Ralph Paglia worked at three car dealerships before taking a sales job with Reynolds and Reynolds, a major automotive information technology firm.

While there, he said he'd never work for a dealership again.

“That was before I met the Gruwell family,” owners of Courtesy Chevrolet in Phoenix, he says. “They are entrepreneurial and willing to experiment using new technologies.”

Paglia returned to the other side and started working for Courtesy in August 2005 as director of CRM and e-business operations. Since then, Courtesy has become a leading Internet retailer. It is No.2 on the Ward's e-Dealer 100.

Paglia quickly hammered out an e-plan of action with his dealership deputies.

“I locked them in a hotel conference room, took away their cell phones and said, ‘We're not leaving until we agree on a plan,’” he says.

Here's what they came up with:

Five team managers and their staff of more than 40 handle inbound and outbound sales communications, using the telephone, e-mail and face-to-face meetings.

The overall operation consists of: three business development centers for telemarketing, an e-business special finance team and four distinct Internet sales teams handling operations at Courtesy's dealership; two used-car outlets; and a special-finance section for credit-challenged customers.

Courtesy uses more than 350 Internet URL addresses which direct users to full websites as well as multiple micro-sites.

Paglia's monthly Internet marketing budget of about $91,000 a month is integrated within total dealership marketing.

That creates growth for the store in general and e-business in particular. It is important for the Internet department to connect to the overall dealership operation and not be off on its own, he says.

Paglia, who at Reynolds and Reynolds consulted with dealers on information technology and Internet initiatives, says, “After years of telling dealers what to do, I've found it's not easy, especially when it comes to getting the right people.”

As a team player, he provides other dealership managers with reports on his monthly marketing expenditures. “If I am spending close to $100,000 a month, I want to make sure others know what I'm spending it on,” he says. “So I give them written reports. It doesn't matter if they leave them on the table after a meeting.”

But the spirit of cooperation only goes so far. Paglia says showroom sales staffers sometimes grab Internet-originated prospects at the door. He calls it “slurping.”

“An Internet lead comes into the dealership but is taken over by a regular salesperson,” he says. “Later, when we call to ask the person why he didn't show up for the appointment, he says, ‘I did, and I bought a car.’”

When it comes to marketing, Paglia is ubiquitous, pitching the dealership everywhere, from cyberspace to bus stops.

“One of our biggest success stories is placing ads at 160 bus shelters,” he says of spreading the word for Courtesy. “The volume of calls was so much, one person couldn't handle it. It was a big surprise. I didn't expect it.”

He also markets online to gays and lesbians. “It's a big segment; doesn't cost a lot; and it is profitable,” he says.

Marketing to Hispanics is a major operation because “in Arizona, it is not minority marketing, it is general marketing.” Courtesy maintains a Spanish-language website.

Much of Paglia's marketing money is spent with search engines such as Google, Yahoo, MSN and AOL. Courtesy Chevrolet creates ads, then uses either key search words or select websites to target which online users see the ads during their Internet searches.

Courtesy also uses online lead referral companies. “We get good service from them, and sometimes I wonder if it's because we use so many,” he says.

Internet leads from General Motors Corp. websites have improved and their closing ratios have doubled in recent months, Paglia says. “They tend to be high-quality leads.”

He has experimented with direct-mail marketing but found it more costly and less effective than search-engine marketing. Radio and TV results “have not been great.”

The dealership's Internet department currently sells about 335 vehicles per month. Paglia hopes to boost that to 400 in 2007.