2016
MARCH
Connect more online shoppers to your dealership.
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TWO ROADS, ONE DESTINATION:
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CONVERSION CITY, ACTIVENGAGE Humanize your digital showroom with ActivEngage live chat, and start driving more website visitors to your brick-and-mortar store. Whether your dealership partners with ActivEngage for live chat software or takes the managed services route, your roadmap will lead to the same destination: more cars and repair orders sold.
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Add value to conversations by sending videos, pictures, and curated vehicle information within the chat.
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2300 Hurstbourne Village Dr, Suite 1200 Louisville, KY 40299 / p 877.818.6620 / f 502.588.3170 / AutoSuccessOnline.com/AutoSuccessPodcast.com / info@autosuccessonline.com
Thomas Williams, Creative Director design@autosuccessonline.com
SusanGivens
sales & training solutions
30 JordanBentley GET YOUR SALES TEAM READY WITH A LITTLE SPRING TRAINING 44 DanielSchutzman STAY UP WITH THE TECH CONSUMERS DEMAND 48 AaronHowerton LEVERAGING SMARTPHONES FOR DEALERSHIP SUCCESS
Hannah Philpott, Media Director hannah@autosuccessonline.com
12 KendallBillman BIG DATA IS A BIG DEAL: How to Turn Data Into Action 20 ToddKatcher SERVICE APPOINTMENT BOARDS INCREASE CSI AND CUSTOMER RETENTION 26 AaronSchinke 2016 TECH TRENDS: Data Integrations Key to Rising Above Your Competition 28 NancyLim THREE RULES FOR STRATEGIC SOCIAL MEDIA ADVERTISING IN THE AUTO INDUSTRY
64 LaneKidd CUTTING THROUGH THE NOISE: Omni-Channel Marketing 72 JasenRice YOU CAN’T RUN NEW-CAR PROFITABILITY WITH A “SET AND FORGET” STRATEGY
Brian Ankney, Account Manager brian@autosuccessonline.com
18 DennisMcGinn TEST YOUR RECONDITIONING TIME 34 DalePollak FOUR TIPS TO SUCCESS IN A SOFTER USED VEHICLE MARKET 36 DealerPanel COMMUNICATING WITH CUSTOMERS: Finding Strategies and Building Communication Skills 46 JodyDeVere NOW IT IS A MUST: How Can We Do A Better Job Retaining Women in Sales? GeorgeEwing NOT JUST LIQUOR AND LUNCH: 52 Utilizing Your Lender Representative to Maximize Your Bottom Line on Every Deal TimByrd THE ANSWER TO REINSURANCE POINTS-BASED LOYALTY PLATFORMS 56 62 AdamRobinson PROTECT YOUR BRAND AND PROFITABILITY WITH EMPLOYMENT BRANDING 70 DavidMetter HOW DEALERSHIPS CAN STAY AFLOAT IN THE AFTERMATH OF NATURAL DISASTERS
Dave Davis, Editor & Creative Strategist ddavis@autosuccessonline.com
marketing solutions
Susie Horne, Account Manager John Warner, Sales-Improvement Strategist shorne@autosuccessonline.com jwarner@autosuccessonline.com
MOBILE — NOT JUST ANOTHER BUZZ WORD
OwenMoon
DEALERS NEED A SEAMLESS ONLINE-TO-SHOWROOM CUSTOMER EXPERIENCE
60 BruceThompson
GIVE THE GREEN PEAS ONE SOLID LESSON ChristianSalazar
SUNK COSTS, NEW TOOLS AND LOST OPPORTUNITIES
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 solutions
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ls leadership solution
SusanGivens
publisher of AutoSuccess \ 877.818.6620 \ sgivens1@autosuccessonline.com
SUNK COSTS, NEW TOOLS AND LOST OPPORTUNITIES
Maybe it’s because the auto dealership is such a visible, material enterprise, but the automobile sales industry hasn’t fully taken advantage of the modern marketplace. After all, since you can’t download a car or have a truck delivered next day by UPS, it’s been easy to overlook the advantages that the modern data tools and structures can provide. It’s easy to ignore just how much data can reinvent your business. The car industry, historically, has been slow to embrace the technology that will make it faster, more competitive and, most important of all, relevant to the modern consumer. Look at companies such as Amazon or Zappos, who use data to not only serve their clients present needs, but anticipate their needs down the road. Ever notice, for example, how frighteningly accurate Amazon’s “customers who bought this item also bought” category can be? The machinery behind this is the data used by the company in the course of transactions — how it is collected, processed and interpreted to predict what the needs of the customer are and will be, and then serve it up to them. But these companies have access to more consumer data than dealerships do, right? Wrong. According the Federal Trade
Commission, the automobile industry is one of the largest contributors to household information and data aggregation sources, second only to the post office. When it comes to big data, however, while the automotive sector is way in front of this issue in supplying information, it lags far behind when it comes to actually receiving the benefits. Why does the auto industry miss the mark when it comes to utilizing the data that it has already collected on its market? Perhaps it’s as simple as a lack of understanding the power this data carries. Instead of owning their own data, many dealerships have “farmed out” access, to the point where they have no idea which vendors have their customers’ information, how much of it they have or what they’re doing with it. In this age of data breaches and security issues, it’s unconscionable that dealerships are not only
Most of what happens in the auto industry is out of your control.
The one thing you can control is who you hire. Are you sure you’re hiring the right people at your dealership?
10 autosuccessonline.com
ignoring a valuable tool they have to reach consumers, but are leaving themselves wide open to litigation, fines and loss of reputation in the event of a breach — and, in many cases, aren’t even aware of it. The automobile industry as a whole is missing opportunities there for the taking, often just because “we’ve never done it that way.” The same adventurous, entrepreneurial spirit that had the vision to see a dealership where an empty patch of ground once stood, however, should be used when looking at the tools that will bring your business to the consumers of the present and the future. Proper data usage can provide for a rich customer experience, contacting the customer at the right time with the right product or service. Proper data usage can also remove costs through the pipeline, making your dealership more efficient, cost effective and productive. Learn from companies outside the auto industry who have based their entire sales structure on knowing their clients and anticipating their needs.
ms marketing solution
KendallBillman
senior vice president of AutoAlert \ 866.892.1447 \ kbillman@autosuccessonline.com
BIG DATA IS A BIG DEAL: How to Turn Data Into Action
There’s no doubt dealerships have access to a tremendous amount of consumer data. Success in the shopper intelligence arena, however, hinges on how specific data is leveraged to reach and engage in-market customers to achieve increased profitability. When you take the data your dealership collects to the next level by analyzing it and using it to gain consumer insights that lead you toward improved marketing and sales, you succeed where many others fail. Businesses have always worked to gain customer information; however, they are now realizing a more focused approach resulting in better consumer insights and, in turn, improved sales. People are shopping online more than ever, which means that on any given day a typical dealership Website could trigger tens of thousands of events from that Website. By carefully analyzing the data they receive with statistical models driven by demographics, contextual analysis and collaborative filtering, the events are no longer unknowns — or singular data points with little value. Instead, taken as a conglomeration, the events take on meaning, allowing the dealership to realize a greater return on its investment. Once your dealership learns how to best analyze the data it’s collecting, you’ll be closer to meeting shopper needs, resolving consumer pain points and providing customer care that goes above and beyond the scratchthe-surface norm that is standard for many businesses. Dealerships as a whole are able to provide an enhanced consumer experience by accessing and utilizing consumer intelligence. Dealerships that leverage constantly amassing consumer events and signals will realize better engagement, because consumers will feel rewarded through a better dealership experience. Ultimately, the outcome offers a strong reputation-building opportunity for dealerships, increasing the potential lifetime value of each customer. In order to get the best return on your time and monetary investments, it’s important to remain focused on the specific goals you want to achieve with the data you analyze. When you begin by outlining your overall plan, you’ll find it much easier to hone in on data specifics that bring to light consumer actions and preferences in the marketplace, and you’ll be able to
see how that data can help you determine your next move. Ask yourself the following questions in order to stay on track and keep your data organized: • What questions are you trying to answer? It’s tempting to begin collecting loads of data simply because others are doing it, but if you don’t first determine what you’d like to discover, you’ll soon find yourself inundated with information, much of it useless for your purposes. When you remain focused on specifically the questions you’re trying to answer, you’ll end up with data that’s more helpful to your dealership.
consumer reactions to see what’s gaining traction and what’s working — both via your own dealership Website and across the industry. You have the ability to access a high level of shopper intelligence, and by sorting and analyzing it, you’ll be able to see consumer patterns, which will help you as you determine your ongoing action plans. • How will you use your data? Gathering great data is a good start, but if you don’t put it to work, your dealership won’t be able to reap the benefits. If you begin by creating models and profiles for your target audience, you will gain a greater understanding of their needs, what they’re looking for in the marketplace, and how you can deliver solutions. While the thought of big data can be intimidating to dealerships that haven’t been using it, it truly presents a limitless opportunity
“Once your dealership learns how to best analyze the data it’s collecting, you’ll be closer to meeting shopper needs, resolving consumer pain points and providing customer care that goes above and beyond the scratchthe-surface norm that is standard for many businesses.” • What problems are you trying to solve? Before raking in the data, work to discover shopper pain points and areas that potentially cause the industry and your dealership struggle. Take a good look at your consumers, get to know them, and then decide which items you’re going to address. When you use the data you collect to specifically target areas of concern, you’ll gain shopper trust and build relationships that lead to sales. • What patterns do you see emerging? Continuously analyze your data and
for those willing to take advantage of all that can be gleaned from it. The amount of data continues to grow — in variety and volume — every day; however, it’s as scalable as you want it to be for your dealership. By identifying your target audience and the data that’s most important to your dealership, you’ll be able to make the task of analyzing information less daunting, and at the same time, you’ll be able to measure your progress and gain greater consumer insights. Big data is a big deal, and when you use it to get to know your target audience better, you’ll see sales at your dealership increase.
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by Susan Givens
RETOOLING THE ‘OTHER’ BDC:
THE SERVICE BDC Service IS the New Sales
As the saying now goes, service IS the new sales. And the numbers indicate that dealerships might be fighting the battle on the wrong battlefield. In spite of numerous manufacturers recalls over the past few years, new vehicle sales in the U.S. have continued to climb. But according to NADA Chief Economist Steven Szakaly, U.S. dealership net income remained unchanged at 2.2% for the third straight year (as of last year’s reporting deadline). So even though sales have continued to climb, the fierce competition on the front-end of the dealership has left dealership net income flat. The showroom will always be the crown jewel of the dealership, but it’s the service drive that will determine the cost of client acquisition in today’s market. For any dealership, each time the phone rings for service, the opportunity for a return on investment knocks. The cost of acquisition per NADA averages around $625 per Per Vehicle Retailed (PVR). And NADA® data reports that 43% of vehicles serviced at the dealership end up as a repeat buyer at that dealership. If this data is known, then why, on average, are 23% of the incoming service calls going unanswered? Consider the many alternative options your customers have. Customers can pick from any of the 160,000 U.S. local repair and maintenance shops that are ultimately driving customers away from dealerships. And it’s not like the age of the average odometer is sitting at 30,000 miles. The average age of today’s U.S. vehicle is now 11.7 years old.
Those types of vehicles will carry higher mileages and need more maintenance. But as is the case with nearly every manufacturer, when the warranty runs out, the customer looks for somewhere else to service.
