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ELEAD1ONE provides the industry’s most advanced dealer-focused suite of products that help dealers achieve unmatched results in increased sales and profit, lead generation, communication, sales processes and complete lifecycle management. The company’s automotive-only virtual BDC and CRM are the foundations of their unique and successful profit-building strategies. No other company in the automotive industry has ELEAD1ONE's resources or ability to be 100% focused on training, teaching and support after the sale.
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Thomas Williams, VP & Creative Director design@autosuccessonline.com
DealerPanel The role of F&I, part 2
DonO’Neill what if we were the consumer? would i buy a car from my dealership?
JimmyVee & TravisMiller how answering the phone could change your business
Hannah Philpott, Media Director hannah@autosuccessonline.com
marketing solution
MichaelObeso Achieve the elusive 45-minute sell (Without Sacrificing Customer Service and Gross Profit)
RussellGrant five easy steps to mitigating data risk
Brian Ankney, Account Manager super6@autosuccessonline.com
sales & training solution
Dave Davis, Editor & Creative Strategist ddavis@autosuccessonline.com
navigating the new vehicle incentives maze (Or Cutting Right Through It)
BruceThompson
The Seven Most Important Words in Closing DavidLewis
who is really responsible for time to market? DennisMcGinn
Susie Horne, Account Manager John Warner, Sales-Improvement Strategist shorne@autosuccessonline.com jwarner@autosuccessonline.com
EdLouis what you need to know about geofencing
18 22
SusanGivens reaching customers through social media advertising
08 10
DavidDunn how important is your bodyshop estimator/salesperson?
32
MarshBuice want a pay raise? up yours!
20 26 28
JoeClementi tend to your garden of success or it will tend to you
24 34 36
MarkTewart successful dealerships practice the 3c’s
14
SeanV.Bradley what was the last training workshop of conference you attended? part 1
AutoSuccess Magazine is published monthly at 2300 Hurstbourne Village Dr, Suite 1200 Louisville, KY 40299; 502.588.3155, fax 502.588.3170. Direct all subscription and customer service inquiries to 877.818.6620 or info@autosuccessonline.com. Subscription rate is $69 per year. AutoSuccess welcomes unsolicited editorials and graphics (not responsible for their return). All submitted editorials and graphics are subject to editing for grammar, content and page length. AutoSuccess provides its contributing writers latitude in expressing advice and solutions; views expressed are not necessarily those of AutoSuccess and by no means reflect any guarantees. AutoSuccess accepts no liability in respect of the content of any third party material appearing in this magazine or in respect of the content of any other magazine to which this magazine may be linked from time to time. Always confer with legal counsel before implementing changes in procedures.© All contents copyrighted by AutoSuccess Magazine, a Division of Systems Marketing, Inc. All rights reserved. Reproduction in whole or part is prohibited without express written consent from AutoSuccess. AutoSuccess may occasionally make readers’ names available to other companies whose products and/or services may be of interest; readers may request that names be removed by calling 877.818.6620. Printed in the USA. Postmaster: Send address changes to AutoSuccess Magazine, 2300 Hurstbourne Village Dr, Suite 1200 Louisville, KY 40299.
Susan Givens, Publisher sgivens1@autosuccessonline.com
leadership solution
SusanGivens
marketing solution
reaching customers through social media advertising There’s no question that digital advertising is here to stay. However, there are a whole new host of challenges for dealers, as the technology is constantly changing. Recently, one of the biggest and most pressing challenges faced by dealers in the digital realm is how to interact with — and generate leads from — customers online. The answer is simple: social media advertising (SMA). SMA is a fairly recent trend within digital advertising. As social media sites transition from niche social platforms to public companies, there is an increased focus on revenue and profitability. One way these sites are trying to monetize is through their ever-developing ad platforms. Despite its age, SMA presents a rich opportunity for dealers to engage with potential consumers and also increase their company’s reach and reputation. “Now more than ever, social media advertising is crucial to a well-rounded digital strategy,” said Tim Schmidt, digital operations manager at Tier10, an automotive advertising agency specializing in SMA solutions to dealers. “Social media used to be only geared towards engagement, likes, tweets, etc. But now, dealers are able to retarget valuable potential customers and target their actual customers on Facebook via custom audiences and other avenues. It has moved past simple engagement and actually helps dealers sell cars.” As Schmidt said, dealers can utilize SMA to target and retarget potential consumers within a specific geographic area based solely on their behavior online. A key difference between SMA and traditional behavioral marketing is that social ads are based off the real-time data of the user, meaning that those who dealers target are interested consumers. Even more exciting is that once a potential consumer clicks on a single SMA ad, they are pulled directly into the sales funnel. SMA also gives dealers another significant advantage: access to younger demographics.
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Many millennials do not respond as well, if at all, to traditional advertising techniques such as radio spots and TV ads. In fact, studies have shown that millennials are much more likely to interact with a brand, company or ad when it has been validated by a group of their peers who exist within their social networks. Given the estimated $170 billion in spending power that this demographic possesses, it is crucial for dealers to target them. However, knowing which social network to advertise on is also extremely important. Choose the wrong network or the wrong message type and dealers risk their ads getting lost in the sea of online noise. “Facebook is by far the most valuable platform for dealers at this point, given the tools they give dealers, such as custom audiences, retargeting, behavioral targeting and look-alike audiences,“ Schmidt said. “But Twitter has some great new direct response products, as well, that are beginning to become more relevant. Things like targeting Twitter conversations that involve consumers looking for advice on which cars to buy and literally joining that conversation. Instagram is becoming more relevant, as well.” The other benefit of SMA is that it is relatively cheap to operate. For literal pennies a day, social media ads can generate tangible impressions that would otherwise take weeks or months to generate through traditional means. SMA, by its very nature, is also already targeted to a known audience that is actively engaged on social media networks. Granted, each platform has its limitations and it takes a period of testing and research to find which platform and messaging strategies works best for specific dealers. But already certain social media sites are beginning to offer a variety of ad platforms based on their vast amounts of user data. Facebook, for example, acquired video advertising startup LiveRail, a supply-side platform that connects marketers and publishers on the Web through video ad targeting. It has a real-time bidding platform in which publishers such as Major League Baseball, ABC Family and others can bid on video ad space, which is then funneled through LiveRail’s system to targeted customers. This means that Facebook’s SMA just gained a major hyper-targeting boost. From a dealer perspective, consumers who visit their Website or the manufacturer Website will automatically be targeted with a video ad that includes your location and current offers. Twitter, on the other hand, has a wide range of affordable advertising opportunities, including promoted tweets, mobile ads and free options like Twitter Cards. Each of these uses Twitter’s advanced targeting capabilities to directly market to relevant users in its user base. These capabilities include keyword, interest, tailored audiences, gender, geotargeting and language. Even more crucial than those targeting capabilities is the nature of Twitter itself. By primarily being a real-time conversation platform, dealers can leverage conversations to build brand loyalty and keep consumers coming back — not just when they’re looking to buy a cars, but after their car is purchased and they need their vehicle serviced. Like digital advertising as a whole, SMA is here to stay. Dealers should begin to incorporate it into their digital marketing strategies in order to expand their reach and prospect lists, engage with targeted consumers and ultimately make a sale. Susan Givens is the publisher of AutoSuccess. She can be contacted at 877.818.6620, or by email at sgivens1@autosuccessonline.com.
