OFFICIAL PUBLICATION OF THE PUGET SOUND AUTOMOBILE DEALERS ASSOCIATION
Auto Ad Strategies page 11
Great Sales Skills page 27
Appraising Your Operational Systems page 33
Dean and Alan Anderson Centered in Burien Page 20
Reduce Your Medical Benefit Costs page 43
Vol. 2011, No.3
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The Puget Sound Dealer Official Publication of the Puget Sound Automobile Dealers Association 16101 Greenwood Avenue N Bldg 2100 Seattle WA 98133 Phone: 206 542-3551 Fax: 206 542-7561 Email: jim@psada.com www.psada.com
President Jason Courter Honda Auto Center of Bellevue
A Message from the Editor He Ain’t Heavy, He’s My Brother In 1970 The Hollies had a Top 10 hit called “He Ain’t Heavy, He’s My Brother.” It was written by Hannah Russell, Molly Hyman and Linda Smith. I always loved that song and the lyrics still move me every time I hear them… remember them.
1st Vice President Jim Morino Acura of Lynnwood
The road is long with many a winding turn that leads us to who knows where, who knows where. But I’m strong, strong enough to carry him. He ain’t heavy, he’s my brother.
2nd Vice President Sara Carter Carter Subaru, Shoreline
So on we go, his welfare is my concern, no burden is he to bear, we’ll get there. For I know he would not encumber me. He ain’t heavy, he’s my brother.
3rd Vice President Steve Klein Klein Honda, Everett
Bridge: If I’m laden at all, I’m laden with sadness, that everyone’s heart isn’t filled with gladness … and love for one another.
Trustee Jim Walen Ford of Kirkland Trustee Greg Rairdon Rairdon’s Dodge Chrysler Jeep Bellingham, Kirkland, Monroe, Arlington Rairdon’s Hyundai, Bellingham Rairdon’s Nissan of Auburn Immediate Past President Sue Byers Bob Byers Volvo, Seattle PSADA Staff James R. Hammond Executive Director
It’s a long, long road from which there is no return. While we’re on the way to there, why not share. And the load doesn’t weigh me down at all. He ain’t heavy, he’s my brother. What a difference it would make if we all lived by these words. Our lives would be enriched. It always proves true that when you invest in another person – at home, at work, even with a perfect stranger – your act of love and concern never encumbers you. You know, this is so true in the workplace. Whether the other person is your employee or your co-worker, a little bit of the Holllie’s song goes a long way in building better lives, better companies and better relationships. Someone once asked, “Am I my brother’s keeper?” As for me, what is best for those around me is usually always the best and most rewarding road to travel regardless of its length. People are worth investing in. You ain’t heavy, you’re my brother.
Ron Olson AYES State Manager
James Hammond Executive Director
Linda Halverson Executive Assistant Susan Leonhardi Programs and Data Base Manager Michele Foley Office Assistant
Inside this Issue
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For information on advertising in this publication contact Jim Aitkins Blue Water Publishers, LLC 360.805.6474
Cover photo by Adam Buchanan 4
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Message from the President - Jason Courter Eight Great Dealer FAQs About Employment Law Auto Ad Strategies Life is Choices, So is Your Inventory Control! Imbed Your Dealership in Your Prospects’ Mobile Phone Taking Care of the Environment Has Perks! The Andersons: Burien - Center of the Known World NADA University - What’s New? NADA Perspective Jay Rogers On Sales - Proven Elements of Success Page One Management - A Must for Every Dealer Growing and Managing Your Money Tree Appraising Your Operational Systems News on the Tax Front The Important Hispanic Market to Your Dealership Dealer’s Insurance Trust Reduces Expenses Hitting a Home Run in Workers’ Compensation Global Journeys with Janet Maines - London Town Coffee Break - Ooooh, My!
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You Talk. We Listen. At Ryan Swanson, we connect with people on a human level. That’s why our approach to helping clients reach their goals is practical, straightforward and cost effective. It’s our no-nonsense way of doing business that puts people first, like Brad Brotherton of Brotherton Cadillac.
Humanese Over Legalese.