Considering the Customer Experience
When is the last time you reviewed your incoming service calls? The service call will tell you a lot about the customers perception because it is a key touch point. Typically what you will find is: • 67% of service calls will be on hold longer than one minute before reaching someone who can actually help them. • A staggering 38% of these calls will hold more than two minutes. • Further, 44% of calls will be transferred at least twice between departments. What does being handled like this mean to your customer before they even come in? No wonder the no-show rate of service appointments is almost 30%. How your incoming service calls are handled will directly speak to the number of service visits your customers will have with your dealership. With more than half of vehicles being dropped off, as opposed to waited on at the dealership, what happens after the drop-off is important, too. The next logical touch-point is how that customer is updated while the vehicle is in the shop. Most customers will need to call to check on the status of their vehicle, only to be caught up playing phone-tag with the Service Advisor. This is another defection point of service for customers that can be easily improved. When the right phone process is in place, the experience is better from the initial point of contact. And the smoother the experience, the more likely they will return for service again. Ultimately, the more they continue to service with your dealership, the more likely they will buy their next vehicle from you, as well. Most dealerships agree with this cycle, but they struggle to implement it.
It’s Time Someone Else Answers Your Phones
For years, the service calls have been sent to the service drive for advisors to answer and load the shop. But when one measures the results, it’s clear that the wrong people are being asked to answer your service calls and load the department. To start, service advisors are typically the busiest. Inherently, they are biased to the time and type of work being scheduled. And finally, the environment in which they are asked to answer these calls has the most distractions and provides the least value to your customer. Sending service appointment calls to the drive makes no sense when you realize this is a critical touch point for service retention.
What happens when advisors take calls? In one study by CallRevu where 557,000 dealership service calls were studied, the following findings were reported: • 11% of Service Advisors did not identify themselves during the service call. • 71% did NOT update ANY customer information during the call. • Only 44% of calls resulted in the Service Advisor actually scheduling an appointment. These results in service calls are typical in the industry, and make it easy to see that the calls are going to the wrong place. By taking the calls away from the drive, you can actually prepare your advisors and customer for a better visit. Once a customer has experienced being placed on hold, transferred to multiple departments, and then being told to “just bring it in” or “drop it off first thing,” their perception of the rest of the experience with your dealership has likely been formed. If dealerships spend thousands of dollars to make their phones ring, why is there such
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g
you don’t “When track something, you probably aren’t managing it either.
“
— John Traver, CEO Traver Connect
RETOOLING THE ‘OTHER’ BDC:
THE SERVICE BDC ...continued a lack of process for when the phones actually do ring? Measuring What You Manage Studies show that less than 10% of dealerships today have successfully implemented a Service BDC solution. Compare that number to over 80% now having a sales BDC solution. There are reasons for this shortfall in execution. “It starts with the fact that less than 1% of dealerships track this process. When you don’t track something, you probably aren’t managing it either,” says John Traver, CEO of Traver Connect, a company dedicated to Automotive Service BDC solutions based in Dallas, Texas. “The volume of calls coming into the service drive has ballooned over the past five years as a result of smartphone use. The Google study shows that 74% of the mobile calls coming in are for service and parts, while only 14% of these calls are for new or used vehicle sales. Dealerships must create a solution for the increase in service calls. It’s an easy choice when you consider how much pressure PVR is receiving. The cheapest and most profitable way to grow the dealership is to service the vehicles you sell. The service BDC space becomes a long-term strategy for retention and profitability. Everything a properly run Service BDC will do contributes to absorption, retention and market share. It’s the antidote for the PVR pressure.” stated Traver. Do dealerships know they are struggling to get their arms around the service BDC process? “It’s different than a sales BDC. Ask anyone who has tried one.
It’s common to get a call from a dealership telling us they have had their own Service BDC in place for a year or more, and are still struggling with it. They aren’t sure if they are profiting from their service BDC process, they admit they have a difficult time staffing it, and they aren’t sure what to do. After 20 years of developing training and metrics for the Automotive Sales BDC process, I can assure you that a service BDC is a different animal,” Traver revealed. “The Service BDC has at least as much upside as a Sales BDC, but how you staff and measure it will differ. It’s a different set of processes and metrics than a sales BDC,” Traver continued. Clients Are Believers While some dealerships aren’t sure about ‘handing over’ their customer calls to someone else outside of their service department, there are plenty of customers that are extremely happy. The answer is to find a company with expertise and the right approach. For some dealerships, the return on investment is the most appealing. “Immediately from the beginning of our business relationship with Traver Connect, we noticed a positive change. The impact was obvious: our service drive consultants were now spending less time on the phone and more time with our clients. We had our largest customer pay month the very first month with them,” says Service Director, Mark Perry, at Rick Case Hyundai in Davie, Florida. For other dealerships that had tried to implement the process on their own, the right partnership can offer timely help. “I knew I needed to hire 8 employees to be able to keep up with our service calls. Traver Connect was able to do it for less than a third of what it would cost us, and it was obvious right away that they knew what they were doing. They really got us up and running quick,” said Fixed Operations Director, Scott Fraze over multiple dealerships. Even Dealers see the impact. “We didn’t realize how much money we were losing as a result of not answering our service phones the way we needed to. They turned us around, and we see the ROI every month in the calls and with their tools. Traver Connect is a part of our long-term retention strategy,” said Michael Coleman, Dealer Principal of two Texas dealerships. It seems the Traver Connect business plan is unfolding as hoped. Everything from their professionally-trained teams to their software and tools are enabling clients to grow profitably. For Traver Connect perhaps the only constant will be change.
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ls leadership solution
DennisMcGinn
founder & CEO of Rapid Recon \ 866.268.3582 \ dmcginn@autosuccessonline.com
TEST YOUR RECONDITIONING TIME
Dealers who have the most efficient recon operations consistently average three to five days from recon start to frontline. They also know where every car is at all times because every step has a clear owner/tech who is connected to it through their mobile phone. The best example of how this works is how quickly a UCM can approve an itemized list in only a few minutes right from their mobile phone — any time, anywhere. When the UCM approval happens in a workflow system, it sets the pace for time-to-market. Try this simple exercise: List what you believe your average real times are for: • Inspection • UCM approval • Mechanical • Body (30 percent) • Detail • Photos Add these up for your store, and do not use the best-case numbers, because they all count. If your number is six days or greater, then you are a perfect candidate for workflow. Before implementing workflow, dealers average 10 days or higher, and burn an extra week of prime selling time. And, if you are not measuring your time-to-market, it is likely that holding costs are cutting deep into your profitability. Time-to-market dealers measure their results in terms of three to five days from recon start to frontline ready. They also expect that every car, in every step, is where it should be because each step has an owner who is always
connected to it through their mobile phone, and they automatically get informed when a car is on their clock. The old adage “information is only as good as the people who use it” is no longer a valid excuse to put off making a time-to-market culture happen. The early adopters of workflow have shown us that, by engaging the entire recon team in the process of designing and launching a workflow system, they can now easily see how it makes everyone’s job easier. When accountability applies equally to everyone who touches your cars, and when they can stay on top of their cars with a mobile phone, all the excuses just go away.
They are continually aware of how they are performing compared to best practices and they always work on improving as their work is transparent to everyone. When something goes wrong in a real-time system, it will quickly show up in your metrics. One significant and timely advantage to workflow is the ability to respond to immediate market shifts, especially with the alarming number of safety recalls. The extraordinary number of recalls certainly pre-empts “business as usual.” Switching to real-time recon atmosphere will definitely promote accountability and efficiency in order to get the job done. No more second-guessing or time wasted. By measuring and managing, the proof is automatically there.
Some dealers have not transitioned to a workflow system because they think they can get by fine with their own manual approaches, or they rationalize it is an unnecessary expense. Yet, dealers who have adopted workflow have consistently added an entire week to their selling time. If your total is six days or more, take a close look at how others have mastered TTM.
“When accountability applies equally to everyone who touches your cars, and when they can stay on top of their cars with a mobile phone, all the excuses just go away.”
The methodology used for instituting a TTM culture can vary, and this may mean that there are four or five active users, or even 12, where the technicians and vendors own steps or work items. The end result, however, is the same.
If you have not yet decided to institute a TTM culture and want to know how it all comes together, I am happy to walk you through the steps to get there. You do the homework — the installation is simple and fast.
Choose Hörmann High Performance Doors for
Service and Shop Entrance & Exit Doorways We have the solutions Booth # 4731C - NADA Expo 2016 Hörmann High Performance Doors Contact us today ▶1-800-365-3667 / 1-724-385-9150 / www.hormann-flexon.com / info@hormann-flexon.com
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ms marketing solution
ToddKatcher
managing partner for Digital Dealership System \ 866.513.6690 \ tkatcher@autosuccessonline.com
SERVICE APPOINTMENT BOARDS INCREASE CSI AND CUSTOMER RETENTION
Many manufactures require that service customers are greeted with an appointment system. Why not wow your customers with digital service appointment boards? These boards let your customers know that you are prepared to fulfill their service needs in a timely manner and that you are happy they chose your dealership. Once the customer has been checked in, they can be kept in the loop with customer lounge notifications on the lounge television. Beyond convenience, both service appointment boards and lounge television solutions deliver dealer-specific marketing to consumers on a platform that helps differentiate a dealership from their competitors. There are several technologies that drive automated service appointment systems on the market today.
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RFID systems identify customers and their vehicles using tags placed on each vehicle in stock. The RFID allows the dealer to monitor the complete life of the vehicle upon entrance into service, including service history, finance, payments, customer information, etc. Back-end software tools mine data based on parameters and allow dealership staff to be alerted when a car comes in that meets a certain equity position. Dealerships have expanded the use of RFIDs to include scanners throughout the property, including the car wash, to let customers know where their vehicle is at any time. The cost of the RFID scanners, however, is prohibitive to some dealers. The scanners cost approximately $15,000 each and a large service drive alone might require up to eight scanners. Software for the RFIDs will range $1,500 to $2,000 per month. Many dealerships have elected to utilize simpler, less-costly plug-and-play digital service appointment boards that incorporate just the most important and necessary steps in the service process: “Scheduled,” “arrived” and “completed” statuses are updated directly from the DMS. This solution tends to have a much lower barrier to entry and provides a marketing platform for the dealership. Dealerships simply connect the media players to 1080p LED televisions, or utilize a provider that offers a complete turn-key package. Most systems support a marketing platform as well, capturing customer’s eyes as they check for updates on their service status.
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Digital service appointment systems allow dealers to install a single screen and add more over time, or install a completely integrated system all at once. Integrating the dealership and providing a cohesive marketing message has the largest return on investment and reaps long-term CSI, customer retention and ROI. Once dealers start seeing improved retention and sales from using digital screens in the service department, many will add showroom systems, video walls and interactive touchscreens. These tools can help improve CSI and retention throughout the dealership while tying together the marketing that brought the customer in the dealership in the first place.
I OWE IT ALL TO MY SOFTWARE #SaidNoCloserEver
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AaronSchinke
director of product management for DealerSocket 866.263.5696 \ aschinke@autosuccessonline.com
2016 TECH TRENDS: Data Integrations Key to Rising Above Your Competition
Last year, Google announced Panda — a search algorithm developed to generate quality search results and to help users find more relevant content. And, while it sounds friendly, this Panda is anything but — if you didn’t prepare to appease it. Many dealerships scrambled to overhaul their digital footprint — designing, developing and launching fully responsive Websites that respond to, and display properly across, mobile devices. They survived, for now.
