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CAR BIZ TODAY The Official News Source of The Retail Automotive Industry
May 2015
Volume 2, Issue 2
Entire contents ©2015 Car Biz Today. All Rights Reserved.
STEPS TO
BOOST YOUR ONLINE REP KATHI KRUSE
...see PAGE 16
CRAFT A
BDC MODEL
THAT WORKS BEST FOR YOU DAVID KAIN
...see PAGE 12
WHAT TO EXPECT FROM YOUR
F&I MANAGER
FORGING A
DISTINCT CULTURE IN
LUXURY AUTO SALES
ARZU ALGAN ...see PAGE 32
GETTING THE MOST
Cleveland-based Bernie Moreno Companies represents 24 different car brands, but founder and president Bernie Moreno particularly leverages his experiences at Saturn in terms of its customer experience-centric sales practices and team-based management philosophy.
FROM CONFERENCES GLENN PASCH
...see PAGE 20
PRSRT STD US POSTAGE PAID Permit No. 1459 Pewaukee, WI
...see PAGE 18
ANALYTICS FOR ALL Dealerships should have real-time research data to understand sales trends not just nationwide but in their local markets. J.D. Power says its Power Information Network can give them that data.
MATTHEW RACHO
Senior Director of J.D. Power’s PIN Group ...see PAGE 26
CBT NEWS 5 Concourse Parkway Suite 100 Atlanta, GA 30328
...see PAGE 26
What’s Trending in Your Market? Get your free report at jdpower.com/CBT
PowerDealer
®
Got screwed lately? Seems that some lead generators out there are putting their own interests over the interests of their dealers. Not Autobytel. Autobytel is your true dealer partner. We’re all about your success. That’s why we never get between you and your customer. We never dictate your price. And we never put our brand above yours. Plus, in our history, we’ve delivered over 50 million leads to dealer partners just like you, helping to sell millions and millions of vehicles. And with a cost per sale of around $275, Autobytel consumer connections will make you money.
Contact us today. Because a lead program that doesn’t support your brand is pretty screwed up.
Text or Call Autobytel
And sell more cars. 1-877-261-4575 Data Sources: Sales number from IHS Automotive/Autobytel Collaborative Study based on consumers that submitted a lead through the Autobytel network. IHS Automotive is part of IHS Inc. IHS acquired R.L. Polk in 2013. "Over 50 million" leads number from Autobytel internal lead totals from 1997 - 2014. "$275 cost per sale" number based on $22 lead price and estimated average 8% conversion rate. © 2015 Autobytel Inc. All rights reserved.
TURN-UP R U O Y
TUNE-UPS
995 $5,9 995 $9,9
CAR BIZ TODAY M
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Letter from the editor
CAR BIZ TODAY MAGAZINE Email
newsroom@cbtnews.com Phone
678.221.2955 President and Publisher Jim Fitzpatrick Vice President / COO Bridget Everett
Dear readers,
Managing Editor Jon McKenna
I am very privileged and happy to join the team at CBT News as managing editor of our two magazines, Car Biz Today and our newly launched Service Drive Today.
Associate Editors Russell Brown
My career has been spent in business publishing (of trade newspapers, magazines, newsletters and training webinars) for industries and professions such as accounting, corporate tax, municipal finance and corporate security. No matter the target industry, I’ve found that all business audiences demand practical guidance that they can viably put to use, in exchange for committing time to a print publication in a short-bites world.
Creative Director Simone Tieber
My goal is to make Car Biz Today and Service Drive Today troves of need-to-know, bottom-line content that managers throughout an auto dealership can leverage. Regardless of whether we profile an innovative dealership or ask a veteran consultant to discuss a favored strategy, you deserve tips and approaches to running your dealership more profitably, with happier and more productive staff, and with fewer headaches. Toward that end, you’ll be seeing a number of changes in the magazines in the coming months. I hope you’ll find they make our publications more beneficial and readable for you. I’d love to hear your thoughts, suggestions and criticisms, so please let me know at (678) 221-2955 Ext. 107 or jmckenna@cbtnews.com.
JON MCKENNA Managing Editor
Jon McKenna
Designer Betsy Alvarez Production Manager Jason Lowsy Creative Director - Digital Keith Tuggle Marketing Associate Roxanne Luhr Subscription Manager Tom Domagalski
Advertising Director of Sales Jane Howard jhoward@cbtnews.com d 678.221.2964 c 404.452.9551 Sales Assistant Alex Branam abranam@cbtnews.com
Customer Service info@cbtnews.com
Subscriptions To subscribe electronically, log on to cbtnews.com and click the subscribe link on the side bar. Alternately, forward your company name, your name, address, phone number and email address to info@cbtnews. com or CBT News, 5 Concourse Parkway, Atlanta, GA 30328. Please send address changes to the above email or mailing address. Permission to reprint or quote excerpts granted only upon written request. Advertising rates are provided upon request.
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CAR BIZ TODAY MAY 2015
SALES
LACK OF CONFIDENCE
A lack of confidence may be the “elephant in the room” during a woman’s car buying effort. While buying cars used to be largely a male-dominated task, today’s numbers show that women are an ever-increasing segment of car-buyers. Women now account for more than half of the vehicle sales each year and influence up to 80 percent of car purchases. Thirty-eight percent of women car buyers out-earn their husbands. On average, women buy or lease eight cars in their lifetimes. Dealerships will be ahead of the game if they provide ways for a woman to feel confident about her current deal. Sales advisors can help boost confidence by using facts and avoiding any attempts to provide false encouragement or pressure. At the same time, a savvy advisor will learn ways to positively encourage a woman’s questions about the deal, so she leaves feeling that her needs were met or exceeded.
NEGOTIATING SKILLS
SAFETY IN NUMBERS: Boost Confidence, Boost Sales You need to impress both the buyer and her companion to improve dealership sales. BY ANNE FLEMMING
W
hen buying a car, 54 percent of women bring someone with them to the dealership, in contrast to only 44 percent when simply shopping for a car. Why do women feel the need to bring someone with them when they are ready to sign the deal? Obviously, if a woman is buying a car for herself or her family, in most cases her partner and she will buy together. But in other circumstances, a woman may want or need additional support while making a car purchase. This article explores the reasons women might feel the need for extra help and how dealerships can make purchasing cars more comfortable, expedient and reliable for women buyers.
AN EXTRA PAIR OF EYES
When making any big decision (like when buying a condo or house), it is natural for a woman to bring a trusted advisor as an extra pair of eyes on the deal. A woman may bring a partner or spouse, a friend or a trusted colleague. A sales advisor should always assume that the person accompanying the woman buyer is an important part of the deal. In fact, the accompanying person may be the one most likely to make or break the deal. A sales advisor must realize that the other person in the room has been tasked with finding a reason not to do the deal. This person is likely less emotionally involved and will be looking out for the car buyer. Learning to read body language and understanding subtext – what the other person is really saying – will help a sales advisor intercept any objections that might arise. More importantly, a sales advisor should never engage in conflict with the buyer’s companion, as this could easily break the deal. Any questions from either the buyer or the companion should be met with clear, TO SEE MORE FROM ANNE FLEMMING GO TO CBTNEWS.COM
For women, a high-pressure approach may make them walk out of your dealership to find a more supportive way to purchase a car.
helpful answers that quickly resolve any issues. As an additional bonus, this is a great chance to impress the companion and set the stage for a future sale.
A CASE OF NERVES
When surveyed, women car buyers ranked “apprehension” as their No. 2 emotion during the car buying process. It is only natural, then, for a woman to bring someone along to provide calming support. Dealerships can help encourage a relaxed environment by providing a private, quiet area for completing the purchase. Gone are the days when a cold, hardpressure environment was an effective sales tool. For women, a high-pressure approach may make them walk out of your dealership to find a more supportive way to purchase a car. A warm, genuine smile and a calm demeanor from a sales advisor can go a long way toward establishing trust and ensure that the experience will fall within the woman buyer’s comfort zone.
Women can often feel their negotiating skills are not up to par with men’s. This is reflected in the way women will spend extra time researching their choice of cars, and will visit more dealerships than men while shopping for a car. While many women may feel under-confident while negotiating, chances are they have done their research and are very well prepared. A sales advisor who listens carefully to a woman’s questions and explains deal terms in a professional manner is sealing a deal now and creating potential for future sales.
SOLO BUYERS
We’ve addressed the 54 percent of women who bring someone with them when buying a car. What about the 46 percent who buy a car solo? What can a dealership do to complete today’s deal and lay the groundwork for future sales? A woman buying a car alone encounters the same issues as the one who brings company with her. There are many reasons a woman might come alone to buy a car. She most likely is completely at ease and confident doing so. Or, she is used to making purchases on her own. Or, timing might not have been right to bring someone to the buying appointment. When a woman chooses to finalize a car deal on her own, it is up to the dealership to fill the role of trusted and respected advisor. If a sales advisor has taken the time to create a comfortable, trusting relationship with the buyer, then the sales process can be relaxed and efficient.
THE DEAL ISN’T OVER YET
The papers are signed, the handshakes are done and the keys are handed over. Is the deal done? Not by a long shot. Now is when an astute dealership knows to take stock and analyze the deal. Ask questions to see if the woman buyer is satisfied. Find out if there are areas where the buying process could be improved. Conduct a follow-up survey in a non-threatening environment to assess the sales process. Encourage satisfied buyers to write reviews for your dealership. If your buyer wasn’t satisfied, take immediate steps to remedy her issues and implement strategies to avoid the problems with future buyers. Never underestimate a woman’s power to influence her friends and family in a positive – or negative – way. Taking the time to understand women’s motivations during a car sale can drive more business to your dealership. After all, you want her coming to your service drive. Whether solo or in numbers, women car buyers represent an increasingly important part of your dealership’s success.
ANNE FLEMMING President of Women-Drivers.com Prior to her involvement in the retail automotive industry, Anne spent 20 years in brand development and strategic product development for several international consumer product companies. Her leadership training led to the founding of Women-Drivers.com, which has been featured in the Wall Street Journal, ABC News, USA Today, Working Mother, Smart Money and other national media. Visit her website at Women-drivers.com and follow her on Twitter @Womendrivers.
MAY 2015
CAR BIZ TODAY
CBTNews.com
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By employing a traditional sales model – reliant on desk managers and multiple pencils – you’re going to continue to have a sales staff older than your customer base and experience turnover north of 100 percent. Adopting a more modern way of selling vehicles will attract and retain a younger sales force. Some ways to do that include:
Internet and phone leads – The younger generation is very technologically savvy and they love their smartphones. So dump your costly and ineffective BDC and hire sales people with the right skill sets to optimize where your greatest opportunities are – phone and Internet.
LEADERSHIP
Don’t Use Same Recruiting Tactics For Younger, Older Salespeople New approaches in training pay and plan, comp structure, work week are needed to lure younger, well-education sales reps. BY MARK RIKESS
E
asily the biggest challenge I hear from dealers is they can’t find and retain young, well-educated salespeople. I believe that is because they are doing what they have always done and are expecting different results – seems pretty insane to me! The bottom line is that most dealers are shooting themselves in their own foot by not making significant changes to the position of auto sales. Some necessary changes include:
Training Salary – Don’t expect to attract an educated, younger and gender-balanced sales force if you aren’t offering a training salary of at least $2,500 per month for a minimum of two months. $3,000 will even draw better candidates.
Initial Training Plan – If you don’t have a 30-day new employee development plan, you’re just creating turnover in your sales force. One of the key questions today’s younger generation wants to know is, “How are you going to train me?” After the initial training you should have a mentoring strategy in place for further new-hire development
Reward Sales Volume – By paying primari-
ly on gross you’re rewarding this younger generation for trying to make as much money as they can off of everyone they meet. The problem is that’s not how they are wired. They also need a reasonable salary or guarantee along with volume and possibly some gross rewards. If you’re still pretty much a “straight commission” store, go ahead and shoot one of your toes off.
Limit or Eliminate Negotiations – Do
you know any 25 year olds who are practiced in the art of negotiations? Or, even enjoy the aspects of negotiations? There aren’t many. That sound you hear is your recruitment window “shutting down.” By 6
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Information Sharing – Today’s buyer is very wary of any form of “hard sell” or a “pushy” salesperson or manager. The guts of today’s sales presentation should be about supplying prospects information they don’t already know. This means you need “geniuses” on your sales staff – people who can not only confirm what the prospect knows about their vehicle of interest but also “elevate” their knowledge and appreciation of the intended product.
CAR BIZ TODAY MAY 2015
Millennials expect to have work-life balance. They are not going to put in the 50-plus-hour workweeks of yore. employing a traditional sales model – reliant on desk managers and multiple pencils – you’re going to continue to have a sales staff older than your customer base and experience turnover north of 100 percent. 40-45 Hour Work Week – Millennials expect to have work-life balance. They are not going to put in the 50-plus-hour workweeks of yore. Your “work-till-they-drop” sales managers will need to get over it and create a reasonable and flexible schedule.
