Around 2000, Red McCombs, famous Texas business man and the founder and owner of Red McCombs Automotive Group, proved he has excellent foresight. McCombs, now 87, called a meeting at the San Antonio-based group to tell his executives that he wanted to get ahead of a new trend, e-commerce.
“Red got us all in a room and said, ‘This is the way the market is going. People are going to want to buy [cars] on line,’” McCombs chief operating officer Tim Cliver told Automotive Buy Sell Report.
Tim Cliver
The McCombs Group started listing vehicles on eBay.
Today, the group includes four of the most successful internet sales dealerships in the U.S. It all comes down to people and process, e-commerce director Zack Freed told Automotive Buy Sell Report.
“As a company, we feel everyone is an internet lead,” said Freed. “You just have to figure out how they want to be communicated with.”
Zack Freed
Around 80 percent of all car shoppers do some research online before they go to a dealership, said Freed.
“Our theory is that, while not everyone may call our store or submit information via a form submission, they most likely have shopped online and we should treat them as if they did fill out a form field online,” he said.
Up to 70 percent of sales for all of the group’s eight dealerships are generated through the internet, he said. That doesn’t necessarily mean the dealership’s website, however. The number of people submitting leads to the dealership has gone way down, said Freed. Instead, shoppers use third party sites.
McCombs always tries to figure out how a customer ended up its dealership – through what website or TV commercial or other media — so it can match that customer’s pricing and other expectations, said Freed.
Software allows McCombs to track every third party website the group works with, and follows the customer’s searches and comments. When a customer contacts a McCombs dealership, “we will acknowledge the site they were on before us,” said Freed.
A McCombs sales person can see what 800 number on what website the customer is calling from so questions can be phrased appropriately, said Freed. McCombs will even take a customer back to a third party site to see what price the customer thinks he or she should get.
The group also aims to personalize the conversation, for example, someone in the military prefers to do business with someone on the military, said Cliver.
The Group also knows what kind of device someone used to enter a website, for example a smart phone or a tablet computer.
Where McCombs still struggles is when a customer just walks into the store, said Cliver.
“We have to ask ‘where did you see us’?” he said. “We are trying to get them to tell us where they have been so we can tailor their experience.”
But, a lot of them “just don’t know” where they discovered Red McCombs, said Cliver.
Or, they don’t want to say, added Freed. “Customers are wary of dealers in general,” he said. “They think it is to their advantage not to give us information.”
Keeping score
The McCombs Automotive Family starting listing vehicles on eBay through IRI Motors in the early 2000’s. In five years, it became the biggest seller of cars on eBay.
The group — whose eight franchises, are all in the San Antonio area — sold 30,000 new and used vehicles in 2014, and ranked 47th on the 2015 Wards Megadealer 100 list. It expects sales growth of up to 12 percent this year.
Four of those dealerships made it on to the 2014 Wards Auto eDealer 100 list. According to Wards, the list “serves as a bellwether for the growing success of dealers harnessing the power of the Internet to attract customers, identify desired vehicles, and initiate the sales process.”
Freed, 30, credits the Red McCombs training system with its online sales success. He has an MBA in strategy and marketing, but hadn’t worked in the dealership business until he came to Red McCombs five years ago.
“They taught me to sell cars,” he said.
The key points of the system, said Cliver, who is 58, are getting back to the customer quickly via the communication method they desire, and keeping score of the sales people at the dealership who are doing that.
That means, for example, if a customer asks a question online, answer it online, said Cliver, and in less than 40 minutes.
Keeping score is crucial, he said. “Percentages don’t lie. If our closing ratios start falling we need to help that person out with training.”
Scoring also helps the group know if sales people are doing all they can to convert every contact into a McCombs customer.
“We don’t want people trying to find the easy deal,” said Cliver.
Managers from all Red McCombs dealerships meet once a month to compare scores and see how they can learn from each other.
Online sales is a constantly changing game. When he started working at McCombs, said Freed, there were five key areas for sales people to know about. Now there are 37 areas they have to know “at least a little bit about,” said Freed.
Like many automotive groups, McCombs is working on shortening transaction time, mostly through moving more of the transaction online.
“We learn a lot from the publics,” said Cliver.
With more telematics keeping track of all aspects of a car’s operations, the McCombs group is also looking into what that means for warranty work.
“We want to get to know the customer on the service side as well,” said Freed.