SHOPPING FOR A MINIVAN
Dealerships that failed to prepare for Panda were — and still are — driven down in relevant search rankings, while stores with responsive sites and strategic digital marketing strategies are given prime positions and an improved likelihood of being found by customers looking for a business like theirs. In 2016, having an infrastructure that simply sets you up for success is a start, but it’s absolutely essential that you continue to refine your digital practices to achieve and maintain a competitive advantage. As Millennials continue to flood the automotive retail landscape, the “traditional” customer has become anything but. Loyalty is scarce and purchasing habits have become somewhat unpredictable compared to older generations. To capture these fleeting consumers, it’s absolutely essential that you find new ways of selling, servicing and retaining your customers, and that you do it now — because your competitors are.
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The value of leveraging big data to operate more efficiently and profitably has been welldocumented in our industry and most others, but in 2016, top-performing dealerships continue to shift their collective focus to integrating the wealth of data available to them and using it to paint a more holistic picture of customer behavior and, ultimately, to shape more relevant and meaningful follow-up communications. Here’s how it works: With a fully integrated automotive technology platform that includes an information-sharing solution, sellers are able to identify Website users as previously known customers in their CRM platform and vice versa. When a match is confirmed, the technology is triggered, and the user or customer’s contact and device information is updated and logged across all solutions within your technology platform. This creates a seamless flow of information that helps you drive profitability across departments. As a result, you’re better able to track customer and prospect behavior during Website visits and to find out what users are most interested in. For example, you can learn: • Total number of Website visits • Number of leads submitted • Source of visit(s) • Pages viewed per visit; which pages were viewed • Date and time of last visit • Date and time of last lead submitted • Vehicle interests Users are classified as “open,” “sold” or “lost,” and the platform allows sellers and their technology partners to tailor messages and follow-up processes to each. This streamlines the car-buying process, ensuring that your customers and prospects receive only the most relevant information to guide them through the process and, ultimately, to a closed sale.
Booth 6500N
612.536.1500 | info@outsell.com www.outsell.com
26 autosuccessonline.com/podcast
If a customer is in the “sold” category, he or she probably won’t buy a car from you in the near future, but there could be a chance to build a loyal, profitable service relationship by offering an incentive. If a customer is in the “open” category and recently looked at a particular vehicle on your site, you’ll be better prepared to follow up about available inventory, incentives and opportunities for a trade that benefits both sides. This year, focus on learning how to best use data to your advantage. Your technology partner should play an integral role in educating you and your team about how to best use science to create bulletproof processes, drive profitability across all areas of your business and create longterm relationships with your customers now and in the future.
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With over 30 years experience in the automotive customer service and repair industry, Rick’s dealerships achieved sales to service customer retention at over 90%, making it ranked #11 in the nation! Rick Manring - VP Fixed Operations
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NancyLim
director of marketing for PureCars \ 866.407.3104 \ nlim@autosuccessonline.com
THREE RULES FOR STRATEGIC SOCIAL MEDIA ADVERTISING IN THE AUTO INDUSTRY
While many dealers have already embraced digital marketing channels like TV and email, fewer have yet to integrate their campaign efforts with more advanced strategies, such as social media. Social media may seem like a foreign frontier for auto dealers, but the channel can actually drive significant results — if done correctly. Social advertising within the auto industry is a highly effective way to reach consumers on a channel where they’re already spending time. One in four car shoppers uses social media to discuss or communicate a recent purchase. What’s more, 84 percent of car shoppers are on Facebook and nearly a quarter of those shoppers use the social network as a resource during their research process. It’s clear that car buyers frequent social, so the question then becomes how can dealers best engage and convert shoppers on popular networks? To effectively turn car shoppers into car buyers on social media, dealers must consider these cardinal rules when generating advertising campaigns:
1. Ads Must be Detailed. Auto ads need ample detail in order to pique buyer interest and extend the research process. Unlike an everyday Amazon purchase such as clothing or packaged goods, a vehicle is a significant financial investment. Shoppers will not impulsively convert simply because an ad for a new model pops up in their Twitter newsfeeds. Auto ads must include important sales and vehicle details (price, deals, features, etc.) that can compete with other content found across all digital channels.
What’s more, these details cannot be random. For example, a low-income shopper remains a low-income shopper even on social media, and will automatically disengage from an ad featuring a luxury sports car. With such limited time to interact with consumers
28 read, listen, watch, share, succeed.
on social networks, dealers must serve ads with details that engage and leverage each consumer’s personalized buying behaviors. As auto marketers learn more about their target audiences, they can move away from broad, top-funnel messaging and please shoppers with targeted product details. 2. Ads Must be Recurring. Researching and buying a car can take weeks or even months. Luckily for auto marketers, consumers spend a great deal of time on social networks, which means that dealers can serve multiple ads over a period of time to remind shoppers about deals and relevant inventory. If a social user sees ads for a dealer many times during her research process — and ideally across a variety of social networks — this company will be top of mind when she actually moves to purchase.
The extended buyer’s purchase journey gives dealers the chance to chase interested consumers with personalized retargeting ads. For instance, if a shopper engages with an ad featuring a red Toyota — perhaps by clicking on the ad or assessing a VDP a dealer’s Website — auto marketers can serve her ads for the same car in the future. 3. Ads Must be Reliable.
Finally, any ads deployed on social media need to be reliable and draw upon real-time inventory updates from dealers’ lots. Although car shoppers may not make purchases quickly, when they are ready to buy, the advertisements they’ve been engaging with online must reflect
the actual makes and models available for purchase on the lot. If a shopper gets his heart set on a specific car and then finds none left at his local dealer, he’ll lose trust in this dealer. Additionally, any links used in social media ads need to work and deliver on what they promise. For instance, if an ad prompts shoppers to “click here” for more vehicle specifics, the link must lead to a page on the dealer’s Website that features this information. In order to truly aid the digital research process, dealers must ensure that these pages are easy to navigate, include high-quality images and are searchable by make, model or other car features.
“Researching and buying a car can take weeks or even months. Luckily for auto marketers, consumers spend a great deal of time on social networks, which means that dealers can serve multiple ads over a period of time to remind shoppers about deals and relevant inventory.” With these three rules, dealers can leverage social networks and implement a marketing strategy that excites and aids shoppers. Car buyers are already interested in making a purchase and, with the right strategies, auto marketers can use social advertising to reinforce this purchasing desire and move consumers along their journey.
s&ts sales & training solution
JordanBentley
national sales manager for Callbright \ 866.865.3175 \ jbentley@autosuccessonline.com
GET YOUR SALES TEAM READY WITH A LITTLE SPRING TRAINING
A certain car manufacturer said it best with the tune, “We love baseball, hot dogs, apple pie and phone training.” OK, maybe those aren’t quite the right lyrics for the iconic Chevrolet jingle, but Major League Baseball’s spring training got me thinking about some great spring training tips for your call handling. My Detroit Tigers are in Florida this month getting ready for the season, and I’m sure more than a few of your sales reps have their brains on the beach, as well. Believe it or not, a few things my Tigers are working on can help your sales team stay focused and get ready for the rest of the year.
your reps are handling the calls once they’re in the glove, so to speak, is just as important. Are they providing poor customer service? Call-tracking software can help you pick up on areas where improvement is needed, and you can practice fielding calls with role playing to clean up errors.
I’m not telling you to pack up a van and head to Florida for some hitting drills, but spring is as good a time as any for your staff to work on fundamentals. From closing sales to practicing phone skills, here are some tips for getting your team ready to smash home runs once your spring training is finished.
Have a Fastball Ready
Practice Fielding Calls
Pitching and hitting have long been the primary skills of baseball, but advances in analytics have indicated that fielding is just as important, if not more so, as these two core skills. That’s why players practice fielding grounders and pop-ups throughout the year and not just during spring training. Improved fielding and defensive range can turn into bigger contracts for players. How well your team is fielding calls can be the difference between success and failure, and I’m not just talking about answering the phone or returning missed calls in a timely manner. How
30 autosuccessonline.com
While fielding can make up for lackluster pitching, good pitching can lead to strikeouts
phone scripts to help your sales team deliver the right pitch for a good sale. Scripts are like scouting reports and will keep your reps prepared for handling customers. Hit the Batting Cages
Solid pitching and fielding can give you a good defense, but you can’t win if you don’t put runs on the board. Hitting has been one of the most desirable skills for players to have since the beginning of baseball, and it’s one of the most difficult to master, as well. Just when a player thinks they have hitting down, a better pitcher and a better scouting report will find their weakness. Being a good hitter means constantly evolving and always improving.
“From closing sales to practicing phone skills, here are some tips for getting your team ready to smash home runs once your spring training is finished.” and easier-batted balls for the fielders to make plays on. A pitcher can induce easy grounders or pop-ups with a well-placed pitch, turning batted balls into easier outs than if a fielder had to chase down a hard-hit line drive into a defensive gap. Similarly, making the right pitch in the sales conversation can result in an easy and valuable sale. If your sales reps are lobbing up poor sales pitches, customers might not even make it in your door. This can turn into a home run for your competitors, who will happily knock that pitch out of the park as you lose customers. Use
Just as hitters have to keep getting better, hitting a sales home run isn’t as easy as walking up to the plate and swinging for the same spot in the strike zone every time. Customers have evolving priorities and buying methods, and you have to adjust to the pitches they’re throwing. A good way to stay prepared is to use a call-tracking program that can scan calls for keywords. This way you can see trends in what customers are looking for or how they’re reacting to certain sales pitches, giving you the best chance for a home run. Want to know some more spring training tips for your reps? Give me a call or send me an email.
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DalePollak
founder of vAuto \ 866.867.9620 \ dpollak@autosuccessonline.com
FOUR TIPS TO SUCCESS IN A SOFTER USED VEHICLE MARKET
You can’t read too much into the used vehicle results dealers have achieved in the first few weeks of 2016. It is, after all, the dead of winter. Sales typically slow down due to more inclement weather and the anticipation of spring. But, do slower sales in January and early February, combined with rising supplies of used vehicles, signal the onset of a softer market? ADESA economist Tom Kontos recently noted that the used vehicle market has been “bifurcated” in the early weeks of 2016. Year-over-year wholesale values for car and cross-over segments have declined by about 6 percent and 2 percent, respectively. Meanwhile, wholesale values for trucks increased by more than 10 percent. Kontos also affirms that retail used sales in January declined by 31 percent for franchise and independent dealers. In addition, the typically strong certified pre-owned (CPO) segment also showed a nearly 16 percent yearto-year drop in retail sales. Signs of a softer market also appear as I evaluate used vehicle inventories. Lately, it’s increasingly common for the overall Market Days Supply of a dealer’s inventory to run close to 100 days; typically, the metric has hovered around 80 days. Likewise, I’m seeing dealers struggle with maintaining average inventory age at levels they achieved in the not so distant past. On top of all this, we all know that this year will see an even larger increase in used vehicle supply as three million more off-lease units are expected to re-enter the market — an influx
34 read, listen, watch, share, succeed.
