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The FordDirect Experiment

July 2012, F&I and Showroom - Feature

by Gregory Arroyo - Also by this author

Derrick Kuzak, Ford’s group vice president of global product development, reveals the 2011 Ford Explorer during a special ceremony on July 26, 2010, in Dearborn, Mich. As part of the launch, the Detroit automaker employed a Facebook campaign that attracted more than 138,000 fans to the Explorer’s fan page.
Derrick Kuzak, Ford’s group vice president of global product development, reveals the 2011 Ford Explorer during a special ceremony on July 26, 2010, in Dearborn, Mich. As part of the launch, the Detroit automaker employed a Facebook campaign that attracted more than 138,000 fans to the Explorer’s fan page.

While Facebook, mobile tools and online sales are in the spotlight these days, a unique, experimental service has spent the last 12 years shepherding Ford dealers into the digital realm.

FordDirect claims to have 99 percent of Ford Motor Co.’s dealer network connected to its service. It also claims to be driving nearly a quarter of the marque’s sales. Stacey Coopes, the company’s chief executive, sat down with the magazine to share what the joint venture between Ford and its dealers has learned since its founding in 2000 by members of the Ford National Dealer Council.

F&I: So, what has changed since 2000?

Coopes: A lot. When we first started, a lead was just that five-point data: the name, the address, the phone number and the customer’s email. We were also going out and working with all the third-party sites like Kelley Blue Book, as well as our own properties, and generating and packaging leads and delivering them to the dealer. And that definition stayed in place for quite a while, but over the years it has been about: How do you get better at taking those customers and addressing them in ways they want to be communicated to?

So, today, we’re giving the dealer more contacts, and we’re also prequalifying leads for financing. We’re also tailoring our response based on what we know about that customer and what we can learn from the third-party websites that will help us deliver a better lead to our users. We refer to this as "Lead 2.0."

F&I: How do you define a quality lead?

Coopes: Ten years ago, people were coming online when they were ready to get a price quote. But now, we have people who come to our Build and Price page who are still further off in the purchase cycle. So, they’ll submit their name and address so they can get more information or updates on the vehicle. We refer to these people as soft leads, or people who are saying, "I want to engage with that brand."

One of the big areas we’re focused on is talking to our dealers about the ownership cycle. In the past, we would usually wait for people to self-identify and say that they want more information on the vehicle. Now we’re telling dealers to go into their DMS to pull out customers and engage them at relevant points in the ownership experience with service offers, happy birthdays, so on and so forth.

Stacey Coopes
Stacey Coopes

F&I: You mentioned qualifying customers for financing. Having lenders prequalify Internet customers is a touchy subject with dealers. How are you handling that?

Coopes: Right now we’re working with Ford Motor Credit, and it’s a very simple process that looks at the customers coming through that have said, "I want to understand finance offers." So it’s a simple prequalification that says this person can get this much money. Then it’s up to the dealership to pull that deal together.

But I do agree with you. This is a touchy topic, but it needs to be addressed, because, if you look into the future, I think the lead process is slowly transitioning into more robust processes that will make that online-to-in-store transition more seamless. I don’t think anybody has really figured that out, but consumers are demanding it and our research tells us that they’re not satisfied with the experience just yet.

F&I: So, what percentage of Ford’s sales is FordDirect responsible for?

Coopes: We’re at 22 percent of sales just on leads. We’re a voluntary program, but we have about 98 percent of all Ford dealers participating. And that covers pretty much 99.5 percent of the volume.

F&I: Tell me about that new service you launched that helps dealers come up with content for their Facebook pages.

Coopes: Well, there are so many customers in that channel. To not engage the site and not try to figure out how you can be relevant in it is probably not wise. But what we’ve seen is that, when used in a relevant way, it can really drive engagement. That’s what we saw when Ford Motor Co. used Facebook to unveil the 2011 Explorer.

So, we went out and piloted some things within social media that could help dealers post relevant content on their Facebook pages. We created pipelines that allowed us to take the most local and relevant content and give it to the dealers in such a way that they don’t have to worry about going out there and finding it themselves. We launched that service about two months ago and we already have 925-plus dealers signed up. We’re also launching an online reputation management service this month.

F&I: What else are you getting into?

Coopes: We’re now looking at mobile and how we can help drive more traffic through that channel. We’re also getting into inventory services to help the dealers better manage their inventory and merchandise it digitally.

F&I: Any merchandising tips you can offer?

Coopes: It’s still about photos and videos. We’re seeing a lot of dealers doing this, but there’s still a lot of work to be done. It is time-consuming, but it’s so much more engaging for the consumer.

Looking ahead, we believe mobile is where the industry is heading. So much of the traffic we’re seeing month over month goes to mobile sites and tablets. Another area is providing video content on alternative channels like Facebook and YouTube. Customers are actually shopping on those sites and they’re looking for vehicles.

F&I: I hear a lot of Internet experts talking about the need to sell appointments rather than sell cars when working an Internet lead or phone-in customer. Do you subscribe to that?

Coopes: That’s exactly what we do. It’s important to get the customer into the store because then they can really establish a personal relationship with that customer. So we provide that in our lead program for free. I also think there are some customers who want to have that online engagement before they commit, so you have to be willing to put a good follow-up process in place because about 50 percent of our leads result in a sale within 10 days. Then there’s the other group that takes anywhere from 10 days to three or more months.

F&I: There are some industry insiders who say the dealership of the future will be nothing more than a place for customers to pick up the vehicle they purchased online. But there’s also research out there that says customers still do rely heavily on dealerships for information. Where do you stand?

Coopes: All of our customer research points to consumers wanting to engage with their dealership, because there are things they can only get by going to the dealership. And that’s where the opportunity lies: How do you connect what they do online to what they’re going to do in the dealership? That disconnect is the big opportunity

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