MichaelObeso
marketing solution
achieve the elusive 45-minute sell
(Without Sacrificing Customer Service and Gross Profit) As credit databases get more refined and the technology gets more sophisticated, the three credit agencies — Experian, TransUnion and Equifax — are coming up with solutions that require no social security number to instantly prescreen credit. This is good news because the consumers are ultimately getting the value. Now the customer’s car buying experience can be quicker and more comfortable because you can show them the right cars right off the bat. Getting the customer’s credit score and profile makes the selling process quicker. Currently, it takes an average of six hours to buy a car and, as vehicles become more expensive, landing the customer on the first demo may not always be the car he or she can get approved for by the banks. Switching customers from a vehicle your salesperson got their heart set on can kill a sale. No one wants to hear that they can’t afford the car they want. Worse than that is the feeling of embarrassment that accompanies this news. The customer goes from the new-car induced high to the credit and affordability low in your showroom — and this feeling is associated with you and your store. This scenario is a loss of two to three hours, CSI points and, potentially, the gross profit even if you are successful in putting the deal back. But in most cases, the customer leaves your dealership with a bad taste in their mouth, blaming the store for not treating him with respect. They then go to another store with a better idea of what they can afford and buy a car. You are the bad guy and your competitor is the knight in shining armor all because you sold them on the wrong car.
About five years ago, TransUnion deployed a batch instant prescreen for the automotive retail sales market. Experian, however, has perfected it and is about to enter into the auto market. When looking for a solution for your store, first it is important that the platform is an EI3PAcompliant solution — a security measure for data storage, which carries security clearance, just as the credit card companies do. Second, make sure it is a truly live prescreen. You can test this by simultaneously pulling the credit bureau from your vendor — the FICO score should actually match. Third, find a solution that will let you know if this customer shops again. Even the best sales process sees buyers leave and wait to purchase a new vehicle. If a customer visits your store and you are ultimately unable to put a deal together, you want an opportunity to sell them when the time is right. You can depend on your salespeople to follow-up, or you can be notified when this person reenters or is likely to reenter the market. Which one do you think would work better?
Switching customers from a vehicle your salesperson got their heart set on can kill a sale. No one wants to hear that they can’t afford the car they want. Worse than that is the feeling of embarrassment that accompanies this news. The customer goes from the new-car induced high to the credit and affordability low in your showroom — and this feeling is associated with you and your store. To stay informed of your customers reentrance into the market, all you need to do is to drop this customer’s data into a lead-watching system or a credit-monitoring solution. Moving forward, when this customer is back in the market and has his or her credit pulled, or if the customer’s credit situation improves, lead watching systems with Experian’s proprietary algorithm will alert you. More importantly, each alert comes with the reason why you were alerted. This is helpful because it gives you a talking point with that consumer. For instance, the report may state that “the consumer is paying a five percent premium interest rate,” or “the consumer now has a 40 percent remaining balance on their auto loan principal.” Each alert let you know to call or get in contact with the prospect with a “firm offer of credit.” And, as a dealer, you need to be able to set up guidelines based on your current lender’s underwriting guidelines. This gives you full control. A system like this will also allow you to upload your mail manifest. A saturation mailing can turn into a rich data set for future marketing. Your mail today is a one-time use. Adding a solution such as this can turn the mail into 12-month sales generating machine. This allows your mailing of 10,000 to provide you with more leads month after month. You can also install a tablet kiosk in the service department and expect another 250 leads from there. You might gain another 250 from Internet opportunities, and another 250 from walk-ins. If you really want to scale your database, buy a “make and model” list, and you can grow your customer base exponentially. For a free copy of “How to get more from your mail,” please contact me with the information below. Michael Obeso is the co-founder and CEO of iPreCheck. He can be contacted at 866.431.3593, or by email at mobeso@autosuccessonline.com.
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MADNESS Conquest system boosts new vehicle sales, margins for dealers
“Dale, you’ve got to do something in new cars. It’s madness.” Ever since vAuto launched its Provision® system for used vehicle inventory management, dealers have been asking for a solution that would help them better attune their new vehicle inventory management practices and pricing to the market. I would agree with the dealer who described current conditions in the new vehicle market as madness. In today’s market, you pay good money to acquire a new vehicle from the factory, only to end up retailing it for little or no margin. In fact, your new vehicle department often effectively serves as a loss-leader, wherein the F&I office becomes the primary money-making beneficiary of each retail sale. What’s worse, you can’t really count on customers coming back to service their vehicles or purchase another car, even if your initial sale seeds the trust necessary to earn repeat business from them. Dealers are quick to point fingers at the culprits behind this challenging retail scenario. There’s the Internet, giving rise to more new vehicle pricing transparency and smarter, more priceaware buyers. You’ve got volume-focused dealers, who give away vehicles and earn their keep through factory stair-step incentives and below-the-line monies. And then there are the factories themselves, training customers to view the manufacturer’s suggested retail price (MSRP) as just that — a mere suggestion. The biggest problem, in my view, is that the new vehicle madness has largely benefited new vehicle buyers at the expense of dealers.
Buyers know more about purchasing a new car and getting a good deal than ever before. This knowledge creates downward pressure on retail prices, and far less disparity between what Uncle Bob or Aunt Mary might pay for the same new car at different dealerships. As this traditional disparity diminishes, dealer profit margins go south — arguably the most painful symptom of a highly efficient, technologytransformed retail market. (Just ask former Borders Books executives.) In early 2013, while working to tame the madness in new vehicles, we quickly found three critical insights: 1. Dealers could at least minimize the madness if they had better knowledge of new vehicle competition and pricing in their local markets, and were able to offer a greater degree of pricing clarity to consumers. After applying our Live Market View® technology to the new car market, we saw a big disparity: Most dealers priced their new vehicles at MSRP, with only a few offering more market-competitive pricing. In most markets, we found pricing imbalances — lots of new vehicles at the top of the spectrum advertised at MSRP, a few vehicles were priced near the bottom of the spectrum, and very little, if any, of the pricing
“clustered” near the middle — a stark difference from the used vehicle market. In other words, we identified a market inefficiency related to pricing, and an opportunity to help dealers become more competitive and precise in their new vehicle pricing. 2. Dealers would need a better, more efficient way to account for factory incentives in their new vehicle pricing and promotion. The prevalence of MSRPonly pricing for new vehicles is in part due to dealers’ inability to accurately and easily account for complex, ever-changing incentives and rebates in their pricing strategies. In short, these factory programs are both a blessing (they help sell cars) and a curse (they’re difficult to manage) for dealers. The end result is that most dealers don’t tie incentives and rebates to their retail asking prices, creating a scenario where consumers can’t really find the “best price” online directly from dealers. Instead, dealers default to determining the right mix (or “stack”) of incentives at the sales desk, and mistakes can (and do) happen, costing customers and dealers money. This insight led us to acquire AIS Rebates, a Detroit-based company with cutting-edge technology that collects and combines incentive and rebate data for dealers from manufacturers. We saw an opportunity to link this information to new vehicle pricing strategies, effectively helping dealers put a “first pencil” price online for every car. 3. Some dealers would likely resist a cure for the new car madness, even if it hurt them to do so. We knew that some dealers, despite consumer desires for greater pricing clarity and transparency, would prefer to maintain a level of mystery in their new vehicle pricing. This preference owes to the traditional way many dealers retail new vehicles. Most buyers get their “number” only after they arrive at the showroom and negotiate for it.
From a product development perspective, this retailing reality posed a significant risk: Would enough dealers embrace a solution that would require them to change the way they do business and stop making the madness worse? In the end, we decided the risk was worth the potential reward — there would be less madness in the new car market, and greater gains for dealers who choose to embrace a different way of managing, pricing and retailing their new vehicle inventories. From these insights, we developed a new car inventory management and pricing system called Conquest. Earlier this year, this system debuted at the National Automobile Dealers Association (NADA) Convention in New Orleans. Since then, it is proving to give dealers what we call “a new way to win in new cars.”
