When Margit Stange of Berkeley was ready to buy a car last week, she didn’t run out to a dealer. She turned to the Internet.
The 55-year-old retired English professor said the Internet made the whole process easier, from finding a dealer who stocked the hard-to-find Toyota Prius she coveted to getting information that helped her get more money for trading in her old Saab.
“I bought my Saab 10 years ago, and it was not nearly as pleasant an experience,” Stange said. “I was not as well informed. The dealers have to act a little better now. People are more informed; they have more options; they have price lists and more access to information about the cars.
“It would have been much harder without the Web,” she said.
According to industry analyst J.D. Power and Associates, 64 percent of car buyers researched their purchases online. Of people who have Internet connections, the figure is 89 percent.
Car companies have figured out that the rush of consumers to the Web represents an unstoppable force, and instead of resisting it, for the most part, they’re starting to improve their Web sites and take control of the process.
A small Mill Valley company, ChannelNet, has been out in front of this wave. Of ChannelNet’s 125 employees, only about 30 are at the headquarters near the heliport in southern Marin, and the rest are in Detroit. Since 1995, ChannelNet has coordinated Ford Motor Co.’s online sales operation.
It has evolved into a fairly sophisticated effort. The company site includes a wide range of information about all the offerings from the Ford family of vehicles, which includes Volvo, Jaguar, Mazda and other makes. The site also includes links to Ford’s vast dealer network. ChannelNet helps each dealership create a personalized Web site to help steer shoppers to its showroom.
ChannelNet founder and Chief Executive Officer Paula Tompkins preaches a multichannel strategy for all sorts of businesses, in which the Web works alongside stores and catalogs to generate sales. Too many companies, she said, make the mistake of seeing the Internet as competition instead of just one more channel.
The car companies are actually ahead of the game, but only because of what she called a quirk. Local dealers, who are typically franchisees of the automakers, have such a strong lock on their local markets that “they fought the dot-com trend very hard. Therefore, the auto industry did not (undercut) them” by trying to sell cars directly, online.
Instead, a model was developed to use the Web to deliver leads, Tompkins said, “and they’ve really become very, very schooled in looking at those leads. ”
One of the outlets that has embraced this strategy is a relatively new dealership, the Ford Store in Morgan Hill, which opened in December. Jack Kitterman, who runs that dealership’s Web operation, said he has all leads sent immediately to his pager.
“The quicker that you will respond to a customer, the quicker you will have a sale,” Kitterman said. “If you wait three or four hours, you’ve probably lost them. You probably need to respond in 10 or 15 minutes.”
He responds with an e-mail first, because that’s what Web users seem to prefer, and he’s not shy about talking price on the phone.
“Ninety percent of the people that come in from the Internet are very well-educated,” he said. “They know as much about the vehicles as most of the salesmen in most of the stores. I like that. They get right to the nut.”
Ford likes it, too. Ford likes anything that will help sales during what have been difficult times for U.S. automakers.