The internet can be a dealer’s friend: Kurnick

A CAR dealer’s reputation, as presented in online customer reviews, may appear to be outside the retailer's control, but that is not the case, according to a leading American executive.

Clever use of websites, including giving customers useful tools to improve transparency, can lead to startling sales closing ratios of around 20 per cent, according to Robert H Kurnick, president of Penske Automotive Group (PAG).

Dealers had to be comfortable with social media management if they were to protect the business's image on the internet, Mr Kurnick told the Australian Automotive Dealer Association (AADA) National Dealer Convention in Melbourne.

“Nowadays, as dealers, we have to be conversant with social media,” he said.

“We have to understand Facebook and Twitter and generally understand reputational management.

“Customers aren’t afraid to use sites like Yelp or Google Reviews to tell us exactly what they think about us or how we are doing and once the comments are on the internet, they are there for everybody to see.”

Instead of feeling powerless and doing nothing, PAG confronted the issue and took strong steps.

“At PAG we take a really aggressive approach towards dealing with social media.

“We have developed an active social media team that monitors our Twitter and Facebook pages. That same team will tweet about special events or dealership promotions or even our Penske Racing results.

“And the same team will monitor our online reputation. The results can be staggering,” Mr Kurnick said.

He said managing your online reputation can be extremely valuable.

“I read that a Yelp rating equivalent of just one star can boost your revenue by five to nine per cent,” adding that he could not verify the numbers.

What he was certain about was that dealers can work to change their negative online reviews.

“So far this year alone, we removed or turned around 129 negative Yelp reviews.

“Our customer service team just go at it until the customer is satisfied and we have turned it around.

“If you look across social media, we mitigated or removed another 173 negative comments that showed up somewhere on social media.”

Conversely, dealers can “unlock” positive reviews that no longer appear automatically.

“Just to make sure we do the very best we can, we also monitor our Google Reviews. We had 300 positive Google Reviews that were just trapped in the Google filters.

“These are the kinds of progressive steps you need to take in today’s environment to protect your reputation and be able to compete and get the customers through the front door.”

Mr Kurnick said the rigors of the global financial crisis in the United States taught the company several lessons about how to survive in tough times.

One was that, even as a retailer of premium brands, relatively low priced used cars could still be an important part of the business mix.

“Used cars have been a critical component of our success. Today at PAG we retail nine used cars for every 10 new vehicles.

“If you go back to 2008 we were retailing five used cars for every 10 new cars.

That was really driven out of necessity.”“Back then we knew that we had to adapt our business model to where the customer was heading, and that really was used cars.

“Customers still needed reliable transportation but couldn’t afford a new car.

So we learned to use the internet as our virtual parking lot.

“We began to market ourselves to a wider range of customers by expanding the products that we held in inventory.”

Previously, as a premium brand dealer, PAG had only stocked used vehicles between one and three years old.

“But what we learned was you can retail everything. So we began stocking cars at $15,000.”

He said the notion of using the internet as a virtual parking lot was also important.

“Where you have a lease return or a trade-in, it is placed online immediately.

We get a trade-in in, we take pictures and we put it online straight away.

“When we make an investment in the vehicle, we then take new pictures and put them online. But it’s immediate, to see how quickly we can turn that car around.

“That takes a lot of discipline from a process perspective at a dealership level.”

A recent innovation on PAG websites appears to be working well, according to Mr Kurnick.

All PAG dealer websites are standardised but Mr Kurnick said PAG has now gone one step further by making the websites all-in-one search sites, and online purchase portals.

“We started to run a pilot about 10 weeks ago and it is an online purchase portal where customers can research their next vehicle, they can actually value their trade-in, they can choose their financing options and they can determine monthly payments and apply for credit and get approved right online.

“We have found that customers are spending more and more time looking at their trade options and exploring their payment options and, as a result of us providing these tools, they are spending more and more time on our website.”“This is still pretty early. We’re actually trialing it in six markets, but the early results are terrific,” he said.

“They have really improved grosses, both on the front end and at the back, and we see closing ratios that are in excess of 20 per cent, which really is world class.”