The New & Improved AutoSuccessOnline.com, Check It Out! March 2010
AutoSuccess Magazine is published monthly at 3834 Taylorsville Rd., Building A, Ste. 1B Louisville, KY 40220; 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, 3834 Taylorsville Rd., Building A, Ste. 1B Louisville, KY 40220.
RESOLUTIONS, PART 2 TedRubin
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CONSISTENCY OF YOUR SALES PROCESS IS KEY TO SUCCESS JeffHager
25
CASE STUDY:
SteveBrazill
28
OOPS! AT THE SPEED OF LIGHT JockSchowalter
32
CRM SHOULD PROVIDE YOU WITH ‘ACTIONABLE INFORMATION,’ NOT JUST LOADS OF DATA JohnFreund
34
PLAN CAREFULLY WHEN IT’S TIME TO MAKE A CAREER MOVE jeff hager
08
DaveDunn
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FIVE REASONS WHY YOUR BODYSHOP IS UNDERPERFORMING...AND WHAT TO DO ABOUT IT
DalePollak
18
ARE YOU GOING BACKWARDS?
SeanStapleton
22
10 BASIC CRM ‘MUST HAVES’
DennisSampson
24
USED VEHICLE INVENTORY CONTROL: PROFIT CENTER FOR YOUR DEALERSHIP
marketing solution
14
LACK OF SYNERGY KILLS STAFFED EVENTS
SteveShaw
26
THE ANSWER IS PRODUCTION
MarkTewart
30
LESSONS LEARNED FROM THE SUPER BOWL
Susie Horne, Account Manager John Warner, Sales-Improvement Strategist shorne@autosuccessonline.com jwarner@autosuccessonline.com
CAN THE PAST TEACH US ABOUT OUR FUTURE IN SALES?
Brian Ankney, Account Manager super6@autosuccessonline.com
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dave dunn
sales & training solution
Dave Davis, Editor & Creative Strategist ddavis@autosuccessonline.com
MattBaker
mark tewart
leadership solution
Thomas Williams, VP & Creative Director design@autosuccessonline.com
3834 Taylorsville Rd. Building A, Ste. 1B Louisville Kentucky Ken 40220 | 877.818.6620 / 502.588.3170 | AutoSuccessOnline.com / AutoSuccessPodcast.com | info@autosuccessonline.com
By TimJames
Susan Givens, Publisher sgivens1@autosuccessonline.com
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KirkManzo
pg p g16
Video Surveillance That Really Works
StephenR.Covey
pg25 pg
feature solution March 2010
leadershipsolution
StephenR.Covey
RESOLUTIONS part 2 Last month, we looked at some of the pitfalls that people run into when making a resolution to create a positive change in their lives. This month, we’ll look at some concrete steps to take to change “good intentions” into lifechanging habits. In each of our lives, there are powerful restraining forces at work to pull down any new resolution or initiative. Among those forces are appetites and passions, pride and pretension and aspiration and ambition. To overcome the restraining forces of appetites and passions, I resolve to exercise self-discipline and self-denial. Whenever we over-indulge physical appetites and passions, we impair our mental processes and judgments, as well as our social relationships. Our bodies are ecosystems, and if our economic or physical side is off-balance, all other systems are affected. That’s why the habit of “sharpening the saw” regularly is so basic. The principles of
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temperance, consistency and self-discipline become foundational to a person’s whole life. Trust comes from trustworthiness and that comes from competence and character. Intemperance adversely affects our judgment and wisdom. I realize that some people are intemperate and still show greatness, even genius. But over time, it catches up with them. Many among the “rich and famous” have lost fortunes and faith, success and effectiveness, because of intemperance. Either we control our appetites and passions, or they control us. Many corporations and cities have aging inventories and infrastructures; likewise, many executives have aging bodies, making it harder to get away with intemperance. With age, the metabolism changes. Maintaining health requires more wisdom. The older we become, the more we are in the crosscurrents between the need for more self-discipline and temperance, and the desire to let down and relax and indulge. We feel we’ve paid our dues and are therefore entitled to it. But if we
get permissive and indulgent with ourselves overeating, staying up late or not exercising, the quality of our personal lives and our professional work will be adversely affected. If we become slaves to our stomachs, our stomachs soon control our mind and will. Gluttony is a perversion of appetite, and to knowingly take things into the body that are harmful or addicting is foolishness. More people in America die of over-eating than of hunger. “I saw few die of hunger; of eating, a hundred thousand,” observed Ben Franklin. When I overeat or overindulge, I lose sensitivity to the needs of others. I become angry with myself, and I tend to take that anger out on others at the earliest provocation. Next month, we’ll look at the cost of not maintaining self-discipline and self-denial, and the rewards those with self-control achieve. Stephen R. Covey, Ph.D., is co-founder of FranklinCovey, and is the author of The 7 Habits of Highly Effective People. He can be contacted at 866.892.6363, or by e-mail at scovey@autosuccessonline.com.
sales&trainingsolution
KirkManzo
CAN THE PAST TEACH US ABOUT OUR FUTURE IN SALES? The question you must ask yourself is, “has our business changed so much that old principles no longer apply?” More and more, shoppers are changing the way they shop for vehicles; so, as a salesperson, do you need to change the way you communicate with the market? There are numerous salespeople we will meet during the course of our life, but for me there is one salesman that stands out even to this day: Jerry Nudavich. Jerry Nudavich was a salesman in South Florida at Hollywood Ford. In 1976 (yes, I realize I am dating myself), my parents purchased a new two-door Ford Granada (for those of you born in the 1950s and 60s, you probably remember the doors being as long as a barn door). So here we are, in 2010, and I still remember the purchase of this vehicle and, more importantly, the salesman that handled the sale, Jerry Nudavich. Why? You see, Jerry was that rare salesman that all of you hear legend of. He made it a point that, once he sold you an automobile, you were his “customer for life,” to borrow a phrase from Carl Sewell. Jerry believed in the value of “a customer for life.” Being only 13 years old at the time of the sale, how do I know this was Jerry’s philosophy? We certainly did not discuss the topic. Rather, it was his actions that shouted out his philosophy of customer relationship. Jerry was the salesman that took the time to send birthday cards to my family for each of us — mom, dad, sister and myself. He sent holiday cards, as well as information on new models available at the dealerships. This ritual went on for years. What is interesting about this story is that my parents never purchased another Ford for our family car. At this point, some of you are thinking what a complete waste of time. Here is Jerry sending all of this stuff to us, and my parents never purchased another Ford car. Well, what you may not realize is that all of those efforts did not go unnoticed. My father owned and ran a small electrical contracting business that operated three trucks. Each year, one of the three trucks would be replaced due to wear and tear, as well as mileage. Who do you think sold all those White Ford Econoline 250 vans to my father’s company? That’s right — Jerry Nudavich.