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206.464.4224 | www.ryanswansonlaw.com
Message from the President
Jason Courter
Honda Auto Center of Bellevue
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New Dealership Classes Coming From PSADA This Fall and Winter
PSADA has long been recognized for its innovative and quality dealership continuing education classes that it offers dealers at the Professional Automotive Training Center (PATC). This fall and winter PSADA will introduce a whole new set of classes – some, of which, will be pilots for other dealer associations to use across America. First, PSADA will be introducing a whole new F&I class with a regional format. Yes, I did say regional format. The new F&I class is being written specifically for PSADA and will be offered to local dealers in various Puget Sound locations. This is part of PSADA’s new plans to take its dealership continuing education classes to you. The class will be taught by well-known national trainers. Watch for PSADA emails announcing dates, times and locations. And, now, you will be able to register with your credit card directly with PSADA. The next set of classes is a first in the nation. PSADA, in partnership with Snap-on Tools and the PATC, will be offering in the Snap-on Innovations Works Center, located in the Professional Automotive Training Center, three new pilot training programs featuring new Snap-on tools for torque efficiency, diagnostic platform and multi-meter. This training focuses on improving the dealership’s bottom line because it is designed to improve the technician’s knowledge, efficiency and work speed. Techs that finish the training will receive national certification from the National Coalition of Certification Centers (NC3) www.nc3.net , a national network of global industries that support, advance and validate new and emerging technology skills in transportation. PSADA and the PATC have helped develop these new cutting-edge programs. Watch for PSADA emails announcing dates and schedules sometime in mid-fall. And, remember, you will always be able to keep up-to-date with these programs and other PSADA classes such as Service Advisor, Customer Service, Title Clerk and US DOT Mandated Hazardous Shipping Certification Class on www.psada.com.
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ThE righT AdviCE mAy BE CloSEr ThAn iT APPEArS.
As you wait for the economy to recover, you don’t have to face uncertainty alone. We work with hundreds of dealerships, helping them tackle challenges and identify opportunities. When every financial decision is an important one, having a trusted advisor is crucial. Discover how we can help you move your business in the right direction.
Everett | Seattle | Tacoma (866) mossadams | dealerservices@mossadams.com w w w. m o s s a d a m s . c o m
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Certified Public Accountants | Business Consultants
Acumen. Agility. Answers.
By Britenae M. Pierce Ryan, Swanson & Cleveland
1.
Do employees have the right to see their personnel files?
Yes. Washington law states that if an employee requests to inspect his or her personnel file, the employer must make the personnel file available for review at least once per year. The employer should make the file available within a reasonable period, which generally is 10 days. The employer can, however, determine if there is any irrelevant or erroneous information in the personnel file and remove it. Also, the employee does not have the right to inspect records relating to the investigation of a possible criminal offense or records compiled in preparation for an impending lawsuit which otherwise would not be discoverable in that lawsuit (such as communications with counsel about that employee).
2.
Can a company terminate an employee for making disparaging comments about the company in social media?
If the company learns that an employee is disparaging the company on a social network, on a blog, on Twitter, or through other social media then the company should investigate and consider appropriate disciplinary action. That disciplinary action can include termination. The disparaging comments may show poor judgment and a lack of loyalty, which can justify termination. However, if the comments concern conditions of employment they may be protected as “concerted activity,” in which case you cannot take adverse action against the employee.
3.
When terminating at-will employees, does the employer need to state a reason for the termination?
An employer is not automatically obligated to provide a reason for termination, unless an employment agreement is in place stating otherwise. But Washington employees have the right to request the reason for their termination, and then the employer is obligated to provide a reason in writing within 10 days of the request. Also, from a practical perspective, an employer may want to provide the reason for termination to avoid confusion and to discourage the employee from filing a lawsuit.
4.
For executive, administrative, and professional exempt employees, how can an employer deduct paid time off from the employee’s salary without losing the exemption?*
As a general rule, all exempt employees must be paid their full salary for any week in which the employee performs any work, without regard to the number of days or hours worked. But certain exceptions exist. Exempt employees need not be paid for any workweek in which they perform no work. Also, vacation absences may be deducted from the exempt employee’s salary in increments of one or more full days (no partial days). Sick leave absences may be deducted in full day increments if deductions are made in 9
accordance with a bona fide plan, policy, or practice, such as a short-term disability insurance plan.
5.
For executive, administrative, and professional exempt employees, how can an employer deduct time off from a PTO or leave bank?*
Some employers use a leave bank, or a paid time off (PTO) bank, even for executive, administrative, and professional exempt employees. Generally, when an employer has a leave plan where employees accrue leave in a bank, the employer may reduce the amount of leave in the bank for partial day absences, as long as the employee receives payment of his or her full salary. The leave bank deductions must be a minimum of one hour, but then in any increment beyond one hour. A partial day deduction may be made only on the express or implied request of the employee for time off from work. In Washington, the employer’s leave bank plan must be in writing in a contract or agreement, or in a written policy distributed to employees.