Always Be Recruiting – When you recruit
primarily out of need, by definition you’re lowering your standards of whom you’ll hire. Again, you’re exacerbating turnover by hiring “Mr. Right Now.”
Management Compensation – At least half of your sales managers’ compensation should be tied to salesperson productivity, with 10 units being the minimum standard. This type of compensation plan forces managers to move from “deal managers” to “people developers.” Tell me how you reward me and I’ll tell you how I’ll behave.
Affordability Consulting – Today’s modern sales force needs to be able to provide prospects with payment estimates for both financing and leasing. The basic idea is that if you get prospects in cars that are more affordable more quickly, you sell more cars! Most dealers are under the old mindset that they need to protect their back-end gross by not granting salespeople the training and ability to provide payment estimates. The reality is customers are not focused as much on price as they are on “does it fit my family’s budget?” Not allowing salespeople to discuss payment options may slightly improve your F&I PRU but it will come at the cost of sales volume. Which would you rather have? Empowerment – Prospects hate watching your sales staff get up and abandon them when they don’t “bite” on the first pencil. You know who hates this process as much? Younger, well-educated salespeople. Step into the new era of auto retailing by transitioning your management team from being desk managers to becoming a great support system by engaging, observing and coaching your sales team while they are making actual presentations.
Transparency – Start by defining what you mean by transparency. If you can’t define it you can’t achieve it. There should be a “pricing rationale” for your first quote. Before serving up a number have your sales staff explain how you determine your vehicle pricing. I strongly recommend that you use a third-party pricing guide, such as Edmunds, KBB, etc., as your first quote, then either eliminate or limit negotiations.
So take that gun away from your foot and change many aspects of your traditional business sales model. If you don’t, you’re going to keep getting what you got – and losing more toes in the process.
MARK RIKESS President of The Rikess Group Mark is a highly regarded expert on progressive retail practices, providing management-consultant services to dealers, suppliers and manufacturers. As a second-generation automotive dealer, he began with an early focus on performance improvement and implementation of results management processes in the dealership-operating environment. Mark founded TRG in 1989, and has consulted more than 150 dealerships. You can reach Mark at MarkRikess@gmail.com.
99.5% OF CONSUMERS SURVEYED WOULD LIKE THE CAR BUYING EXPERIENCE TO CHANGE. Isn’t it me to listen?
HAPPY CUSTOMERS When you remove the pressure, it’s easier for buyers to fall in love with the vehicle and trust the person who brought them together.
HAPPY SALESPEOPLE We train your salespeople the No Pressure way consumers want to buy new vehicles today.
HAPPY DEALERS The March 2015 Autotrader study of 4,000 consumers revealed that when they receive their preferred buying experience, 66% will likely buy from that dealership, and 53% will buy a vehicle more ooen.
To start selling the way your customers prefer to buy call 800.515.0034 or visit StartNoPressure.com today.
LEADERSHIP
CONSIDER CUTTING NUMBER OF CUSTOMER TOUCH POINTS IN
YOUR DEALERSHIP’S SALES PROCESS MAY BE SET UP THIS WAY:
SALES PROCESS IN HALF BDC approach just makes younger buyers who crave continuity have to deal with more people. BY KIRK MANZO
BUSINESS DEVELOPMENT CENTER
SALES REPRESENTATIVE
SALES MANAGER
I
nsanity is often defined as doing the same thing over and over again and expecting a different outcome. For the past three decades, our industry has taken the same basic approach to selling automobiles, with traditional salespeople and sales managers at the core of that approach. Yet numerous studies, the most recent of which from AutoTrader and Driving Sales, clearly show the current sales model MUST evolve. Where to begin? We know consumers find the sales process takes too long and want to deal with as few points of contact (people) as possible. They want continuity. We must admit that both desires are reasonable. Many dealership groups utilize a business development center (BDC), with business development representatives (BDRs) or customer service representatives (CSRs) to manage inbound calls and Internet leads. But, have we not effectively added in one more layer of contact or touch point for the consumer? When surveyed, consumers often identify the F&I process as the slowest part of the buying experience. Again, what are our options? A possible first adjustment would be to redefine the sales process with two objectives in mind: Reducing touch points and cutting time. Currently, many stores operate with four touch points: BDC, salesperson, sales manager and F&I/business manager. Why not cut these in half? An alternative, two-tiered structure would use product specialists (PSes) and team leaders (TLs). The product specialist’s role would combine the activities of a BDC person while including initial steps of the actual sale, such as vehicle selection, presentation and demo drive. Once those elements are completed, the team leader would complete the sale (discuss and confirm all figures, including F&I products) before turning final delivery back to the PS specialist. 8
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CAR BIZ TODAY MAY 2015
For this streamlining to work, the team leader’s role also would need to be modified. By combining functions of a sales/desk manager and the F&I/business manager, one touch point is eliminated. Now the customer is only dealing with two people vs. four. However, ALL administrative functions – e.g., inventory management, reconditioning of used vehicles, other non-sales-related duties – would need to be managed by the GSM/GM or perhaps an inventory manager, for the system to work. Depending on the volume per team, a document specialist or administrative support clerk supports the team leader’s paperwork load and helps maintain timely funding of contracts. Currently, several dealership groups in the marketplace are beta-testing and running pilot programs to achieve a more customer-centric process. Technology vendors such as Dealer Track are on the forefront of delivering a seamless user experience about which both dealerships and customer can feel good. A side benefit to such a fundamental restructuring of your sales department would be that the pool of candidates our industry must successfully attract and retain (the under-32 crowd) should find this model much more appealing. The industry only needs to deal with about 78 million of them as consumers and team members!
F&I/BUSINESS MANAGER But, maybe your customers would prefer: handling normal BDC activities, plus working on vehicle selection; presentation and demo drive, then handing off to...
TEAM LEADER to complete the sale, confirming all figures including those of F&I products, before returning to...
PRODUCT SPECIALIST to take care of final delivery
KIRK MANZO President of The Manzo Group As a nationally recognized speaker and professional trainer, Kirk has conducted hundreds of in-dealership programs nationwide and was a featured speaker at the 2008 NADA Annual Convention in San Francisco. As a certified member of the John Maxwell Team, Kirk facilitates mastermind groups, in-dealership workshops and coaching services based on Maxwell’s strategies on leadership and communications. Visit his website at Manzogroup.com.
TO SEE MORE FROM KIRK MANZO GO TO CBTNEWS.COM
RDE SAL VE ES E
YEARS OF EXCELLENCE 1985–2015
198 5 – 2015
C.
JO
$2,905,988 Net Profit
30
AINING,I TR N
The #1 Training Company In The Car Business
AG MAN EMEN T
JOE VERDE
&
JOE VERDE – #1 WORKSHOPS
$2,905,988 is the realistic net profit potential just from improving sales and gross from the floor traffic on the lot now in a typical 100 unit dealership that delivers 20% of their traffic, with a pre-tax net of just $500,000. You’ve tried everything – more ads, weekend events, buying more leads, adding a BDC and it didn’t get you there. Why? Because traffic isn’t the problem and more traffic isn’t the solution. The problem is, and always has been poor selling skills, ineffective processes throughout the sale, and a lack of daily training and daily ‘sales management’.
Management Workshops n Team Leadership This is the critical class managers never got on “Sales Management.” Attend this workshop first. n Negotiating & Desking Improve your sales and gross with this easy ‘customer friendly’ 3-Pass Desking Process and increase Satisfaction Scores at the same time. n Train The Trainer You train to improve & grow. If you don’t train, you don’t & you won’t! Sign up today.
What is there not to understand? 1. The customer came to buy 2. 8 out of 10 people do buy
Sales Workshops
3. You miss 6 of the 8 buyers 4. Your salespeople can’t sell
n How To Sell A Car & Close The Sale Aren’t you tired of explaining why you don’t sell more? Sign up now.
Note: If a dealership had us train their staff initially in our classes, and then daily on JVTN ®, most dealerships would spend less on training in a year to double sales and triple net, than they spend each month now on ads, etc., to sell what they’re selling now.
n How To Close The Sale, Overcome
Objections & Negotiate Get solid buying commitments, more deliveries and higher gross.
Post this page everywhere in your dealership until everyone understands the problem & opportunity. Then when you want a chunk of that $2,905,988...
n Internet / Phone Business Development You’re only missing 8 out of 9 deliveries from your lead sources. We fix that.
Call us at 888-712-6647 We’ll help you implement processes and create a training plan that gets results. That’s what we do best, and that’s why we’re #1. Call us today!
Get Joe’s New Book FREE! Go To: JoeVerde.com/CBT
“From 5 to 19.5 & $100,000+” “Joe, I got into the car business… tried it my way with no training and I sold 5 cars. Then, I started training on JVTN® and watched a chapter, practiced it and it worked, so I continued taking courses believing it would make a difference, and it did. Thanks to your training, I went from 10 the next month to 18.5 and then to 19.5 and then to leading the board and earning over $100,000 in
less than a year! And I went from living in an apartment with my wife and 4 kids to a beautiful home, a new car and all the other things that matter. Your training gave me the confidence to know that I have found the career I want to be in. I’m a Manager now and I teach other people the impact your training will have in their own lives. Thank you!”
– Nathan Syme, Sales Manager, Ed Bozarth Chevrolet, Las Vegas, NV
JVTN® – #1 ONLINE TRAINING
10 Million Reasons Why You Should Train On JVTN® What is JVTN®? It’s the most powerful virtual sales training in the world! What would Joe Verde teach our salespeople? The complete sales process... n How to sell a car today. No salesperson will be left behind, not know-
ing what to say or do when they get a customer. Word for word – we’ll show them what to say from the greeting to the delivery!
n How to close the sale, overcome objections and stay off price on the lot to build value. We teach your salespeople how to handle every objection – including price questions and price concerns that come up during the sale, closing and the negotiation.
n How to build your business by phone. Phones ring and leads come in daily, unfortunately most don’t end up as deliveries. We teach salespeople how to take calls and leads and make outgoing contacts, to turn more lost sales into be-backs and more contacts into appointments that show. n How to follow up, prospect and retain your customers forever. Again, word for word on everything they need to say and do to build your future business. JVTN® includes a powerful, easy to use mini-CRM built for salespeople.
Call Now • 888-712-6647 SC 12351
LEADERSHIP
WHAT IS LEADERSHIP? Not everyone is chosen to be a leader, but those who are realize their success lies with the success of the people they lead. BY DAVID LEWIS
O
ver the past several decades, focus on leadership has become an increasingly significant subject matter. A seemingly endless supply of books and training materials can be found on the book shelves and in media libraries, all claiming to unlock the secrets that can equip today’s entrepreneurs and business leaders with the tools and philosophies for success. In my own efforts to offer our clients the best materials and training on this subject, I have discovered five common traits that generally define what leadership is:
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CAR BIZ TODAY MAY 2015
1. Leadership is about influencing others Anyone not living in a cave by himself influences someone else, whether he knows it or not. If you know someone, you have at least some form of influence on him or her that can be good, bad or even indifferent. Leaders, however, influence people in such a way that inspires or empowers them to do things that make a difference for themselves and others. By their words and actions, they draw followers to themselves and in so doing are able to accomplish things that move the ball forward. Leaders tend to draw out of others the potential they themselves cannot necessarily acquire on their own. They influence, motivate and encourage others and have the power to effect change, which in itself creates a desire in others to follow their leadership.
2. Leadership is a verb, not a noun Leadership is not the result of receiving a title or holding a position in a company or group of people. It is what someone does that makes them a leader, not what title is written on their office door or displayed on their desk. Leadership is a verb inferring action, not a noun signifying a person, place or thing. Though someone may be a figurehead filling a specific role or position, this does not make them a true leader. Those who view leadership as a noun may feel this gives them their power over others. This, however, is not the kind of leadership that inspires others to act out and accomplish things beyond their expected duties. True leaders invoke esteem and loyalty from their peers and subordinates. They understand the value that team effort brings to any task, and they focus more on garnering the resources of the team to accomplish their goals rather than trying to do it all themselves. Because they take action and lead by example, their teammates gladly follow them toward the goals they have set, knowing they are far more likely to succeed under trusted and proven leadership. Leaders are willing to go before those they lead and guide them in the path of achievement. Leadership is a verb, not a noun. It is an individual’s action that makes him or her a leader, not just the sign
LEADERSHIP IS A VERB, NOT A NOUN. IT IS AN INDIVIDUAL’S ACTION THAT MAKES HIM OR HER A LEADER, NOT JUST THE SIGN ON THEIR DOOR OR DESK. TO SEE MORE FROM DAVID LEWIS GO TO CBTNEWS.COM
on the door or desk. It is not the position they hold in the dealership or organization that draws others to follow them, but the respect they have earned through the commitment and dedication they show to the success of those they lead. By helping others, leaders encourage and inspire them every step of the way in their pursuit of personal achievement.