Some of you are thinking, while this may be an interesting story about some “ole car dog,” does this even make sense today? The average salesperson in America is only going to sell approximately 100 cars per year. This is based on eight units a month for 12 months, with a few extra for good measure. So, for those of you who sold 120 to 150 last year, you did better than average. For those of you who sold 200, nice job. Then there are the rare operators in our business, those sales people that truly understand the “lifetime value” of a customer. Salespeople who sell 300 to 400 units per year understand that to accomplish that level of success will require extra work. A few months ago I met an individual that practices Jerry’s style of keeping in contact with his past customers. This salesperson works at a dealership group in the Midwest. He sells 600 to 700 units per year, new and used. A large percentage of his business is repeat and referral. But the man has an exceptional work ethic. He works a daily schedule that begins at 5:30 a.m. each morning at the dealership where he can work uninterrupted sending cards and letters to his past customers and contacts. Yes, contacts. He believes that once you meet, you are now his “customer for life,” even if you don’t purchase from him at this time. He understands that eventually (in three to five years) you will need a car again, and he plans on getting the next one. What is interesting is that this salesperson will follow up with everyone the same way, whether you buy a vehicle or not. What would happen to your business over the next five years if you applied this same approach to follow up? Yes, the market today has changed in many ways, but yet certain principles still apply. Stay in contact with your past customers and you will sell more units. It was true in 1976, and it is still true today. Ask yourself this question: Will the customers I sell a vehicle to today remember my name 34 years from now in 2044? Kirk Manzo is the president of The Manzo Group. He can be contacted at 800.858.6903, or by e-mail at kmanzo@autosuccessonline.com.
the #1 sales-improvement magazine for the automotive professional
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leadershipsolution
TedRubin
CONSISTENCY OF YOUR SALES PROCESS IS KEY TO SUCCESS There are many tools and techniques that we all use to help make sales and close more Internet deals. In my opinion, though, the most effective yet underutilized tool in the industry is consistency of process delivery. For some reason, consistency in the delivery and presentation of any sales process seems to be very difficult for managers to procure from their salespeople. Why is this? Time and time again, we have all read studies and seen reports stating that if you can define a successful process and specifically stick to that particular process, then you will be able to reproduce that success over and over again. It would appear that if we, as managers, were able to train new salespeople to use a proven process, then the process is what would make the sale; there would be less reliance on the salesperson, and more on the effectiveness of the process itself. I can specifically vouch for this success myself. In our company, we handle chat conversations. We handle an extremely high volume of conversations on a daily basis. Our reps will handle more chats in a single day than most store personnel will handle in two or three months. Because of this, we are able to see how slightly tweaking the process (in our instance, the chat conversation) will affect the outcome. We are constantly reviewing the data, making small changes and the reevaluating the data to see what effect has been produced. However, if we were not able to rely on the consistency of our deployment – that of our representatives handling the conversations – then the data would be subjective and of little value. This is specifically why we have several layers of management, and ongoing training for our representatives. We need to know that we can count on their consistency of our process delivery so that any changes we make to the process will produce usable measurable results. Having noted all of this, and for the most part accepting as fact that a consistent deployment of a sales process — whether online, on the phone or in person — can produce more effective results and make it easier to bring new salespeople into the fold, it seems to many to be a trap for managers. Managers don’t demand consistency out of their salespeople. They often don’t spend the time and effort to control the process and require conformity. Then, because of this deficiency, the process will never be
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cultivated, and then possibly the process itself will not evolve as necessary to continue to be effective. Moreover, some will try to reason that it is the process itself that is the inhibitor. Different salespeople work better with different circumstances, and therefore can use different processes to produce a more consistent outcome. This is just simply not accurate, and should be seen as the excuse it is and the reason for failure. There are some rules that you can use to make sure that you are developing an effective process, and that you are controlling it to the point where you can be sure that consistency is insured. 1. Define Your Process Be sure that you not only define your process, but that you write it down. This is so important. Your process will definitely be a living document. It will change as necessary to accommodate your product and your constituency. But, it will be impossible to control consistency if there is no specific and documented definition of the process itself. Everyone needs to be able to refer to a definitive version of the current process. It is the only way to know if there is any deviation from it. Write it down. Train it. Follow it. And, then update it as necessary, every time that you feel that a change must be made. Keep it current. Don’t let it get away from you. If you find that it is not current, then you can also immediately construe that there is no consistency in your deployment, either. So, go back to the beginning, and start again. 2. Train and Explain Your Process, Then Train Some More Take the time to train and explain your process to those who will be using it. This is significantly important to gain the commitment of your personnel to use the process. You need to be able to explain why you have chosen this particular process. Show reasons why particular aspects of the process are required, and what the expected result of the pieces of the process is to produce. Get buy-in and commitment from your staff to use and follow the process you have defined. 3. Monitor the Process Your process must include a way to monitor itself. You need to include milestones in the process that must be
passed before the user of the process is able to proceed to the next point. This is where most managers get hung up. It is truly imperative that you, yourself, comply the process. Also, as you are managing your personnel, make them comply with it, too. Depending on your management style, you can force this, or you can communicate the reasons why it is important. But, one way or another, you have to control the personnel to the point that you know the process is being followed. 4. Measure Your Success When setting up your process, look to define areas where you can identify a measurement of the success of that piece of the process. You should try to identify at least three points where you can measure a certain level of success or failure for that portion of the process. This will help you to more quickly evaluate and tweak your process to its best end result. 5. Start Again Now that you have defined your process, trained and explained, monitored and measured your success, you need to go back to the beginning, make alterations to your process that you feel will enhance it, and follow the system again. Ultimately, this is a never-ending process in itself. But, you should be able to see continual improvement if you pay attention and use it thoughtfully. It will keep you on the cutting edge, and always on top of the best process for you and your team to be successful. It will keep your system from getting old and stale. It will insure that your salespeople are at the top of their performance. And, it will make it easy to bring on new personnel, as you need them, with the ability to have the highest expectation of their production. It can even limit your liability from misrepresentations or erroneous statements. It is just like staying in shape. It is healthy for you and your business all the way around.
Ted Rubin is a founding partner of ActivEngage. He can be contacted at 866.387.9061, or by e-mail at trubin@autosuccessonline.com.