The power of Conquest and its promise for dealers This new system is built on a simple premise and promise: Dealers who properly price and promote their new vehicles will be rewarded by customers who seek a higher level of pricing transparency as they shop for and purchase a new car. Over time, they will sell more new vehicles in less time, and achieve better profit margins. To help dealers reap the rewards, Conquest offers dealers: Unprecedented competitive new vehicle insights. Conquest gives dealers the ability to see the vehicles “on the ground” in their markets, showing their brands in comparison with competing makes and models. The system distinguishes colors, trim packages and other attributes to ensure dealers see relevant car-tocar pricing and supply / demand comparisons. A Northeast Volkswagen dealer said this new way of dealing with new car pricing helped him spot opportunities to raise his new vehicle prices and improve his front-end margin by nearly $500 per unit. “We were using our gut and horror stories we heard from customers to determine how we’d position our prices as a ‘good deal’ online,” the
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dealer said. “We found we were giving away a ton of unnecessary gross profit. Now, we’re able to position ourselves aggressively in the market and significantly increase our gross profit.” Dealers can also use the system to validate their new vehicle prices with customers, showing them how and why a vehicle’s asking price stands tall against the competition. Flexible, intuitive pricing rules. With this system dealers can create rules to price vehicles based on MSRP or invoice, as well as the age of a vehicle in a dealer’s inventory. With competitive market data now in hand, dealers can set prices for individual vehicles, or multiple vehicles grouped by model, trim level and other criteria. Dealers can also set minimum prices to help desk managers instantly know the lowest dealer-approved retail price to close deals with customers. Conquest’s pricing features bring a higher level of efficiency and precision to the way many dealers currently price their new vehicles. “It was cumbersome for me to price the cars,” a Pennsylvania Toyota dealer said. “It would take me an entire day to apply our homemade formula. My prices were half-decent for what I came up with, but they weren’t anywhere near as dialed in as they are today using the system.” Incentive / rebate stacking and management. Using this technology, dealers can include all relevant incentives and rebates in their new vehicle pricing strategies. Through the integration with AIS Rebates, Conquest helps dealers configure and automatically “stack” incentives and rebates to effectively “show the math” behind a new vehicle’s online asking price. In addition, this integration helps dealers maintain consistent pricing rules and strategies, even as incentives and rebates change from month to month. Custom new vehicle descriptions. Conquest incorporates vAuto’s AutoWriter technology to help dealers craft descriptions that highlight each new vehicle’s most compelling equipment and features, as well as required disclosure information for incentives and rebates.
Currently, many dealers do not create custom descriptions for new vehicles, a merchandising gap this new system helps fill. One-touch syndication. This new technology provides a single system to set new vehicle prices and syndicate listings to dealership and third-party Websites, eliminating redundant data entry for dealers who currently use multiple systems to set and update their new vehicle prices. The Pennsylvania Toyota dealer said Conquest is living up to its promise — his more transparent new vehicle pricing and promotion makes customers happy and benefits his bottom line. “We spend our time talking about our pricing philosophy with customers in the showroom, as opposed to price,” he said. “Customers buy in and love it. If we have to discount, our discount is now in the $150 to $200 range.”
From madness to method in new cars I am both gratified and humbled by the positive early responses this new system has received from dealers. The system is living up to its potential and promise, and dealers are enjoying the rewards they expected when they signed up. It’s also striking how much Conquest’s rollout is similar to what vAuto encountered when we brought the Velocity Method of Management™ and the Provision used vehicle inventory management system to dealers. With Provision, dealers who embrace new market data and methodical, metrics-based management have transformed sleepy used vehicle operations into powerhouses. These dealers were, in effect, taking control of their destiny in a used vehicle market where traditional markups and gut instincts simply weren’t working anymore. With Conquest, dealers face a similar dilemma. The madness in new cars is real, and it requires a new, more market-methodical way of doing business for dealers who want to thrive for years to come. I’m encouraged that dealers who have embraced this system find the system helps them ease, if not erase, some of the pressure on their front-end margins for new vehicles, and turn their inventories more quickly. In effect, it is helping dealers embrace a higher level of market transparency, and take back some of the retail control the Internet has eroded away. As the Northeast VW dealer said, “The day will come when Conquest is vital for every dealer. I don’t know if that day will be two, three, four or five years from now. I’m not waiting. I’m all in now.”
MarkTewart
leadership solution
successful dealerships practice the 3c’s Success is not a mystery. Success leaves clues, patterns, strategies and philosophies to be studied, emulated and practiced. Failure has its own story. If you study both, you begin to get a clear picture of how to be successful and how to avoid failure. One component of all successful dealerships is the leadership practicing the 3C’s — Coach, Counsel, Cut. The more frequently and more effectively you coach people, the less you have to work and worry about deals. When you begin to more effectively coach people, you move your dealership’s culture from transactional to transformational. Transactional dealerships are bogged down in continually working deals with a poor process delivered in a poor fashion that delivers a poor customer experience. The leaders in these dealerships are focused on managing things rather than leading and transforming people. All dealerships succeed or fail based upon the 4P’s — People, Process, Product and Positioning. Unfortunately, without the “People” portion of the 4P’s being right, the other three will not matter. Your people are the equity in your business. Equity is either grown or lost. You do not grow equity by just managing deals.
spending their most precious capital of time: in front of their team or in front of customers. In the marketplace of the future, managers will greet the customers in the beginning, instead of a T.O. (turnover) at the end of the sales process. You win or lose most of your customers in the first two minutes. Why not use your most highly paid and valuable team members in the beginning of the process? By the manager making introductions, salespeople are properly coached and the customers are introduced to the experience they will receive. The excuse made by managers is that they are managing deals and admin duties. Therefore, no significant change is made in the process — it’s like Groundhog Day with every deal. The same mistakes are made. The same deals lost yesterday will be lost today for the same reasons. Human capital is lost. Effective use of time is ignored and status quo reigns. The same excuse is made when it comes to training. Good coaches coach and make their team better every available second they have. In the transactional approach, training does not occur, turnover is rampant and the dealership is in a never-ending cycle. The more you coach people, the less you have to work deals.
Managers must remove themselves from their desks. Too many When leaders give their team members clear expectations and training managers have become chained to their desk either working deals in a transactional manner or conducting duties that are worthy of a minimal- for their job duties and results, then they have earned the right to Counsel — the second of the 3C’s. wage person. There are two places a manager should be primarily
Underperforming team members deserve and need counseling to let them know the boundaries and tolerations of the organization. Otherwise, your team members are left to chance. Your team is left with ambiguous messages about their success, failure and progress. Imagine a football player having really bad games over and over and the coach never coaching him on his mistakes, or giving him counseling to the consequences of his mistakes.
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The third of the 3C’s is Cut. If you are not willing to cut underperforming or bad team members, you are tolerating bad behavior and creating bad expectations. At that moment, your fate is sealed. You get in life what you tolerate, both good and bad. If you are not willing to cut bad poor performers or team members with prevailing bad attitudes, it’s like knowing there is cancer in your body and you can be saved by cutting it out, but you keep it, let it grow and hope it will change on its own. It won’t. Cut it out. Too much turnover on your staff isn’t a good sign, but turning the bottom poor performers or bad attitudes is a good thing. It creates a higher level of expectations for everyone. Remember: The goal of employee retention does not mean tenure. You must always look to improve and upgrade your team. In professional sports, there is a draft each year for new players. The environment and expectation is to perform or be replaced. This is nothing more than natural selection and Darwinism in action. This keeps team members on their toes with an attitude of wanting and needing to continually improve. This should be the goal of any business. Create a stronger and perpetually growing dealership with a culture of winning. To create that winning culture, practice the 3C’s. Mark Tewart is the president of Tewart Enterprises, and the author of the best seller, How To Be A Sales Superstar. He can be contacted at 866.429.6844, or by email at mtewart@autosuccessonline.com.