3. Leadership is about creating change and facilitating growth All things are usually in a state of fluctuation. This includes people and their efforts to grow and change their abilities and further develop their talents and skills. Leadership means a person is willing to take responsibility for creating change and facilitating growth in his or her team and their organization. They are not afraid to advance new ideas or to develop better tools or introduce stronger concepts that will help them reach higher to accomplish their goals. True leaders are constantly searching for new ways to improve and to help those around them advance themselves in their trade and profession. Leaders are fearless in their quest to find new training resources to bring to the attention of the group. They are always seeking creative ways to work with others and help them further develop their knowledge and skills. They don’t hoard new information in order to make themselves stand out in the crowd. To a leader, their goals are accomplished when those of their team are realized; therefore, they share what they learn in order to advance everyone toward achieving their goal.
4. Leadership deals with people and their dynamics Not everyone is qualified to be a leader or has a desire to lead others. The responsibilities are often more than someone wants to manage, and so they take the position of a follower and leave leadership to others. This isn’t bad, because not everyone can be a leader of others. To quote someone educated in the art of leadership: “A leader without followers is just someone out taking a walk.” Leadership is an essential part of life, and so is the ability to be a willing follower. Effective leaders know that all people have skills and abilities and that, if guided and led in the right direction, they can usually accomplish great things. Each person is unique in his own way. An important part of leadership
is learning how to understand and develop the unique abilities of those who work alongside them. The more they learn to understand and lead those under their supervision, the more they grow their own leadership skills in the process. Everyone is different in many ways, and learning how to motivate people is a big part of a leader’s job. People react differently to different types of coaching and leadership. Effective organizers understand the dynamics of the individuals working under them, and they customize their leadership to draw the maximum potential that each person has to offer. True leaders don’t simply issue commands and expect everyone to fall into line. They lead by example and by the personal understanding they have of those who follow them. They know that their effectiveness as a leader depends on their ability to connect with those they lead. All people react differently to leadership and require different levels of attention to help them reach their goals. Once you know this as a leader, you can help them construct a plan for achieving success.
5. Leadership is about advancing others, not advancing yourself One of the often-misunderstood facts about leadership is that it is not primarily a self-serving role. True leadership focuses on advancing others in their abilities and achievements. Real leaders are driven by the goals and satisfaction they want to achieve as a group, not the personal acclaim that comes from achieving them. Leaders realize their own success in the achievements of those they lead. They know that if those under their supervision believe leaders are only seeking personal advancement, they will stop responding and the leadership will end. They take personal pride in the accomplishments of those who achieve success from what they have been able to teach and inspire them to accomplish. As the Chinese proverb says, “A leader does best when people barely know he exists. When his work is done, his aim fulfilled, they will say: We did it ourselves.” It is enough for a leader to know that his guidance and leadership has aided in the accomplishment he set out to achieve, and that those who participated as followers can enjoy the personal satisfaction of knowing they have done a good job. They strive for achieving excellence in others and gain their greatest satisfaction from the achievements of those under their guidance and leadership. Not everyone is chosen to lead others, and those who do are not usually driven by the rewards of their success so much as the satisfaction of knowing that they have played an essential part in something worthwhile. Those who desire to become effective leaders and are willing to commit to the challenge and discipline required for success, will find themselves growing in the process as they advance their own skills and the skills of those they lead to new heights of achievement.
DAVID LEWIS President of David Lewis & Associates David Lewis is the president of David Lewis & Associates Inc., a national training and consulting company that specializes in the retail automotive industry. He is also the author of four industry-related books, The Secrets of Inspirational Selling, The Leadership Factor, Understanding Your Customer and The Common Mistakes Automotive Salespeople Make. Visit his website at DavidLewis.com.
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LEADERSHIP
IT’S TIME TO REFINE YOUR
BUSINESS
DEVELOPMENT Going beyond the current BDC model and establishing a business development dealership makes all employees accountable for growth in sales and service. BY DAVID KAIN
B
usiness development centers (BDCs) offer a great way to grow your dealership’s sales and service business, when set up properly. The trouble is that many I have encountered over the years were designed and launched hastily and have been dismantled as quickly as they were built. I’ve often said that I’ve witnessed more BDC funerals than births, and that is accurate. You’ll want to review this article if you are considering either building a BDC yourself or dismantling one you already have in place.
SETTING THE RECORD STRAIGHT – I AM A FAN OF BDCs
I am a fan of BDCs but have heard from many who say it’s time for them to end. Why dismantle a BDC when it covers a lot of process failures within the current dealership structure, including poor inbound call- and lead-handling by the floor sales team? They also assist with the missing role of true business development including marketing to customers in equity, declined services, unsold showroom follow-up, and on and on. Truth is, it’s time for us to go beyond the current BDC set-ups and arrange for a model that is more sustainable and helpful for your overall dealership. Even when a dealership has a well-designed and high-performing BDC in place, there are tons of opportunities left by the wayside. One element that is particularly harmful for dealerships is the atrophy that sets in for the floor sales team. We have noticed with increasing regularity that the floor sales teams of dealerships with high-performing BDCs tend to cease their own business development efforts. This hinders the opportunity to create repeat and referral sales, because of the reliance on the BDC staff to manage post- sale follow-up. In addition, 12
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when a customer doesn’t purchase on his or her first visit, we see be-back process breakdowns, as it tends to fall through the cracks. The current BDC set-up needs to be adjusted from a dealership center to the overall dealership.
WHAT IS A BUSINESS DEVELOPMENT DEALERSHIP (BDD)?
In simple terms, a BDD is a dealership that has created a culture of business development throughout the entire dealership. On a daily basis, everyone who walks through the door as an employee is responsible for helping the dealership grow sales and services. It’s the difference between a dealership where the employees come to “work to work” and coming to “work to wait” for someone to develop an opportunity environment. The condition that exists in many dealerships is the waiting and wishing game , in which we just waste time hoping someone comes in to buy something instead of proactively generating opportunities. This has been exacerbated in many instances by the creation of BDCs, because many employees simply use the excuse that the BDC is responsible for developing opportunities. You have to decide what is best for your dealership. I already know which you prefer.
HOW TO SET UP YOUR BUSINESS DEVELOPMENT DEALERSHIP
As is always the case, it starts at the top with senior dealership management. If the boss buys in, the team will buy in. I hear all the time from senior managers that they are looking for the team to “buy in” before they act on an idea. The fact is, this is the wrong sentiment. The team will never buy in until the boss decides they must buy in. The team may question or wish to improve an
idea a boss buys into, but if they know the boss is set on it; they will soon buy in also. So, once the boss buys in, the team just needs to know how to do it. Develop A CRM Culture
A foundational element to set up your BDD is to create a customer relationship management (CRM) culture at the dealership and track the business activities of your team members. This seemingly simple concept presents an Achilles heel in a lot of strategies, because the managers do not actively use the system themselves. If the managers use it daily and teach the team how to effectively use it, then great things can happen. It also takes a lot of time to train the team properly on the CRM, so be sure to set aside the time and assign responsibility for training to a high-ranking manager on the team. Create a framework for what the team needs to know and start the teaching. Most CRM companies provide an excellent online training platform, so self-learning is simple. Just make sure your team learns the essentials, and test them to ensure they do it your preferred way. Daily CRM check-outs are a vital step to making sure your team completes the agreed-upon daily tasks. Once the CRM culture is established, you will have some good momentum to move along the BDD path. Build Daily Work Habits
Part of what makes a BDC so attractive to dealership management is the fact that ti generates a lot of work output, because it creates effective daily work habits. This is not always the case on the showroom floor, where it is almost celebrated as an
EVEN WHEN A DEALERSHIP HAS A WELL-DESIGNED AND HIGH-PERFORMING BDC IN PLACE, THERE ARE TONS OF OPPORTUNITIES LEFT BY THE WAYSIDE. ONE ELEMENT THAT IS PARTICULARLY HARMFUL FOR DEALERSHIPS IS THE ATROPHY THAT SETS IN FOR THE FLOOR SALES TEAM. artistic workspace. As a result, a lot of great salespeople do not achieve their full potential because we do not hold them accountable to daily work habits for calls made, e-mails sent, social media engagement, etc. In a study of habit-building by University College in London, it was determined that it takes 66 repetitions to make something a habit. This study convinces me that most people simply give up before they create good work habits. Great managers can make good employees great by just having them complete their daily habits. Create 52 Weeks Of Engagement Messages
If you expect your team to call, e-mail and socialize each day, you’ll need to create messages for them that are consistent with the marketing and promotion actions of the dealership. Oftentimes when I train at a dealership, I find that the sales team would love to do their daily work activities but they just don’t know what to say to prospects and customers. The good news is one message a week can be powerful and works with phone, e-mail and social. In fact, maybe just start small with just 12 monthly messages. A good idea is to use what I used when I was selling cars at the dealership – the “holiday follow-up plan” – January, Happy New Year or Martin Luther King Day; February, Valentine’s Day; March, Happy St. Patrick’s Day; and so on. Once you have this mapped out, think in terms of what you want to have your team communicate on a weekly basis – new arrivals, fresh trade-ins, try our service department, new accessories, etc.
dIn account and once you have made connections, check back daily and LinkedIn will prompt you to endorse people. These small and non-controversial social actions will quickly expand the reach of your team. Establish A Productive Work Setting
Most dealerships are hubs of activity, which it makes it tough to get much done during peak work hours. Check your own work setting and make certain it is set up for uninterrupted work time. Perhaps you need an electronic up system so that your sales team knows they don’t have to watch the lot. Perhaps you need a room off the floor where you have work cubicles set up for making calls, sending e-mails or doing social posts. In any case, eliminate interruptions and provide the right space for your team to be productive. Additionally, each team member needs to have set times when he or she can be on a computer to interact with the CRM tool.
IF IT IS TO BE…IT IS UP TO ME! Leaders of the dealership – and that is each and every employee – need to remember that if it is to be, it is up to them. No one can make you the very best. You have to make that call on your own.
Teach Your Team About Their Circles
Of Influence
Each member of your team has established circles of influence. They just may not realize it. The circles include friends, family, work contacts, neighbors, church or clubs, and online social networks. These circles may overlap a bit but if you asked team members to list whom they know and influence, I believe they would be amazed at how large their circles of influence actually are. The key is to encourage them to let their circles know what they do for a living. Oftentimes, we see salespeople frustrated because a friend or neighbor bought from a competitor because they didn’t realize the employee sold cars. The social engagement with the circles is very easy, too, and can be accomplished by having your team members join Facebook, or Google Plus and then “liking or plus one” posts made by customers. They can comment (appropriately) and from time to time post a picture of a vehicle or a new story on a product or service. With LinkedIn, they can do “endorsements” of their customers for items they know they are good at. If you are not familiar with this simple action, you can set up your LinkeTO SEE MORE FROM DAVID KAIN GO TO CBTNEWS.COM
DAVID KAIN President of Kain Automotive David has a unique background that includes automotive retail, OEM executive leadership and digital sales training and consulting. His 20 years in retail included various positions in sales and service at Jack Kain Ford, where he remains a partner today. David was the COO and cofounder of FordDirect.com, the Internet lead provider to Ford and Lincoln dealers. In 2003, he developed Kain Automotive. Visit his website at www.KainAutomotive.com.
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SAVE THE
DATE
FEB 9-11
2016 O M N I AT
C N N
H OT E L C E N T E R
AT L A N TA
Attention Dealers, GMs, GSMs, Sales Managers, F&I Managers, Marketing Directors, Service Managers, Internet Managers, BDC Managers and Pre-Owned Managers CBT Automotive Network is proud to announce the 2016 CBT Automotive Sales, Service and Marketing Conference & Expo. The retail automotive industry's top leaders and keynote speakers will come together to present more than 100 powerful sessions and thought-provoking panel discussions during this dynamic three-day event. Mark your calendar now for February 9-11, 2016. We'll see you in Atlanta!
Visit CBT Conference and Expo.com for more informaaon
7 THERE ARE CONVERSATIONS GOING ON RIGHT NOW ABOUT YOUR STORE. DENYING THAT REALITY IS DANGEROUS.
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MARKETING
Basic Steps
to Optimize Your Dealership’s Online Reputation To effectively capitalize on your online presence, don’t leave your online reputation to chance. BY KATHI KRUSE
A
re you one of the many dealers, GMs and managers who find it difficult to manage your online reputation? There are literally hundreds of places where your customers can go to share their opinions. While the specific sites and services will continue to evolve over time, there will always be a need for solid strategies to grow, improve and sustain your dealership’s online reputation. Although each review site is unique, there are some basic actions you can take to leverage each to its full potential. Google+Local, Yelp and others can be difficult to navigate, especially if you’re not a regular user. Let’s start with seven basic steps to get traction. You never know how far you can go, and these will get you on the right path.
1.
Review sites’ business models are built on the premise that users will spend time there writing reviews, engaging their network and sharing other content. Review sites serve ads to users while they’re there. For businesses, creating and maintaining a powerful profile that holds lots of good information and special offers is mostly free. Utilize the space by completing your profile, including added photos and video. This gives people more insight into your business and a reason to buy from you.