Remember the day when an “Internet” lead was a bad word that would send the sales team running? All we heard were complaints about how Internet leads knew too much about a car or were just shopping for best price. At one point, we even envisioned Internet shoppers purchasing vehicles directly from manufacturers and utilizing the local dealership only for delivery and service. All we really knew was that we had this thing called a “Web site” and we could receive e-mail leads through this thing called “the Web.” But how should we manage it? None of our sales team wanted to waste their time trying to figure this thing out, and none of them knew how to set up an e-mail account anyway. So, we hired a young kid who was “computer literate,” isolated him in an office away from the sales floor, and called him our Internet Manager. Most early Internet Managers had no experience selling cars and zero experience in marketing. But, hey, we had a Web site and e-mail leads, so we had to have an Internet Manager. The good news was that not everyone had computers at this time, and we still drove all measurable floor traffic through our traditional media. So we set up our Internet Departments to fit this model: • The car buying experience was a very emotional experience for the consumer. • The Internet could only be accessed via a computer. • All measurable floor traffic was driven by our traditional media. • We compensated our Internet Managers based off of sales to “Internet Customers” through our Web site and online classifieds. • We distributed our inventory across the Web with basically no data and had someone come out a week later to add a photo or two. • Though we didn’t rely on Internet-generated traffic, we could tell that something wasn’t working right compared to our competition, so we fired that Internet Manager and brought in another one (something had to be broken, so it must be the Internet Manager, right?). • Meanwhile, all of our Internet Managers kept telling us that the
reason we didn’t have more traffic was because of our Web site. So, once our Web site contract came up, we fired that Web site company and replaced it with another that promised us better results (something had to be broken, so it must have been the Web site, right?). Oh, the good ‘ole days. Fast forward to present day. While a lot of things changed, some things have stayed the same. Today, consumers have the ability to access the Internet and stay connected with their peers during every waking moment via mobile devices as well as computers. The Internet has evolved from “walled garden” — business-to-consumer content that got delivered days to weeks in arrears — to “open source,” consumer-to-consumer content that gets delivered in real time, giving the public access to information they’ve never had. It has educated society — and revealed all the dirty little secrets. As a result, consumers today put far more trust in what their peers say than in what you or a manufacturer tells them. What hasn’t changed: • The car buying experience is still a very emotional experience for consumer. • We still hire young kids who are “computer literate,” isolate them away from the sales floor, and call them our Internet Managers. • Most Internet Managers still have no experience selling cars or in marketing. • We still compensate our Internet Managers based off of sales to “Internet Customers” through our Web site and online classifieds. • We distribute our inventory across the Web with little data and have someone come out a week later to add photos and additional data. • Though we don’t rely on Internet-generated traffic, we can still tell that something isn’t working right compared to our competition, so we fire our Internet Manager and bring in another one (something has to be broken, so it must be the Internet Manager, right?). • Meanwhile, all of our Internet Managers keep telling us that the reason we don’t have more traffic is because of our Web site. So, once our Web site contract comes up, we fire that Web site company and replace it with another that promises us better results (something has to be broken, so it must be the Web site, right?). The fact is, if your current Internet department looks like the one from yesterday, you’re outdated, losing sales and it’s likely you’re at risk
of failure. The way we reach customers has changed so dramatically over the last few years that it has completely overhauled the way we do business — and we’ve only seen the start of it. And yet, most dealerships still follow the same process that they established 10 years ago. In order to define a successful process that will have you succeed today, you must first apply some simple rules: • Your Web site and online classifieds are not just marketing; they are rich media sources, just like your local newspaper, TV and radio stations. • Your Web site must provide content rich information that today’s consumer demands, optimized to drive traffic to your “online showroom.” • Your “online showroom” must have vehicle display pages that duplicate the emotion of your traditional advertising, optimized to convert “online showroom” traffic into floor traffic at your dealership. • Your vehicle display pages can be seen by more consumers in one day than all your traditional ads are seen in a week; therefore, your vehicle display pages are your most important ads and demand significant attention. • Unlike your traditional media sources, you CAN measure the success of your online ads all the way down to each unique individual consumer. Your Web site should be “Internet optimized,” not just Search Engine Optimized. Just because you’ve sprinkled a little “Google Love” on your Web site and may be driving more Internet shoppers to your Web site, does not mean that you have a successful “Internet Marketing Strategy.” You must “optimize” your Web site by determining: • How many consumers are not satisfied with the content of your Web site, leave your Web site, and go immediately to your competitor’s Web site? • How many consumers engage your Web site, only to be disappointed in the response they receive from your dealership or the time it took to receive it? • How many more consumers would engage you from your Web site if you offered them the ability to engage you the way they want to engage you vs. the way you are telling them to engage you? If they can’t engage you the way they want to, how many leave your Web site and go to your competitor’s site (who is giving them what they want)?
• What are the most popular entry and exit points of your Web site, and what can you do to improve all entry and exit points? • What are your competitors doing? You need to stand out as the only game in town — to differentiate yourself. If you suddenly find you aren’t getting the leads you used to, there’s a good chance that someone else is steering shoppers their way. The above is just the beginning, but it is enough to get you, hopefully, realizing that the skills required to get online shoppers onto your lot are very different than the skills required to close a deal. Today, you need an Internet Marketing Manager, not an Internet Sales Manager. Your Internet Marketing Manager must be technologically savvy and understand both traditional marketing and Internet marketing. Your Internet Marketing Manager must work directly with your marketing department (or ad agency) and BDC to drive traffic to both your “online showroom” and your “physical showroom” from all touch points. Your Internet Marketing Manager should also be compensated for driving traffic to both your “online showroom” and your “physical showroom” from all touch points, and not sales delivered by themselves or the rest of your sales team. If they have the personality and skills of a great salesperson, it is very unlikely they also have the personality traits of a detailed, organized and marketing-savvy Internet Manager. Finally, your entire sales team should be trained to be “Internet salespeople” and understand how to communicate with Internet shoppers with complete transparency using all the tools available to them. Your dealership must embrace the educated online shopper because that is the present… and the future. No doubt, the future of your Internet Department is that it will be your Marketing Department. As consumers migrate more and more of their daily activities online, your marketing efforts will reflect a similar migration in order to meet them there. And those efforts will require far greater amounts of marketing savvy in order to compete on such a level playing field. To Be Continued… The remaining “Future” portion of this article will be forthcoming at some point, well, in the future. Tim James is the director of sales with HomeNet, Inc. He can be contacted at 866.228.5111, or by e-mail at tjames@autosuccessonline.com.
marketingsolution
MattBaker
LACK OF SYNERGY KILLS STAFFED EVENTS Remember last month’s Super Bowl game? Sure – the Colts and the Saints had incredible seasons, and both teams came ready to win. Yet in the end, New Orleans proved their worth by bringing home a welldeserved victory. So then, consider for a second what might have happened to the 2010 Super Bowl had New Orleans decided not to practice. Think the Saints would still be 2010 Super Bowl champions? Chances are, probably not. Making a decision not to practice doesn’t make much sense in the world of sports. But when trying to relay this philosophy to the business world, especially the world of staffed events, it can often become lost in translation. Any football team understands the importance of training and building synergy amongst its members. Not all staffed event companies, on the other hand, do. For many staffed event providers, training regimens and team-building exercises are viewed more as a waste of time than they are a key to successful performance. Many staffed event companies (and dealers alike) think an event sale is nothing more than putting different car guys in a showroom full of prospects just to see how many units they can sell. As a result, these companies and their dealers never realize how much of a direct impact training and synergy have on the overall performance of their sale. Your staffed event provider should utilize training as means of getting everyone involved and working toward a shared goal — much like the New Orleans Saints did in preparation for the Super Bowl. The purpose of the event is to sell more cars at a greater profit. This requires both technique and team work. Is there really any organization in any industry that thrives when there is no synergy? A lack of cohesive bond between event team and dealership sales staff will kill any perfectly good sale. No matter how much you spent on advertising. No matter how many ups you see. If these two parties aren’t working together, they’re going nowhere
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fast. Without a real connection, without real synergy, there is no shared ambition. Instead of working to establish similar goals, efforts by both parties are focused almost solely on overpowering one another. This rivalry eventually wears down every stakeholder in the event’s success, often leaving frustration and disappointment in its wake. So, one may ask, if synergy is key to keeping promotional events profitable, how does one ensure their dealership’s culture promotes total cooperation? The answer to this question can encompass many parts. Imagine an offense on a football team where half the members are running a pass play and the other half are running a run play. Think that this offense is going to achieve any success together? No, probably not. A sales force combined of dealership staff and event team staff is no different. If the event company comes in with an ego that is against selling with your staff, they’re probably not the best fit for your store. Just like dealers, not all staffed event companies do business the same way. One key factor to keep in mind is the staffed event company’s pay plan. Be mindful of how you set up the pay plan for the team. Putting all the pressure on the team often results in less overall team work. This is because the members of the event team become so focused on reaching certain numbers just to get a pay check that they ignore the dealership staff. In return, the dealership staff feels left out and may make an effort to sabotage teams coming in. Has your dealership established any common goals with your event company? If you don’t know what everyone is working towards, what can you expect to achieve? Consider the importance of proper training when developing your dealership’s sales force. You know you need top-notch sales talent, and creating that top-notch sales team requires regular, disciplined training. Even the best car salespeople get caught in routine from time to time and start skipping steps. Training, when done correctly, creates synergy and produces results. Do your
“Imagine an offense on a football team where half the members are running a pass play and the other half are running a run play. Think that this offense is going to achieve any success together?” vendors (especially staffed event vendors) offer personalized training programs to help integrate their process with your sales staff? Do they make an effort to establish and build a cohesive bond with your dealership? If they do, your staff is likely begging you to keep them coming back. If they don’t, you and your dealership staff are probably left frustrated by a miserable experience. Obviously, there’s more to building synergy amongst your staff and your event company than I can share here. Don’t let that fact, however, keep you from realizing the bottom line. There is not another product in the auto industry that can generate more profit to the dealer in only a few days than a staffed event. Unfortunately, many companies have cut too many corners, ultimately diminishing event results and faith in event effectiveness. Understand that your dealership’s success is a direct product of its environment. An environment rooted in opposition will bring you hostility, while an environment rooted in cooperation will bring you results. If you’re interested in learning more about cultivating a cohesive environment in your dealership, e-mail me to receive a free guide to creating synergy that drives results. Matt Baker is the vice president of sales for G&A Marketing. He can be contacted at 866.618.8248, or by e mail at e-mail mbaker@autosuccessonline.com.
