SHOPPING TOOLS
are pushing more auto-sales transactions into the digital world, raising
the question of whether the Internet
will prove as disruptive to the car
business as to other retail sectors.
Depending on the automaker's
technology, shoppers can research
choices, book test drives, spec out
their purchase, arrange financing,
get a trade-in valuation and set up
delivery, all without setting foot in a
showroom. That includes signing the
paperwork.
If home electronics, music or books
are anything to go by, automakers
and dealers who are slow to implement online tools are at risk of losing
business.
An IPSOS survey conducted in
2017 for vehicle evaluator Canadian
Black Book found more than a third of
would-be shoppers used online buildand-price tools and trade-in calculators.
About half read reviews and while
the poll did not distinguish between
print and online, David Mogensen,
YouTube's head of ad marketing,
noted in a 2015 post that viewing of
car-review videos doubled from 2014
to 2015.
Consumers clearly appreciate the
time saved trudging from dealer to
dealer.

It's a time-saver for dealers, too, he
said. Most shoppers show up knowing
what vehicle and options they want
and are well-versed in what the transaction requires.
"We assume everybody's been on
[the Web] for at least five hours, done
the reviews, done the interpretation,
worked up the cost reports before they
contact us," he says. "So, when we
talk to them we talk at a very educated level."
That doesn't mean dealers can jettison staff, he said. If anything, "you
need more and better Web-savvy peo-

ple who can help convert leads into
sales, which he said takes an average
of five followups.
"I'm at a dealership that gets 200
unique leads a month," said Ostiguy.
"The average person can only handle
50 a month with followup. That immediately leads me to need four [staff]
plus a backup."
It might take several exchanges via
email, social media or other means
before a customer actually visits the
showroom, but when they do they
are more likely to buy. Conversion
rates of 35 per cent are now standard,
compared with 20 per cent five or six
years ago, he said.
"Dealership visits are way down,
but the qualified people are way up,"
said Ostiguy.
Most automaker Web sites so far
offer limited tools, which means that
prospective customers are fed to dealers for followup because the dealers
have the vehicles.
The exception is Genesis,
Hyundai's new standalone luxury
brand, which has A-to-Z online sales
direct from the automaker.
"The bill of sale you get is actually from Genesis Motors Canada,"
said brand director Mike
Ricciuto. "We own all the
inventory and by doing
that we are able to sell
online, which was a key
component of our strategy of modernizing the
Online shopping tools
such as Hyundai
Express, top, and
Canada Drives, left,
don't mean that dealers can pare down
staff. Quite the opposite, said J.P. Ostiguy:
"You need more and
better Web-savvy people who can help convert leads into sales."

way people buy cars."
Ricciuto says the best way to distinguish Genesis from a segment
crowded with quality offerings was
to provide direct sales at no-haggle
prices.
"Experience managers" provide
test vehicles, inspect the trade-ins and
deliver cars to buyers.
"We want to be known as the luxury car company that comes to you,"
said Ricciuto.
Another approach is Canada
Drives, a Web portal that allows buyers to shop for vehicles and arrange
financing through as many as 300
dealers. Customers also learn for
which automaker incentives, rebates
or special financing they're eligible.
More than 700,000 Canadians
applied for financing with Canada
Drives in 2017, said Cody Green,
founder and co-CEO of the Vancouverbased company.
"For the dealers, the advantage of
working with us is the incremental
business that it drives," says Green.
"We don't work with just any dealership."

MYSTERIES SOLVED
Dealers pay a fee to use the platform, they must commit to offering an
array of financing options and they
must assign a staff member to service
Canada Drives customers, Green said.
The Web provides clear benefits
from a tracking and accountability
standpoint, said Ostiguy.
"I can really track and pin down
my numbers because everything can
be tracked now," he said. It used to be
a mystery how shoppers ended up in
the showroom, he added.
"When a customer came with a
newspaper ad I have no idea where
that customer came from."
"With the Internet customer, when
they do decide to come in and do business with us, it's a very short transaction." - ANC
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Table of Contents for the Digital Edition of Automotive News Canada - April 2018