4. BE WHEREVER YOUR CUSTOMERS LOOK FOR YOU
Managing your online reputation is part marketing, part sales and part public relations. In today’s online marketing environment, we have the ability to laser– target those buyers who will most likely buy from us, rather than blanketing the land with meaningless messages like we used to. This undertaking may save us in advertising expense, but the spend makes up for it in manpower. You must identify where your customers spend their time. Metro areas have similarities to and differences from rural, less-populated areas. Knowing the characteristics of your target customers is vital to your business’ online reputation management process.
2.
3.
RECOGNIZE YOUR REPUTATION IS ONLINE – WHETHER YOU’RE PARTICIPATING OR NOT
There are conversations going on right now about your store. Denying that reality is dangerous. You need to participate in those conversations – or your competitor will. Start by observing how your customers talk about you. Develop an action plan to monitor things and then begin engaging in those conversations.
TO SEE MORE FROM KATHI KRUSE GO TO CBTNEWS.COM
TAKE ADVANTAGE OF FREE REAL ESTATE
DESIGNATE ONE PERSON TO MONITOR, LISTEN, RESPOND AND RECOGNIZE OPPORTUNITIES
“Everybody’s job” can mean “no one’s job.” Don’t fall into the trap of assuming someone has your back. Assign one person to be the kingpin. Depending on the size of your store, you may want to create a team of managers to support the person you select.
5.
ENSURE YOUR CULTURE IS READY FOR PRIME TIME
A secure house is built on a strong foundation. Today’s customer is connecting with brands with which they identify. He or she is looking for authenticity and transparency. If you promise one experience but deliver something else, trust begins to erode and you miss the chance to make them a customer. Is your business culture ready for the spotlight?
6.
BE PROACTIVE ABOUT ASKING FOR ‘FEEDBACK’
Anyway you slice it, you’re leaving your online reputation up to chance if you’re not proactively asking for opinions and feedback (a.k.a., reviews). Develop an action plan for obtaining the opinions of your happy, loyal customers: • E-mail“love drip” requesting feedback from your current and repeat customers. • Incorporate scripts into your sales process. • Invite and gather customer testimonials.
7.
RESPOND TO EVERY REVIEW
Cars.com states that of its 800,000-plus dealership reviews, only 30 percent received responses. That means there’s a lot of room for improvement. There are specific tactics to take with different types of reviews – one to two stars, three stars and four to five stars. Each type requires a thoughtful, deliberate response. I see many dealers not bothering to respond to any reviews they’ve received. This is like someone giving you a compliment and you walking away without saying anything. It’s like someone calling you out for a mistake and you cowering waiting for the storm to blow over. Take the time to respond to every review. Building, sustaining and improving your dealership’s online reputation is not difficult unless you choose to make it that way. Even if resources are in short supply, there are things you can do to mitigate catastrophes. Set solid, achievable online reputation goals for yourself and your staff. Keep the momentum going by tracking your results. You’d be surprised how great things will go once everyone’s engaged. The conversation is happening with or without you.
KATHI KRUSE President of Kruse Control Inc. Kathi is an automotive social media marketing expert, blogger, speaker, coach and author. Her passion for the car business spans a 30-year career managing successful dealerships in Southern California. Kathi is the author of “Automotive Social Business – How to Captivate Your Customers, Sell More Cars & Be Generally Remarkable on Social Media.” Her Kruse Control blog is the leading automotive social media blog in the U.S. and Canada. Visit her website at KruseControlinc.com.
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MARKETING
STRATEGIZE HOW TO GET THE MOST
OUT OF CONFERENCE ATTENDANCE Great ideas don’t get magically implemented. Pick your sessions carefully, and plan how to push through the best suggestions. BY GLENN PASCH
E
ach month, car dealers are bombarded with promotions for conferences that market their ability to help improve the audience’s business practices. Full disclosure: My company puts on the “Digital Marketing Strategies Conference,” and I have attended, hosted and presented at various conferences in the automotive industry. My goal is not to write about the merits of various conferences, but rather to address problems I frequently see arising from conference attendance regarding information overload and the failure to implement seemingly great lessons learned. Most conference attendees arrive ready and eager to learn, and leave with notebooks filled with ideas and tactics offered by presenters. Yet, they struggle to implement these changes upon returning to their dealerships. Ultimately, dealer principals are unlikely to approve future conference registrations if they’re frustrated with a lack of ROI. Recognizing this danger, I have been changing my own presentations in ways I hope will make it easier for my audience to implement affect real change in their organizations.
ADVANCE EVALUATION, PLANNING ARE CRITICAL It can be really hard to strategize about applying what you have learned at a conference, once you’re back at work. Even if you’ve kept up with e-mails on the road, it seems as soon as you walk back in, everyone is at your desk needing help. Your catch-up list grows,
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then your daily routine takes over and in a few days or weeks, your conference notebook is buried on your desk. That great idea no longer seems that important; something else is the new shiny object. Preventing such a wasteful outcome is largely determined by the planning your staff does before ever leaving for the conference. Have you sat down with your internal team at the store to look over the speaker list and pick those workshop sessions that are most pertinent to your current challenges? I ask this because I see many attendees picking sessions by asking a colleague at the conference whom he or she is going to see. They need to already have identified workshops relevant to what their dealerships are striving to improve. Maybe you need a session on unifying your marketing messages, accessible leadership, Google Analytics, social media advertising or hiring the right employees.
STOP AND THINK AGAIN BEFORE YOU IMPLEMENT Okay, now you’re back in the office and ready to ram through the great suggestions you picked up at the conference. Slow down a bit. I propose focusing on these five questions before you try to implement any new policy or procedure.
1 - Why do you want to change? This may seem like a silly question, given that you’ve just heard a great speaker touting results at other dealerships that you’d love to have. You’re pumped up; isn’t it obvious that others at your dealership will be, too? I just challenge you to consider if this change will really help the dealership overall, or just make your job easier. Remember, any change you install will likely require adjustments in other areas, with other employees. When you present your idea, you need to recognize and suggest those adjustments.
2 - Is this change worth the time and effort? Even the best-laid plans will have short-term costs for your business. For example, installing a new tool to manage the sales floor may immediately affect your metrics and frustrate the sales team. Your case needs to hinge on the long-term benefits. For example, hiring more salespeople over the long haul should help your dealership sell more cars and retain more customers thanks to better service. Both the short-term costs and long-term benefits must be mapped out in your presentation.
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3 - Are you personally able to make this change happen? With all due respect, you may be a great mid-level manager, but upper management may not hear your voice. If you critically self-examine and conclude you are not the most effective person to head up this mission, then recruit someone else to be the advocate. Go discuss your idea and plan for him or her to bring it to the leadership table. But, if you are the right person to champion this change then be prepared to answer tough questions from upper management, and if they green-light the project remember there will be times you feel you are the only one passionate about it. That is fine; stay committed to the course.
4 - What or who is a roadblock to your success? Does your dealership embrace change, or are new ideas typically met with resistance? If the latter, anticipate which people stack up as skeptics and try to get them on your side early. Maybe you can even persuade them to be advocates for your plan. Remember, if you are not passionate about your vision with the execs or managers who appear to be roadblocks, then they will never buy into the plan.
5 - Are you set up to train, measure, require accountability and repeat? This is where the rubber meets the road. In order to have change, you must train correctly. I recommend you read my article on the eight-step coaching process, at http://bit.ly/1OpuVho. If you follow this coaching process, you will maximize effectiveness of your change-implementation efforts. You also need to ongoing accountability for the change and be willing to re-train until it becomes second nature. You have to agree on the right metrics to measure success. And, you personally must be ready to re-dedicate every day. Your team will watch your level of commitment to this initiative, and if they see you slip they will also. Soon, your once-great initiative will have failed, and you will be back to square one.
GLENN PASCH CEO of PCG Digital Marketing Glenn is a trainer at heart. He is a highly sought-after speaker, writer, coach and operations strategist, as well as a customer service fanatic. He has spoken throughout the U.S. and Canada, educating audiences on a variety of topics including business leadership, change management, digital marketing and the impact of this new technology on culture, business and society. Visit the website www.pcgdigitalmarketing.com
DEALER PROFILE
BANKING
W
ON A
NEW CUSTOMER
EXPERIENCE Bernie Moreno, founder and president of the Bernie Moreno Companies, draws upon his days with Saturn Corp. to build Ohio’s largest luxury auto group. BY CAROL WHITE
hen Saturn was founded back in 1985, it truly was a different kind of car company. Some would argue that it was a company way ahead of its time, and its success in the early ’90s seemed to indicate a bright future for the newest General Motors brand. Despite the company’s demise in 2012, it brought ideas to the automotive table that many dealerships are starting to embrace today. Saturn’s forward-thinking ideals and its teamwork philosophy are exactly what attracted a young Bernie Moreno to the company. As a college student, he interned two summers with Saturn and eventually went to work for the manufacturer for three years before making the move to retail. Today he still draws upon his days with Saturn and its avantgarde ideology to operate his highly successful Cleveland, Ohio-based Bernie Moreno Companies (BMC), formerly The Collection Auto Group. From its beginning in 2005 as a one-store Mercedes-Benz dealership in North Olmsted, Ohio, the organization has grown into a 16-rooftop company representing 24 brands, employing 834 people with 13,587 vehicles sold in 2014. Not too shabby for a dealership led by a Colombian native who moved to the United States at age 5 not speaking a lick of English. Moreno’s story is not your typical “coming to America” tale. “Both of my parents were wealthy,” he explained. “My mom thought we had it too good in Colombia and she didn’t want us to become useless trust-fund babies. So she rebooted our entire family.” In 1971, the Morenos gave up their farm, several houses, domestic help and drivers to move Bernie and his six older siblings into a two-bedroom condo in Fort Lauderdale, Fla., with his grandparents. Moreno remembers very little about his family’s well-heeled life in Colombia, but he does recall vividly being enrolled in kindergarten – not being able to speak English – with a teacher who didn’t speak Spanish. His mom, a hard-nosed, driven businesswoman, wouldn’t allow him to become the victim, so her advice was, “learn English.” “So I did, listening to Schoolhouse Rock!” he said laughing, breaking into a fine version of “Conjunction Junction.”
THE RELUCTANT DEALER Moreno’s love affair with cars began during his early childhood in Colombia. His father, a surgeon, is especially fond of Mercedes-Benz, and Moreno shares that passion for nice toys. So it seems fitting that his first dealership purchase was a Mercedes-Benz store in the Cleveland suburbs. Ironically, working for a dealership, much less owning one, was never on Moreno’s radar. His dream was to become the chairman of General Motors, which led him to attend the University of Michigan, from where many of the corporation’s executives graduated. “I never intended to work in a car dealership ever. Ever. Ever. Ever. In fact, I hated car dealers…I thought car dealers made the car-buying process horrible.” Moreno was on the fast track at GM, working for Saturn, when an executive from the Herb Chambers Companies in Boston approached him about joining the team as the general manager of its Saturn dealership. One thing led to another and next thing you know, the 25-year-old Moreno, who had zero experience in retail, was managing the company’s Saturn dealership. Because the Saturn brand was so unique and different, it made sense to hire someone who didn’t have the traditional baggage from another dealership, he said. Even so, “it certainly was a scary proposition for both of us. But it worked out really well, because that dealership 20
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became one of the most successful Saturn dealerships in the country, and one of the most profitable dealerships in Herb’s company.” Moreno eventually moved on to manage other dealerships within Herb Chambers Companies, and was the vice president of sales overseeing nine dealerships when the Mercedes-Benz dealership in North Olmsted became available. Again, owning a dealership was not on Moreno’s radar when the manufacturer approached him about jumping in the ring with a handful of other minority candidates to vie for the dealership. Having never visited greater Cleveland, Moreno thought it might be an excellent idea to go there to get a feel for the area before moving forward in the deal. He and his wife traveled to North Olmsted, stopping by the dealership – posing as car shoppers new to the area – to check it out and met a “Debbie Downer” salesman who strongly encouraged Moreno to run as fast as he could back to Boston. “He told me, ‘Cleveland had the worst people, the worst economy, the worst weather,’ and because it was a blue-collar town, nobody buys Mercedes. That was his sales pitch,” said Moreno.
of your experiences – good and bad.” Moreno is a firm believer in supporting the communities that support his company, which is why he has never taken a tax incentive to open a dealership in any of the 15 municipalities in which he operates. “We believe in making the community that we serve better than they were before we got there.” In addition to dealerships in Ohio, BMC has stores in Fort Mitchell, Ky., and Burlington, Mass. Construction will begin later this year on a new Infiniti dealership in Coral Gables, Fla., bringing the number of team members to well over 1,000
Moreno, adding that none of his stores are open on Sundays and every team member is given a company-paid day off each year to volunteer for a cause of their choice. “The work-life balance is critical. If it’s tipped too far to the work side, you just burn out that team member. We don’t want our people to be burned out. Our sales consultants work about 50 hours a week. That’s why we’re able to attract a lot of female team members.”
and sales in excess of $1 billion. “Our strategy now is to lay back and take a breather on the acquisition front. A, because we want to optimize what we’ve got; and B, dealerships are trading at ridiculous multiples right now. I prefer to buy low.”
processes into his dealerships. “What buyers of luxury cars are looking for is the experience,” he explained. “The product is already the best, so it’s about making the experience match.” This type of experience is one that Moreno feels also appeals to younger car buyers. “Those customers aren’t going to put up with a four-hour sales process. They’re not going to put up with a 40-minute sales process. They’re not going to put up with you not being on social media and not revolving around the way they want to buy a car. They’re not going to put up with a service experience that’s anything other than quick, simple and easy with a lot of technology baked into it. They just won’t. “The negotiation should be 30 to 60 seconds, and that’s it. If it takes you longer than that, you’re doing something wrong. It doesn’t mean we don’t negotiate, I’m not a believer in one-price, but I believe the negotiation should be quick, simple and seamless for everybody involved.” That’s an ideal that came from Saturn. General Motors might not have been able to take its “different kind of car company” to the next level, but Bernie Moreno Companies is taking many of Saturn’s philosophies all the way to the bank.