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DennisMcGinn
leadership solution
who is really responsible for time to market? Quick quiz: Who is really responsible for time to market? 1. Used Car Manager 3. Fixed Operations Manager 2. F&I Manager 4. All of the above If 1, 2 and 3 are not being measured as a start-to-finish workflow process, Time to Market performance cannot realistically measured and managed. This fact makes the GM, by default, the owner of Time to Market. The problem is that he or she does not typically have the time to collect and verify the data needed to evaluate each and every car from acquisition to front-line ready.
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Suppose, however, you could eliminate the time a GM needs to referee conflicting priorities between their used car manager and fixed ops manager, and replace that time with a realistic Time to Market goal that is both measurable and manageable? That is exactly what workflow technology does for Time to Market. Workflow technology measures and manages, in real-time, every step of the process from purchase or trade to front-line ready or funded, so your employees are independently accountable. It’s also flexible enough to change quickly to keep up with the unforeseen day-today challenges of a dealership. Every dealership should be able to respond to constantly changing conditions. This includes varying business levels, availability of qualified technicians, space and location changes, and onsite and offsite vendor management. The GM needs to be able to have sales, service and F&I operating with the same game plan for every car, constantly adapting to change. This is what makes workflow the right tool for the job; it also creates a culture of individually managed accountability that is net positive. To illustrate this point, we need to look at what has been happening up until now. GMs have been attending their 20 Group meetings for years, and when the topic of reconditioning comes up, the response is most likely, “My average is two or three days and, therefore, I don’t have a problem.” If the GM had the real numbers, however, the response might be, “My average is 10 days and should be five days or less,” which means that GM has two turns hidden in recon. When there is no reliable measurement to work with, the tendency is for the recon process manger to quote best-case numbers — usually what a GM wants to hear. Sound familiar? With a properly configured workflow system, Time to Market puts your used car manager and fixed ops manager on the same page and provides the GM with a way to not only hold each everyone accountable from start to finish but to set realistic targets for each step and even plan resource capacity levels and subrelationships to support your business plan. Next time, I will be describe how three different dealerships are using workflow to measure and manage Time to Market from purchase or trade to funded, including new cars. Dennis McGinn is the founder and CEO of Rapid Recon. He can be contacted at 866.268.3582, or by email at dmcginn@autosuccessonline.com.
David Lewis & Associates Automotive Sales & Management Training
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EdLouis
marketing solution
what you need to know about geofencing By now, we have all heard the term “geofencing” and have possibly benefitted in some way from this technology. At a mall, you may have received a coupon via push notification on your smartphone when you walked by your favorite store. Maybe you’ve driven past a popular local establishment and received a notification about a special event for that day. Geofencing is a location-based service that allows businesses to send messages to smartphone users who enter a defined geographic point. Once you enter a specific address into the system, it creates a virtual “fence” around that point. You can then create unique messages catered to the needs of the business or the consumers. When you know where customers are and how they behave, you can not only customize offers, but also give them rewards and a personalized experience. Below are some areas that outline how dealers can use this technology to attract, sell and retain customers: 1. Engage your shoppers. Some dealers send promotions to customers’ smartphones when they
enter their store. The message can be “Welcome to Paragon Honda. We have complementary beverages available during your visit with us. Please see Susan at the front desk if you need assistance.” Or, as a customer drives by your dealership, they receive a notification that says, “Stop in today and receive a free car wash.”
Deals can be hyper-local. Knowing that customers are nearby lets dealers tailor offers based on local events or holidays. For example, for the upcoming Labor Day season, a dealer can deploy targeted ads such as “Labor Day Special — Free Oil change,” or “Labor Day Special — Free Fall/Winter inspection” in the days leading up to the holiday. This technology, by the way, can also be used for internal messaging. If you have all of your employees download your app (which they should), you can create a specific message with an announcement. An example may be “Please remember that the Special Lease Program ends today.” 2. Competitive Edge. By sending a targeted offer to a customer in a parking lot, you may be able
to steer them away from competitors. If a customer or prospect drives into a local express lube shop or a nearby competitive dealer, they can receive a notification with customer rewards, such as gift cards or coupons from your dealership.
3. Local Businesses. Dealers can also work with businesses in their local area for cross promotion.
For example, if you have a local gas station that you are familiar with, once your app users enter the gas station, they receive a notification from your dealership that says “Complimentary fill-up on us with your next oil change. Stop by today for details.” Or, if it’s a local restaurant, “Appetizers are on us (ABC Motors). Show this coupon to your server to redeem.”
If you are worried about abusing this technology and upsetting your customers with too many messages, there are measures in place to prevent this from happening. It is possible to create limits to the frequency of a particular message. For example, if your dealer’s address is one of your defined geographic coordinates, the “Welcome to ABC Motors” message can be set to “no limit.” This would mean that every time that particular customer walks into the dealer they receive the same welcome message. Or, if it’s a competitor message, you may want to limit that to once a month. If it’s the one for entering the parking lot of a local business, such as a gas station or restaurant, you can limit that to once every six months. Always keep in mind that push notification technology and location services are opt-in only services. Your customers must agree to accept these services once they download your app. They can also choose to opt-out of these services. By keeping the above parameters in mind and not abusing this technology, you can maintain a competitive edge, increase business and amaze your customers with unique and timely messages.
Ed Louis is the CEO and co-founder of DealerApp Vantage. He can be contacted at 866.604.6710, or by email at elouis@autosuccessonline.com.
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MarshBuice
sales & training solution
want a pay raise? up yours! • Be Last: Most salespeople show up and wing it every day, which is precisely the reason why Three pounds is all that is keeping you from most salespeople suck; the good news is that, because the bar is set so low, it doesn’t take much ultimate success — namely, your brain. If for you to be extraordinary. Before you leave tonight, make a three-, four- or five-item “Why it weren’t for our brain, the sales profession Do” list. I call this a “Why Do” and not a “To Do” list because a “To Do” list makes you actively would be an easy job. Instead of using our brain ineffective. A “Why Do” list, on the other hand, is a list of three to five things you need to do as a tool, though, we use it as a weapon — on the minute you show up tomorrow. Why? Because that’s how you sell a car. ourselves. It’s the self-defeating thoughts, past experiences and bleak predictions that sharpen Your list, for example, can be: our blades of self-destruction. 1. Follow-up on all unsold customers (Utilize all mediums: phone, text, email) When you were new, you had no problem 2. Follow up with previous day’s customers to thank them and see if they have any questions. grabbing an Up. With no preconceived notions, 3. Find and call at least three customers who you haven’t spoken to in three months. (I know you believed every customer was truthful and you’re scared to call the ones you haven’t spoken to in years — they probably don’t own the car every one of them would buy from you — if not you sold to them, but do it anyway. Fear will hold 99 percent of other salespeople back.) today, sometime in the future. But with every 4. Find and adopt least one orphan owner sitting in service. Be genuine and in a “give” mindset “no,” ignored phone call, missed appointment not a “take” mentality. (Often, they’ll be shocked, thinking you’re trying to sell them and outright lie, the stones of negativity and something. Awe them by just being a helpful friend) cynicism sharpened your sword of self-defeating 5. Hand out two business cards to anyone outside of the dealership. People love to have a friend thoughts. It’s as if we begin our sales career with in the car business. Start with two cards and try to out do yourself each day. (Again, fear of an empty backpack — we proudly slip both arms how they’ll be perceived will stifle 99 percent of other salespeople) through the straps adjusting it so that if fits, but with each rejection a cupful of sand is put into As soon as they show up for work, most salespeople jump out of their car and react to whatever is the backpack. Eventually, the burden becomes going on. If a group of salespeople are standing around, they’ll join the crowd hoping that they’ll too heavy to carry. Our hopes shattered and sell a car, too. With your “Daily 5” list, you’ll show up with a purpose and become more productive. knees buckled, we work less and rest more. • Be First: Now that you’re armed with a “Daily 5” list, your mission is how fast can you get in Two miles down the road from my house front of a potential customer. Regardless if it’s a customer in service (and that’s on your list) or sits a multi-million dollar casino; in