that will place additional downward pressure on vehicle values, sales volumes and dealer margins. In light of these conditions, it’s relevant to share four recommendations to help dealers minimize the effects of a more challenging market:
of each unit’s relevance for the dealer’s inventory and market conditions. A more disciplined focus on costs should also include fees for reconditioning. You shouldn’t compound a poor purchase decision with unnecessary costs that sap a vehicle’s profit potential. 3. Speed Up Front-line Ready Times
This persistent challenge becomes an even greater imperative as market factors, such as an influx of competing units or reduced demand, 1. Mind the Market Days Supply diminishes a vehicle’s viable retail shelf life. I tell dealers that if I only had one market data point to assess the retail potential of a vehicle, it Dealers should strive to make every vehicle would be Market Days Supply. This tells you if a front-line ready and online in three days or less. Those who fail to consistently meet this vehicle will retail quickly, given the number of standard have no room to complain that their competing vehicles available in a local market. vehicles aren’t delivering the ROI they expect. A high Market Days Supply isn’t necessarily bad. It simply is what it is. However, vehicles with higher Market Days Supply metrics 4. Eliminate “Pipe Dream” Pricing should be regarded for exactly what they are My inventory evaluations reveal another — units that, by definition, have less appeal in disturbing trend: Dealers aren’t consistently the market. As dealers appraise auction vehicles pricing vehicles to match current market and trade-ins, they should account for each conditions. I often see vehicles at 30 days of unit’s Market Days Supply as they bid and make age and beyond priced well above competing offers, and plan the exit strategy for the unit. units. There are always reasons, of course. They paid too much. They put too much into reconditioning. They didn’t realize the vehicle 2. Press Down Your Costs isn’t as appealing as originally thought. In During recent inventory evaluations, I’ve the end, however, these rationalizations don’t noticed a correlation. The vehicles that often excuse vehicle pricing that reflects a desire for a contribute the most to inventory age and front-end profit the market simply won’t pay. higher Market Days Supply averages are more expensive units. As we dig deeper, we usually Even if the market improves, dealers who heed find that appraisers and buyers weren’t as costthese recommendations will see higher levels of conscious as they could or should have been. used vehicle profitability. After all, those who In many cases, these vehicles reflect personal learn to ride market waves rarely wipe out. preferences rather than a dispassionate analysis
COMMUNICATING WITH CUSTOMERS: There has never been as many ways for a dealership to connect with current or potential customers than there are today. Where the telephone or direct mail were the only options available to salespeople just a few years ago, the modern consumer is more connected than ever before, with multiple avenues open for communication. With this advantage, though, comes a challenge: How do you know which form of communication works best with specific customers, and how do you effectively use that method to get your message across?
Tom Hawkins
Chris Saraceno
dp
two
part
Andrew DiFeo
the DealerPanel
Finding Strategies and Building Communication Skills
use phone coaching to keep their skills fine tuned. In service, we use self-training programs via the manufacturer, as well as utilizing the mystery shopping service via our manufacturer as a platform for improvement.
CS: I have always believed that the speed of the leader is the speed of the pack, and that you consistently have to walk your talk. The staff For this part of our Dealer Panel, we’re focusing on how our panel finds has to see that you, as their leader, are living the methods most effective for bringing customers into their dealerships what you say. When a store has a leader who is and keeping them happy after the deal, and how training comes into play communicating and making himself accessible, to make the best use of the opportunities available in the modern sales it puts positive pressure on the rest of the team marketplace. to perform. They think, “Boy, I know that if I don’t take care of this customer quickly and don’t get back with them quickly, my leader is so AutoSuccess: What communication strategy works best for accessible that someone’s going to get back with your dealership at the moment? him, and he’s going to want to know why this Andrew DiFeo, GM of Hyundai of St. Augustine: We use the wasn’t taken care of quickly.” I think, when sales data in our CRM to make sure that we’re having relevant conversations consultants, service consultants and the other with the consumer. For example, if it’s a service customer who we want to communicate with, we know their vehicle service history, the mileage managers at the company see that the leader of the store makes himself completely accessible and what’s already been done on the vehicle so we’re not delivering a message to the consumer to customers and goes above and beyond to that is irrelevant to them. From the sales side, we know their buying history. If they’ve bought communicate with customers, it becomes part several vehicles from us, we know what type of vehicles they prefer and their buying cycle. We of the culture of that store. know when they’re in equity positions, based on their make, model and mileage. Again, we do this to have a relevant conversation with the consumer, versus just generic mass communication. We do use a monthly email newsletter, but we keep that mainly to just to community events that we’re involved in, with some light editorial pieces that are not related to the car business, but information happening in our local area for our customer base. Tom Hawkins, Owner of Hawkins Chevrolet: The phone is still dominant, with email
following, but we are working on evolving other methods done properly. We are implementing strategies in the service department to encourage more online appointment creation to take pressure off the phones for the service advisors. This includes a process to opt-in to text messaging via our CRM. We are also encouraging all customer-facing employees to determine each customer’s preferred method of communication and make note of it in order to provide the best experience possible. In the end, the strategy that works best is the one the customer prefers.
Chris Saraceno, VP and Partner of Kelly Automotive Group: We make sure we provide prompt responses, using all forms of communication to get back with people as quickly as possible. One of our main goals is to let people know, verbally when we’re face-to-face with them, that we are always accessible, and that we want to know what’s going on. We want to know if they’re happy, we want to know if they have an issue… whatever it is, we want to know right away, immediately, so we can take care of them. AS: What are some ways you’ve found effective in training salespeople and other service employees to communicate with customers? AD: One of the best training methods we’ve found is the use of role playing in our training
sessions — to have our employees act as customers and one as the employee, and utilize and develop our guest service skills training through that exercise.
TH: For the sales department, we have used our CRM training modules initially, and currently
“I think, when sales consultants, service consultants and the other managers at the company see that the leader of the store makes himself completely accessible to customers and goes above and beyond to communicate with customers, it becomes part of the culture of that store.” Next month, we’ll conclude our examination of communication methods our dealers use by examining how they go about discovering a customer’s preferred method of communication, how that affects the relationship they build and how they believe communication will evolve as new technologies come into play.
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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s&ts sales & training solution
DanielSchutzman
social media & marketing coordinator for DOM360 \ 866.711.1004 \ dschutzman@autosuccessonline.com
STAY UP WITH THE TECH CONSUMERS DEMAND
Automated vehicles and flying cars might not be a reality yet, but automotive technology and the demand for it are increasing at a rapid pace. Here is a list of technology expected to be most in demand in 2016 and beyond, from sources like AutoTrader and CheatSheet. Augmented Reality Owner’s Manual
As written media becomes more digital, why not your owner’s manual? Instead of flipping through a physical book and relying on diagrams and brief instructions, now you can see detailed videos and guides to help you through whatever issue you’re facing. Using your smartphone or tablet can unlock the answers you need with visual accompaniment that will shorten the time it takes to solve the problem. Apple CarPlay/Android Auto
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Apple and Google offer technology that makes controlling a vehicle’s infotainment system easy and consistent — no matter the make or model. As technology gets more powerful and complex, having a familiar interface will allow customers to feel more comfortable and less frustrated with their car. Chevy and Hyundai are already compatible with Apple and Google, and the demand and supply should only increase. LED Headlights
Not only are LED headlights a great value, but they can also improve safety on the road. The bulbs will burn longer and more efficiently than traditional lights, saving you money and the hassle of replacing burned out headlights. The improved clarity offered by the more powerful bulbs will keep you safe on dark roads, as well. Smartphone Vehicle Management
Ever forget where you parked the car? Locating your vehicle is just one of the things you’ll be able to do with smartphone vehicle management. Technology is rapidly becoming available that will let you do much more with your phone, including starting your car and getting report cards on your car’s health. As autonomous cars become closer to reality, smartphones will have more and more of a role in making your car do almost anything.
“As autonomous cars become closer to reality, smartphones will have more and more of a role in making your car do almost anything.”
M A R K E T I N G
44 autosuccessonline.com/about-us
These are just a few of the technologies that experts predict to be most in demand in 2016. Customers are searching for vehicles with cutting-edge technology. Take the time to keep up with the latest trends and advancements — ideally, be aware of them before your customers are so you can provide them with a pleasant surprise — and make sure your marketing message makes automotive technology a priority.
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JodyDeVere
CEO of AskPatty.com \ 866.849.9973 \ jdevere@autosuccessonline.com
NOW IT IS A MUST:
How Can We Do A Better Job Retaining Women in Sales?
Dealerships who have 25 percent of their face-to-face positions filled by women are reporting that they’ve experienced as much as 35 percent gain in overall vehicle sales — new and used — and a substantially increased used car turnover. Not only that, but they’ve shown an increase of desirable employee statements regarding company loyalty and goals toward longevity. How did they do it? Simple. They brought women into their sales, service and management positions and found ways of retaining them. All dealerships want to increase sales, build a more loyal and appreciative customer base and keep employees excited and happily compensated for the long haul. All dealerships also want their environment to be a totally Yelp-friendly popular facility that dramatically attracts the fast-growing women’s market and that of the Millennials, who are a big part of this. It’s time to assess how your dealership treats females, and make changes when you see areas for improvement. What can you lose? Wouldn’t you rather find out what you can gain? Considering that 85 percent of all automotive purchases are either directly made or directly influenced by women buyers, if we are not responding to this statistic, our dealerships are totally missing the boat. ROI is a major driving force in the physical programs and offerings we put forth to the consumer to entice them to visit our facilities. There’s no denying that the Internet has affected profit margins; historically, margins were inflated by consumer ignorance, and we simply cannot make the margins we used to. We, as an industry, have to find ways of addressing our concerns as survival efforts. The bottom line is that we must place our investment monies into areas of concentration that will bring us returns that will not only keep us in business, but by their very nature helps us grow in our financial viability — viability that is attractive to women who may be considering this industry as a workplace. Here are some reasons why we, as an industry, are not attracting women: • Traditional resistance — Many organizations are still male dominant, and have programs in place that do not interest the new female-driven market. “What was good for my dad is good enough for me” is the motto above the entrances of many empty and abandoned dealerships. • Reluctance to trying new programs — Management and owners may not have the desire or courage to try new programs. Or, perhaps worse, they may be lazy.
46 read, listen, watch, share, succeed.
• Equitable pay and work programs — Considerations must be made for family needs, which may include part-time or adjusted-time participations. The traditional long hours do not work. • Knowledge and expertise — The existing dealership management may simply not have neither the knowledge nor expertise to design and implement marketing to attract and hire women, or initialize the training and incentive programs to make this happen.
With general sales team turnover figures ranging from 72 percent to 80 percent, the highest turnover rate in the key dealership position of female consultants is at a shocking 90 percent. Turnover among Millennials is presently at 54 percent. It is obvious we are doing a lot of things wrong. Here are some realistic solutions: • Get off our butts and try new methods. Explore new technology. Employ marketing specialists comfortable with women’s needs. Eliminate procedures that we have utilized just because we have always done so. • Re-examine possible positions that can effectively interest and challenge women. Conduct non-traditional interviews that ask what these interests might be.
“Considering that 85 percent of all automotive purchases are either directly made or directly influenced by women buyers, if we are not responding to this statistic, our dealerships are totally missing the boat.” • Necessary minimal monetary investments — Many management personnel simply may not want to make these necessary investments. • “Difficult economy conditions” — Many organizations lean on this often-perceived statement as an excuse. This is not an excuse; hiding from reality will not improve conditions. • Negative reputations, previous poor treatment and general lack of respect — The bad taste of how women have been treated at the dealership level is still strong in how women perceive dealership viability. Women are still being greeted on the sales lot with detestable statements such as, “Is your husband with you today?” • Failure to address the needs of the female Millennials — Times are different. Women in this largest group of consumers want to be in organizations that “feel good” to their basic drives, other than just to climb through positions or achieve high income. They want to have better communication with their administrators, and most often prefer working “with” them, as opposed to “for” them. So, how do we fix this, and not only bring talented women into our organizations, but keep them there, as well?
• Re-evaluate compensation incentives and adjust them. Consider not just the primary needs of full- and part-time women, but their family and personal needs, as well. • Take a new look at our models. We must address the elimination of restrictive traditional procedures we may have in place. • Encourage our educational systems to step up to the plate, and support local and regional programs. We need realistic training at design, management, service, finance and especially sales. This must happen at all levels of the industry. Today’s women are time-constrained, pragmatic, comfort-conscious and heavily into efficient and consistent communication with their employers. They are extremely effective at communicating within their own groups and friends, and pay little attention to advertising. They are direct with their customers and are especially effective at establishing meaningful rapport that translates into return business transactions built upon trust. If we wish to survive — let alone prosper — we cannot wait any longer. Let’s do everything we can to attract these valuable women employees and provide them with the incentives to keep them with us. The time is now, not tomorrow.
