NEW ORLEANS -

Forrest McConnell III, as it turns out, follows website analytics rather intently.

It’s no wonder, then, that the new chairman of the National Automobile Dealers Association has this point of advice for his fellow dealers: “If you’re going to be a successful dealer in the future, you better understand how that customer interacts with your website.”

McConnell, who is the president of McConnell Honda and Acura, said he has studied videos detailing how consumers shop.

These videos provide what’s essentially an over-the-shoulder view of consumers’ online car-shopping behaviors.

“They use the Web like a squirrel on caffeine. They are all over the place. They click all the time,” said McConnell, whose franchises are located in Montgomery, Ala. “What we think is logical may not be to them. So, you need to make it really easy for them to find what they want.”

He recently has utilized heat-mapping, and also mentioned “click maps” that can show where shoppers are clicking and focusing their eyes on a dealer’s website. Additionally, McConnell said, there are companies that dealers can bring in to shop their respective websites for specific cars.

“You will actually see how they get there. And it will surprise you; they don’t seem to use the same logic that maybe you do as a dealer,” he said. “Just like anything, you need to really look at it from the customer’s perspective and make it simple.”

McConnell said he and his team have had great success in generating leads via website traffic. While he attributes this to a number of factors, a big chunk of the success comes from this point of advice: “You make it easy for them, and give them the information on your site that they can’t get somewhere else.”

When asked what else has surprised him about online shopper behavior, McConnell added: “The main thing they want to look at is inventory. I know that sounds obvious; but a lot of the things that you put on the website that you think the customer will really be interested in, they don’t pay attention to it.

“They’re focused on looking for a specific car that they had in mind, and then, they will look at specials,” he continued.

And dealers should offer easy navigation for the customer to get exactly where he or she is trying to go with fewer clicks. In fact, McConnell said, customers will seldom read any text on a home page. They want to get where they’re going and do so quickly.

As for the websites of his franchises, one particular section of the McConnell Honda site (www.mcconnellhonda.com) is devoted to inventory priced under $10,000. This, McConnell said, attracts a great deal of attention.

“I’m definitely in to all the website analytics. And I will tell you that cars under $10,000, they’re easy to sell, because there are just tons of people in the market looking for them. That’s why we try to keep every car,” he added.

“We certainly want to make sure we’re reconditioning cars properly, because we want a customer happy if they buy a lower-priced car. That’s the easiest car to sell,” McConnell continued. “If you look at how many people on a website view a car that’s under $10,000 versus one that’s, say, $15,000, it is a tremendous number.

“You would be shocked how many more people will view a car that’s under $10,000. There’s just a big market for that. Let me say this: you don’t have to be a great salesman if you have the cars and they’re nice cars. They sell,” he said.

NADA Chair Details Strategies for CPO Success

As he prepared to take the lead role among the national body of franchised dealers, McConnell also talked with Auto Remarketing in January about his store’s certified pre-owned and used-car operations.

More than a third of the used-car business that McConnell sees at his Honda and Acura franchises comes from the CPO side. It could be even stronger, he says.

“The hardest thing is getting the inventory,” said McConnell. “If we get more inventory, it would be higher.”

That said, the dealerships’ 35-percent CPO penetration was higher than the industry average for franchised dealers during the third quarter (19.2 percent), according to Edmunds.com.

When it comes to securing used vehicles, McConnell said the “top priority” for his store is to get the trade-in.

“Part of it is, make sure that you put the money in the trades,” he said. “That helps us because people feel a lot more confident when they know you traded a car in.”

McConnell also honed in on the importance of purchasing as many off-lease cars as possible, and buying up the leased vehicles that are grounded at his store.

“In addition to that, if somebody else has (a vehicle) somewhere else, we are constantly looking online to see if we can get one elsewhere — that maybe somebody else was sleeping a little bit and missed one,” he said.

One of the changes he has noticed in the industry is that used-car acquisition, particularly at the auctions, has gotten more competitive. You really have to stay up to speed on the market, he said.

“The other thing I think has changed is that most dealers that I know, they’re trying to keep as many cars as they can,” McConnell said. “If they wholesale a car, the good dealers are really looking closely at, ‘is that a car they could have sold on their own?’”

Used-Car Margins

In Manheim chief economist Tom Webb’s recent examination of third-quarter used-car results from the seven public dealer groups, he pointed out that used retail gross margins continued to be “very narrow,” but managed to climb “fractionally” year-over-year (on a sales weighted basis).

Narrowing margins on the used-car side has certainly been challenging; so how does a dealer like McConnell suggest keeping them strong?

For one, he said he doesn’t keep cars more than 60 days — “period.”

McConnell stressed the importance of strong reconditioning and said the advertising element can be quite important.

“On the advertising front, you have to take great photos, have very good descriptions, and you’ve got to price the car, in my opinion, on the market,” McConnell said.

“Most people used to, many years ago, come to a dealership … on a Saturday morning and look at all your used cars.  They don’t have to do that now,” he said. “They can look at every Honda Accord in my market sitting in their pajamas at a computer.

“So, the advantage is that if you price them competitively, there is not as much negotiation. It makes it a little bit faster. But if a person comes in now, and they’ve seen the car online, they’re telling you that you’re priced within the market for the car. Because they’re doing their price comparisons before they get to you.”

Why CPO Works

The conversation with McConnell also delved further into certified, something that he finds very beneficial to dealers.  For starters, it gives shoppers a different choice, and can serve as an entry point to the new-car market.

“(CPO) gives customers options. Maybe they don’t want a new car … but it brings more traffic in the store, and maybe you sell them a new car,” he said. “Or if they’re looking at a new car, it gives them an option. So, I think it’s been a big plus for dealers in general."

The CPO business, he said, gives the dealer “an entry point for the customer to come in, and if they buy a certified pre-owned  — say, a Honda or a Toyota — they are much more likely, when they buy new, to buy that same brand.”

The certified operation tends to have a widespread impact, as well.

“On the sales side, first of all, it gives the customer assurance that they’re buying a good car. In addition to that, it gives the salesperson confidence in the vehicle they’re selling,” he said.

Beyond the sales side, it can boost the service shop as well. McConnell was once service manager of the dealership, and he brings some of that experience to his current role, calling the dealership “very service-oriented.”

“You make a lot of money reconditioning those (CPO) cars in service; plus, those customers tend to come back and have that car serviced there. A person who buys a certified pre-owned wants to make sure they get a good, reliable car — condition-wise — so they’re more likely to come back to your service (department), because that’s what’s important to them: reliability,” he said.

But a big part of CPO success is educating the customer.

“I think the salespeople need to understand it. They need to be experts on it, and they need to be sold on process. It costs money: you recondition the cars more; certification costs more. But the customer gets a really good value,” McConnell said. “What we always try to do is to look at it from the customer’s point of view. If it’s good for the customer, you’re going to have success.

"On our website, we explain the certified pre-owned process,” he added, noting that the automaker does the same on its website, as well.  

“But a lot of those detailed questions (happen) when the customer comes in, and the sales people need to really understand what the customer gets with a certified car and how to convey that to them,” McConnell said.