sales&trainingsolution
DaveDunn
FIVE REASONS WHY YOUR BODYSHOP IS UNDERPERFORMING... AND WHAT TO DO ABOUT IT While exhibiting at NADA in Orlando, I couldn’t help but notice the recurring theme of frustration expressed by the dealers who stopped by my booth. I decided to put together an article that addresses the mostoften repeated issues I overheard. 1. The Person You are Listening to is Either Uninformed or Misinformed The way information is disseminated in the bodyshop industry is a little like the childhood game called “telephone.” One player whispers in another player’s ear and the process repeats throughout all the players. If you have ever played telephone, you know that the original information becomes distorted every time the story is told again. In the bodyshop business, managers and estimators are often trained by someone who had no real training. The new manager tweaks the information to his/her liking and a whole new set of misinformation is born. Never assume that someone knows the “right way” to do something just because they have been around the industry for many years. Shop managers often seek advice from the manufacturer or paint representatives with whom they come in contact. I can tell you from experience this practice can be a real crap shoot. Just because someone is good at selling paint or parts does not make them a qualified consultant. 2. The Bodyshop Manager/ Estimator is Really Not Much of a Salesperson Bodyshop managers often lack sales acumen. They may be good at the technical aspects of fixing a car, but unqualified to properly sell collision repairs. Many dealer shops become preferred providers (direct repair) for large insurance companies. This can be great if you know how to still make money on the cars you repair. Unfortunately, the manager may delude himself into thinking “volume” is all that matters. Volume is only good if you maintain appropriate gross on every deal. Few managers have the ability to properly
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job cost the individual repair orders and are often guessing at profitability. Learn to sell and learn to job cost. 3. Your Pay Plan Probably Creates Incentives for Your Manager to Sell Labor, Rather Than Parts Parts sales drive just about every important metric in your business. Managers may rationalize that, since the typical gross margin is higher on labor than on parts, it would be better to repair borderline panels. This can be a huge mistake regarding profit, quality and CSI. Additionally, parts sales can increase revenue in the paint and materials cost center while simultaneously lowering costs. The dealer often bases the manager’s pay plan on labor sales; therefore, the manager leans toward repairing badly damaged panels in lieu of properly replacing them. 4. Your Bodyshop is Blown About Like a Leaf in the Wind After the Latest and Greatest Fad Specialty programs, such as the current
“Shop managers often seek advice from the manufacturer or paint representatives with whom they come in contact. I can tell you from experience this practice can be a real crap shoot. Just because someone is good at selling paint or parts does not make them a qualified consultant.”
emphasis on “LEAN” processes, can be good. However, in most shops, chasing some of the latest industry buzzwords like LEAN is a little like putting the cart before the horse. Most shops have some rudimentary issues that need to be addressed before they get involved in complicated process management. More basic needs must be addressed first. Streamlining issues like organization and administration, job costing and pro-active customer communication is needed. My business partner often says that managers chase specialty programs “instead of” more fundamental issues, rather than “in addition to.” Get the basics right first and do not chase industry fads. 5. Your Bodyshop Chases DRP’s, Instead of Keeping Score Bodyshop managers often chase DRP’s (direct repair programs) in lieu of capturing all of the current relational traffic available to them. I am amazed at how much potential relational customer work is ignored while pursuing insurance referrals. Dealer body shops usually have a substandard batting average regarding estimates written verses conversions. Insist that your estimators log all of their traffic and all of their new conversions. If they are batting less than 70 percent, they probably aren’t doing a good job with selling the customer. How would they know for sure if they aren’t keeping score? Additionally, very few shops know how to quantify their capabilities regarding production capacity. Send me an e-mail and I will send you a free Resource Capacity Calculator. If you can’t figure out how to run it, call me and I will walk you through it.
Dave Dunn is the founder of Masters School of Autobody Management. He can be contacted at 866.386.0042, or by e-mail at ddunn@autosuccessonline.com.
sales&trainingsolution
DalePollak
ARE YOU GOING BACKWARDS? Do you agree that the Internet makes it less likely each and every day that used car investment dollars will generate lucky profits? If you do, then you already know that you have a dilemma on your hands. The problem is that you have to figure out how to make up for those lost gross dollars in today’s changed used car marketplace. If you can tack on a few extra days to the month or another month to the year, you’ve got the problem cinched. You’re also in good shape if you can afford to put more dollars into the pot. However, short of these two unlikely solutions, you’ve got to find a way to make up the dollars that you used to make from “getting lucky” on the used car lot — unless you want to go backwards. When it comes right down to it, it’s a math problem, and the only solution that I know is to make the same dollars invested in used vehicles turn faster and more often. This means that it’s no longer acceptable to take 60+ days to sell a vehicle, but rather, it must be done within a far shorter window, a maximum of 30 to 40 days. It has always been true that you could sell any car wholesale on any day if you are willing to take what the wholesale market will offer. The good news is that today, because of the Internet, this is largely true for retail as well. There’s bound to be a retail buyer for any vehicle on any day if you’re prepared to price the vehicle to attract that buyer. The Internet provides visibility into
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your showroom that makes sure your cars can be found. So, in other words, if you can’t sell retail out of a vehicle within 30 to 40 days, there has to be a reason. I believe it can only be one of two reasons. But let me first confirm that what I consider to be the obvious is already in place: You are properly merchandising your used vehicles online to capture today’s Internet-enabled shoppers. This includes compelling descriptions, clear photos and a price. The Internet is the primary gateway that determines whether or not a shopper will choose to contact your store or show up to inquire about a used vehicle, right? Now, with that agreed, let’s address the two reasons that a vehicle might begin to age.
The second reason that a car would age in today’s transparent marketplace is that, while you are well aware of the price needed to generate immediate interest, you are unwilling to price the vehicle to sell because it would generate a significant loss. If this is the problem, then we need to back up a few steps and examine how you got yourself upside down in the first place. There is no longer any margin for error in the used car business — you can no longer afford to own vehicles wrong and then “mark up from cost.” Fortunately, just as there is technology to help you price your vehicles appropriately to the market, there is also technology that shows you how to acquire vehicles at a cost to market that allows for gross profit.
The first reason that a car might age in today’s Internet market is that the car isn’t priced to affect an immediate retail transaction. If this is the case, and your intention is to move the vehicle, you might need a technology system that clearly shows you the price point at which similar vehicles are being sold in your market. To be clear, I am not saying that every car needs to be the lowest price. What I am saying is that cars need to be priced right to drive traffic. Pricing right is different for a car with a high marketdays supply than for a car that is “hot.” Again, there is available technology that provides the market days supply metric for each used vehicle to help make appropriate pricing decisions.