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AaronHowerton
director of client services for Interactive 360 \ 866.383.7481 \ ahowerton@autosuccessonline.com
LEVERAGING SMARTPHONES FOR DEALERSHIP SUCCESS
In 2011, only 35 percent of American adults owned a smartphone. Now, just five years later, that percentage has jumped to roughly 64 percent of all Americans, according to the Pew Research Center. The same study also found that 63 percent of all cell phone owners use their cell phone to go online. This includes the people staffing your dealership and the vendors providing your technology. This ever-growing shift toward mobile access will require dealerships to make some adjustments and do their part to help leverage smartphones for overall dealership success. So, what exactly can you do to take advantage of smartphone use at your lot? • Extend Wi-Fi Coverage — Buy a booster and make sure your network reaches all corners of your lot so that your staff doesn’t have the excuse not to adopt the mobile technology that’s going to be running your dealership because it eats up their data plans.
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• Enhance Wi-Fi Speeds — Make sure you’ve got adequate speeds and bandwidth to handle the traffic that comes from having all of your staff and customers bouncing around on the same network. • Smartphone Enforcement — It’s very common for sales reps to go cheap on their phone plan and get a lower-quality device and service. It may not be popular, but you could consider adopting a minimum technology requirement for your team so that their equipment doesn’t become an excuse for poor performance. • Offer a Stipend — Although uncommon in the dealership world, you might also consider a mobile stipend based on performance for power users to help defray the cost of their cell phones. This could be an additional boon if you decide to enforce specific models, and will definitely set your dealership apart from your competitors when it comes to attracting top talent. • Buy Tablets — Avoid the hassle of equipment and cost complaints altogether when you buy tablets for your staff and make them sign a damage agreement. These can easily be looped into a secure network for your staff. They also increase consumer confidence because tablets appear more professional than a smartphone in the first place. • Platform Features — All the work of leveraging mobile in your store goes to waste if your technology vendors aren’t equipped to provide the mobile experience you need. Make sure your vendors are delivering key mobile features, or at least have solid plans to do so in a timeline you can live with. Mobile is changing the game across every industry, and the dealership that gets ahead of the wave is going to stand out and blow the competition away. Email me for a free quick-sheet of mobile facts to share with your dealership so that your sales, service and BDC teams can see why you care so much about the mobile revolution. To your success!
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OwenMoon
director of automotive digital solutions for CarClick360.com \ 866.446.7143 \ omoon@autosuccessonline.com
MOBILE — NOT JUST ANOTHER BUZZ WORD
Today, we have some of the sharpest minds in the country working in the auto industry. From dealership personnel who are on the front lines assisting car buyers to vendors who develop software that help dealerships become more efficient, there has never been an industry that relies so heavily on the talent and synergies of its people. One thing this industry is also known for is its buzz words. A couple years ago, it was all about Big Data. Then came Responsive Web Design. At the latest Digital Dealer in Orlando the new buzz was all about Mobile. But what exactly does “Mobile” mean? Not all mobile is created equal. Let’s break down just what mobile actually means and why each area matters for a dealership to be successful. Mobile Websites
With as much as 60 percent of all dealerships Website traffic now coming from mobile devices, it’s more important than ever that a dealership has a mobile-friendly version for its Website. Whether it’s creating a separate Website for mobile or having a responsive design that automatically changes whether a consumer is using a tablet or smartphone, a mobilefriendly Website will enhance the customer online shopping experience making it easy to navigate to inventory and connect with your sales team. Google has also made changes, so if a dealership doesn’t have a mobile-friendly Website, it will affect its organic search rank. Since these strategies are always changing, it would be a good idea to consult with
Social Media Is More Than a Popularity Contest
an SEO expert to make sure you are keeping your dealership’s mobile Website search engine friendly. Mobile Apps and Relevance
There are many companies out there today that develop mobile apps for car dealerships. While a mobile app can be a great way for a dealership to stay in touch with their customers, many are using them incorrectly. Since this technology is relatively new, many dealerships are having their most recent customers sign up for their dealership’s custom mobile app. Then, they constantly market to these consumers with things like current rebates and incentives, vehicle specials, etc. Chances are that customer won’t be in the market to purchase another vehicle for three to five years.
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“A 2013 study by Compuware said that between 80 and 90 percent of consumers will uninstall a mobile app after just two uses. So, imagine how many of these new customers will uninstall the dealerships mobile app if they aren’t getting relevant notifications.” A 2013 study by Compuware said that between 80 and 90 percent of consumers will uninstall a mobile app after just two uses. So, imagine how many of these new customers will uninstall the dealerships mobile app if they aren’t getting relevant notifications. Instead, the dealership should send relevant notifications that a new customer would be interested in. Using the dealership mobile app for things like current service specials, special events, or any community events the dealership is involved with are all great things to promote using your dealerships mobile app. Mobile App Marketing
Mobile usage is at an all-time high and continues to grow daily. In contrast, newspaper readership continues to decline. Consumers have turned to online sources to get their news, sports, financial advice and lifestyle interest stories. With more people now using smartphones, mobile apps is where these two intersections meet. Popular mobile apps like Accuweather, ESPN, Huffington Post, Facebook, etc. make consumers’ mobile online experience easier and more efficient. The challenge for dealerships has always been how to reach in-market buyers using mobile apps. By integrating GPS technology, dealerships can now use mobile apps to increase both sales and service revenue. By reaching serious car buyers when they are at specific locations, such as competitor stores or even in their homes, you can now put your competitive message in front of consumers when they are in the final moments of their buying cycle giving your dealership consideration to win the business.
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Today, mobile is not just a device; it’s a mindset. What used to be an emerging opportunity has become the new normal. So, the next time you have a conversation about mobile, ask yourself which area the conversation applies. Is it consumer experience or mobile marketing?
ls leadership solution
GeorgeEwing
director of sales strategy & development for Flagship Credit Acceptance \ 866.440.3445 \ gewing@autosuccessonline.com
NOT JUST LIQUOR AND LUNCH:
Utilizing Your Lender Representative to Maximize Your Bottom Line on Every Deal
Walking around a modern dealership, we can frequently find more vendors, bank representatives and advertising account managers looking to sell you something in your own showroom than there are “real” customers. More than any other time in our business, there are an increasing number of hands out, asking for your hard-earned cash and time in exchange for promises to increase profits or reduce your costs in one “new” way or another. This can be a frustrating occurrence, particularly when your volume goals aren’t being met and you are struggling to adjust your sales strategy and close out a successful month. As a veteran of the retail auto industry, I remember the days when I swore to myself that if one more lender representative, account manager or other outside product salesperson came to my desk or headed toward my F&I office, I was going to find a reason to physically throw them out (politely), or at least find some personal solace by hiding in the bathroom or the service lane until they were gone. We have all been there…. Call them what you will — bank, lender or dealer development representatives; I was guilty of leveraging my relationships, or lack thereof, with these sales representatives only for lunches, branded pens, notepads and occasionally an “exception” or favor from their team of credit analysts or funders. What I realize now, and what I then overlooked, is that these lender representative visits were my personalized weekly update on industry trends from expert eyes and ears from the street, my access to authorities knowledgeable on my competitors and what worked — and didn’t work — for them, and engagement with a specialist who had a different type of insight into the industry. These individuals (the same ones I was avoiding or just asking to buy me lunch) were there in my showroom and they were poised and ready to help me — and my business — in any way that I asked. I just failed to ask them the right questions.
“These individuals (the same ones I was avoiding or just asking to buy me lunch) were there in my showroom and they were poised and ready to help me — and my business — in any way that I asked. I just failed to ask them the right questions.” I remember one bank representative who consistently said, “I can help you with liquor, lunch, pens and pads, but not a whole bunch more than that.” What I realize now is that this lender representative was pandering to the misplaced “value” that I had put on his
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visits: a routine and expected quick pitch about their program, and then onto a negotiation for lunch, pens, pads and maybe even tickets to a local game or event. Instead, these visits could have earned me a real relationship and partnership with an expert, along with his supporting service triangle team, all who have been trained to support dealerships in protecting and building profits. Here are just two examples of ways your lender representatives can help you capture more profit this month and every month into the future, if you only ask: Service Triangles and Profit Maximization Teams
Understanding what happens to your application once you submit it to any given lender is of utmost importance. Your lender representative can easily talk you through this process, provide you all of the most convenient forms of access to your credit analysts (all who are trained to make you the most money), and to the crucial funders, who verify the application and customer information and book that profitable deal. Many lenders choose to utilize “service triangle” teams (made up of area sales manager lender representatives, credit analysts and funders) who communicate together every day about your individual business. They also discuss how to provide you a quicker approval, improve your deal structures to maximize profit and work together to ensure your deal is funded in record-time. If you have not utilized your relationship with your lender representative to be introduced to your expert service triangle, or other dealer services teams, I guarantee you are leaving money on the table and are not getting the attention, profit, service and ease of use from your lender program that you want and deserve. Profitable Preferred Programs
With the myriad of lenders available on RouteOne and Dealertrack — presently more than 1,200 nationwide — it is impossible to memorize all of the programs that can contribute to your dealership delivering more cars and producing a bigger bottom line. Even if you truly understand all of the nuances and
“sweet spots” of any specific lender program, the platform and the profit opportunity are only as good as the specific essentials required to maximize your profit on every approval. You do not need to simply know what type of deal the lender buys; you need to understand how to make the most profit on every application they approve. Many times, that lies within their individual preferred status or other loyalty programs. These preferred programs can often open up the maximum number of allowable ancillary products you can sell on both the front and back-end of your deal, allowing product penetration to skyrocket. The moral of the story here is to take the time to ask your lender representative about their preferred program and what it can mean to maximize your profits. This may not only surprise you at the end of the month during your gross-profit analysis meeting, but it may also change how you think about and interact with your lender representative. The Lender Representative Opportunity
In our insanely competitive industry, it is crucial to take advantage of every opportunity and leverage every possible relationship in order to protect and grow profits your way. One easily overlooked — and potentially game-changing — relationship that you may have yet to maximize, is the one with your lender representative. I have shared a few examples of how to reframe the way you see your lender representative and how to utilize their presence in your dealership to gain a better understanding of market trends, your competition and the industry. In addition, by utilizing your lender representative to better understand their program’s service triangle, or service team, you can substantially increase profit opportunities, decrease your application turn-time, and quickly shorten your contractsin-transit list.
Lastly, taking the time to ask your lender representative to explain the rules and specific conditions and caveats of their preferred program can change how you think about your profit opportunity on virtually every deal. Don’t worry — your lender representative will always be good for “liquor, lunch, pens and pads.” But, if you consider looking at these professionals as a new and crucial resource and profit-center partner in your dealership, you may discover that lunch with your lender representative tastes so much better, particularly when you starting breaking product penetration and gross profit records every month.
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ChristianSalazar
vice president of sales for Phone Ninjas \ 866.467.3861 \ csalazar@autosuccessonline.com
GIVE THE GREEN PEAS ONE SOLID LESSON
Car dealerships today are transforming. We are hiring better employees.
setting appointments at an 80 percent phonecall-to-appointment ratio. That equals more Big business is buying into the automotive world, and with big business comes efficiency showroom visits and more sales for your team and the dealership. and process improvement. Customer service and experience are becoming the focal points of most auto dealership operations across the nation. It’s no secret that people buy from people who they like and from a clean, crisp showroom.
an inbound phone call, creating excitement around the unknown availability of the vehicle, creating a sense of urgency to visit the dealership, obtaining contact information, and getting the appointment.