A ‘NEW’ BUYING EXPERIENCE Moreno has incorporated many of Saturn’s sales
“THE WORK-LIFE BALANCE IS CRITICAL. IF IT’S TIPPED TOO FAR TO THE WORK SIDE, YOU JUST BURN OUT THAT TEAM MEMBER. WE DON’T WANT OUR PEOPLE TO BE BURNED OUT.” A trip to a competing Lexus dealership down the street delivered a completely different experience to the couple. “My wife said, ‘It’s too bad you’re not buying a Lexus dealership,’ and I said, ‘No, we’re buying the right one.’” Moreno was able to convince the manufacturer that he was the right guy for the dealership, and with a loan and every penny he could muster he became the proud owner of a dealership on May 11, 2005 – a dealership that had sold only 24 cars in the previous four months. He brought with him about a dozen people from Boston, and recruited several from that competing Lexus dealership to help turn the store around. That same month, his team sold 80 vehicles and never looked back. “We were the largest Mercedes-Benz dealership in terms of units sold from May 1 to May 31 in 2005. Ten years later, we’re still the No. 1 dealer in the Midwest, and we outsell all our competitors combined,” he said. “I tell you, we have absolutely, bar none the best leadership team of any dealership group anywhere. I firmly believe that. I’ll put my guys up against anybody in terms of philosophy, effort, hard work, everything.”
RAPID GROWTH Shortly after the purchase of the Mercedes-Benz dealership, Moreno went into acquisition mode. “We had been a dealer for a whopping seven months already, so we knew everything,” he said, laughing, “So we bought a Porsche dealership.” From there, the company continued to grow at an insane pace adding mostly luxury brands, including Saab. “You learn more from your failures than from your successes, so we learned a lot with Saab. We lost $3 million, but I don’t regret it one iota. I wouldn’t change anything because you are an accumulation
THERE’S NO ‘I’ IN TEAM When Moreno speaks about his company, he always uses the terms “we” and “ours” to reflect the “team” philosophy. And don’t use the word employee – he hates that. “‘Employee’ insinuates a hired gun, somebody who’s just there for a paycheck,” he said. “I just wanted to do something different. The reason I went to work for Saturn was because that was their philosophy – the idea that you’re part of a team. I call it our company. We’re in the customer service business we’re not in the car business. We need our team members to be engaged, and that’s a key foundation. My job is to serve them and their job is to serve our clients. BMC’s culture has a lot to do with its less-than10-percent turnover rate, which is well below the industry average. That same culture attracts the younger talent coming into the workforce today. “Millennials care about quality of life,” said
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Closing the
GREAT DIVIDE By uniting sales and service, you’ll keep customers from falling between the cracks and in turn, create a loyal base of satisfied buyers. BY BRENDA STANG
A
few years ago, I was on a break at a Dealer 20 group meeting. It was after the service department review and there were more than a few dealers shaking their heads with frustration. One fellow in particular commented on the performance of his service department. His pain points? He knew he was missing out on a great profit opportunity in service but frankly he didn’t know where to start. His sales and service departments seemed to operate in two totally different worlds. He didn’t know where to start closing that gap. What he did know was, that if he could fix those two items, he could build an outstanding dealership and make a lot of money. I don’t know of too many savvy business people who would sink millions of dollars into a business that sets its departments up to conduct business at odds with each other, yet that seems to happen in so many dealerships. In many cases, sales and service relationships are full of friction and are divisive. The customer falls between the gaps and that is not a good thing. Closing the great divide between sales and service requires developing practices and behaviors that ultimately result in a great workplace culture, increased employee retention and increased customer retention. The end result is not only aligned sales and service departments but also increased profits that are sustainable. I’ve yet to meet a dealer who is allergic to that. Closing the gap doesn’t happen by accident, it happens by design. Here are some how-to points.
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GREAT WORKPLACE CULTURE Take a look in the mirror first. Did you really intend to build a business where the divide between sales and service creates the gaps that your customers are falling into? Dealers who are intentional about their culture and who make a priority out of clarifying their values get the business they deserve. Here are concrete steps to building your customer focused culture. • Culture starts at the top and it moves down through the ranks. What are your values, passion and purpose for your dealership? What does it mean to you to have a seamless business where customers are served and retained? What does it look and feel like? Are you living it and do your employees see it? The leader always goes first and they don’t preach, they lead by example. When employees see their leader, day in and day out, talking about and living their values they will follow. • Are you firm in your belief in the purpose and values of your dealership? Firm enough that you will hire people in alignment with them? Firm enough that you will offload the people who are pushing your dealership out of alignment? The action plan to conquer the divide will be carried out by the right people in place in your store. Put the extra care and diligence into hiring and bring on the right people the first time. • Share your story with your customers. The quality of vehicles is pretty well equal and everyone has great looking facilities with lots of cars, modern service and parts departments. Your prime differentiator is your people creating the great customer experience. Talk about what makes you different, the seamless process between sales and service and what that means to your customers and make sure that you do it every day.
INCREASED EMPLOYEE RETENTION Imagine what a dealership filled with the right people looks like. These are people who fit with your culture and are working in the right jobs and working to their strengths. Now, what are some things that can be done to close the divide and keep these people with you? • Help them understand the business model of your store. One of the industry statements is that nothing happens until a vehicle is sold. It doesn’t mean that the sales department is more important, it just means their role is to start the ball rolling. It makes them more visible, not more important. Service is equally important in that it provides the after-sale care. The care they give is important in the retention of the customer. They need to own this and be proud of it. The dealerships that get this right will rule the industry. • Have them walk a mile in each other’s shoes. When staff can have an understanding and appreciation for the roles in other departments they will find ways to support them in their work. Instead of looking for fault or placing blame they’ll ask more questions so they can understand and support. • Encourage after work functions that build teams. The Gallup Organization did a massive survey on workplace satisfaction and found that the workplaces that built teams and encouraged camaraderie had high levels of employee retention. Strengthening personal relationships between departments can only work to improve communication and create cohesiveness in the business.
INCREASED CUSTOMER RETENTION While it is true that sales creates a customer, service retains the customer. The stats are in and the customer has spoken. Seventy-six percent of people will buy from the dealership at which they are happily serviced. Dealerships that are able to seamlessly transition and
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76%
OF PEOPLE WILL BUY FROM THE DEALERSHIP AT WHICH THEY ARE HAPPILY SERVICED.
deal with customers between its departments will be more successful at retaining its customers. Here are some simple tips to improve those transitions. • Put a sales-to-service introduction in place so your customer knows what comes next. Don’t let them fall into the gap. The key to success with this is to have a consistent process that ensures every customer gets the same tour and information packet every time. Your goal is to make your service department highly visible and top-of-mind with your customers. A higher percentage of customers will return to service their vehicle and in turn will purchase another vehicle when the time is right for them. • When sales staff are talking with customers, are they mentioning the service department and the great maintenance services? If they are aware of customer issues with service, are they empowered to a certain level to fix it? If it’s beyond their scope, do they know who to elevate it to? The interesting fact here is that customers
who have had problems that are appropriately addressed, turn into the most loyal customers you will have. • Service retains customers in many ways. In many cases the service advisors will be the first one to hear when a customer is thinking of getting a new vehicle. The turnover to a sales consultant should be consistent and friendly. Everybody benefits from retaining this customer. Sales sells another vehicle and service keeps a happy customer in their service cycle. The biggest myth in our industry is that the great divide between sales and service cannot be closed. It’s there and just live with it. Too many dealerships accept the status quo and let it live on. This is good news for the dealerships that have figured out that they are in the people business and that the prime differentiator in their marketplace is their people and the impact they have on their customers. Close the great divide between sales and service in your store and your customers will stay with you for life.
BRENDA STANG Chief Shifter at Shifting Gears Training After 19 years in the dealership world, Brenda shifted a gear and started an organization to train and coach dealership managers. During her time in the Ulmer Auto Group she worked with GM, Toyota, Nissan, Dodge and Chrysler stores. As Managing Partner for two of the top GM dealerships in Western Canada for the past 14 years, Brenda worked with her management teams to develop and practice the best habits to be effective and efficient. Brenda is a Certified Trainer, Coach and Speaker with the John Maxwell Team. You can reach Brenda at LeadershipIsInfluence.com.com.
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SALES
Your Best New car buyers are
boomers
BY STEVE HOWARD
62.3%
of all new vehicles are purchased by buyers over 50*1. People age 50 to 68 are known in the marketing world as Baby Boomers. Boomers control 70 percent of the U.S. wealth and 50 percent of all discretionary income, which now averages over $24,000 per Boomer per year.*2 On the flip side of new car buying ability are the 15to-35 year-old millenials. 36.6% of millennials are unemployed and 36.5% still live with their parents*3. As an extra burden to this generation’s FICO scores, 2/3 of millennial graduates owe an average $27,000 for student loans. Limited disposable income is a key reason only 11.5 percent of all new vehicles are registered to millennials*4. Here’s a fact that every automotive sales consultant needs to know; 22 percent of all Boomer parents contribute financial upkeep for an adult child not in college*5. A millennial may be on the phone or in the showroom, but there may be a Boomer providing the down payment and influencing the decision. Unlike millenials, Boomers have a long-term love affair with their cars. The happiness Boomers get from cars runs much deeper and lasts years longer than almost anything else they can buy. After loved ones, Boomers love cars most. Cars represent freedom. Cars defined Boomers. Today, the vehicle Boomers drive is still silently telling the world who they are. Millennials use smartphones to meet new friends; Boomers used cars. Cars were the heart and soul of the early Boomer social experience. Boomer boys met
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Boomer girls slowly cruising Central Avenue on Saturday night in their cars. To maximize premium and luxury sales, ask questions to help Boomers relive those memories and feeling of open road ahead excitement.
IS YOUR SALES PROCESS GEARED TOWARD MILLENNIALS?
If you’re using a logically based sales process that focuses on offering the lowest monthly payments or negotiating a price acceptable for the buyer, you’re losing Boomer sales. Why? Boomers use emotions more than logic when making car-buying decisions. To sell the way Boomers buy, follow this proven six-step process.
CREATE TRUST
awareness of mortality jolts many boomers into buying the vehicle they really want. And this time they’re not going to compromises. Here’s where you become invaluable. Boomers need your listening skills and product knowledge to help them customize the perfect vehicle for their changing roles, physical needs and lifestyles. Let Boomers sit in the fit-like-a-glove heated driver’s seat and feel how it reduces the strain on the back and neck muscles. Help grandparents discover the road trip-ready, grandchildren-friendly onboard entertainment system. Show how Boomers can safely back out of their driveway without twisting their necks and watch as they move themselves up to the model with the rearview camera package.
With so many models, packages and technology available, the first thing Boomers shop for is a sales consultant they can trust. High trust trumps low price. Show a sincere interest, monopolize listening and encourage Boomers to tell you more.
REDUCE RISK
DETERMINE DESIRES
When you pull into fast-moving traffic, how important is quick acceleration?
Questions not only allow you to discover your buyer’s desires, they also allow you to create new desires. Questions like:
Every time Boomers buy new vehicles, they face five potential risks. The way to provide the greatest peace of mind is to help Boomers identify these risks and reduce each one to their satisfaction. One way to comfortably discuss risk is to ask questions like:
Now, when you demonstrate the blind spot wanting system, Boomers listen harder because emotionally, they already own it.
For most Boomers, safety trumps MPG. Boomers are old enough to know that any purchase that requires negotiating carries risk. Over the years, most Boomers have a losing record when negotiating with experts. Instead of negotiating to keep your gross by holding your price, review all the benefits each Boomer buyer wants. Every time you review their emotional benefits, desire to own them grows and the price seems less important.
CUSTOMIZE THEIR IDEAL VEHICLE
ELEVATE EMOTIONS
Have you every changed lanes at high speed then suddenly saw another car hiding in your blind spot? Did you ever wish there was a way to keep that from happening again?