order to a fresh up, talk to them ASAP. This will get your mental juices flowing and jump-start your selfkeep people coming back, they’ll “give away” confidence. Your self-confidence wanes every hour that passes when you haven’t spoken with a Harley-Davidson motorcycles, Mercedes Benzes customer. Keep your confidence high by pressing the flesh with any and everybody. and Aston Martins. The rules are simple, “No purchase necessary and you must be present to • Average Per Up: The longer we’re in sales, the more judgment we seem to pass. We judge our win.” While people anxiously wait for their name Ups based on what they drive, say and how they look. We foolishly think that we don’t want to to be announced as one of the lucky winners, “waste our time” with an unworthy Up so we become selective in who is worth it. what do you think they do? They gamble — they spend their resources in the wrong places. The truth is, every customer is worth your time. Divide your YTD gross by your YTD Ups. For Salespeople are much the same way; we show instance: YTD gross $25,000 / YTD Ups 288 (48 ups/month), so $25,000/288 = $87 per Up up, hope something lucky happens, and spend our most valuable resource — time — in the Now, if I told you that I would give you $87 for every Up that you do your best to demo, write up, wrong places by gossiping, mindlessly waiting and sell to — regardless of the outcome — how urgent would you be? Chances are you’d think and catching up on social media. twice about letting someone else catch that Up or incoming phone call. Every time you look the other way, act like you’re on your cell phone, or “go check on a customer’s vehicle in service,” just The sales profession is not a drawing, and so you won’t have to wait on a “unworthy Up,” it costs you — big time. “hope” is not a strategy. There should be no reason why you would/should show up every Making it a game will take the sting out of the rejection. So when those three customers didn’t day and leave without ever having worked with buy today, instead of beating yourself up, know you still made $261. Keep that mindset every day a customer, and yet salespeople do it every day. and you’ll be cashing big checks. Want to be the best? Up yours and prove it! I’ll see you next time We show up and hope. The sales profession is on the blacktop. more mental than it is physical, and when it Marsh Buice is the sales manager of Mark Dodge, Chrysler, Jeep. gets too mental we get less physical. To help He can be contacted at 866.535.5006, or by email at snap you out of your funk, here are three rules mbuice@autosuccessonline.com. that will help you get back and stay on track.
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RussellGrant
leadership solution
five easy steps to mitigating data risk If you knew your dealer management system (DMS) was going to be attacked and that your company would be on the brink of a data breach, would you change your data risk plan? Would you even know where to begin fortifying your plan to protect your company and your most valuable asset — your data? For most, the presence of the described imminent threat would cause a frenzy of worry and work around building up one’s DMS security, if not a complete re-work of the old and tired data risk plan in place. I don’t know of a single dealer who wouldn’t jump through as many hoops as necessary to prevent their data from being breached under these circumstances. This scenario, and its foreseen results, then begs the question: Why would anyone wait to protect their data? We’ve all stood as shocked witnesses as large company after large company has had their data breached. With the immense fallout trailing each attack, worldwide attention has been commanded and focused upon the issue of data security. Both recent and potential future events emphasize the importance for all to take the required steps to protect the data they’re responsible for now. If you find yourself amongst those who would feel the pressing need to vamp up data security, I would like to propose an easy five-step process that could take you from where you are now to where you want to be.
Step 1: Understand The Applicable Law While the Gramm-Leach-Bliley Act is rather lengthy in its entirety, the most crucial component for dealerships to understand is whom it holds responsible for data breaches: the dealership. Federal Trade Commission (FTC) Chairwoman Edith Ramirez emphasized this point when she asserted that it was their responsibility “to hold companies accountable for safeguarding consumer data.” Step 2: Control Who Has Access to Your Data Currently, the vast majority of dealerships allow vendors unlimited access to their data and dictate how it is moved from their DMS. This issue is exacerbated by the sheer number of vendors who have the aforementioned unrestrained access, as well as how poorly this group is monitored and updated by dealerships in accordance to the contracts they have in place. This issue leads to the second step that must be taken by dealerships: Request a list from your DMS provider of all who have access to your DMS data. After the list has been obtained, verify that all who are currently receiving your data are valid recipients. Step 3: Control How Your Data Is Moved Along with ensuring that your data is only being shared with active vendor partners, you should control the way in which your data is moved. As the National Automobile Dealers Association (NADA) recently recommended, all dealerships should push DMS data to their vendors, rather than grant them access to their DMS to pull said data. This seemingly small shift in how data is moved will empower you with the knowledge of exactly what data is being pushed and to whom it is being pushed. Step 4: Have Binding Agreements in Place That You Understand Part and parcel to having an accurate list of those who should be receiving your DMS data is confirming that you have a valid contract with each data-receiving vendor. Above and beyond merely having a binding contract, you should be sure to understand each contract and what it enables a vendor to do with your data.
It is best practice for a dealership to have a standard agreement in place prior to any and all business transactions transpiring with each vendor that guarantees the protection of the dealership and all customer data being shared. Step 5: Have a Fail-Safe Cyber liability insurance is the last critical aspect of a fool-proof data risk plan. As ever-increasing amounts of data are being shared amongst a vast number of individuals and companies, no plan can sufficiently address all potential risks. It is necessary for both dealerships and vendors to acquire cyber liability insurance to ensure ample protection for any and all transactions. Our Best Offense Is Our Best Defense
Complacency when it comes to security and data risk plans can no longer be tolerated. We can no longer sit back and hope that our data is not breached; the risk and cost are simply too great. Start planning today to reduce your dealership’s risk and exposure. If you would like any help with your dealership’s data risk plan, please feel free to contact me via the email listed below.
Russell Grant is the vice president of brand and business development for DealerVault. He can be contacted at 866.662.7330, or by e-mail at rgrant@autosuccessonline.com.
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JoeClementi
leadership solution
tend to your garden of success or it will tend to you Find a mediocre salesperson and you’ll find him or her surrounded by peers with like-minded views, opinions and excuses. They will tell you why their sales volume lacks consistency and their gross profit production is far below the median. They practice the excuses so well that they’ve become experts a closing themselves on mediocrity. They come to this new job with an abundance of enthusiasm despite the fact that they know so little. They eagerly plant new seeds of opportunity with modest optimism. The degradation of skill doesn’t happen overnight, so what happens to them?
At some point, a weed will sprout in their newly planted garden. In the beginning, the weeds are harmless and do little to hinder the growth of the newly planted seeds. In fact, the growth is so slight it appears as an insignificant sprout that blends in with its surroundings. The salesperson thinks, “it’s a bit of an irritant but harmless to my garden.” Experience has taught them to ignore the weed and hope it grows tired or dries out. Sooner or later, their garden is so riddled with weeds that they never see the infestation take over. Poor salespeople accept the weed as a condition, instead of an inhabitant that needs to be tended to. They find blame in everything else around them but the gardener. The expectation is this newly planted garden will not resemble the last spot they planted. Gardens that are littered with excuses have the ability, if allowed, to contaminate other gardens beyond their boundaries. Poor gardeners love to share their wisdom and insight with all willing participants. They are happy to provide shortcuts, methodology and philosophies — if you allow it. They provide directions, as well as how to walk away when the garden becomes too much to care for. Management of the gardener takes time, persistence and nourishment — all of which require a commitment for the long haul. The gardener has to show up consistently to pull the weeds of doubt, discontent and uncertainty. The master caretaker must be capable of performing the most tedious tasks day in and day out — when no one is looking. High-performance salespeople take pride in their gardens. They pull the weeds of pessimism and negativity daily. High-performance people search out high-performance organizations. They look for organizations that create a culture of well-manicured gardens that produce beautiful results. High-performance people take pride in the gardener. High-performance people seek out those with more robust gardens so they can find how to do it better. To all those poor-performing salespeople who refuse to tend to your garden: Take up root somewhere else. For the average salesperson that wants more: Find someone who has the garden you want and do what they do. It takes more effort to water and feed the garden then it does to eliminate that single weed, but the results are so much more satisfying. Remember: The garden is only as good as the person tending to it. Joe Clementi is the general manager and sales trainer at Sacramento Kia. He can be contacted at 800.452.5606, or by email at jclementi@autosuccessonline.com.