In 2016, general managers have MBAs, Internet managers have skills in Web design and management and marketing directors possess marketing degrees from top universities. Mechanics are certified in multiple areas and are held accountable to keep testing and certifying.
There are many great training companies out there that can turn a green pea into a rock star appointment setter within that allotted time. Onsite training and video training for sales skills and customer interaction takes much longer to develop.
Green peas in the auto industry are the first point of contact that your dealership has with a potential buyer. All of the training and hard work that has gone into building your dealership and managing it in the current competitive environment is placed in the hands of a young salesperson who you hired a few weeks ago. With the lion’s share of advertising dollars aimed at making a phone call, answering the phones properly and earning a caller’s trust enough to obtain contact information and set an appointment will be the best thing you implement in your dealership in 2016. Phone training is something that I did when I was selling cars in 2004. It’s also something you, the general manager, did in the 80s or 90s. It has been able to withstand toughest of all tests — the test of time. Imagine hiring a salesperson who has never been in automotive before and, after three short weeks, listening to them take control of
Phone sales training for staff during the onboarding process will also produce happier and longer-lasting hires. When salespeople are given the proper training they need to succeed, they will make more money. When they make money, the dealership makes more money. Everyone wins, and that environment radiates out to every employee and the customers in the showroom. The new hire retention rate amongst dealerships with a solid phonetraining program is impressive; more than 70 percent of hires are still with the company
“With Gen Y, the Millennials and even Gen Z comprising most of your sales staff, most of them don’t have basic phone skills. Think about it — in 2008, text messages became more relevant than phone calls. The youngest Millennials are 21; phone conversations are something they most certainly haven’t had in their lifetime, especially in a professional setting.” With Gen Y, the Millennials and even Gen Z comprising most of your sales staff, most of them don’t have basic phone skills. Think about it — in 2008, text messages became more relevant than phone calls. The youngest Millennials are 21; phone conversations are something they most certainly haven’t had in their lifetime, especially in a professional setting. Poorly handled phone calls by sales staff is one way to surely make you cringe. So, why let your dealership be a victim of bad phone skills? The most successful dealerships that use ongoing phone sales training for their staff are
after a year. After four years, they are no longer taking ups or have moved into management. Most dealerships are paying to have their phone calls recorded with one service or another. And it’s impossible to review and manage every single sales call that comes in. The average dealership in the U.S. is spending more than $40,000 monthly in advertising. More than 90 percent of that advertising is associated with a phone number, urging its viewers or listeners to call the dealership. Give your dealership the gift of phone training. Your sales reps, their bank accounts and your own bank account will be appreciative.
GROW USED VOLUME 20 –30% “We have been selling 80 used cars for years. In May, we signed up with Lotpop and what a difference it has made. We have averaged 111 units the last three months and broke our all-time record last month with 120 units with 131 in stock.” - Chad Vaught of Jimmy Michel Ford Learn how to Increase Your Used Volume Up to 30%. Visit LOTPOP.COM for a Free Inventory Evaluation. Jasen Rice,
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ls leadership solution
TimByrd
founder & president of DealerRE \ 866.347.6022 \ tbyrd@autosuccessonline.com
THE ANSWER TO REINSURANCE POINT-BASED LOYALTY PLATFORMS
We all know that loyal customers are the lifeblood and future of our dealership success. You know it and most factories handsomely reward dealerships that are successful at doing it. Points-based rewards programs have quietly grown in popularity in the automotive market over the past 20 years with a major explosion as the industry exited the recession. The fact is, no one wants to go back and everyone has learned that a properly cultivated and retained customer base is a game changer in a declining market. Unfortunately, history tends to repeat itself, so if retention is on your radar screen, now is the time to build it when times are good. Loyal customers become more profitable over their ownership life cycle as they purchase new products, repair older ones and recruit others to do the same. In fact, customer loyalty is the single most important driver of growth and profitability for a dealership. A properly retained customer base that actively spends money and becomes a referral source to drive additional incremental business allows dealers to effectively reduce their overall “spray and pray” advertising spend. Live by the door, die by the door. It’s that simple. I have had the opportunity to work with dealerships that have implemented successful loyalty strategies and the companies that create, implement and manage them. As a reinsurance expert, I am often asked if the contingent liability — created by a point-
based loyalty strategy — can be ceded into a reinsurance environment. The answer is “yes,” with a true understanding of the rules and if the loyalty company you choose to work with truly understands your business. Existing F&I products may dovetail neatly with a pointsbased loyalty program and work well for a dealer-owned reinsurance company. But, like all insurable products, the devil is in the details. The opportunity to take the risk created by this customer-driven incentive program and transfer that risk to a dealer-owned reinsurance company works by systematically reserving a percentage of the points accumulated each month by each customer into a dealer-owned reinsurance company. The fact is, breakage is not necessarily good for your long-term retention goals, but certainly part of the reality and why a dealerowned reinsurance company may make sense. A few preliminary thoughts to consider are a program must be based on a “cash-in, cash out” model and provide a clear and structured process to earn out over time. Premiums can only be a fraction of the total liability and your loyalty partner must have the ability to track this liability accurately and in real time. Not only must the points (liability) being earned be tracked accurately, the points earning out or
redeemed are also vital data to making it work. If both sides are accurately tracked, premiums deemed unclaimed or earned out can become underwriting profit. Combining this approach with other products, such as warranties and vehicle service contracts, the dealer is assured a tremendous profit center from their dealer-owned reinsurance company. An often-misunderstood benefit to a dealerowned reinsurance company is that they are actually small property and causality insurance companies. Under Internal Revenue Code 831 (b), “Small property and casualty insurance companies with less than $1,200,000 in annual net premiums may elect to be taxed only on investment income.” So, when setting aside premium reserve in your reinsurance company to transfer the risk created, unlike making a deposit in your account at the local bank, you are not increasing your taxable net profits. Remember, including a points-based loyalty program into your reinsurance program starts with truly understanding how it works and how to set it up correctly. Do your homework and partner with a loyalty program provider with a long track record, a solid ability to track your points and ability to report it as needed. If you are considering developing a program or have one and would like to better understand how to cede it into an existing dealer-owned reinsurance program, speak to an expert and know the rules.
SOCIAL Follow the AutoSuccess social sites during the NADA 2016 convention, and we’ll keep you updated on everything from the prime booths, celebrity guests and hottest parties, down to the best food, coolest swag and shortest coffee lines.
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BruceThompson
CEO of Pearl Technology Holdings \ 866.613.1344 \ bthompson@autosuccessonline.com
DEALERS NEED A SEAMLESS ONLINE-TO-SHOWROOM CUSTOMER EXPERIENCE
It is quite clear that auto dealers need to implement a customer journey that allows a consumer to start the car-buying process online and pick up right where they left off in the showroom. The technologies needed to accomplish this do exist today, and they are already making a huge impact within the industry. The proof of that is right in front of our eyes with Carvana, Beepi, Vroom and other online marketplaces leveraging said technology to take sales away from dealers. Most dealers either don’t recognize the consumer trends that are spurring these companies forward or lack the financial and technological prowess to develop a quality solution that can compete in the marketplace. In my experience, the most successful dealerships today have chosen to change their showroom culture and have adopted technology that resonates with consumers inside and outside of the showroom. They understand that all of the components of the retail transaction should be available in a streamlined process that starts online: efficiently pre-screening shoppers, providing accurate and personalized offers for their trade-ins, desking solutions that enable customers to change variables on their own to find a structure that fits their needs, menubased finance offerings, and don’t forget digital contracting. However, the progress the customer makes while shopping online cannot drop into a black hole once they do choose to come visit the dealership. Their transition from “clicks to bricks” must be one that is seamless and transparent; otherwise, dealers will risk those customers walking right out the door with a bad taste in their mouths if their “deal” has been lost in the depths of cyberspace.
Success in the retail marketplace of the 21st century has been defined by customer convenience. Shocker, right? Take two of the so-called corporate “unicorns” — Amazon and Uber. Both companies were born with the goal of providing the most innovative and convenient experience to their users and have relentlessly evolved their businesses to accommodate their customers’ desires. Uber started within the niche of offering on-demand black car transportation in select markets in the United States. It now operates across the globe; offering real-time services that range from your basic taxi to a helicopter journey across town, from food delivery to “renting” a puppy for a half-hour. Amazon grew its retailing presence by utilizing emerging e-commerce technology and now offers same-day delivery via its burgeoning drone fleet in select markets, with $26 billion dollars in Q3 2015 sales to show for their efforts. The conclusion is clear: Consumers dictate who succeeds and who fails in the retail marketplace.
Thanks to companies like Amazon, Uber, Carvana and Vroom, today’s consumers are understandably far less willing to spend much time at the dealership. Confrontations and adversarial interactions during negotiations are things that they will no longer put up with. The longer our industry falls behind in transforming the consumer car-buying experience, the more these start-ups will gain ground. We are at a crossroads in an industry that is going to change — with or without us. The answers and solutions are already there to transform your dealership into the new age of automotive retail. Leverage today’s technology and provide a better start-to-finish customer experience that is truly “clicks to bricks.” I do know for a fact that most dealers truly want to offer the technology and express retail experience that the Millennial generation is demanding, and that opportunity is now rapidly approaching on the horizon. While AutoNation, the largest dealer group in the country, has the financial muscle to spend $100M or more to custom-build its AutoNation Express solution, other dealers don’t have that luxury. Thankfully, there are other vendors in the industry that are bringing plug-and-play products to the market that allow the average dealer to get themselves into this space with both feet forward. Hint: Keep your eyes out at this year’s NADA in Las Vegas.
Don’t Settle for Less! You Can Be More and Earn More! Take the lead! Your F&I Performance Matters! Plant the seeds for a profitable future with our all-in-one interactive virtual training program. Try it for FREE. Register for a 5-day FREE Trial now. "One of the big differences Rebecca Chernek brings to her training is that she ties the front end desking process to work with the F&I process like an engine and a transmission working together. Her training produces ‘instant offense: gross, product sales and compliance all at the same time!’"
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AdamRobinson
chief hireologist for Hireology \ 866.455.1671 \ arobinson@autosuccessonline.com
PROTECT YOUR BRAND AND PROFITABILITY WITH EMPLOYMENT BRANDING
Developing your auto dealership brand accomplishes several critical goals that contribute to the success of your business. Doing so allows you to differentiate your company among competitors, build awareness in target markets, increase consumer traffic, foster loyalty and transform a service into a need — ultimately bolstering relevance and trust among buyers. How Much Have You Invested in Branding?
To appreciate the scope of your investment in branding, consider advertising spending. According to research from the National Automobile Dealers Association, the average auto dealership spends roughly 1.04 percent of their sales on advertising. That money is going toward ads on the Internet, TV, radio, newspapers and direct mail. In short, dealerships are working diligently to build their brand and generate leads. Keeping in mind that average total dealership sales reached more than $49 million in 2014, the actual spend per dealership on advertising can reach upwards of nearly $494,000 on an annual basis, according to NADA data. Now, that’s a significant amount of money for brand-building and it’s likely that you’re spending quite a bit more than this on your overall marketing efforts. What this neglects to take into account is that your people are the ultimate representatives of your brand. Without question, auto buyers are key to profitability, but the talent working on the sales floor, operating the phones and repairing vehicles in the service center are the drivers of a successful business. Why Do Auto Dealerships Need an Employment Brand?
