Q&A with Larry Van Tuyl

Posted by on Jul 23, 2008

Larry Van Tuyl
Larry Van Tuyl
The Van Tuyl Group Inc.
Co-CEO

The Van Tuyl Group Inc. manages the largest group of privately held automotive dealerships in the United States. With offices in Arizona, Kansas and Texas, the management group works with approximately 65 independently operated dealerships nationwide.

The Van Tuyl Group supports its dealership clients by providing accounting, finance and insurance, risk management, legal, real estate, construction and technology-related services. The group has a history of pioneering innovative services and the latest technology, but its first priority has always been a dedication to hands-on customer service and training.

The Van Tuyl family has had a long history with the automotive industry, starting with Cecil Van Tuyl who began managing a Kansas City Chevrolet dealership in 1955. Joined by his son Larry in 1971, they have built a world-class management company based on the principles of hiring the right people and giving their dealership clients the right tools, training and support necessary for success.

DealerADvantage: Where does online advertising fit into your overall media mix?

Van Tuyl: It’s constantly changing and growing. Collectively, our dealerships are spending about a million dollars a month on the sales side for internet marketing. Over the past five years, that number has grown significantly. We know that a big percentage of our business comes from online traffic. Merchandising our cars online is where we are focused right now. With the capability to track and show true ROI, more and more of the budget seems to be shifting this way. I think it will continue to grow with a more proportionate mix with other media such as newspaper and online.

DealerADvantage: How many vehicles, on average, do you sell each month? What percentage of these sales is attributed to the internet? How do you determine what constitutes an "internet sale"?

Van Tuyl: In 2007, our dealerships sold a total of 86,000 new and 78,000 used vehicles. Last year we tracked 40 percent of our new-car business directly to internet and 25 percent of our used. We know that the internet contributes to a lot of our walk-in traffic as well, so we know that number is growing. As we continue to source that traffic better and utilize our CRM tools, we will see the numbers grow significantly.

DealerADvantage: What is your process to manage a lead from the time it is received until a vehicle is sold?

Van Tuyl:Most of our dealerships use the same CRM tool to manage retail sales and internet processes. DealerSocket has a very good application that makes this process seamless, especially when integrated with our call-tracking solution provided by Century Interactive. We use our CRM tool to manage and monitor our leads. Email leads are a given, but tracking the inbound internet phone call leads inside the application is key. We are also able to track the outbound responses to those leads within the same system.This way we can see the lead as it comes in by source – whether it is an email lead or phone call and what we did with that prospect throughout the buying process. Response time is big within our group. Our goal is a phone call response within 15 minutes. We mystery shop once a quarter to help us reach that goal. Our follow-up process for internet leads goes out 120 days and is managed through our CRM tool.

DealerADvantage: What internet tools do you use to develop leads? What is your overall closing rate for traffic you drive through internet advertising/listings and for leads you purchase through third-party providers? Can you share with us your per-sale costs?

Van Tuyl: Most of our dealerships use the same CRM tool to manage retail sales and internet processes. Collectively, our dealerships are closing approximately 12 percent of leads right now with increasing goals in this area. We try to keep our cost per sale around $150 and have managed to reach that goal this year.

DealerADvantage: How do you drive profitability and maintain gross with internet customers?

Van Tuyl: Internet customers are the same people as our traditional customers; they are just reaching us a different way now. We have amazing dealerships with great CSI, and they treat their customers well. The customer still wants to be educated on the vehicle, so our product knowledge is important. If you give shoppers a good experience, they will give you the business.

DealerADvantage: How does Van Tuyl manage internet sales? How do you train within your internet department?

Van Tuyl: We have at least one internet director in every store with internet departments that range from five people to 45. These departments are growing rapidly, and, as our internet business grows, more and more of our retail salespeople are becoming “internet certified” to handle those leads. Our dealerships are always hiring new managers and salespeople. Having good experience with handling the internet customer is certainly a plus.

DealerADvantage: How do you measure online advertising partners? What matters most when evaluating their performance?

Van Tuyl: It’s all about ROI. We look at appointments set, appointments shown, demo percentage, car deals and profit. We also know that, more than ever, our customers are using the internet for research very early in the purchase decision process and that it is a great tool for dealership and brand awareness as well. Along with tracking ROI from the leads, good CSI is very important to us as well. We want our internet buyers to be service customers and come back to us for their next vehicle.

DealerADvantage: What do you look for in a partner when purchasing online advertising?

Van Tuyl: We look first and foremost for companies that have a good reputation in the business – with dealers and consumers. If the consumer trust is there, then we want to be their partner. We look at partners that are going to support us, price their products fairly and offer ongoing training to our staff.

DealerADvantage: To what extent are you managing your online reputation?

Van Tuyl: Dealer ratings and online CSI is going to be huge over the next couple of years. We have to worry not only about the surveys we get from our customers, but we now have to focus even more attention on those who don’t or can’t buy. One person can make a lot of noise very quickly online with blogs and dealer rating sites. We have to make sure that we manage it quickly and make sure that our happy customers are posting their success stories as well.

DealerADvantage: How are you leveraging search engine marketing/search engine optimization to drive more traffic and generate more sales?

Van Tuyl: We are managing SEM ourselves. We have learned that we can control our messaging and focus much better that way. Plus we can control the cost. We are using SEM to drive sales, service and parts business.

DealerADvantage: What emerging trends are you seeing in online automotive?

Van Tuyl: We’re almost there now, but soon everyone will have visited the Cars.com website and ours before coming to the dealership. That’s why the content on the site is so important: Our dealerships must be able to represent themselves through their websites.

DealerADvantage: What advice would you give an incoming internet sales manager in your operation?

Van Tuyl: Focus on follow-up processes and make sure you have a way to stay on top of each and every lead throughout the buying cycle. Track everything, and make sure you know what works and what doesn’t.

DealerADvantage: How do you work with manufacturers to maximize online initiatives?

Van Tuyl: Our manufacturers have been very supportive with our online initiatives, even attending meetings and holding breakout training sessions for our internet directors, sales managers and general managers. We know how important it is to work together to drive traffic and consistent messaging.