The bottom line is that there is simply no good excuse for not selling every vehicle in 30 to 40 days. And, the fact of the matter is that you no longer have the luxury of doing business any other way. If it is taking you longer than 60 days on average to sell a vehicle, and you don’t own the only vehicles left on this planet that still generate the “lucky” big grosses of the past, then it’s a mathematical certainty that you’re going to go backwards. Dale Pollak is an author and the founder of vAuto. He can be contacted at 866.867.9620, or by e-mail at dpollak@autosuccessonline.com.
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sales&trainingsolution
SeanStapleton
10 BASIC CRM ‘MUST HAVES’ In today’s competitive environment you need every advantage possible. We can’t afford not to continually evaluate the new dealership technology enhancements for process advantages and reducing the profit leaks. Look carefully at some of the bestperforming dealerships today. Do you realize they have several things in common? One is they have leveraged many of the recent advancements from CRM industryleading providers to provide many new enhancements, increasing their efficiencies. This level of functionality has never been available before. I think the recent automotive challenges, new selling landscape and shrinking margins have provided a big advantage. The CRM companies had to raise the bar and increase their functionality and accountability because dealers required more. Here are 10 best practices, collected from the automotive community, that you can ask yourself about your CRM in order to be successful in today’s market. We define “successful” as profitable, market share leader, service absorption rock star, growing, etc…. 1. CRM data and DMS integration? How well does the CRM integrate with your DMS? Can it push/pull real time? Does your CRM vendor have a certification with your current DMS provider? How secure is your data? How many vendors are pulling your data today? Remember, your data is one of your most valuable assets; are you treating it that way? 2. Is your current CRM system “super user friendly” for all levels of the dealership, including service? Overall ease of use can be the difference between success and failure. We all know one thing here: If it’s not simple, it will not get used to the fullest! 3. Do you have full inventory integration in your CRM? Do you have access to your inventory? Can you see all the stores together, including full details, pricing,
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pictures and more? It would be good to know what you are selling. 4. Do you have the latest ILM CRM Internet lead functions with advanced social networking support? Can you easily track, monitor and report on everything? Can you easily e-mail pictures and details about your inventory? Do you have e-mail read recites that alerts your PDAs in real time? Do you have social media search links from customer dashboard? Why not? 5. Does your CRM help manage all aspects for proper showroom traffic maximization? Can you track the activity in the showroom and do unsold follow-up based on that activity? How easy and flexible is it really to use? Do you use it daily with your monthly sales goals? 6. Mobile CRM — mobile everything is an absolute requirement! Honestly, this is one of the easiest and biggest changes you can make now to help in this new automotive environment. If you haven’t yet, you must go mobile as soon as possible. Responding to leads from a mobile device is a must have today. Just think about how much your response times affect your bottom line and you will realize how easy this decision is. 7. Is your CRM integrated with your vehicle valuations/book out today? Does it allow you to do trade appraisals, price inventory and apply changes easily to all of your marketing communication channels in real time? Does it dynamically build your inventory comments, with real-time incentives? Is it truly integrated into your inventory and sales process? 8. How are your CRM reporting and measurement capabilities? Reporting must be simple to use, customizable and unlimited. Anyway, anytime, with a “set and forget” approach. You must have the ability to build your own custom reports. Reporting must include phone PBX integration — you really need to track and measure all of the inbound and outbound phone calls possible.
9. How is your CRM with database marketing campaigns? You need to be able to mine your database to the max! Can you easily market to unsold, sold, service customers or equity customers, based on customer value, distance from your dealership, based on customer pay greater than X, OPT codes, OPT code decline…. You get the point. You have gold in your data — mine it! 10. How is your CRM support? Do you have a dedicated support team? Do they provide online training? Will they review your system usage and make “best practices” suggestions? How many customer updates did your CRM company release to support your changing needs last year? Remember, this list of 10 basic CRM “must haves” have been assembled from all types of dealers in all markets of North America. Please provide me your feedback and thoughts to the list. For some dealers, reading this list will assure them they are very well prepared for this new retail automotive world. Others, however, will need to review their options, functionality, data integration and current vendors. How many profit leaks do you have after reviewing this list that you have not focused on yet? Why wouldn’t you want to give your dealership or group the biggest competitive advantage possible? Moving to this new level of CRM functionality and accountability will absolutely provide you advantages designed for today’s new opportunities and challenges. The new CRM advantages are in use now; are you prepared? Does your dealership have all of the most advanced CRM advantages possible? If not, ask yourself “Why not?” Sean Stapleton is the executive vice president of VinSolutions. He can be contacted at 866.587.7629, or by e-mail at sstapleton@autosuccessonline.com.
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sales&trainingsolution
DennisSampson
USED VEHICLE INVENTORY CONTROL: PROFIT CENTER FOR YOUR DEALERSHIP The key to a successful used car department lies within your inventory turn. There are many thoughts about how often we should turn our inventory. Should it be 60 days, 90 days or 120 days? I have heard several arguments to the issue of having your inventory on a 60- to 90-day turn. The truth of the matter is that the closer we keep our inventory on a 45-day turn, the higher the gross profit the dealership will realize. The average vehicle depreciates approximately $12 per day. (In many locations $12 a day is on the low end of the spectrum). So, based on that assumption, you can see the need to turn your inventory as close to 45 days as possible. Review the chart provided, based on an average $15,000 ACV purchase, running the vehicle through your service department with an average service RO of $600.
Service Department
Vehicle Turn
Wholesale Loss
Net Dealership
$270.00
30 Days
(-$0.00 to -$360)
(+$270 to -$90)
$270.00
45 Days
(-$360 to -$540)
(-$90 to -$270)
$270.00
60 Days
(-$540 to -$720)
(-$270 to -$450)
$270.00
90 Days
(-$900 to -$1,080)
(-$630 to -$810)
$270.00
120 Days
(-$1,260 to -$1,440)
(-$990 to -$1,170)
$270.00
150 Days
(-$1,620 to -$1,800)
(-$1,350 to -$1,530)
PROFIT
best loss” still holds true. I understand that the above losses by keeping the vehicle longer than 45 days may be quite conservative; you should truly consider the advantages of turning your inventory.
The success for managing your used vehicle inventory to a 30- to 45-day turn is to have a plan, and then work your plan. Have a strategic plan for managing your inventory. As you can see, the longer you keep a All used vehicles must be lot ready within vehicle trying to retail out of it, the deeper 72 hours from the time you purchase or take you sink in to dealership losses. The old it in a trade. If there is some reason why this saying that “your first loss is usually your vehicle can’t be lot ready within 72 hours, you must evaluate if you are going to keep this vehicle or will you be taking it to the auction. The longer you wait for a vehicle to become lot ready the further Loyalty Driver away from book enewsletter content value it becomes.
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Work your plan. Remember that you don’t need to keep this vehicle for the full 45 days. If you have this vehicle on your lot for 25 to 30 days and none of your sales people have demonstrated this vehicle, take it to the auction. Keep your inventory standing tall, and make sure it is detailed properly. I would suggest that you put pin stripes and mud flaps on all your vehicles; it cost very little but may payoff greatly.
