In between cow pastures, unoccupied storefronts and an empty parking lot in Alpharetta, Ga., sits RBM of Atlanta-North, a navy blue, glass-and-steel Mercedes-Benz and Sprinter dealership. The store covers eight acres in this less-than-ideal location, but that hasn’t stopped it from becoming one of the highest rated and most reviewed luxury-brand dealerships in metro Atlanta.
Type in the phrase “Atlanta and Mercedes-Benz” on Google.com and a listing for RBM of Atlanta-North will appear along with 235 five-star ratings and reviews for the dealership. There are other Mercedes-Benz dealerships in the area with online reviews, but none are as prolific as RBM North.
The dealership’s accomplishments on the Internet are impressive considering the hurdles it faced when it opened its doors in late 2007, about the time the recession was taking hold. In addition to the economic downturn, RBM North faced an undeveloped market and stiff competition from more than a dozen high-line stores.
“It became the most challenging thing — from a business perspective — that I’ve ever faced,” recalls Randy Powell, RBM North’s general manager.
Timing is Everything
RBM North’s location wasn’t initially a cause for concern, which is why Mercedes-Benz targeted the location in the first place. “This area, because of the growth, affluence and school systems, represented an ideal spot for a new dealership,” Powell says.
The dealership, which is 22 miles north of Atlanta, primarily serves customers in Forsyth, Cherokee, Cobb and North Fulton counties, areas that began to flourish after the 1996 Summer Olympics in Atlanta. In fact, in 2010, Forbes magazine named Forsyth County, which has a median household income of $86,938, as the 20th richest county in the United States. Additionally, the U.S. Census Bureau named Forsyth and neighboring Cherokee County as the nation’s sixth- and 29th-largest growing counties, respectively.
The area is also home to the corporate headquarters of several major corporations, including The Coca-Cola Company, The Home Depot and Delta Air Lines. According to Powell, many top executives, business professionals and their families have moved outside city limits, creating a potential market for luxury dealerships in the suburbs.
In 2006, Mercedes-Benz approached RBM North’s dealer principal, John Ellis, and offered him the opportunity to open a brand-new store in Alpharetta. Ellis, who also owns RBM’s sister store, RBM of Atlanta in Sandy Springs, agreed. He then selected Powell to oversee the dealership’s construction and hiring.
Powell staffed the dealership’s sales, service and F&I departments with more than 50 employees. In March 2008, a mere six months after the dealership opened, Powell began to realize that the economy was taking a turn for the worse. Residential and commercial construction came to a screeching halt and unemployment started to rise, but Powell kept his foot on the gas pedal.
“I was determined to get through this without laying any employees off,” said the 30-year industry veteran. “So many of the dealerships around here, and I’m not being judgmental in any way, had little choice but to do that. But I was determined to find a way to continue growing the operation to support the people we had made these commitments to.”
Building an Online Reputation
When RBM North first opened, it utilized mostly traditional marketing media, including newspaper and billboard advertisements, direct mail and local sports sponsorships. With the onset of the recession and the decline in new-vehicle sales, Powell looked to the Internet to drive in more customers.
Today, more than 90 percent of the dealership’s monthly advertising budget is directed toward digital campaigns, according to Powell. “We spend about $1.70 for every dollar that a typical Mercedes dealer spends to advertise,” he says. The dealership puts that money toward search engine optimization, search engine marketing, online reputation management and online inventory listings on Websites, such as eBayMotors.com and AutoTrader.com.
Internet Manager Bethany Johnson, who has spent 10 of her 12-year industry career in Internet sales, oversees RBM North’s “I-sales” department, which she describes as a “mash-up of an Internet department and a traditional business development center.”
Johnson and two other Internet sales specialists employ a time-tested leads process. As the process goes, the I-salespeople will contact the customer by phone three times and by e-mail four times over a period of 10 to 12 days after a lead is received. Once the customer expresses interest in a vehicle, he or she is encouraged to visit the dealership. If it’s an out-of-state customer who is prepared to buy, the Internet sales specialist will nail down the price and other figures over the phone.