If success ultimately depends on the people who work in dealerships, you need to develop experiences that motivate talented, committed job seekers to join your business. Historically, auto dealerships haven’t fared well when it comes to retention, especially among their sales force. In fact, the NADA’s 2014 Dealership Workforce Study indicated the average dealership had a 66 percent turnover rate among sales consultants in 2013, which is up 4 percentage points from the previous year.
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This is well above the national average for the private sector at 42 percent. As a result, auto dealers are faced with a significant amount of disorder in their sales teams and operations, which ends up leading to expenses related to recruiting, hiring and retraining new people to fill the vacant positions. Just as branding helps foster loyalty and trust among consumers, the same rules apply to your employees. The candidate journey typically begins with the auto dealer’s career site. Each touchpoint that a candidate encounters either enables a positive experience, or turns them off from your employment brand. How a Career Site Influences Hiring — and Dealership Success
Perceptions largely dictate attitudes and behaviors. This holds true in the way individuals react to their environment, including their home, work place, shopping experiences and a variety of other situations. In circumstances like choosing a career path, the perceptions that job seekers form about an auto dealership’s career site can be highly influential for a number of reasons.
Employment brand is a major differentiator between dealerships. Whether a dealership advertises an opening on a job board or social network, candidates will invariably arrive on the career site where they form their opinions and perceptions of the brand. If there is no identifiable brand, the dealership immediately loses credibility and the confidence of the applicant — especially if the candidate is truly interested in making a significant career move. Without a clear, relevant brand, dealerships run the risk of attracting job seekers who are ambivalent about the position and will likely end up being unproductive members of the team.
Additionally, there’s the hidden expense of a poorly-developed career Website. Auto dealers spending hundreds or thousands of dollars to advertise through job boards and other channels are essentially throwing their budget away by directing job seekers to a generic, unbranded site. Everything from a dealership’s brand colors, fonts and logos to the history, graphics and photos build an experience that influences the perceptions and behaviors of the talent the business is aiming to attract. What Should an Automotive Brand’s Career Site Include?
There are a few key considerations that go into constructing a strong employment brand through a career site. First, be sure to create a seamless, convenient application process. It’s unrealistic for auto dealerships to expect applicants to recreate their resume through an online form. In the same way dealers limit the number of fields that consumers fill out to get information about a vehicle, they need to follow suit with online applications. The candidate’s experience is a complement to employment brand and should be central in the process. Further, it’s critical that auto dealerships take mobile experiences into account. Today’s consumers and job applicants increasingly reach for their smartphones when searching the Web or scrolling through job postings on mobile apps — whether they’re at home or on the go. A career site has to be optimized for mobile users; otherwise, it risks alienating or missing out on a huge pool of talented applicants. As it plays out, the difference between auto dealerships that invest in their employment brand and those that don’t will become obvious. Those that foster strong candidate experiences and clearly showcase their brand through their career site have the chance to see their hiring expenses decrease as the quality of hire increases. Those that don’t will likely see employee churn rates remain painfully high — or even increase — while their profit margins continue to shrink.
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LaneKidd
national account executive for Horsepower 360 Marketing \ 866.852.2754 \ lkidd@autosuccessonline.com
CUTTING THROUGH THE NOISE: Omni-Channel Marketing
From the moment you open your eyes until the second you turn off your phone and lay your head down to sleep, there are a multitude of companies competing for your mind and dollar space. Persuasive imagery and language produced at a rapid rate and output, all designed to prompt a purchase. After a while, the typical consumer becomes jaded, and what was once intended to create a reaction eventually falls on deaf ears. Is there a way to cut through the noise? Is there a way to make your message stand out from the rest of the crowd? As marketing decision makers, you are faced with several projects vying for your attention every day. One after the other, you make tough decisions that your company will heavily rely on. Among the madness of managing people and making the numbers work, you have to find and create new ways to reach the buyer. Staying ahead of the competition is a constant battle, and taking your foot off the gas — if only for a moment — can risk a major setback. Implementing the proper marketing mix at your dealership is an ever-evolving process, and pinpointing your target can seem like a moving target.
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There is light at the end of the tunnel. There is a way to reach a segment of buyer’s consistently and continuously using the most direct and modern mediums: omni-channel marketing. Omni-channel marketing has been able to cut through the noise of the fast-paced world we live in. Taking your message and delivering it across multiple channels is a way to keep your message constant and relevant. When setting up a campaign, the most effective way is leveraging modern technology and traditional direct mail to create a successful event. By utilizing IP direct banner ads, direct mail and emails, you can combine a potent mix that is affordable and will increase your response rates significantly.
“Staying ahead of the competition is a constant battle, and taking your foot off the gas — if only for a moment — can risk a major setback.” Advertising takes time and repetition to cut through the noise and reach the people you’re targeting. By providing a consistent message across different media, leveraging traditional and digital methods to reach prospects on every level, you multiply your efforts, multiply your impact and multiply your marketing spend.
SUCCESS STORY APRIL 2016 · NO 4
WORKING AS A
TEAM 30% TOYOTA OF TRI-CITIES HAS
INCREASED SALES VOLUME BY
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Success Story Ä CONTINUED FROM THE COVER
Founded in 1997, Toyota of Tri-Cities is one of three stores operating under the Summit Auto Group Holding. Located in Kennewick, Washington, the dealership’s location can be an advantage — the nearest competing Toyota store is more than 30 miles away. They provide a full-service facility six days a week so they can manage every customer’s needs, and have built a loyal following in the past two decades. The dealership’s leaders, however, knew that there was more that could be done to build for the future.
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“our business has changed in recent years and it demands that you go to market with a more strategic approach… data is the new currency” Carmen Marquart Director of Marketing Toyota of Tri-Cities
Two years ago, Toyota of Tri-Cities decided that they had to become more forward thinking, and that they couldn’t grow to the level they wanted to without bringing in some outside help. They decided to make some changes and really focus on finding good-quality vendor partners. First, they upgraded to a new CRM company that updated their day-to day activities. As Carmen Marquart, Director of Marketing, explains, “our business has changed in recent years and it demands that you go to market with a more strategic approach…
Toyota of Tri-Cities Perfect Prospect™ map allows the dealership to see which zip codes offer the highest conversion rates with the lowest cost per sale
data is the new currency.” Then, they partnered with a company who helped monitor new leads so that the dealership’s salespeople were on a rotation and knew when new customers were coming in and out of the dealership and could better prepare and make the most out of each new lead. TriCities believes in the 4 P’s - People, Process, & Partnerships. With the right People, good Processes, and Partners like Team Velocity Marketing, they are able to achieve the 4th P - Profits. This is what helped Tri-Cities grow their dealership to a year-over-year 51 per month unit improvement.
Here’s how they did it... CONSISTENCY
Marketing is a science, and can be a tricky one, at that. Finding the right formula to get the most consistent message to your audience is something that many dealerships find themselves unable to achieve on their own. Whether it is through radio, direct mail, TV or any other media, one of the main components of a dealership’s marketing should be consistency. The ad on the radio should reflect the tone and philosophy of the TV marketing, which should echo the message of the direct mail, and so on. Dealers are great at many things, but selling cars should always be the primary
focus; other details can be outsourced to experts in those fields and together, the team can grow the dealership. After an extensive agency review, it was clear that Team Velocity Marketing was the best strategic marketing partner for the dealership. “For us, becoming the marketing partner for Summit Automotive Group’s Toyota of Tri-Cities dealership, is a perfect fit. They understand and embrace the data-driven strategies our company delivers”, says Justin Byrd, President of Team Velocity Marketing. Once Toyota of Tri-Cities sent a constant, consistent message to their targeted audience, they were able to see results. In fact, over the past 14 months - since Team Velocity Marketing was brought on board - the dealership’s sales volume has increased 30 percent.
TAKING IT TO THE NEXT STEP
The number of loyal customers Toyota of TriCities has developed is unbelievable, and most are achieved through the dealership’s new Upgrade Department. Toyota of TriCities has two designated “concierge experts,” whose sole job is to put the customer who is in for service at ease. They invite them to the Owner Loyalty Lounge, which is equipped with iPads, a library, TV, refreshments, and other amenities. Taking
TOYOTA OF TRI-CITIES customer service and hospitality to the next level, they embrace an Omotenashi culture in their store, a Japanese philosophy which means act of providing detailed service in a variety of ways to allow guests to spend a relaxing and memorable time by putting customers first. The experts make sure that their needs are met before the subject of equity trade-in and vehicle upgrade is even mentioned. Their motto is to treat the customer like they would a guest at their own house; the feeling of “family” is crucial to the dealership’s sales attitude. Once a customer is comfortable, the concierge expert will talk with the customer about their upgrade options. Most of the time, they can help them move from their current vehicle to a new or certified used car at no additional cost to them. “We are selling 30 additional cars a month by establishing the Upgrade Program — 21 new cars and 9 certified used cars,” said John Manterola, General Manager of the dealership. With the Upgrade Program, Toyota of Tri-Cities generates more trade-ins, which not only helps the used car department, but also
keeps loyal customers happy, which prevents them from shopping competitors. Because of the Upgrade Program, their certified program has soared to 7 out of 71 dealers in the months this has been implemented.
TEAM WORK
One of the main keys to a successful dealership is the people. “Most of our team has been here for years,” Manterola said. “We treat them right. We offer them a 401K program that is second to none. We show them what we expect and we deliver.” When people go to work for Toyota of Tri-Cities, they do not want to leave. The dealership’s leadership make the processes and standards tight, so some are not cut out for it; but the ones who are, are there long-term. This allows not only for a more satisfied, and therefore happier and more productive staff, but it also ensures that the experience of the employees stays at the dealership, and provides more support and more professionalism for its customers. Selling more cars and more service with help Online Display Ads
from their marketing partner, Team Velocity Marketing, makes for a really fun environment and keeps employee retention high.
UNDENIABLE RESULTS With a strategized, consistent marketing plan in place, a bulletproof Upgrade Program and a dedicated team to help get Toyota of Tri-Cities to the next level, the dealership has seen a 30 percent increase in volume and a 37 percent increase in bottom line profit over the last 14 months since putting Team Velocity’s marketing services in place. Eight of the last 12 calendar months, they have set record numbers. “This is the best profit year in our history because of our consistent message through marketing, our on-target Upgrade Program and because our people are having fun,” Manterola said. To learn more about Toyota of Tri-Cities and the strategies outlined in this article email: successstories@autosuccessonline.com
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Point of Sale Apollo Technology Platform Direct Mail
Mobile Responsive Offer Site All of Toyota of Tri-Cities targeted marketing is managed from a single platform. This allows them to deliver consistent branding and offers across all of their media channels and monitor the results from all of their campaigns from a single, web-based dashboard.
Success Story
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Success Story
TOYOTA OF TRI-CITIES
This is the best profit year in our history because of our consistent message through marketing, our on-target Upgrade Program and because our people are having fun John Manterola, General Manager, Toyota of Tri-Cities
IN A NUTSHELL
In just 14 months, John Manterola and team have increased sales volume by 30% and a 37% increase in bottom line profits. •Consistent Message — Whether you are putting your money into TV, radio, direct mail or other media, being consistent with your message is the key to the best results. •Upgrade Department — Offering Upgrade options to customers visiting your service lane daily is a way to quickly grow new and certified pre-owned sales tremendously. •Partnerships — Finding the right partnerships with vendors will allow you to concentrate on what you do best — sell cars — and outsource the rest to help your dealership grow. •Long term Employees — Creating a family-like atmosphere for your team will keep the turnover rates low and the experience level high.