PROFIT
You will find that if your vehicles are detailed and lot ready when you bring them to the auction, they will usually bring more money, especially once people see the vehicles that you continually bring to the auction are lot ready. Keeping your inventory on a 45-day turn takes planning and effort, but you will find the rewards far outweigh the investment. By keeping your inventory on a 45-day turn, your vehicles will always be closer to book value, offering you a greater opportunity to hold gross. I’m sure the questions arise about where and how do I find the customers in this kind of a market to be able to turn my vehicles in 45 days? Well, there are many marketing ideas that may generate floor traffic, but the ultimate key to this kind of success comes from a marketing program that drives pure “In The Market” buyers into your dealership, not gift seekers. For example, Anthony Panarella, from Queens Nissan, has used a unique copywritten marketing program every month for the past 15 months that keeps his inventory fresh, and has helped assure his continued growth process, even in this downed economy. I would like to think that the above 45-day used vehicle turn concept was my idea but that would be far from the truth. I need to give credit to the many automotive mentors in my life that taught me to keep my eyes and ears open and my mouth closed, and stay humble so that successful people will be happy to show you how to become successful. Contact me with the information below for marketing ideas to help you evolve your business and dominate your market. Dennis Sampson is the national sales manager of The Premier Group. He can be contacted at 866.212.0452, or by e-mail at dsampson@autosuccessonline.com.
leadershipsolution
JeffHager
CASE STUDY: Video Surveillance That Really Works When Ed Morse built a new dealership in Ft. Lauderdale, Florida, he wanted to ensure the new building was fully covered by the latest CCTV technology. Previous CCTV installations at Ed Morse sites were analog, which in most cases failed to provide the desired image quality and functionality. Ed Morse Operations chose intelligent IP video surveillance because of its successful track record in security. The Requirements Ed Morse Operations required an IP CCTV system with the “ease of use” of a DVR, but with the functionality offered by the latest IP surveillance cameras and software. Megapixel video was required for identification of individuals on the exterior and interior of the property. In addition, the recorded video had to be smooth and fluid in order to evaluate any accidents on the property. If a customer falls on the service lane, then the video had to be fast enough to see “why” and “how” the customer fell.
The Choice After evaluating numerous mainstream solutions, it was decided that a custom intelligent IP video surveillance solution was the best choice. It offered a robust solution with the required flexibility needed in the auto industry. In addition, the solution provided superb resolution and picture quality.
The Rewards The installation has already provided evidence in three attempted thefts and successfully helped defend five lawsuits due to “slip and falls” on Ed Morse properties. This has literally saved Ed Morse Operations thousands of dollars in operational expense and liability insurance.
The Result The solution provided an easy to use, intuitive GUI. Any member of the staff, with correct permissions, can easily view the live images and navigate through the recorded footage. Management can also easily create evidence DVDs for local law enforcement. Management of the dealership is further enhanced with managers’ ability to login to the system remotely, via their iPhones, Blackberrys, laptops, etc., to check camera activity and playback recorded footage. Following the success of the installation at Ed Morse Toyota, every dealership within Ed Morse Operations now has the same successful formula of intelligent video surveillance.
Four Tips to Improve Your Security: 1. Put a camera on key track machines and main interior entrances. 2. Exterior cameras will cut down on damage to your inventory and add profit to the bottom line. 4. Insurance claims will reduce and your insurance expense will reduce. 5. Service drive cameras will eliminate false slip and fall claims.
TEXT
Jeff Hager is vice president of Video Verification Security. He can be contacted at 866.218.8486, or by e-mail at jhager@autosuccessonline.com.
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marketingsolution
SteveShaw
THE ANSWER IS PRODUCTION How many vendors approached you last year with the miracle cure for your woes? With all of these programs you have bought into, is your ELR any higher? Are your “sales per RO” any greater? Did you drive more customers in the shop with that advertising program? Wait, you also have an awesome technology tool so your advisors can be more professional and your technicians can perform better multi-point inspections? How is that working out for you? Question: Why is it that you are not seeing more profit? The problem with all of these programs is not the program. Nor is it the vendor. I have trained many service advisors and technicians on these different computer-enabling tools. I support their use and recommend them often. They perform exactly as they are designed to perform. They will get you an increase in your key performance indicators (KPIs). What happens then, when you do not see the results you expected? A vendor provides a solution to the dealer for a symptom. The symptom is your KPI, which is an indicator of drivers to profitability. I submit that often we do not look beyond the KPI. It is easy to mask the symptom and feel good that the problem has gone away. Then a few months later as the net profit does not change, many search for another band aid.
That begs the question, “How can I drive more traffic, increase my KPIs and still have less net profit?” The real problem in the shop is production. Time after time I have performed an evaluation in a shop where the manager tells me repeatedly that traffic will solve all the problems. He is only looking at the symptom. More traffic will only cause more headaches and grief. More traffic is not the cure. I submit a different solution. Production is the key to success. The only way to sustain long- term profits in your repair shop is production. Production is the solution to the problem that ails you. If your production system remains the same, it is nearly impossible to stuff 1,000 repair orders into an 800-repair order shop. Driving more flat rate hours in your shop will give you the customer retention performance and the net profit you need in your dealership today. The three responsible ways to increase production are to hire more technicians, to remove the obstacles of production and establish individual production targets. I’d advise that either you keep growing your shop with technicians, or you are falling behind. Now, before you run out and just put two more tool boxes in your shop, you better know exactly how you plan on feeding these professionals. Hiring a technician will initially get you a spike in production. The end result is usually the status quo. As important of a step that this will become, first look at removing the obstacles of production. The first step in removing obstacles is to determine the current situation. Learn and observe your process. Once you understand what is currently going on in your shop, you can then begin to improve the system. Soon you will be recreating your own highperformance system. Let me share just a few possible hindrances to your profit: Dispatch Examine your system of dispatch. I suggest that the ROs should be handed out to technicians by the closest person in his or her peer group. Do you have lead technicians? Conventional dispatch systems work very well, also. It is just as important that you have examined the process looking for roadblocks and bottlenecks. Throughout your examination, solve those issues.
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Parking Lot Are you maximizing the parking lot www.autosuccessonline.com
for your technicians? How long does a mechanic spend wandering the lot finding and moving cars? How many flat-rate hours will you gain, or lose, while your technicians roam the lot? Keys How many places are keys kept in the service department? How many sets of keys are in a technician’s tool box? How many keys have made the trip home to your technician’s house? Where exactly should a technician place the keys when he is finished with the vehicle? Parts Why do we get parts the way we get parts? Because that’s how it’s done, right? Is there a better way? Can we have cabinets or carts in the shop? Can parts be delivered to your techs? I have even seen dealerships without back counters. That works, too. I am not telling you which way is best for you. I am only suggesting that you examine your way. Can it be better? It is just human nature for us to work harder and strive to achieve goals. This is especially true if our paychecks depend upon them. Develop targets that stretch each employee. Hold your technicians accountable for hitting these targets each day. Utilize a morning meeting and review your flat-rate hours every single day. Now, you have structured your system to evolve and grow. Now, hire more technicians. You should always be recruiting and hiring the right technicians. You can take your shop to new levels by rolling out the white paper. Grab a pen and start talking to your people. Ask them questions about how to make things better. Determine your own obstacles to technician production. Make changes and then follow through. Your people will praise you for your efforts. If you examine the direction and make course corrections each and every day, you will be successful in your endeavors. Once you have a well-designed production system that accounts for every step, now start the advertising, start the ASM training, start your inspections, start your walk-around, start your engines and let your production system drive profits through your shop.
Steve Shaw is a partner and performance coach for M5 Management Services, Inc. He can be contacted at 866.201.3043, or by e-mail at sshaw@autosuccessonline.com.
leadershipsolution
SteveBrazill
OOPS! AT THE SPEED OF LIGHT
A couple comes into your showroom and select a model to demo. As the salesperson excuses himself to get the keys, they ask about safety ratings. He assures them the model has top ratings. When he returns, he’s surprised to find them checking vehicle crash ratings online using their mobile phone from your showroom floor. “You lied!” they say as they head for the door. A young lady returns to your service department to pick up her car. It’s the end of the day; she’s tired and unhappy over the inconvenience of needing service. Imagine any of the events that might go wrong, then visualize her pulling out her mobile phone and opening a social networking app while standing at your cashier’s window. Faster than you can swipe her credit card, 358 of her friends know (or believe they know) that your service department just ripped her off. Get online, go to www.ftc.gov, and you can’t miss the box at the top of the first page that asks: “Consumer complaint? Report it to the FTC.” Uncle Sam solicits complaints and provides a convenient, one-click process for your customers to submit them. Many state agencies do the same. Add to that a collection of rules and regulations that multiplies with the speed of rabbits. You have more ways to get in more trouble in less time than ever before. In a world of mobile Internet access, social networking and 24-hour news cycles, you have plenty of reasons to make your operation as error-free as possible. That can be a tall order, but here are some thought starters.