Once Boomers come face-to-face with the scary fact they have more days behind than ahead, this sudden
Baby Boomers buy the vehicle that gives them the most emotional satisfaction they can afford. Boomers
must experience the fit and finish, smell and aromas; must touch the controls and visualize the joy of driving down that long and winding road. The more emotional benefits Boomers receive, the less they compare and the quicker they buy at full advertised price.
ATTAIN AGREEMENT
There are four indispensable benefits only you can provide: Your dealership, the greatest peace of mind, your buyer’s ideal vehicle and you. When Boomers want the four benefits your competition can’t provide, there is no need to negotiate because your competition has been eliminated.
FOLLOW-UP
Twenty-four hours after the sale contact your Boomer buyers and ask this question:
Are you 100% satisfied with everything?
No matter how small their dissatisfaction might be, do everything in your power to take care of it immediately. There is no faster way to create an unlimited supply of pre-sold Boomer referrals. This requires a daily investment of your time, but when done consistently it can pay phenomenal dividends for you and your loved ones long into the future. Millennials get a lot of attention these days because they are seen as tomorrow’s most important new car buyers. After they inherit almost $10 trillion from their living parents, Baby Boomers will continue to be best new car buyers you’ve ever had. *1 J.D. Power and Associates and AARP study *2 US Consumer Expenditure Survey *3 Pew Research *4 R.L. Polk research *5 Nielsen Company and Age Lessons study
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THERE ARE FOUR INDISPENSABLE BENEFITS ONLY YOU CAN PROVIDE: YOUR DEALERSHIP, THE GREATEST PEACE OF MIND, YOUR BUYER’S IDEAL VEHICLE AND YOU. WHEN BOOMERS WANT THE FOUR BENEFITS YOUR COMPETITION CAN’T PROVIDE, THERE IS NO NEED TO NEGOTIATE BECAUSE YOUR COMPETITION HAS BEEN ELIMINATED.
STEVE HOWARD Founder of No Pressure Selling® Steve is the author of Boomer Selling -- helping the wealthiest generation in history own your premium products and services. Boomer Selling is one of three VT programs that lead to No Pressure Selling® certification. For more information, please go to NoPressureSelling.com.
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VENDOR PROFILE
THE POWER IN NUMBERS W
ant to know whether Coca-Cola in a bottle or in a can sells faster? You can bet Coke bottlers know that information and a whole lot more, and armed with that information they improve pro�itability and operational performance. Since 1993, researchers who developed J.D. Power’s Power Information Network (PIN) have been striving to compile and make available to manufacturers and dealers that level of research data in order to help them do a better job, not only on a daily basis but also in planning week-to-week or month-to-month operational strategies. “Back then, the packaged goods industry had more information about the sale of a 20-ounce bottle of soda than some of the manufacturers had about a $20,000 automobile purchase,” said
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Matthew Racho, senior director of PIN at J.D. Power. Since its inception, PIN has provided PowerDealer, the platform that delivers the data to participating dealers, for free. It was originally delivered to dealers on a weekly basis in printed form, giving dealers lots of information to help them understand trends in the industry across the nation and also in their own marketplace. PIN and PowerDealer are now able to provide real-time information and decision-support tools based on the collection and analysis of daily newand used-vehicle retail transaction data from thousands of automotive franchises in the U.S. and Canada. “In the U.S., we have participating dealers in pretty much every designated market area across
PHOTOS BY LEE LANDERLITE
J.D. Power’s Power Information Network and PowerDealer are offering dealers the real-time insights they need to stay responsive and competitive in the marketplace. BY BARRY COURTER
PIN AND POWERDEALER ARE NOW ABLE TO PROVIDE REALTIME INFORMATION AND DECISION-SUPPORT TOOLS BASED ON THE COLLECTION AND ANALYSIS OF DAILY NEW- AND USEDVEHICLE RETAIL TRANSACTION DATA FROM THOUSANDS OF AUTOMOTIVE FRANCHISES. the country, broken into 34 markets and still growing,” Racho said. “The volume of those markets accounts for 74 percent of all retail transactions in the country.” Users of PowerDealer can log onto the site and quickly get an overview of either new- or used-vehicle sales at a glance, for example. Also, and they can compare monthly sales over the prior year in almost two dozen categories, such as average days to turn, ROI, percentage female/male, average buyer age and percentage �inanced. The dashboard page gives the same information in the form of a tachometer-type graphic. Racho said PowerDealer is just one tool dealers can and should use in conjunction with other specialized tools in assessing the market, but “I think what it does is provide the competitive advantage that will make a good new- or used-car manager a great one.” It does so by giving dealer principals and general managers a wealth of data speci�ic to their market. It gathers and collates the information without bias toward any particular �leet or market. “A particular dealer may have a wealth of their own data, but what is lacking is that competitive view,” Racho said. “We provide that data back
to them. We are committed to helping our clients use key intelligence to improve their operations.” Racho said that PIN has an alliance with the National Automobile Dealers Association (NADA), and that NADA has “reviewed our dealer agreement, understands it and they feel we handle the data and information in the right way.” In addition, NADA is using the data in its 20 Group Live Program to help participating dealers compare new and used vehicle sales performance in real time. PIN and PowerDealer offers three key elements for dealers, Racho said. “First is the timeliness, second is the breadth of the data, and third is that it is free to franchised dealers.” An example of how this might bene�it a dealer is in off-brand trade-ins. A Ford dealer who has a customer come in with a Fusion or an F-150 knows the trade-in and resale values of those vehicles, because he deals with them on a regular basis. He is likely less familiar with a Honda Accord or Nissan Altima, Racho said, and while he might know some values based on his own experience, the data can provide factual information regarding their value in that market. PowerDealer provides that dealer
J.D. Power’s Troy, Mich., regional office features a fun, unique, modern style throughout. Pictured: Main lobby
Matthew Racho, senior director of Power Information Network
with what those cars sell for in that market, in this case comparing that Honda Accord to those sold at non-Honda dealerships. This ensures a quicker, pro�itable turn. “Every market has its own nuance in terms of vehicles that perform better than others,” Racho said. Perhaps more importantly, PowerDealer allows dealers to see into the future a bit and adjust business strategies accordingly. If the data show, for example, that a particular car sells well or doesn’t sell at all in your market, plans can be implemented to take advantage of that knowledge. PIN began integrating its data collection with Google Maps, allowing dealers to see where in the region they sells a lot of cars or not many at all. “You can see certain cities and ZIP codes where volume has gone down, and recapture those opportunities before someone else does,” Racho said. GMs and principals can also use the website’s goal-setting element to set targets for the week or month based on the data at hand. Having that information available to the entire staff can go a long way toward getting everybody on board with the plan, Racho said. In response to the many requests heard from interviewing many of those dealers, PIN developers are continually working on updating the system and adding value. “We’ve spent a signi�icant amount of time at key industry events and gone out and knocked on doors asking dealers what they want to see,” Racho said. Dealers are asking for more granularity, and more speci�ic insight into their particular store’s performance, more insights and understanding as to what the potential drivers of increased pro�itability in their market is. They also want to use the data in conjunction with, not as a replacement for, other sources of data already used by the store.
From left to right: Tom Petro, senior director of marketing; Sarah Krause, account manager, PIN; Kristine Rosychuk, supervisor, marketing; Matthew Racho, senior director, PIN; Max Canevari, account manager, PIN; David Thill, director, PIN.
J.D. Power opened its second regional office in Troy, Mich., where the Power Information Network is housed.
More than 170 employees work in the Troy, Mich., regional office of J.D. Power.
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TO SAY NOT IN SALES OR BUSINESS
SALES
WHAT
Being agreeable with your customers is crucial to closing more deals. BY GRANT CARDONE
Y
ou can never expect someone to agree with you if you are disagreeing with them. This is vital – and is the single most important and violated rule of selling! You may think, “I don’t want to mislead the customer,” and “What if I over promise and I’m unable to deliver?” There’s an art to telling the customer, “I’d love to make that happen for you” rather than, “I can’t do that” or, “That’s not my job.” And you can disagree in more ways than just saying “No”. There are many other statements you should never say, under any circumstance, during a sale or in business. You must agree as you are writing deals – don’t fight the deal. Here are seven things to never say in sales or business:
“I’m off today.”
Have you ever tried to contact someone, only to get an “out of office” automatic response? It’s so impersonal and drives me nuts! No one should ever announce they are closed off to opportunities. You need to be doing whatever it takes to be open for business, no matter what, no matter when. If a customer calls you and you are out of the office, you must still be open for business. Look, I understand: I’m a father and a husband and there are plenty of times I’m in 10X mode giving full attention to my family. However, business is still getting handled – Tweets are coming in, Facebook posts are going out – and people who are trying to reach me have no idea I’m playing with my daughters or on a trip with my wife. I’m still always connected.
“That’s not my job.”
You need to take responsibility for everything, whether it’s in sales or your personal life. Don’t blame others, don’t blame the economy and don’t blame external conditions, because blaming is something you do to become a slave. It doesn’t work; it ties you up in shackles. The greats gave up the blame game long ago – they’re big on accountability, big on “the buck stops here,” they take the responsibility to get the job done. If you are willing to take credit when you win, be willing to take responsibility when you lose.
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“Trust me.”
Sometimes, you may notice that a buyer isn’t fully listening to you. This occurs because the buyer assumes that as a salesperson, you cannot be trusted. The media is constantly running broadcasts about scams and cons that make consumers skeptical of salespeople. This lack of trust will cost you sales, and losing credibility will add time to and reduce your chances at a sale. Saying “Trust me” to a prospect isn’t going to build trust and may even have the opposite effect. To deal with that, you must understand that people believe what they see, not what they hear. Always show written material to support your presentation or proposal. When you’re collecting facts for your customer, use third-party materials that support what you’re saying. And always, always, always write down what you’ve said, offered, proposed, promised, implied and suggested. Anytime you’re going for the close, insist on putting it in writing.
“I’ll be right back.”
Car salespeople are notorious for leaving their customers and going back and forth to their managers to check on one thing or another. This is the greatest pet peeve of car buyers. This back-and-forth creates undue antagonism in the negotiations, lowers perceived value, reduces customer satisfaction and extends the closing time. This does not mean that there is not an appropriate time to leave a buyer and use an authority for a close, as this can be very powerful as long as it is not overused.
“No, I don’t use this product or service personally.” Until you become convinced of the value, others will not agree with you. If you’re working for Toyota, pitching its cars all day and then a prospect sees you drive off in a Ford, you will lose credibility and trust – and no one buys from someone they don’t trust. Conviction is the make-or-break point, – and a sale is made when your conviction and belief about a product, service or idea is stronger than another’s. The moment that they give up a bit of their conviction is when the sale becomes possible. You must be completely “in” if you are to fully maximize opportunities before you. Do not even attempt selling someone else until you are completely sold yourself.
“This might be out of your price range.” What you decide about the customer, employee, individual, opportunity or situation will be exactly what you get. In selling, anyone who believes they have the ability to pre-judge a buyer vs. a non-buyer is costing himself a fortune. I have had countless situations when I was told there was no way a deal would work out, but because I treated the buyer like they could, guess what? They did. Regardless of the circumstances: – no money, no budget, no taxes, not the decision maker, can’t, won’t, not gonna – whatever they tell you, always treat a prospect like they can and will buy.
“We're competitive.”
Dominate, don’t compete. The message of “competition is healthy” was meant for consumers. When Steve Jobs wanted to get into cellphones, the people at Apple told him to stick with iPods and to leave the phone alone. He responded, “I’m going to make a phone so sexy, people will want to lick the buttons off the phone.” The iPhone is the single most popular smart phone on the planet. When someone thinks of a smart phone, they think of an iPhone. You want to dominate a space that way. You need to become an expert in your field and use LinkedIn, Twitter, Google+ and other means to be the first person people think of when they look for your type of product or service. All of these are forms of disagreement and are ways to make the customer lose faith in you, your product or your service. You won’t close deals if your customer doesn’t believe in you. Agreeing with the customer means control over the sale, a happier customer and quicker decisionmaking. Miracles take place out of agreement.
THERE’S AN ART TO TELLING THE CUSTOMER, “I’D LOVE TO MAKE THAT HAPPEN FOR YOU” RATHER THAN “I CAN’T DO THAT” OR, “THAT’S NOT MY JOB.”
GRANT CARDONE Entrepreneur and New York Times best-selling author Grant, a national speaker and motivator, is a respected, highly regarded master salesperson whose passion is to teach people how to sell themselves, their products and services regardless of economic climate. His books, audio packages and seminars provide people of all professional backgrounds with the practical tools necessary to achieve high levels of success. Follow him on Twitter @grantcardone.
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FIXED OPS
WHAT THE
INDY 500 CAN TEACH DEALERS
Watch how race teams pursue vision, define own career paths and dress the part. BY JEFF COWAN
M
y first love, outside of my family, is the Indianapolis 500, “The Greatest Spectacle in Racing.” While the race (to be run again on May 24) is massive entertainment, you can learn some highly valuable life and business lessons along the way – if you pay attention. Taking a look back over the past few decades, let me share some of these very valuable lessons.