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BruceThompson
marketing solution
navigating the new vehicle incentives maze (or cutting Right Through it) OEM rebates and incentives inspire mixed emotions within dealers. On one hand, dealers rightfully see them as opportunities to play with “house money” when it comes to their new car pricing. These subsidies allow them to have a significant advantage over the competition if they take the time to advertise a lower price on the Internet, deducting OEM incentives from MSRP. The real problem, however, is that most OEMs have not made it easy for dealers to integrate these incentives into their pricing in an efficient manner — and that’s putting it mildly. Some dealers would probably have stronger words to say on this subject. If you’ve heard the term “monthly incentives maze,” you know exactly what I am talking about. Applying these incentives to retail Internet pricing for stores with a large and diverse new car inventory is a completely manual process that requires the precious time and effort that most dealers do not have to spare. How do the incentives “stack” on top of each other for a particular unit? Which incentives can be used with others? What combination of incentives results in the highest discount for the customer? These are the challenges. Why isn’t there a better way to do this? It is imperative, obviously, for dealers to embrace the trend of pricing transparency that has developed in the industry over the past few years. The evolution of an Internet-based car shopping experience has been the catalyst for a more-informed consumer who has defined expectations for their vehicle search process
today. Technology needs to step in to make this process painless, for the benefit of both the dealer and the consumer. I am happy to say that there are now software solutions on the market that can automate this process for dealers and reduce what was once a completely manual and timeconsuming mess into a seamless, instant and manageable task. A dealer’s entire new car inventory can now be priced with all applicable incentives “baked in” and syndicated to all retail pricing feeds in a matter of minutes. Technology can now determine the optimal combination of “stackable” incentives that are eligible for a particular unit on the fly so a dealer can offer customers the best possible price on the market.
The real problem, however, is that most OEMs have not made it easy for dealers to integrate these incentives into their pricing in an efficient manner — and that’s putting it mildly. Some dealers would probably have stronger words to say on this subject. If you’ve heard the term ‘monthly incentives maze,’ you know exactly what I am talking about. These tools can also help a dealer dynamically price their inventory to market by monitoring the true market value of any new car in their competitive market, giving them further insight and leverage with the customer. The ability to prove that a dealer’s price for a given unit is a fair price based upon the market is worth its weight in gold to both the dealer and the consumer. Top dealers across the country have already embraced this trend with fantastic results. Again, transparency is now the name of the game. Dealers slow to adopt the technology and transparency will inevitably begin to lose market share. I can assure you that this will become the over-arching reality moving forward. Incentive integrated pricing is a good place to start, and there are new tools on the market that make it a snap to use the manufacturer’s money to lower the price of your new car inventory. Bruce Thompson is the founder and CEO of Pearl Technology Holding. He can be contacted at 866.613.1344, or by e-mail at bthompson@autosuccessonline.com.
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DonO’Neill
sales & training solution
what if we were the consumer? would i buy a car from my dealership?
The other day I went to replace my iPhone. I like going directly to the source, so I went to my local Apple store. As I exited the car and approached the store, I noticed several of the employees out front smoking. They didn’t acknowledge me, and let me walk right past them. I thought it was odd, but shrugged it off. I entered the store, and walked over to the newest iPhone they had. Looked good, but I had some questions. I looked around the store, saw two employees, and waived at them for some assistance. They seemed to finish their conversation, then, casually one came over to assist me. “Can you tell me the difference between these two models,” I asked. “Sure, that one is black, that one is gold,” he said, sarcastically. “OK, how much is the 5s 64 GB?” I retorted.
“Absolutely,” the kid chimed back. “Just let me get your initials here that, if numbers and figures are agreeable, you will be purchasing this phone today. Also, I need you to fill out this application, so we can get you the best rates for your phone.”
make a purchase,” he said, “but before we ever give pricing, we always want to make sure that the customer is ready to buy.” Seem unbelievable? Do you believe that scenario could ever happen at an Apple Store? Now, ask if it could happen at yours. Does it happen at yours? We throw around terms like “customer experience” in this industry as if, by merely saying it or printing it on some dealership collateral, it makes it so. I always worked to try and sell the right car to the right consumer every time. That had more to do with listening as a salesperson, manager, finance manager or (insert position here) than it did having my “hit list” of cars that were aged. If we can incorporate our technology acquisitions and our training to make each consumer’s experience a pleasurable but unique experience, we are on our way. One way dealers can accomplish this is to utilize a pre-screen process to ensure that the customer with a 608 credit score doesn’t fall in love with that $58,000 vehicle. These dealers tend to lead that consumer to vehicles which are more fitting of the customer’s budget, rather than just the initial dreamer’s drive of that car they can never get approved on. Thus, these customers are spending on average three hours less in the showroom and the lot. The customer leaves with the satisfaction of knowing that they were given several options, and never were they pressured into a car that they “had’ to purchase. It is all in the presentation. Maybe it’s all in the pre-screen — real time, of course. Either way, they are selling the right car, to the right customer, every single time. I have news for all of us. These experiences are unique, and special to each of us as a consumer, good or bad. The difference between companies like Apple, Disney, the Ritz Carlton and ours is that that they empower their employees to make the experience unique; we give an oil change coupon. So the next time you set out to change the culture or the customer experience at your dealership, ask yourself this hard question: Would I buy a car from me?
This was weird. “I am paying cash for my phone,” I said, getting aggravated. Just then, a manager came from the back, tapped the kid on the shoulder, and then stepped up to engage me. “Sir, I would love to give you all the information you need to
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Don O’Neill is the vice president of sales and marketing for CreditMiner. He can be contacted at 866.469.9770, or by email at doneill@autosuccessonline.com.
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JimmyVee & TravisMiller
sales & training solution
how answering the phone could change your business
For most dealerships, not being able to attract customers over the phone is a major roadblock to success. The problem isn’t with the customers, but in the lackluster phone skills of your staff. When customers call a dealership, it isn’t to talk about a car. They are looking for help. They are looking to be guided to the right decision. They want to be told why they should buy a car from your dealership and why buying from you rather than any other dealership is better for them. They’re calling to cross you off their list. And most dealerships make that easy. Your team must discover what it is they are looking for so you can deliver it with confidence. If the customer has confidence in the seller, price will be less of an issue. Take, for example, what happened when we were in the market for new computers for our office. When the salesman answered the phone, we explained how we’d narrowed down the selection to two different brands. Right away the seller should have been raving about what he could offer us that his competitors couldn’t. He should have told us why his store was a better choice for us. But how could he have known? The first mistake this salesman made was that he didn’t ask any questions.