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DavidMetter
president of AutoHook, powered by Urban Science \ 866.406.8374 \ dmetter@autosuccessonline.com
HOW DEALERSHIPS CAN STAY AFLOAT IN THE AFTERMATH OF NATURAL DISASTERS
The residents of Missouri and Illinois had a rough start to 2016 after the flooding of the Mississippi River and other waterways spanning the two states. In some areas, more than two feet of rain graced the Midwest with its presence, resulting in more than 25 deaths and thousands forced from their homes in freezing temperatures. The vicious results of natural disasters can have snowballing impacts (no pun intended). Mother Nature doesn’t simply affect individuals, families and their communities but, on a larger scale, both businesses and entire industries feel the consequences. Data has revealed the flooding in Missouri had a direct impact on their auto sales when compared to all other states. In January, sales in Missouri were down about 10 percent, compared to a 4 percent increase throughout the rest of the country. More recently, the East Coast was hit with monumental and even record-breaking snowfall accumulation due to late January’s winter storm, Jonas. The storm’s heartless medley of snow, ice, high winds and coastal flooding proved the unyielding domino effect of weather-related damage that expands far beyond vehicle sales. More than 80 million Americans were affected, including at least 31 deaths and of course, property damage. According to Automotive News, the “Jonas Effect” forced Toyota to temporarily close 200 of its dealerships. Herb Gordon Volvo, in Silver Spring, Maryland, experienced a roof collapse due to the overly dense snow. Fortunately, there were no human injuries; however valuable inventory was lost (seven Volvos, to be exact). General Manager Ed Sarecky reported the damage will take about 45 days to be restored. The silver lining: They plan on rebuilding the area with a more enclosed, highly stabilized rooftop to prevent losses like this in the future. This is not the first time the auto industry has suffered from natural disasters, nor will it be the last. Back in 2005, on a much larger scale, Hurricane Katrina became infamous as one of the five deadliest storms in the history of the U.S. But there is a light at the end of the tunnel. As an industry, we did learn a few things that can benefit dealerships in the case of yet another unwarranted disaster.
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The following are the top three findings dealers should be aware of in order to prepare for, or minimize the damages associated with natural disasters such as these (excluding the obvious of securing a good insurance policy). 1. Sales will skyrocket after 30 to 90 days following a natural disaster. What dealers don’t necessarily expect is that directly following this lagging, bounce-back period is when vehicle sales reach record highs. A trend we’ve seen with unprepared dealerships is they often lack the necessary inventory to meet the soaring demand. In addition, we have to consider not just the quantity of inventory to prepare for the spike in sales, but also the right variety of vehicles to keep in stock depending on the geographic location and nature of the storm.
Urban Science conducted an extensive data study one year after Katrina hit. According to Wards Auto, the study revealed, “While Hurricane Katrina sparked a human exodus and crippled many car dealerships in the metropolitan region, automakers scrambled afterwards to get the right vehicles to market because of an ensuing surge in demand.” Mitch Phillips, global director of data at Urban Science, toured the city of New Orleans and its dealerships to witness the aftermath six months after Katrina. “Car sales dropped, but pickup truck sales nearly doubled,” Phillips said. “As people came back to the city, they were fixing their homes and hauling away debris. They needed pickup trucks.”
sales coma should be fast, intelligent and purposeful — meaning you can use it to craft your sales strategy right away. Accept nothing less than real-time data, as this is the only truly efficient source towards improving your sales and marketing efforts. 3. You’re going to get fewer leads, so make the most out of the ones you have. This means optimizing your Website, lead forms and overall marketing efforts for conversion. I’d recommend beginning with mobile and
“What dealers don’t necessarily expect is that directly following this lagging, bounce-back period is when vehicle sales reach record highs.” working your way down. Make all calls to action, including directions and your phone number prominent and easy to find. Make forms short and to the point. If you’re going to ask for someone’s information, they are more likely to provide it if you offer them something in return. Consider a gift card incentive just for coming in for a test drive. You always have a better chance of converting a customer once they are physically in front of you. While looking back on his visit to New Orleans, Phillips said, “It’s not just hurricanes. Any natural disaster, such as an earthquake, can cripple a dealership. There need to be provisions for natural disasters in areas susceptible to them.”
Personally, I like to consider myself an optimist. Over time, the snow will melt, water levels will recede and the material damage will be restored. Roads will be cleared and made safe once 2. The odds of real-time data will always again, and the revival of new hope will begin work in your favor. And by real-time, I mean real time. I don’t mean data from 30 days ago. I to set in. I believe that with every misfortune mean real sales and transactional data from this or tragedy comes a valuable lesson. What we very instant that can be used to your advantage. can learn from the unstoppable, unpredictable force of Mother Nature is how to prepare for the Big data alone won’t cut it. The data you use to optimize your strategy during a storm-induced aftermath should it happen again.
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Targeted Direct Mail • Experian’s Exclusive “In the market model” – This list actually pin-points prospects in the market for a car. If you are looking for great lower tier prime and sub-prime prospects, this list works. We have had dealers sell over 40 units in a month. • Campaigns start as low as $.65 a piece.
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JasenRice
owner of LotPop \ 866.891.1193 \ jrice@autosuccessonline.com
YOU CAN’T RUN NEW-CAR PROFITABLY WITH A “SET AND FORGET” STRATEGY
I get to know numerous smaller dealers and how they manage their new and used inventory. What I see happening — more accurately “said,” not “happening” — with their new-car practice frightens me, and it should them, too. I shouldn’t focus this comment on small dealers — I know it happens at dealerships of all sizes, all makes, and in all areas of the country. Here’s what sets me back: • Dealers who do an excellent job analyzing how to maximize eyeball contact on used cars, whether on the lot or online, do a terrible job marketing new cars to get the same results.
• They’re sticking to a “set and forget” online pricing strategy. Too little thought is given to maximizing online exposure for new-car inventory they list on Websites. I recommend these operators stiff things up. If you’ve been around the business for any length of time, you know a “lot party” is the day the GM or GSM gets everyone out on the lot to move and reposition the cars, tidy up the lot and otherwise stir up the status quo. A lot party’s objective is to increase inventory appeal. Many used car managers do this often. They pay close attention to market pricing. They price and adjust pricing to attract the most exposure measured via search results page (SRP) and vehicle details page (VDP) views. New car managers should do this with new-car inventory. I’m advocating here flat pricing for
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new cars marketed online to improve exposure. So, forget a “set and forget” online pricing strategy for new cars. Here’s why “set and forget” is detrimental: • You limit your market • You limit your exposure • Your units age longer To illustrate how a “set and forget” online pricing strategy hurts new car sales, just study how other dealers price their new inventory online. You’ll notice pricing like “$40,017.” Given how most third-party listing sites categorize — or bucket — cars for their search parameters, this price kicks the vehicle out of a $35,000 to $40,000 bucket. Do you want to miss that buyer exposure and leads for a mere $17? Pricing that new car at a “flat price” of $40,000 will expose your vehicle to the $40,000 and less shopper and the $40,000 and higher shopper, which will increase your search results. Or, with prices like “$22,187,” is it worth forgoing the eyeballs of all those searching for cars in a $15,000 to $22,000 range just to get perhaps that final $187 and miss that shopper? It’s not really if you can capture a few additional dollars, but how many eyeballs you can attract to your product by thinking strategically about your price so it works effectively with the lead sites’ search parameters.
If this strategy is compelling to you, consider assigning an inventory specialist to manage your online new car inventory. Hold this individual accountable for ensuring flat pricing and for maintaining these other virtual lot party best practices: • Customize every vehicle description — OEM vehicle descriptions are useful, but a human eye on them will make them more compelling to your market. Understand, too, how your lead providers’ Websites handle keywords. For instance, on Cars.com, if you used the term “moonroof ” in the description, and a customer searches “sunroof,” your vehicle will not show up. So, you may need to tweak description language to optimize search to improve your SRP results. • Image every vehicle — Let’s face it: Factoryprovided photos are flat. Image your new-car inventory as you do your used cars to highlight features you know are popular with your market — and be sure those details are written into the vehicle descriptions. Marketing and managing new cars online is a job — but dealers who do it retail those units sooner and retail more units. Many dealers performing these suggestions will double inventory turn, which increases their new car sales bottom line. How do you value a result like that — in any market, but especially in today’s margin-challenged one? Got questions? Email me at the address above.
REVENUE IS CALLING. WE’RE THE ANSWER. Missed service calls. Scheduling inefficiencies. Upsell opportunities lost. The list goes on. This can all stop today by engaging Traver Connect’s robust Automotive Service BDC. Our proven service and solutions can ensure every service call will be answered, upsell opportunities will be taken, and an increase in service appointments will be made. This Service BDC will help absorption, increase your average repair ticket, and enhance your overall customer experience. Traver Connect’s automotive Service BDC is your new profit tool, not a line item expense. This solution is self-funded and increases your service center’s revenue stream. Your customers are giving you their business. We’ll make sure you don’t miss their call.
For a free phone survey, contact us today: 855.891.0010 • TraverConnect.com
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RETENTION IS JUST A WORD
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ustomer Retention is defined in Business Dictionary as, “…An assessment of the product or service quality provided by a business that measures how loyal its customers are. Customer retention statistics are typically expressed as a percentage of long term clients, and they are important to a business since satisfied retained customers tend to spend more, cost less and make valuable references to new potential customers.” But, how do you achieve that, exactly? Based on 10 years of working with dealers of all makes and models scattered across the United States, I believe it can be summed up in a single word: culture. The dealer must be willing to refine the culture of his business and how it relates to the customer. Almost all dealers “think” they do a good job at customer satisfaction, but when compared against the nationwide dealer network, they are pretty much all the same. Consequently, the customer perception of automotive dealers has not really changed much and, in fact, the perception was generally not that great to begin with. Changing the culture in the business model is essential in gaining a higher level of customer satisfaction, which results in retention rates that have not been seen before in the industry. It is simply not good enough to design a customer-centric retention program without making sure that it includes the dealership staff. Getting 100-percent buy-in from every employee in the dealership is essential to achieving success with any retention program. You get engagement from your staff by training, monitoring and accountability.
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Day One must include extensive group and oneon-one training be retention professionals who have the experience to establish professionals who have the experience to establish a foundation of understanding that everyone can easily understand. Every employee must know that this new culture is
a “game changer,” and that there is a new way of doing business in your organization. Without the basic foundation, your program will begin with a few successes, but not the overwhelming results you should be seeing from it. The amount of time you devote to this training defines your level of commitment to your program. Too little time, and your employees will see this as just another “annoyance” and will continue to do “business as usual.” I recommend that one to two days be devoted to retention training at small-to-mediumsized stores in order to accomplish the goal of creating a new culture. Beginning with the day after training, your staff should be implementing
your retention program with every customer encounter. You ensure this is done by constantly monitoring their work process to confirm it includes at every interaction with a customer the mention of your retention program. This must be done on a recurring daily basis, and with the goal of 100-percent compliance by every employee. Holding your managers fully accountable for implementing your program should be the new norm – and not the exception. This can be done by continuing training and focusing on the new retention program at every opportunity. It is crucial that the dealer principal and general manager be the driver of this program in order for it to become culture. Jack Garrity
Retaining Customers Coast to Coast. Dealership For Life is the premier customer retention program in existence today! Since 2004 Dealership For Life has assisted dealers in creating custom programs to brand their businesses, administrate their program, train their staff and produce retention and sales/service profits that set new standards in the industry. Let us help your dealership become a Dealership For Life!
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