Irving VW dealership one of many tapping into Web's marketing power

03/11/2001

By Terry Box / The Dallas Morning News

IRVING – For the last couple of years, Volkswagen has urged its dealers to master the Web.

Lawrence Jenkins / DMN Frank C. Heinz III (left) and Wallace Gauthier work for the Internet department at Metro Volkswagen in Irving, which recently won two awards for its Web site.

Metro Volkswagen Inc. of Irving was already persuaded. Well aware of VW's young, Webhead customer base, the dealership began planning for a "super site" two years ago.

Metro believes that investment is already paying dividends. Last month, the site won two awards in a national contest sponsored by Automotive News magazine and Ziff Davis Media Inc.

The awards illustrate how important the Internet has become in car dealers' operations today, industry officials say. In short, they say, few dealers view the Net as a threat.

"That fear is pretty well gone now," said Mike Morrissey, a spokesman for the National Automobile Dealers Association. "One reason it's gone is dealers have learned to embrace the Internet."

Just a few years ago, many dealers worried about where they would fit in the so-called new economy. Some consumer groups predicted that car-buyers would one day use the Internet to buy new vehicles directly from the factory, bypassing dealerships altogether.

Instead, the Internet has evolved into an effective tool for new-car dealers, industry officials note.

"It is one of the fastest-growing advertising mediums for new-car dealerships," Mr. Morrissey said. "We have just begun to track it, but we know that Internet use is increasing dramatically."

More than 90 percent of car dealers in the United States have Web sites today, and most use them to entice buyers, display their inventory, schedule service appointments and monitor customer satisfaction, Mr. Morrissey said. Some are even experimenting with streaming video, which permits visitors to take a virtual tour of the dealers' facilities.

Many also are using e-mail to alert customers to special offers at the dealership or get quick, direct feedback.

"At first, some dealers may not have understood the potential of the Internet, but as soon as they did, they adapted," Mr. Morrissey said. "Certainly there are some venture capitalists out there who are surprised at how quickly we adapted."

Setting the pace

Metro Volkswagen's Web site – www.metrovwtx.com – was judged "best e-commerce" and "best service and parts" in the contest.

The latter award was for the section of the site that allows customers to schedule service or check on parts.

More than 1,300 dealerships entered the contest, and the results were announced at a recent National Automobile Dealers Association convention in Las Vegas.

"Our demographics demand that we place a higher percentage of our resources in the Internet than a traditional dealer," said Chris Idema, Metro's customer relations manager. "If we were a Buick dealer, we might not bother with it."

"The Internet is such a force," added Brad Hagestad, general manager of the dealership. "If we are going to do something like that, we need to do it right."

Erin Gaudreau, a spokeswoman for Ziff Davis Media Inc., said the purpose of the contest was to promote the importance of the Internet, and Metro's awards suggest that "these guys get it."

"When you're on their site, you feel like you're in an actual dealership," she said. "And that's the key to the game – making people's lives easier."

Even at its peak a year or two ago, the Internet controversy among car dealers was probably exaggerated, said Drew Campbell, president of the New Car Dealers Association of Metropolitan Dallas. Today, "very few" dealers worry about being forced out of business by direct Internet auto sales, Mr. Campbell said.

"That's over," he said.

More than just sales

Like many dealership Web sites, Metro's permits visitors to view its new-car inventory and get information about specific Volkswagen models. But it also has links to VW concept vehicles, classified ads, VW clubs and information about VW's racing program.

In addition, the site has an automotive news section. Included in the section on a recent weekday were stories about national auto sales in January, how station wagons are becoming "hip" and how Volkswagen's profits in 2000 had beat analysts' expectations.

The site was designed by Mark Barnberry of East Providence, R.I., who was a sales manager at a VW dealership before getting into Web work.

Metro officials declined to say how much the dealership has invested in the site but described the cost as reasonable.

"Our site is not particularly expensive," Mr. Idema said. "It does not have all the bells and whistles, which can cost you more than $100,000 to develop."

An effective tool

Most dealers have come to view the Internet as just another marketing or advertising tool, Mr. Campbell said.

"The Internet is not a marketplace," he said. "It is a tool for our marketplace."

And at Metro VW, it's a tool that is probably moving some metal. Mr. Hagestad, the general manager, said the dealership does not attempt to measure the cost-effectiveness of its Web site. That would be as difficult as trying to determine how much traditional advertising contributes to each sale, he said.

But the dealership is getting 20 e-mails a day from potential customers, and the Web site is attracting about 1,200 hits a week.

Last year, Metro established a four-person Internet sales staff, and though the new department usually accounts for more than 30 of the dealership's average 120 sales monthly, it struggles with the volume of inquiries it gets, Mr. Hagestad said.

"The key now is how to use this to our advantage," he said. "Everyone is still trying to figure out the secret of how to sell to someone who wants to be communicated with over the Internet."

As the largest VW dealer in Texas, Metro has long had customers from outside the Dallas area because it has a fairly large inventory of vehicles. Those buyers usually account for 5 percent to 10 percent of the dealership's sales. In recent weeks, Metro sold cars to buyers in Austin, Illinois, Michigan, Nebraska and New Jersey, Mr. Hagestad said.

The new Web site is extending the dealership's reach even farther, Mr. Idema said. About 10 percent of its hits originate from points outside the United States, he said.

The site has had visitors from the United Kingdom, Canada, Australia, Germany, France, India, Japan and Indonesia, Mr. Idema said.

"Obviously, the people who shop us from so far away have no intention of buying from us," he said. "But there is an indirect value. In the global marketplace, that's how you build presence."

Ideal demographics

No major automaker is better positioned than Volkswagen to harness the Internet, industry analysts say. VW's line includes the popular New Beetle, as well as highly regarded – and highly Teutonic – sedans like the Passat, the Jetta and the Golf GTI. The cars range in price from about $16,500 to $32,000.

But it is VW's demographics that are the envy of many in the auto industry. The average age of its buyers is 37 and drops to 31 on the Jetta, the GTI and the Golf Cabrio, said Tony Fouladpour, a spokesman for Volkswagen of America Inc.

Moreover, 62 percent of its buyers are college-educated, and the buyers' average household income is $68,000 a year. About 65 percent of VW's buyers use the Internet to some degree, Mr. Fouladpour said.

"Obviously, it's a medium that is important to us now and is going to become more important," he said.

Metro thinks it is prepared for that growth.

"There was a time when the Internet seemed to be taking over the world," Mr. Idema said. "We may not see that. But if our Web site stands as a place where people will go for sales information and a place where people will go to handle service and parts issues, we may have it covered."

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