Since the relaunch of its Web site 16 months ago, Renault has seen
Web sales leads hit 900 a week, with 50% of enquiries resulting in
sales. Daniel Thomas finds out the secret of Renault's
success
In the heady days of the dotcom boom consumers were told they would
be able to buy vehicles direct over the Internet, and high street
dealers were warned that they would be put out of business by new
car e-tailers.
As was the case with many e-commerce promises, this proved to be
little more than hype, but companies in the automotive retail
industry are beginning to show that the Web can be a key channel in
helping to drive car sales.
Last week, French manufacturer Renault revealed that its UK Web
site has become the biggest source of new sales and service leads
for its dealer network around the UK, outstripping telephone
enquiries, showroom walk-ins and other modes of enquiry.
Richard Harrison, e-commerce director at Renault, said Web sales
leads have grown by 980% since the site was relaunched in April
2001 - an average of almost 900 leads a week - leading to a
"significant" sales conversion rate.
"More than 50% of our potential car buyers use the Web as the first
point of call and the Web positively influences the buying decision
of about half of our buyers," he said. "With the economies of scale
that the Web offers this is obviously very good for us from a
return on investment point of view."
Although other car manufacturers, such as Ford and Vauxhall, have
explored the opportunities to sell direct over the Web, Renault did
not want to exclude its dealer network, Harrison said. "Our dealers
are crucial to the success of our business and relationships with
our customers," he said.
Michael Dornan, automotive analyst at research firm GartnerG2, said
most car manufacturers realised that the Web could never replace
the dealer network.
"Very few consumers will carry out the whole car buying process
online, and the 1%-2% who would are more likely to go to a car
marketplace, such as Jamjar.com," he said. "Also, manufacturers
need to protect the dealer network because that is where their
sales come from."
In addition, Dornan said, the European Union "block exemption" law,
which allows car dealers to sell more than one brand, is another
reason for manufacturers to keep the dealer network on side. To
this end, every main and satellite Renault dealer has its own Web
site, which is integrated with the main Renault site and hosted by
the manufacturer, Harrison said.
"Every time an online customer puts in a request to talk to a
dealer on the main site it goes straight into the dealer
environment, via our Siebel lead management tool, and about 81% (of
dealers) respond within 24 hours," he said.
Giving dealers a standard, "one size fits all" Web presence makes
sense, according to Dornan. "A lot of dealers have their own Web
site but branding is not consistent, which does not reflect well on
the manufacturer," he said.
"Bringing the satellite network under one umbrella means [the
manufacturer] can control the brand. It is all about improving the
relationship with the customer directly, using the dealer as an
agent."
Integrated Web sites also bring a number of benefits to dealers,
said Martin Hill, who runs four Renault dealerships in
Bournemouth.
"We can conduct our marketing campaigns via Renault, which is good
from a resource point of view," he said. "Integration also means we
can utilise advanced functions, such as personalisation, that we
would not have been able to use otherwise."
The lead management tool means dealers have more opportunities to
turn enquiries into sales, Hill said. It also improves customer
service, which has not always been of a high standard in the
industry, he admitted.
"It is a sadness of the motor industry that showroom staff do not
always follow up every lead, whether it is because they do not
think it will be worth dealing with, or a case of not checking
e-mails," Hill said. "The system allows us to follow up every
lead."
Initially, Hill admitted, many sales representatives were
suspicious that leads coming from the Web would not be worth
following up. In fact, he said, the new channel has proved to be a
key driver of sales.
"The proof is in the pudding - in the past six months we have sold
28 cars as a result of Web enquiries," he said. "We categorically
would not have made these sales had it not been for the Web site."
According to Hill, online car buyers are more demanding than
average, expecting higher levels of service. But, he said, given
the right approach there is a "very good commercial opportunity" on
the Web.
As well as an opportunity for generating sales leads, the online
channels have been a key marketing tool for Renault in the past
year, Harrison said.
Some car manufacturers use pop-up online advertisements but
consumer surveys have identified these as one of the most annoying
aspects of the Web, so Renault has tried to keep them to a minimum,
he said.
Instead, it has focused on new ways to exploit the marketing
potential of the Web, such as overlays - less intrusive versions of
the pop-up - and micro-sites for particular products such as the
new Renault Megane, which launches next month.
"We have provided exclusive information about the new Megane
online, including the ability to book test drives before anyone
else," Harrison said. "The site has been running for seven weeks
and has had 37,000 visitors, with 1,200 test drives booked. All
this without any advertising."
Renault has also used the Web in an attempt to create loyalty among
existing customers, with a personalised section called "My Renault"
where information, such as vehicle configurations and dealer
addresses, can be saved.
The company is looking to expand the site to include more added
value features, including an online quote-and-buy insurance
service, Harrison said.
As well as focusing on the Web, Renault has been working on ways to
exploit the potential of interactive TV (iTV). "We launched our
first iTV advertising campaigns at the start of 2002, offering test
drive [bookings] online at the end of the adverts," Harrison said.
"As a result we have seen a significant number of entirely new
prospects, with 95% of respondents having not contacted us
previously."
iTV will be an increasingly important marketing platform for car
manufacturers, according to Dornan. "The main demographic of car
buyers, generally males over 40, fits in well with iTV users," he
said. "It allows the manufacturer to grab the viewers when they are
stirred, directly after an advertisement."
Such hybrid commerce, where consumers use one channel to research a
product and another to buy, will become increasingly popular, both
for car manufacturers and other multi-channel retailers, Dornan
said.
Although the success of hybrid commerce is difficult to measure in
purely financial terms, car manufacturers such as Renault can
provide a useful example for IT directors and e-commerce managers
who are trying to justify investment in online initiatives, he
said.
"When measuring the success of these projects you can obviously
look at sales figures, but there are other aspects, such as
generating loyalty via the Web site, which can lead to follow-up
sales," he said. "For car manufacturers this is particularly
important as people only generally buy cars every three or four
years."
What Renault did right
- It hosts a Web site for main and satellite dealers, integrated
with its own site, allowing it to control the online brand
- Implementing a lead management tool has enabled better
monitoring of potential customers, meaning that every sales lead is
followed up
- "My Renault", the personalised section of the Renault site, has
boosted customer loyalty
- The use of overlays and micro-sites online has improved
Renault's marketing.
Further information:
www.renault.co.uk