A customer should never have to drive the conversation forward. And yet, there we were, telling the salesman what we needed. We were left asking all of the questions. If the seller had asked questions — “What are you trying to accomplish?” or “Will this be a home computer,
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or will you use it for business?” — the conversation would have been more effective. In order to sell, you must ask the right questions, so the process can run smoothly. Salesmen with subpar phone skills hurt your dealership. When a customer calls a dealership, on some level they are ready to be sold. And if your team doesn’t ask the right questions, they can’t provide the best solution, leading to frustrated customers, poor experiences and lost sales. Your team must know how to prep the bait by asking the right questions of the customer. If they can’t figure that out, then you can’t take your business to the next level. The Importance of Asking Questions
Conversations start and thrive with questions. The more questions you ask, the better the conversation will be. Ask your customers not only what they are looking for, but also what their goals are. By asking questions, you can guide your customers to the right decision. Through questions you discover what the buyer is interested in and why. You can start to build a meaningful relationship with them. Then, when they show up at the dealership, you already have a connection, making it easier to get off on the right foot. If you guide them toward a different car that better suits their needs and goals, for example, they will realize you have their best interest in mind. The most effective question you can ask is “what do you want to accomplish?” This question starts a conversation and reveals the customer’s needs, so you can lead them in the right direction. Continue asking questions until you have narrowed it down to the best scenario for your buyer. The more effective your questions, the more opportunities you have to tell a story — and stories equal sales. For a complimentary Traffic Scale Report, which compares the quality of your traffic to other dealerships in your area and helps determine whether or not there’s potential business you’re missing out on, visit www.TrafficScale.com and use coupon code ASM1408.
Jimmy Vee and Travis Miller are founders of The Rich Dealers Institute and the authors of Gravitational Marketing: The Science of Attracting Customers and Invasion of the Profit Snatchers. They can be contacted at 866.867.9618, or by email at jt@autosuccessonline.com.
DavidLewis
sales & training solution
the seven most important words in closing Whether you are a salesperson or sales manager, your goal is to close sales. All we do up to that point is set-up and preparation. So, why is it that so many fail when it comes to this final step — approximately 75 percent of time? Closing is asking for the sale and should only be done once you have earned the right. Why would you ever ask for the sale if the value of your product has not been fully presented? I cannon tell you how many times I have asked a class of automotive sales professionals what they say immediately after they have presented their customers with the figures to buy the car. Nearly every time, most will state that they say nothing; they just sit and wait for the customer to respond. This is not asking for the sale — it is opening the door to responses you do not want to hear, such as, “Is that your best price,” “How much are you giving me for my trade” and worst of all, “Let us go home and think about it.” Some will even try to trick and confuse the customer by stating, “And how would you like this to be titled?” That’s not a closing question.
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It is an indirect form of pressure. Worse, most people realize the intent and become defensive. Once you have presented the numbers, there is only one thing you want the customer to say: “Yes, we would like to buy the car.” So, why not just come out and ask for the sale? If you have professionally earned the right to do so, no one will be mad or insulted. If you are the sales manager and are coming in for the close and the salesperson has made the proper presentation, most expect to be asked for the sale. Therefore, why not just do it? The seven most important words in closing are: “Would you like to buy the car?” It is a simple, non-pressure, direct question — and one that is expected. The time has been invested making the presentation and preparing the figures; the time is now right to simply ask for the sale. That is it, seven easy words. And do you know what is so exciting about these words? Some people will actually say “yes”! Those who do not say “yes” will likely respond with a reason as to why they are not ready to buy today and, after successfully overcoming their objections, guess what your final question will again be? “Would you like to buy the car?” By the way, “Would you like to buy the car today” is eight words. So never state “today,” because “today” is one of those pressure words you want to stay away from. Give it a try; I know you will like the results. David Lewis is the president of David Lewis & Associates, Inc. and the author of three industry-related books, The Secrets of Inspirational Selling, The LEADERSHIP Factor and Understanding Your Customer. He can be contacted at 866.834.6074, or by email at dlewis@autosuccessonline.com.
DavidDunn
sales & training solution
how important is your bodyshop estimator/ salesperson?
It dawned on me during a recent consulting visit that our industry rarely speaks in “sales” terms, but rather in “estimator” terms. If you go back 20 or 30 years, there was a high emphasis on salesmanship in bodyshops because jobs were often awarded to shops on a competitivebid basis. It was important for the bodyshop estimator to have sales skills because there was quite a variance in pricing from the dealer shop to the independent. In fact, 30 years ago the dealer shop was normally the more expensive but the better choice. It required selling acumen to justify the more-thorough estimate. Today, with the proliferation of DRPs (direct repair programs), it seems that estimator sales skills have waned. This is because insurance companies have been setting the rules for file handling, and even dictating how the estimate should be written. I feel that this has severely affected the dealer bodyshop’s bottom line. In fact, even some independent consolidators have fallen victim to chasing the approval of insurance companies to the detriment of quality, customer service and profitability. What Qualities Should You Have in Your Estimator?
The successful estimators I have worked with have two things in common. 1. They know how to ask for the sale.
she gets out maneuvered by either an insurance company who directs work away from you or simply a competitor who has better selling skills. Give this employee some sales training. Bodyshop-specific selling training or generic sales classes will help a lot. Additionally, start measuring sales effectiveness by keeping score. Measure opportunity, a.k.a. traffic, new sales and batting average. “Opportunity” equals the dollar amount of estimates written daily and month to date. “New sales” is the dollar value of estimate conversions into ROs. “Batting average” is the relationship between opportunity or traffic and new sales. It is calculated as “new sales” divided by “opportunity” or “traffic.”
2. They understand the importance of a long-term relationship with the customer. All too
often, the bodyshop estimator begins chasing the quick-fix of DRP agreements. While we are not anti-DRP, we do feel that it is dangerous to put too much emphasis on the insurance company programs and forget about your loyal relational customer. The bodyshop salesperson should never see the repair job as a one-time transaction that is steered to his shop. Rather, he should seek to build a lasting relationship with every customer who comes in the door. Often, the bodyshop estimator reacts to the urgency of key performance indicators set by insurance programs and fails to focus intently on that relational customer who has bought cars from you for years. Once again, the estimator may have never considered how important the potential lifetime buying cycle this customer has with your organization.
How Do You Know What Good/Great Performance Is?
A car manufacturer study a few years back showed that the consumer predisposition to have a collision repaired at the selling dealer was from 65 to 90 percent. The variance is due to different brands and quality perception of those brands. So, if your bodyshop batting average isn’t between 65 to 90 percent, you have serious sales issues. I recommend that you start keeping score of your sales batting average performance so as to help your estimator reach potential. I remember a former Toyota bodyshop guru telling me that when he saw shops with a batting average less than 80 percent, he figured they had a sales “prevention” program rather than a sales program. So, I guess you have to ask yourself just how important is your bodyshop estimator or salesperson. Is he or she a seller, or do you have a sales “prevention” program?
No matter how great a job you can do technically, it is to no avail if you can’t get the order. So many times the estimator is a great technical thinker but lacks the “Sales 101” training that you would give any new salesperson in any other department. Even if estimator “writes a great sheet,” he or
David Dunn is the founder of Masters School of Autobody Management. He can be contacted at 866.386.0042, or by e-mail at ddunn@autosuccessonline.com.
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the dealer panel
Chris Saraceno AndrewDiFeo Brian Benst ock Danny Benites Joe Clement i The F&I department, from the customer’s point of view, is probably the most mysterious section of the dealership, and it’s also one of the final impressions the customer is left with from your dealership. In the second of our current three-part Dealer Panel series, we’ll look at what goes into making an effective F&I department. For this installment of our panel, we spoke with Danny Benites, general manager of Greg Lair Buick-GMC in Canyon, Texas; Chris Saraceno, vice president and partner of Kelly Automotive Group in Pennsylvania THE and Florida; Joe Clementi, general manager and sales trainer at Sacramento Kia in California; Brian Benstock, vice president and general manager of Paragon Honda and Acura in New York City; and Andrew DiFeo, general manager of Hyundai of St. Augustine in Florida.