You Need the Right People It starts here. Without people with the right knowledge, skills and attitudes, your opportunity to succeed gets very small. You can provide knowledge, you can build skills, but you can’t teach attitude — you have to select for it. Review your employee selection process and improve it. Get help from outside sources. Yes, that can cost money; what do you think hiring the wrong people costs?
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Train Your People This is a process that never ends. Untrained people make errors, and errors cost you money. When you think of the money you spend fixing employee errors, think of icebergs, because in both cases, most of the problem is unseen. Training is also an important method to improve the productivity of your people, which is another way of saying you get more units of work output www.autosuccessonline.com
from the same number of people, and that’s a key driver of profits. It is difficult to overtrain your people, unless you have an employee retention problem, in which case your competitors will send you thank you notes (just kidding) for improving their talent pool. That leads to . . . Retain Your Good People You can’t reap the benefits of good hiring practices and training if you can’t retain your employees. Dealerships are notorious for high employee turnover; if you want to reduce errors, improve profits and create competitive advantage, you will remove the revolving doors from your store. It’s almost inevitable that some employees will deserve to be unhired, but it is imperative that you hold on to your best and brightest. You know who they are. You need a plan (hope is not a plan) to keep them on your team. This is not always a matter of money and is often an individual matter for each employee. Get to know your key people and learn what matters most in life to them. Find a way to help them scratch whatever itches they might have and you can solve many of your retention problems. Listen to Your Customers This topic gets overworked, but few businesses really do it well. You don’t necessarily need expensive processes and outside services. By the time call centers and surveys kick in, much of the damage has already begun. Internet clicks and tweets happen too fast. But you can create an environment within the dealership that makes it easy for customers to speak their minds to you before they talk to others. Are your managers visible? Are they accessible? Are they skilled at listening to customers in addition to being technically proficient in their fields? Do they prowl the dealership actively seeking customer issues to resolve? The cost of waiting for disgruntled customers to identify themselves is high and the window of opportunity for resolving problems is often narrow. If you have a defensive mind set regarding customer problems, you can turn that around and become aggressive at detecting and resolving problems before your customer pursues other channels. When problems occur, don’t you want to be involved in what happens next? Steve Brazill is the chair of automotive marketing for Northwood University, Texas Campus. He can be contacted at 866.861.1515, or by e-mail at sbrazill@autosuccessonline.com.
marketingsolution
MarkTewart
LESSONS LEARNED FROM THE SUPER BOWL Another Super Bowl has come and gone. Every year, there is a lot of hype and hoopla and it’s an event to enjoy. This year, I thought I would share what are some valuable lessons for sales, marketing, work and life all gleamed from the Super Bowl. First of all, let’s start with a few observations about the advertisements. I am always amazed at the money spent on the ads, the creativity, the well-designed ads — and the really poor ads, as well. The No. 1 reason for an advertisement to exist is to sell something. David Ogilvy said that, and I concur. Millions of dollars are spent on ads that don’t sell or don’t position a product to sell — the money is wasted. I always ask myself after an ad what was the product that was just advertised. Oddly enough, every year there are ads where even right after the ad ran, I cannot tell you what the product is. Humor is a great communication tool. However, humor alone does not mean you have a great advertisement. Humor should help convey the message of the product you are selling, but it should not be the message itself. So many agencies are vying for the ego-driven award of “funniest Super Bowl advertisement,” rather than the ad that drives the most sales. Let’s examine two of the Super Bowl ads that were very effective. I chose two of the
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simplest ads as examples. First off, let’s look at the Google advertisement (http://www. youtube.com/watch?v=nnsSUqgkDwU). The Google ad was simple but ingenious because it used several great points. The Google ad was told in a story. Remember: facts tell, stories sell. The Google advertisement used emotion. Emotion is one of the greatest connecting forces in nature. The Google ad also used subtle enthusiasm and humor through the example told by the story. The ad showed Google being Google. Brilliant! You were reminded to use Google right then and there with your laptop while watching the Super Bowl. Next up, let’s examine the ad from Denny’s (http://www.youtube.com/ watch?v=B9kK7GttRWI). Denny’s managed to use humor with a direct response message to take action now that heightened the brand at the same time. The ad was simple. A great deal on breakfasts at Denny’s this week and it’s going to take a whole lot eggs to serve everyone coming in. Once again, the ad was simple, but very effective. The real measure of success for any of these ads comes from sales that now occur because of these ads. The real measuring began immediately after the Super Bowl. “Feel good” points aren’t enough. Now let’s examine a lesson that combines great elements for work, preparation and life success. Peyton Manning, who is one
of the greatest quarterbacks of all time, was intercepted at the end of the game on a crucial drive. The interception by the defensive back wasn’t just luck or great athleticism. Players and coaches prepare diligently to know the tendencies of the opposing players, coaches and the team in general. The game of football involves the theory of probability. In every situation, what is the probability that something will occur? Everything is measured, considering the best, worst and most-likely scenario. The interception occurred because of many hours of film study, preparation and probability theory thrown into action with great athleticism. In our lives, we generally get what we prepare for, work for and believe. The Super Bowl and the Super Bowl advertisements are great examples of fundamentals executed properly or poorly. The Super Bowl is just a microcosm of life played out on the big screen For free bonuses, contact me at the address below. Mark Tewart is the president of Tewart Enterprises, and the author of the best seller, How To Be A Sales Superstar. He can be contacted at 866.429.6844, or by e-ma ailil e-mail at mtewart@autosuccessonline.com.