1)
The Indianapolis Motor Speedway had sat idle during World War II due to rubber and gasoline restrictions. Even though weeds were growing through the track and grandstands were crumbling, post-war track owner Tony Hulman still spied opportunity. He not only restored the track but also improved it, with newer and nicer seating and race speeds second to none in the world. Each year that the Hulman family has owned the speedway, they have invested in significant upgrades.
LESSON LEARNED: In business, as in life, you must have imagination and vision.
2)
A.J. Foyt is one of the greatest drivers in the world, and in 1977 at age 42 – a time of life when most drivers walk away from the sport or are pushed out – he showed the world he was not done. He became the first four-time winner of the Indy 500, in a car that he built himself. He drove in 35 Indy 500s by the time he retired in 1993 at age 58, ignoring calls from many to hang it up.
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LESSON LEARNED: Control your career so that you may control the results.
3)
Roger Penske is practically synonymous with the Indy 500, as the winningest team owner (15 races), speed records, innovation awards, etc. He has done it with remarkable class. I remember his as the first teams to “dress up” the raceway pit and garage areas. His teams arrived well groomed, with starched buttondown shirts, creased slacks and well-shined shoes. Plus, Penske wanted no drivers and crew who moonlighted at other races and in other series. He recruited people whose only goal was winning at Indy and held them accountable.
so cold the race nearly was postponed. And, Unser drove a car that was untested on big ovals for 500 miles at top speeds. Many felt teammate Danny Sullivan and Unser would be lucky to make it to the halfway point. Instead, Unser, who said beforehand he felt “a little lucky,” won the closest Indy 500 ever by 0.043 seconds.
LESSON LEARNED: Even when it seems no one else does, you must believe in yourself to achieve.
LESSON LEARNED: You must look and act the part in order to be taken seriously.
4)
Al Unser Jr. won the Indy 500 on his 10th try, on a day no one expected him to do well. There were 10 past Indy champions in the field that day, with temperatures
JEFF COWAN President of Jeff Cowan’s Pro Talk Inc. Jeff, in his 28th year of training, is recognized as the creator of the modern-day walk around and selling processes for service departments. Currently partnered with NADA, EasyCare, NCM, MPi and other vendors and manufacturers, Jeff is the nation’s authority when it comes to training service advisors and service support staff. Visit his website at AutomotiveServiceTraining.com and sign up for free, weekly training.
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REVEAL THE PRINCE ON
YOUR USED CAR LOT.
Learn how to certify your Other Makes & Models at: motortrendcertified.com/royal or call 888.965.2924
©2015 Automobile Protection Corporation-APCO. EasyCare is a registered trademark of Automobile Protection Corporation – APCO. MOTOR TREND® is a registered trademark of TEN: The Enthusiast Network Magazines, LLC.
FIXED OPS
BACK TO BASICS
Knowing what is expected of the F&I manager translates into more fluid deals and higher profits for all departments. BY ARZU ALGAN
T
he main responsibility of the finance manager is to protect the deal. Sale of the vehicle should be the primary objective, and that includes ensuring that negotiations go as smoothly as possible. This can be accomplished by separating the vehicle sale from the finance sale and avoiding any conflicts in between. There are, however, several key factors for which you bear the responsibility in securing the vehicle sale. F&I managers have a high level of responsibility tied to their position, as they serve as a model representative for the dealership. Appearance is the first thing people notice, and it makes a difference in a customer’s initial perception. Equally important are your attitude toward others and your personality. An F&I manager should always strive to behave respectfully, personably and professionally. Part of professionalism is the environment to which the customer is welcomed. It is a proven fact that decisions are based mostly on the impressions that the finance manager, and his or her office, gives. To do this, the atmosphere of the office should be calming, classy and pleasant. You can achieve this atmosphere by maintaining a clean office and comfortable seating, and keeping the decorations simple and professional but with a splash of one’s personal life to create an inviting environment. All tools, brochures and evidence manuals should be within reach. After all, the more comfortable a customer is, the more relaxed and receptive they will be to your professional expertise. It is your job to be your customer’s advisor, his confidant and his helping hand. Since he or she just purchased a vehicle, it is important that the finance manager help safeguard the newly acquired investment to the fullest extent possible. If the finance manager truly cares about the customer’s protection and believes in what is being presented to that customer, then it shows and establishes a connection that leads to additional product sales. The finance manager is in charge of presenting customers with all of the applicable products the dealership has to offer, without exception. It is very important that F&I managers are aware of all the services and products offered by the dealership, and that they can accurately describe them. Finance managers must be both knowledgeable and ethical when offering any product
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The finance manager is in charge of presenting customers with all of the applicable products the dealership has to offer, without exception. or service. A customer’s confidence in your knowledge will lead to his or her trust and, in turn, sales. It is the finance manager’s responsibility to know and follow both federal and state laws regarding sale and financing of the vehicle. Always fully disclose every aspect of the deal to the customer, for the protection of the dealership. It is also the finance manager’s job to generate, complete and double-check all necessary DMV, dealership and loan or lease documents before authorizing delivery of the vehicle. Even seasoned F&I managers should have a checklist to make sure all documents are properly completed and signed before the customer leaves the dealership. Earning the trust and respect of your lenders is vital; never do anything to betray that trust. Do enough research on your lenders to get to know their underwriting guidelines, and qualify your customers under these guidelines. Ask what the most common dealer mistakes are. It is less costly to learn from the mistakes of others than to make those mistakes yourself. Ask what the lender’s specific requirements are for approvals. The more you know, the better you can structure your deals to meet those requirements. Successful achievement of potential F&I profit is dependent in large measure on how well a dealership’s sales department and finance department internally relate to one another. To work well with the sales management team, a finance manager should build and maintain a successful and professional relationship with them. They are, in essence, two sides to one coin.
Vehicle sales and front-end gross are the responsibilitiesof the sales department; however, back-end profit, legal paperwork, credit approval and authorization of delivery are the responsibilities of the F&I department. In order to maximize the total profit, both departments must work together on every deal. There are problems that can arise when it comes to these two departments. One reason you lose profits is because either the finance department didn’t lay out or fully explain all the services and options available, or the sales department did a poor job in acquainting a customer with the representative from the finance department. Problems differ in each dealership, but it is vital they are dealt with and resolved quickly and effectively to raise the profit margin of both departments. Proper introduction is vitally important when it comes to transitioning a customer from the sales floor to the F&I department. The smallest comment with a negative inference from the salesperson can leave the finance manager to discuss the possible services in an unfavorable environment. The finance manager must also refrain from making negative comments about members of the sales team. The salespeople are very important to the dealership in general and the finance department in particular. Their job is what starts the process, and without their sales, no one else would have work. They are also the ones who build initial rapport with their customers. What they say about you helps to influence the opinion of the customer regarding you and your department. Salespeople must have confidence that their finance managers will support them in securing the vehicle sale and trust the finance manager to protect the front-end gross profit. If a finance manager really wants to improve his or her relationship with the sales department, attending sales meetings could be a key component. It lets the salespeople know that the finance department takes them seriously. It also gives the finance manager an opportunity to share his or her processes with the sales department. Knowing how things work allows the salespeople to be more confident when recommending dealership financing and finance products to their customers. Let them know that you have the same goals by being quick and efficient in completing the F&I process and by turning the customer back to the salesperson to deliver the vehicle in a timely manner. Management meetings give the dealer a chance to review successes and failures with each department and solve problems. It is important for the finance manager to attend management meetings, because it gives the finance manager an opportunity to learn the operations of the other departments and to understand their problems and accomplishments. This perspective often leads to better communication. The business office is another important department of the dealership. That office manages the dealership’s transactions, so it is very important for finance managers to respect and maintain a great professional relationship with them. Be meticulous and organized when filling out paperwork going to that office. An error in paperwork can be a major source of frustration for your co-workers and can damage the reputation of the dealership with the customer. Success requires teamwork and everyone’s best efforts. Each department has a part that is essential to the sale of a vehicle and you should do all you can to make things go smoothly, not only in your own department but also in the others. Prove that your dealership is managed as a real team.
ARZU ALGAN Dean of Education at Automotive Dealership Institute Algan has been creating and teaching F&I curriculums for more than 27 years. She has been the dean of education at ADI, located in Scottsdale, Ariz., since 2004. ADI is the nation’s only licensed and accredited diploma-granting F&I school, with professional job placement in all 50 states, averaging more than 93 percent job placement every year for the last nine years. ADI offers fully trained F&I managers to franchised dealerships at no cost. Visit the website at http://www.autodealerinstitute.com.
TO SEE MORE FROM ARZU ALGAN GO TO CBTNEWS.COM
AUTOMOTIVE NETWORK ANNOUNCES
SERVICE DRIVE
Jeff Cowan
TODAY.COM
Don Reed
Lee Harkins
Online Daily Newscast
Anne Fleming
CBT AUTOMOTIVE NETWORK IS PROUD TO ANNOUNCE TWO NEW VENTURES IN RETAIL AUTOMOTIVE! ServiceDriveToday.com, an online news source, and Service Drive Magazine, a monthly print publication, brings Dealers, GMs, Service Directors and Fixed Ops personnel the news, information, trends and training tips they need to operate a smooth and profitable service department.
Brian Pasch
ServiceDriveToday.com reaches more than 50,000 Servi service personnel each day, while Service Drive Today magazine is delivered to more than 17,000 Fixed Ops Directors and Service Managers in the U.S. and Canada. Access to the industry’s top Fixed Ops Trainers and Consultants is now just a click away. Monthly Magazine
Drive more service profits with Service Drive Today! Rich Holland
Go to ServiceDriveToday.com and sign up for your free subscription. ServiceDriveToday.com is a member of the CBT Automotive Network
Jim Fitzpatrick
Founder and CEO of CBT Automotive Network
CBT AUTOMOTIVE NETWORK ANNOUNCES 3 NEW VENTURES: SERVICE DRIVE TODAY.COM, SERVICE DRIVE MAGAZINE AND CBT CONFERENCE & EXPO The first quarter of 2015 has been very busy for the CBT staff
Last month our team had the opportunity to attend the NADA/J.D. Power Automotive Forum, the New York Auto Show and the Innovative Dealer Summit where I was fortunate to meet with and interview some of the top
In addition to the newscast, ServiceDriveToday.com will have programs covering all areas of your service operation. For instance, “Weekly Tune Up” with Jeff Cowan will deliver best practices, training tips and interviews with
executives from auto manufacturers, as well as thought leaders and innovators in the auto industry. These events were buzzing with excitement about the state of automotive retail and the future of our great business. It is on FIRE and will only get stronger in the coming years.
people who will help you move the needle in your service drive. “Auto Marketing Now” with Brian Pasch will tell you what works and what doesn’t work when it comes to connecting with those hard-to-find service customers.
We at CBT Automotive Network are proud to do our part in promoting the best interests of retail automotive. We have been busy building a media platform to help you run your dealerships more efficiently and much more
Service Drive magazine is the perfect complement to ServiceDriveToday.com. Along with the insightful and relevant articles that
profitably. I am excited to tell you about all the great things happening here at CBT Automotive Network. L et me start by telling you about our amazing growth over the last two and a half years. CBT now has more than 100,000 subscribers throughout all of North America. From Toronto, Canada to Miami, Fla., we have truly become the official news source for the retail automotive industry. On One year after starting CBTNews.com we decided to launch Car Biz Today magazine. Ever since our first issue back in January 2014, dealers and fixed ops directors have asked, “What about the service department? Will CBT offer a website, daily newscast and magazine designed specifically around
are found inside the covers each month, we will spotlight a dealership and dig into what makes their shop a success. In addition to receiving a free, printed copy of Service Drive magazine, you’ll be able to access every issue on the website. But that’s not all that we’ve got going on at CBT Automotive Network. Last month we announced we will be hosing the first CBT Automotive Sales, Service and Marketing Conference & Expo in February 2016 right here in the heart of the Southeast – Atlanta, Georgia!
the needs of the men and women working in the service, parts and collision centers at new car dealerships?”
Unlike other automotive conferences that
Well, you will be happy to know that this month, CBT Automotive Network is launching another great resource for new car dealers and their service department personnel – ServiceDriveToday.com.
Marketing Conference & Expo will have something great for every member of your dealership team. Later this year we will be announcing the world-class speakers who will educate you on the latest things happening in
Much like CBTNews.com, ServiceDriveToday.com will provide service managers and parts and collision center managers with news, information, best practices, in-depth interviews, training tips, and so much more.
deliver industry news and updates that affect dealers’ fixed operations. From safety and compliance issues to sales and marketing techniques, they will provide the news your service and parts department can use. We will feature all of the top trainers and consultants in the fixed operations business including Jeff Cowan, Don Reed, Lee Harkins and Chris Collins just to name a few.