DEALER PANEL
AutoSuccess: What makes for a good F&I manager? Joe Clementi: The F&I professional is a hybrid — part quasi-
attorney, part advisor. He or she has to know how to cover the essential duties representative of the law while presenting products that produce revenue. Selling intangible products is difficult enough, but selling those products while presenting perceived value is complicated. These characteristics are most paramount: acute attention to detail, very disciplined and highly organized, ability to multi-task, customercentric focused, persistent and tenacious, avid goal setter, enthusiastic, passionate and responsible while holding high ethical standards.
part 2
the role of F&I
AS: What steps can an F&I department take to ensure customer satisfaction and repeat business? JC: They need to offer a thorough explanation of the financing options,
and give a detailed explanation of the products being offered and how they meet the customer’s needs. An F&I manager will bind the customer to the dealership long term not by overselling a product, but by actively engaging the customer so that they understand how to maximize the benefits of the product offerings. The lasting impression of the dealership and its service qualitybywill reside with the F&I professional. successful solutions provided
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AD: The most important part is the interview with the customer and
getting a feel for the customer’s driving habits, because that allows the F&I manager to tailor their presentation for products that will really add value to that consumer’s ownership lifecycle. If someone’s putting $10,000 down, for example, they might not need GAP insurance because they might not be in a negative equity situation. On the flip side, if someone drives 30,000 miles a year, they’re going to be out of the factory warranty after two years, so a vehicle service contract would make sense. This is where customer satisfaction comes into play. Also, the timeliness between the customer saying “yes” to the sale and when they’re in the F&I office is extremely important; a long wait is one of the biggest drivers of customer dissatisfaction. The more the sales and F&I departments can be in sync, the better.
a short period of time to get someone to like, trust and believe in them. Also important are their organizational skills. They’re handling a lot of local, state and federal paperwork, so attention to detail is crucial where you’re establishing a loan for a consumer, you’re processing a consumer’s registration and title for their new vehicle, you’re handling the transfer of the registration and title for their old vehicle and you’re making sure the old vehicle lein, if there was one, is paid off.
CS: Using a streamlined selling system will provide the customer with a transparent experience while offering them all available products in a timely manner. Ultimately, F&I is the last department to interact with the customer, and they do so during a part of the deal when all the customer wants to do is leave. With proper assistance from the sales team to “line” the customer for products, the F&I manager can properly explain the benefits of the products quickly and efficiently and, ultimately, sell product. The top F&I process complaint is always time and pressure; a proper F&I selling system eliminates those issues.
Chris Saraceno: A good F&I manager is a unique individual, as they
BB: They should be able to talk about everything the dealership can offer
Andrew DiFeo: They have to be a “people person,” because they have
need to display both the “retail and the detail gene.” They are a person who has strong people skills and can handle the day-to-day pressures of the dealership environment. This includes the stress created by dealers and general managers as they need to produce gross profit, salespeople and sales managers as they need to process deliveries and, of course, the office personnel as they need to submit proper and accurate paperwork. Having a competitive spirit is also a trait that figures into the success formula.
Brian Benstock: We want someone with a good understanding of the financial landscape, someone who always looks at the customer’s situation — because every consumer’s situation is different — and someone who’s efficient. We want customers to be able to go into the F&I department and get the products that they need. The F&I manager needs toSaraceno understand thatProvos time is t valuable, but also not just go through a Chris Tony AndrewDiFeo Brian Benst ock checklist. It’s a balance. Danny Benites: A good F&I manager has to be a protector and a
producer. First and foremost, they have to protect the dealer and the deal. Then, they have to have the ability to produce on a regular basis. I generally want this person to have a strong ethical base and a business-like approach to dealing with people.
THE
DEALER PANEL
them, but not be too pushy. We want to ensure the customer knows of everything available to them, but we don’t want to push them to the point panel of the havingdealer a bad experience. The F&I managers have to keep in mind that, minus the actual delivery, they’re going to be the last impression that the customer has of the dealership. They want to ensure that experience is well handled, the customer feels value in what they purchased and that they have a full understanding of what they purchased.
DB: In a word: listen. As dealers, we tend to force word tracks and
rehearsed pitches down F&I manager’s throats. The most important technique we can teach is how to effectively listen and respond. I’ve seen a lot of people in this position spend most of their time trying to figure out something clever to say when they should be listening. The No. 1 complaint by customers in the F&I environment is unsolicited financial advice. Our customers will be satisfied, and consequently return, if they feel that you have responded to their needs, not forced yours on them. Next month, we’ll finish our series by examining ways our dealers have found effective in integrating F&I with their overall sales process. If you have questions or are a dealer who would like to be considered for the panel, please contact us at thepanel@autosuccessonline.com.
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SeanV.Bradley
leadership solution
part 1
what was the last training workshop or conference you attended? Other than NADA, training from your manufacturer or a free event from one of your vendors, when is the last time you attended a training workshop or conference? Exactly! Most of you haven’t attended a workshop in years and, sadly, some of you have never been to one. This blows my mind. There are more than 250,000 automotive sales professionals (owners, managers and consultants) in the United States, yet if you take the top five automotive sales training workshops/conferences in the industry, they have roughly 500 to 800 dealer attendees at each event. They also conduct their events once to twice a year. So, giving the maximum benefit of the doubt, and assuming that no one goes to more than one event (which, of course, is ridiculous, because many people go to numerous events), that is a total of 8,000 attendees a year. Let’s also factor in all of the Tier 2 and Tier 3 events and add another 2,000 attendees, for a grand total of 10,000 dealer attendees per year — out of the 250,000 professionals in the franchised industry. This doesn’t even take into account professionals working for the 40,000 independent dealerships out there. Another way of looking at this is saying that 240,000 automotive sales professionals never go to a training workshop or convention. When you break down the numbers, this seems insane. This also tells me that there is huge opportunity to have a competitive edge.
an automotive sales training workshop or convention and bringing your key people. Don’t just delegate employees to go without going yourself. Why? If you send Internet sales managers, BDC directors, sales managers or even GSMs, they might be key important players on your team but, usually, they do not have the ultimate decision-making power. So, even if they discover incredible strategies or opportunities, their hands are usually tied in implementing them without the dealer or GM authorizing the initiative. The benefits of attending a workshop or conference can be profound and immediate. It’s also extremely cost effective compared to bringing high-level experts to your dealership. For example, Tier 1 training experts receive $5,000 to $10,000 per day for training. That may sound high, but I assure you I am exact on these numbers. On the other hand, at a three-day workshop you will have at least 25 speakers and, out of those speakers, you will have approximately 20 percent who are Tier 1 trainers and experts. Plus, the other 20 speakers are leaders, executives and subject-matter experts. So, if you placed a value on their knowledge and expertise, you are looking at a bare minimum of $20,000 for the event. Now, add in food, VIP parties, workbooks, training materials, etc. You can quickly see tremendous amount of value and the average workshop, which usually costs between $995 and $1,495. The only thing you have to factor in is your hotel and travel, and still, for $1,495 to $1,995, you are “all in.” I feel this is one of the most incredible returns on investments you can ever get in training. This also gives you the opportunity to sample a trainer, consultant or vendor before committing to a partnership and a possible contract. It makes all the sense in the world for me. It also blows me away that the average dealership, according to NADA, spends $640 per car sold in advertising, sells 9.6 units per month and employs 10 salespeople. That means the dealership invests, on average, $61,440 per month in advertising, or $6,144 per salesperson. It’s crazy that the average salesperson, factoring in commissions, bonuses, spins or spiffs, doesn’t even earn $4,000 per month, but the average dealership invests more than $6K per person and they don’t really train their people. They don’t invest in their greatest asset — their people. Next month, I’ll share some tips of what to look for in conferences and workshops to ensure you get the most out of your time, money and energy.
Dealers, I implore you to consider attending
Sean V. Bradley, CSP, is the founder and CEO of Dealer Synergy, a nationally recognized training and consulting company. He can be contacted at 866.648.7400, or by email at sbradley@autosuccessonline.com.
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