leadershipsolution
JockSchowalter
CRM SHOULD PROVIDE YOU WITH ‘ACTIONABLE INFORMATION,’ NOT JUST LOADS OF DATA Management by Exception (MBE) is a management philosophy and practice where manager intervention is primarily focused on the areas of organizational performance that need attention. In other words, corrective management actions are driven by someone or something not performing “as expected,” or an exception. A good analogy of the theory might be a hospital ward with several patients. Each patient is hooked up to monitoring devices to measure heart rate. When there is an abnormal deviation in a particular patient’s heart rate, the sirens and bells go off and the nurses come running to “manage” the problem. This is a much more efficient means of managing the ward, as opposed to the days where they didn’t have such equipment and by the time the nurse realized the exception, it may have been too late. Why CRM Have Reporting Tools Failed to Serve the Dealer? Most CRM and other sales support software applications have failed to deliver on their promise of improving sales results for a number of reasons, not the least of which is that they are often unable to provide dealership management with actionable information. Now, one might say that “my software gives me every report I could ever dream of,” but herein lies the problem. Typical of software systems designed by software engineers, and the amount of data provided by the software is usually quite vast. Notice the emphasis on the word “data.” However, managers only need data or reports on a periodic basis. What managers need on a continual basis is information that is meaningful in making dayto-day decisions. This is what we refer to as “actionable information.” To illustrate the difference between data and actionable information, let’s take, for instance, a standard closing ratio report that any CRM should contain. This report will tell you the percentage of deals closed in relation to the number of sales opportunities (leads) that each individual has had over a period of time. This is great data to have, no doubt. Let’s say that
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your dealership group has 100 sales associates. Now you are looking at a report with a vast amount of data, and in order to get to the point where you can transform this data into actionable information takes both significant time and energy; both of which are already in high demand for managers. In the real world, where managers are busy putting together car deals, putting out fires, dealing with customer, employees, vendors, etc., the exceptional effort required to transform the typical data coming out of a CRM means one thing: Reporting does not get looked at on a regular basis — if at all. CRMs utilizing Management by Exception help overcome this problem. Before we move on, let’s look at two distinct categories of Exception Management for the dealership. Process Execution vs. Results Exceptions Two of the most important things to dealerships — or any other business, for that matter — are process execution and results. What are the results we want and what is the process we need to execute to achieve those results? In the sense of using a CRM to help manage your dealership, execution of process needs to be done in as close to “real time” as possible in order to facilitate course corrections. Without this ability, the only information you are receiving is far too old to take action upon, and therefore is only useful for making future decisions (“next month we’ll do better…”), as opposed to being able to take immediate corrective action. Let’s use a simple dealership example. Say you have a process that stipulates that any new Internet lead should receive three phone calls within 24 hours until an appointment is set. If you have no means to track whether they are making these calls or not, then your results will be the only information you have, and by then it’s probably too late to save the deals where someone submitted a lead and nobody ever bothered calling them back. Results exceptions are generally easier to track because dealerships have been already
measuring results as a normal course of business. Regardless of the gymnastics that managers have to go through to obtain valid results — which is an entirely different discussion — most managers have the ability to identify results that are not being achieved according to expectation. This, of course, becomes less manageable as organizations become larger, especially for centralized management structures. Your CRM should create meaningful, real-time actionable information. The CRM technology should be able to take a measurement of the process critical tasks that have been assigned to each individual in the sales team. Each dealership should determine which tasks they want to include in the measurement. The dealership then can set a benchmark of completion (minimum score) that is acceptable. Once this benchmark is notated in the system, management needs only to look at locations that are “out of process,” thereby focusing energy where it is needed. Conclusion Managing people, processes and organizations has always been challenging. With the advent of modern computing systems and customer databases, the shear amount of information available to management is daunting. This resulted most commonly in a situation where the data was ignored all together. Management by Exception (MBE) is a concept that basically says “just give me the information that I need to take action on! I’ll go get the rest if I need it.” Using this principle, your managers will be able to focus more time fixing, rather than determining what’s broken. For a free consultation on using Management by Exception in your dealership, e-mail me at the address below. Jock Schowalter is the president and founder of DealerPeak.com and WideStorm. He can be contacted at 866.869.1108, or by e-mail at jschowalter@autosuccessonline.com.
leadershipsolution
JohnFreund
PLAN CAREFULLY WHEN IT’S TIME TO MAKE A CAREER MOVE The days when an employee would spend his or her entire career with the same company appear to be all but gone. Nowadays, beyond simply changing jobs over the course of a career, many workers even take on an entirely new career before they finally reach retirement. When you make a job change, one of the biggest challenges you may face could be deciding what to do with the assets you’ve built up in your former employer’s retirement plan. Unfortunately, many people look at these funds as a free gift when they change employers, and they choose to take a cash payment and spend it. Keep in mind one of the most important sources of your retirement income is the payments you receive from company retirement plans. By taking the money out in cash, you eat away at this valuable source of retirement income. Instead of taking the cash, you may want to consider rolling the money from your company-sponsored plan into an IRA. A direct rollover, where the funds from your company plan go directly into an IRA, is a simple way to allow these assets the opportunity to continue to grow tax-deferred, and will help you avoid the temptation to spend these important funds on other things. Moving from job to job may not be the only
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change you’re considering. IRA rollovers can also prove useful if you decide that instead of just changing jobs, you want to retire. If you’re younger than 59½ and would like to take withdrawals from a retirement account, you may be able to avoid the IRS 10 percent early withdrawal penalty as long as the withdrawals qualify for certain exceptions. Let’s take a look at an example to help illustrate the options. John is 58 years old, and would like to retire early to join his wife Carol, 57, who retired two years ago. Currently, their modified adjusted gross income (MAGI) is $98,000, but if John retires that figure will drop to $48,000. This should still be enough to cover all their expenses, except their mortgage payments. John has a 401(k) balance of $300,000 and an investment portfolio worth another $125,000, while Carol has an IRA with a current value of $25,000. They are considering taking $100,000 out of their retirement nest egg to pay off their mortgage, but if they’re not careful, doing so could require them to pay both income taxes and the IRS 10 percent early withdrawal penalty on the amount they withdraw. One option that may help would be to take a $100,000 withdrawal from John’s 401(k) to pay off the mortgage. This would result in taxable income, but since he would be older than age 55 at retirement, John would qualify
for a special “55 or over” exception, meaning he would not face the early withdrawal penalty. The remainder of his 401(k) balance could still be rolled into an IRA. As another alternative, John could roll the money from his 401(k) into an IRA first. He could then use one of three IRS-approved withdrawal methods to take “substantially equal periodic payments” from the IRA without an IRS penalty, and use that money to make their monthly mortgage payments. While these withdrawals would be taxable, this strategy could still allow for greater tax deferral because the entire 401(k) distribution could be rolled over. As you can see from these examples, it’s important to know what your options are and you may need to consult with financial professionals — including your tax advisor — to sort them all out. Whether it’s your first job change or your last, your retirement nest egg needs to be handled with care. Consider your alternatives so you can make good decisions to keep your savings in line to meet your needs.
John Freund is the senior vice president of investments for Moors & Cabot. He can be contacted at 866.599.9162, or by e mail at e-mail jfreund@autosuccessonline.com.
Used Inventory Turn ROI increased by 33%
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Almost everything my franchises bring to our new car side, vAuto brings to our used operations, including
pulling customers into my front door. —Dwayne Hawkins President Crown Automotive Group St. Petersburg, Florida
Beyond the leading-edge technology. Beyond the exclusive features. Beyond the data-driven insight. For a select set of dealers nationwide, vAuto has become much more. It has become all the power and the privilege of a franchise — refocused on used car operations. License to proprietary software proven to drive profitability. Access to the Velocity Management™ playbook and coaches. Entrance to a community of like-minded, highly successful dealers. Contact with customers predisposed to buying from you. It’s “the franchise”— reinvented for today’s used car market. vAuto is The Franchise 2.0.
Get a live demo today. Visit www.vAuto.com/nextfranchise or call 888-536-4086.
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Build Your Future at J&L Marketing! J&L Marketing is looking for Business Growth Strategists to sell our multichannel direct marketing products and services. They will prospect for new customers as well as manage leads from J&L Marketing’s growing national accounts. This is a full-time B2B outside sales position. We require an extensive (paid) formal training program located at our corporate headquarters in Louisville, KY that lasts four to six weeks. This training and the costs associated with it are covered completely by J&L. This position is salary plus commission, with a generous benefits package. Requirements: 2-5 Years of Successful Sales Experience Strong Work Ethic with Desire to Succeed Charismatic, High-Energy Personality www.jandlmarketing.com • kkasun@jandlmarketing.com
Do you want to be a part of one of the fastest growing software companies in the retail automotive market? vAuto’s pricing, appraisal, stocking and merchandising tools are an evolutionary step forward for used car departments. If you have strong retail automotive and/or technology solution provider experience in the dealership industry, then we want you to be part of our tremendous growth. Send resumes to: vautocareers@autosuccessonline.com. Learn more at www.vAuto.com. vAuto is an Equal Opportunity Employer.