CBTNews.com
all areas of the retail automotive industry including leadership, management, sales, service, marketing, F&I, BDC, leasing, customer service and so much more. We chose to hold our first conference in Atlanta for a few reasons. First, Atlanta is our hometown! That’s right – the CBT studios and executive offices are located in Atlanta. Second, it’s one of the easiest places to get to from any other city in North America. Hartsfield-Jackson Atlanta International Airport is the second busiest airport in the world and is the hub for Delta airlines. Third, Atlanta is an amazing city with awesome people.
ServiceDriveToday.com will feature a daily newscast featuring CBT’s very own Bridget Everett and Russell Brown. Every day Bridget and Russ will
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focus on one or two areas of your dealership, the CBT Automotive Sales, Service and
CAR BIZ TODAY MAY 2015
It’s
also
home
to
the
world-famous Atlanta Braves, Atlanta Hawks and the Atlanta Falcons, not to mention the College Football Hall of Fame and Fan Experience, the World of Coca-Cola and the world-renowned Georgia Aquarium. Did I mention the temperature in our fair city often gets as high as 65 degrees during February? It might just be the nicest place to live or visit in the U.S. Be sure to mark your calendar for February 9-11. We hope to see you at the CBT Automotive Sales, Service and Marketing Conference & Expo!
HOW DO YOU FIND NEW CUSTOMERS? Everywhere I go, I converse with people about their vehicles and find out what they would change in their current car to be their dream car.
SALES SUPERSTAR
WHAT’S THE GREATEST CHALLENGE IN YOUR POSITION AND HOW DO YOU OVERCOME IT? In the
subprime department, the biggest objection is and always will be the banks. I overcome the objections by finding the right car, walking the lot every morning, and knowing not just the manufacturer I work for but most vehicles on the road.
NAME: EDWARD MACEDO DEALERSHIP: NIELLO VW
TO WHAT DO YOU ATTRIBUTE YOUR SALES SUCCESS?
LOCATION: SACRAMENTO, CA
My father. He is, in my eyes, bar none the most dedicated and motivated man in the business.
FAMILY: Daughter, Elyse
WHAT MOTIVATES YOU? My daughter
HOW MANY UNITS DO YOU AVERAGE A MONTH?
WHERE DO YOU FIND INSPIRATION? Whenever
My 90-day average is between 17 and 20. I also have had days when I have sold three to five in one day. Last year was my second full year in the auto industry, and I sold 203. HOW MANY UNITS DO YOU AVERAGE A MONTH? 17 HOW MANY YEARS IN THE AUTO BUSINESS?
the military and I say it daily, and in sales it is all about communication. “Poor communication leads to poor execution.”
WHAT ARE YOUR INTERESTS/HOBBIES OUTSIDE OF THE DEALERSHIP? I really enjoy working out and
hanging out with family.
NOMINATED BY RAY CHACON
Eight months
WHAT MADE YOU WANT TO BE A SALESPERSON IN THE AUTO INDUSTRY? Growing up, my father was
a finance manager. I lived a great life where my dad never missed a football game and we always took family vacations, and I want to return the same great life I lived to my daughter. WHAT DO YOU LIKE MOST ABOUT JOB? Hearing every customer’s story.
the job gets tough or I start to lose mental focus, I remember what I went through in the military and realize that I have been through worse and nothing will ever be as difficult mentally, physically or emotionally.
WHAT ADVICE WOULD YOU GIVE SOMEONE NEW TO AUTOMOTIVE SALES? There is a phrase I learned in
YOUR
I am writing you in regards to a sales superstar who works at Niello Volkswagen in Sacramento, Calif. He joined the Army infantry at the age of 18 and toured in Afghanistan in close combat, seeing the unthinkable. He has a 5-year-old daughter who keeps him motivated above all else. He’s been the top man at Niello Volkswagen for the past seven months and he has only been in the business for nine months. He receives high CSI scores and averages about 20 cars a month at a Volkswagen dealership. He is a true professional and hero. Who’s Your Superstar? Do you have a salesperson who pushes the envelope each month and consistently lands at the top of the leader board? Does one of your professionals make considerable contributions to your community while maintaining a lead position in your dealership? We want to know! Send your nominations to the editor at newsroom@cbtnews.com and let us know why he or she is your store’s Superstar!
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ON THE SET WITH
AUTOMOTIVE NETWORK
Sandy Schwartz, President of Cox Automotive; Peter Welch, President of NADA; Bill Fox, Chairman of NADA; and Forrest McConnell, 2014 Chairman of NADA
Erich Gail, COO of Cardinale Auto Group
Jonathan Collegio, VP of Public Affairs at NADA
Michael Brown, Partner/Owner of Atlantic Auto Group
Avi Steinlauf, CEO of Edmunds.com
Colorado Innovative Dealer Summit Tim Barnett Jr., Sales Manager at Steve Rayman Chevrolet in Marietta, Ga.
Russell Brown of CBT News, Vince Santivasi of Zurich and Bridget Everett of CBT News
Jeremy Anspach, CEO and Founder of PureCars
Phil Sura, VP Automotive at UnityWorks Media
Mark Tewart of Mark Tewart Enterprises
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CBTNews.com
Tony Dupaquier, Director of F&I Training at American Financial and Automotive Services
Jeff Coats, CEO and President of Autobytel
CAR BIZ TODAY MAY 2015
Randy Henrick, Associate General Counsel at Dealertrack
Tim Jackson, President of the Colorado Automobile Dealers Association
Zach Klempf, CEO of Selly Automotive
Larry Bruce, Founder, President and CEO at OnlineDrive
Jack Simmons, New Dealer Training Manager of Cars.com
CNCDA Recommends DealerVault
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Contact DealerVault to Protect Your Dealership DMS Data www.dealervault.com | 877-834-2451 | sales@dealervault.com
ASK THE ?
PROS
A
t CBT News, we are fortunate to partner with the best trainers in the industry. Whether it’s information on sales,
F&I, marketing, management or fixed ops, our contributors are the go-to professionals for reliable, relevant advice for dealership personnel. You have access to the foremost authorities in the retail automotive industry. Need a new closing technique? Wondering what’s the best way to increase sales in the service lane? Send us your questions at AskThePros@cbtnews.com. We’ll forward your inquiries to our ensemble of experts.
Q
MY DEALERSHIP JUST ANNOUNCED THAT IT WILL BE TRANSITIONING TO A NO-HAGGLE SALES PROCESS. FOR THE MOST PART, I’M EXCITED ABOUT IT, BUT I’M CONCERNED ABOUT LOSING SOME OF MY BEST SALESPEOPLE. DO YOU HAVE ANY ADVICE ON HOW TO ADDRESS THE ISSUE WITH THEM? Marvin S., Brunswick, Ga.
A
Sanjay Prakash, General Manager of Town & Country Toyota/Scion: While recruiting and retaining quality sales professionals remains a challenge in most dealerships a shift in sales philosophy to one-price, no-haggle shouldn’t make this task harder. In fact, if rolled out correctly and with thought, retention can actually increase. Think about it from a guest’s perspective: if a sales associate is evaluated on volume and has the ability to improve a commission percentage or achieve a big bonus at month – end for hitting 20, how different is the level of pressure he or she will apply to that guest who happens to be the 20th on the last day of the month versus the first guest on the first of the month? Now from a sales associate’s perspective, how uncomfortable is their life coming to work knowing that if they don’t sell a car and hit their target they will lose their bonus, miss their fast start goal, or even lose their job. Both scenarios are equal in “pain points” within a dealership and can cause dysfunction. By setting up a well-thought-out sales process that you can hold associates accountable to, attracting, hiring and training people who have the capacity to please customers and paying them fairly, then the byproduct of this will be improved volume. We keep paying based on raw sales rather than the actual activities that are attached to what our customers really want: • A credible person to act as a knowledgeable consultant • A good listener who can put the needs of the client first • A high sense of urgency so the transaction or shopping event doesn’t take six hour • A professional who follows up based on the clients
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CBTNews.com
CAR BIZ TODAY MAY 2015
communication preferences; Email, cell, text, snail mail • A full knowledge of inventory and product
The sales associates in the store currently must understand why you are changing the process or culture and be a part of the solution. By simply mandating change and dictating what you think the outcome will be is simply unrealistic. The current team should be part of the architecture process so they have a buy in. Allow them to develop the solutions to the areas that need improvement so they have a vested interest in the success, and pay them for that. They will feel like they participated in the building of the structure and be proud of it. If we only focus on volume, your results will become one-dimensional. Focusing on all the activities that actually lead to a sale are more critical as it leads to increased margins, better CSI, happier associates who aren’t forced to go into uncomfortable negotiations. The real retention key is to design the pay plan around your volume objective and, of course, tie their pay to it, but also to the activities listed above and allow the process to mature. Success will not occur if the pay plan isn’t given time to develop your results so patience is very important. Equally vital in this new environment will be the ability to adapt and stay nimble. If components of the plan aren’t showing results, then don’t be afraid to make slight adjustments. Also, when transitioning to a new process like no-haggle it is important that you let your sales team know that this is to help them sell more vehicles as well because it simply makes their job easier by focusing on what customers want and staying away from the uncomfortable parts. Sales associates not capable of seeing your vision or unable to change are not associates you want anyway. They may be great folks but if they cannot carry forward your mission and execute at a high level then maybe you should promote them to customer!
Q
WHAT IS THE BEST WAY FOR F&I TO DEAL WITH A CUSTOMER WHO SETTLES ON A VEHICLE AFTER EXTENSIVE SHOPPING, AGREES TO A PRICE, BUT THEN FINDS OUT, BECAUSE OF THEIR CREDIT SCORE, DOESN’T QUALIFY FOR THE TERMS. Patricia M., Bakersfield, Calif.
A
Jenn Reid, Sr. Director of Product Marketing, Automotive Services at Equifax: The ideal state for an F&I manager is to be involved throughout the sales process so they have an opportunity to meet the customer, understand their situation and therefore help the sales team get to the right terms to mitigate qualification issues. If a customer interview is not already part of the sales lifecycle, I would highly recommend incorporating it into your process. That being said, there will be times where deals do not go as anticipated, and the key focus needs to be on taking care of the customer, and finding a solution that meets both their driving and budget needs. Some recommendations are: • Talk to your lender and make sure you are clear on why a customer did not qualify. Ask if there is additional information needed, or if are there adjustments to the deal that can be made in order for the customer to qualify. • Determine if the current deal can be reworked so that there are options provided to meet the customer’s goals. Example: Can additional cash be put down, terms lengthened, cosigner added to the deal, retail payment be quoted versus a lease, rebate taken versus the special APR? • See if there are vehicle alternatives that can meet
the customer’s parameters. Example: CPO vehicle instead of a new purchase, lower trim level, demo vehicle with some miles on it. • Be honest with the customer about why they did not qualify. Validate the customer’s needs versus nice-to-haves, present them with options and ask which works best for their situation. • Ask the customer if they have any questions, and talk through any concerns they have. • Reassure the customer that your goal is to help them get into a vehicle that meets both their driving and budget needs.
No one likes to hear that they do not qualify, particularly in a perceived stressful situation. It is important that dealers try to make customers feel comfortable and respected. Remember, you do this every day – customers don’t – so be professional through the entire process. This will help dealers to close more deals, and earn loyal customers.
Q
HOW DO YOU HANDLE A CUSTOMER WHO WALKS IN WITH A LOW-BALL PRICE ON A VEHICLE FROM A DEALERSHIP DOWN THE STREET? Harvey W., Cedar Rapids, Iowa
A
Grant Cardone, Entrepreneur and New York Times best-selling author: Attitude is more important than the product or the price. I’ve had customers who come in, determined to pay the “fair” price for a vehicle. But I know they aren’t worried about price as much as they are worried about a great experience. I had a guy who wanted a truck, but didn’t want the dealership to make any money off of the deal. To him it was fair that he only paid the invoice for the truck. This makes no sense, of course, because if the company sold its products for invoice then it wouldn’t stay in business to service customers. I trusted the customer would pay for my positive, can-do, agreeable attitude –remember, always, always, always agree with the customer. So I told him, “No problem, whatever you want, it’s yours, my friend. I just appreciate having the opportunity to do business with you.” He was shocked by my response and the smile I had on my face – and I hadn’t let him get under my skin. I spent time with him, showed him the truck, got to know him – even laughed with him – and remained a positive influence throughout the whole interaction. I treated him as if he was about to give me $1 million – always treat the prospect like they can and will buy, regardless of the circumstances. I put aside the fact that he didn’t want to pay more than invoice and pushed everything in the direction of a great attitude. At the close I showed him the documented invoice for the truck, with state taxes of $4,000 and another $2,000 for me to take care of him for the next four years. He looked at me and said; “I know I can buy this down the street without paying the extra two-thousand.” And with a smile I responded, “You’re probably right, but you won’t get me down the street.” He laughed and said, “I don’t know why I’m doing this, but let’s do it,” signed the invoice and wrote the check. Remember, there is no treasure greater than a great attitude and no way to get real treasures without having a great attitude.
I trusted the customer would pay for my positive, can-do, agreeable attitude – remember, always, always, always agree with the customer.
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