Johnson estimates that 33 to 40 percent of total monthly sales are now touched by the I-sales department. In fact, 85 percent of total monthly sales begin online, whether through posted reviews or inventory listings, she adds.
RBM North also maintains Facebook and Twitter pages, but Johnson prefers to use these social media sites to connect with customers. “Being high-line, I feel there should be a softer, more personalized approach rather than listing inventory and trying to sell a car via Facebook,” she says. “I just want it to humanize us.”
Even without the recession, Johnson admits that establishing a solid online reputation for a new dealership like RBM North was a major undertaking. That’s why the dealership turned to Riverside-Calif.-based eXteresAuto three years ago for help. Specializing in online reputation management services, the company helped RBM North rack up more than 235 five-star customer ratings and reviews from sites such as Google.com and Edmunds.com.
“[Customers] see that there’re a lot of good things about us,” Johnson says. “We jump off the page with 200-plus five-star ratings. It immediately makes you want to call us.”
Boosting CPO Sales
Internet marketing also proved useful when the dealership looked to boost its certified pre-owned (CPO) sales to offset the recession-induced decline in new-car sales. Powell even used the medium to increase business in the service drive. “We realized that, with this decrease in business, people were going to start reevaluating their car needs,” Powell recalls.
Sensing this shift, he aggressively marketed the dealership’s used-vehicle inventory through third-party sites such as eBay.com and AutoTrader.com. Powell even offered free shipping to customers. “We were shipping cars to Montana and Seattle … but mostly we sold in our area to help grow our service business,” he says.
In addition, RBM North marketed its inventory to leaseholders who were near the end of their terms and wanted vehicles that were “a little less expensive and a little less ostentatious.”
By 2009, RBM North was one of the Top 10 dealerships in the area in terms of pre-owned vehicle volume. “We had adjusted to that ahead of the rest of the market,” says Powell. “So we sold a lot of certified pre-owned cars in the first year — more than we sold new, which is pretty unusual for a new-car dealer.”
Recession’s Impact on F&I
The dealership’s average monthly volume currently stands at 60 new vehicles, 60 pre-owned units and 15 Sprinter vans, according to Powell. Those figures have translated into a solid performance for the F&I department. “Everything around us has gone really bad, and we’ve done really well,” says Jon Hazelwood, the dealership’s F&I director.
The store’s profit per retail unit averages around $1,000-$1,200 on new vehicles and $500-$799 on CPO vehicles. Hazelwood says most of his customers have credit scores in the 700-800 range, with about 60 percent of his customers opting for dealership financing. The rest of the deals are cash. The dealership’s primary lender is Mercedes-Benz Financial Services (MBFS), but Hazelwood also counts on Bank of America, Wells Fargo and Chase to finance his customers’ vehicles.
Most of RBM North’s F&I products carry the MBFS brand. Tire-and-wheel protection leads the way with a 40 percent acceptance rate. Dent repair touts a 30 percent sell-through, followed by GAP and CPO extended warranties at 20 percent each. Hazelwood says the dealership also sells MBFS-branded interior/exterior protection and a service contract through Norcross, Ga.-based EasyCare, which benefits trade-in customers who want extra coverage.
Despite RBM North’s early struggles, the store is now poised to make greater strides this year. Powell says he has no plan to change his Internet marketing strategies, but he wants to see a 10 to 12 percent increase in new-vehicle sales. “I think the percentage of new versus pre-owned will move back toward new, because there is still pent-up demand in the marketplace,” he says.
The economy’s slow recovery is a cause for concern, but Powell is hopeful that his dealership’s strong Web presence and the continued support of his staff and dealer principal will help RBM North achieve its goals this year.
“Without that [economic] growth, it’s going to continue to be a challenge for us, so we have to work harder,” he says. “I look forward to the day where we are surrounded by other businesses and this area becomes more of a destination. In one way, we’re a destination point now. That’s because if you’re coming to us, you’re looking for us.”