6.
Does an employer need to pay unused sick leave or vacation time to an employee who quits or has been terminated?*
Unless the company has a specific policy requiring such payment, the employer does not need to pay out the unused sick leave or vacation time. This is because vacation time and paid sick leave are voluntary benefits provided by the employer, not required by Washington State law. You should follow your normal practice to avoid complaints of discrimination.
7.
Are noncompetition agreements enforceable?
Generally yes, if the noncompetition agreement is reasonable. To be consid10
ered reasonable, noncompetition agreements must be: 1) necessary to protect the employer’s legitimate business interest or goodwill; 2) not greater than reasonably necessary to secure the employer’s business interest or goodwill; and 3) not cause injury to the public by the loss of the service and skill of the employee. Noncompetition agreements must be supported by independent consideration. This means an employee must be given some contemporaneous benefit in exchange for giving up the opportunity to compete with the employer. If an employee signs a noncompete prior to starting work, the employment itself is the consideration. If an employee signs a noncompete sometime after starting work, then the noncompete should be supported by independent consideration, such as a bonus, special training, a raise, or a promotion.
8.
Can a company require its employees to sign up for direct deposit?
Yes, as long as there is no cost to the employees.
*This article does not cover the FMLA or its various exceptions to exempt employees’ entitlement to their salary. Britenae M. Pierce is an attorney in Ryan, Swanson & Cleveland, PLLC’s Employment Rights, Benefits and Labor Group. She can be reached at 206.654.2289 or pierce@ryanlaw.com.
Does an employer need to pay unused sick leave or vacation time to an employee who quit or has been terminated?
By Jeff Kent Business Development Manager Comcast Spotlight – NW Region
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What’s Working Now? Think of all the media types you use in a day. You probably send text messages, read your email, surf a few websites and watch a video or two. But at the end of the day, or even during the day, you and millions of other consumers right here in Western Washington are settled in front of the TV. Consumers are using media in a variety of new ways, but day after day they return to television. Television has always been a powerful tool for auto dealers. Now with the myriad of media options available, you may feel some confusion about where to spend your advertising dollars. Should you move your money to other media? The truth is, too much time and money spent on tweeting and status updating can leave your dealership feeling unfriended. So don’t jump on the latest fad and muddy your message. Instead, use new technologies effectively. Auto dealers need a balanced mix of media types to reach the right consumers. To do that, you start with TV.
Tuning In In spite of so many new options, television remains the most effective advertising medium in the automotive world – and cable TV is especially effective. In the Seattle area, 1.4 million homes are wired in and cable viewing is on the rise. Hours spent viewing cable has increased 44% in the last 15 years and the average number of stations received has jumped from 33 in 1990 to 130 in 2008. (CAB Factbook 2011, Nielsen TV Audience 2008)
want to reach. With more than 50 networks and thousands of programs, you can focus your advertising dollars more effectively. Each network and program has a specific audience profile, so you can target your customers by age, gender, income, lifestyle and interests. If you’re advertising a family-friendly
Cable is unique in that it offers precise targeting to the specific type of auto buyers you 11
SUV and want to reach women, go with networks like Cooking, Lifetime and HGTV. Men who want the biggest truck out there are watching ESPN, Versus and Spike. Viewer profiles can be broken down in much more detail, so you can get as specific as you want with your advertising.
veloped between larger cable providers, smaller local cable systems and satellite TV services. You now can make one media buy through cable and reach all of these audiences. This means you do less work to reach more auto buyers.
one day, or even at the same time, making your dealership more memorable and your advertising more effective. (Nielsen Cross-Platform Homes March 2010, Scarborough Seattle-Tacoma DMA Mar10-Feb11)
Logging On
Sports programming can be an especially effective tool for auto dealers. Local teams like the Huskies, Cougars, Seahawks and Mariners consistently draw the largest audiences of any programs on Seattle area cable. National sports programming such as college football’s Bowl Championship Series, Monday Night Football and March Madness are also popular with viewers. And adults who plan to buy new vehicles can be as much as 73% more likely to watch sports programming than the average cable TV viewer. (Scarborough Seattle-Tacoma DMA Mar10-Feb11)
If you want to reinforce your advertising message in the strongest way possible, consider creating a complementary online campaign. You can target your banner ads to the same areas where you have an on air presence, with the added bonus of allowing consumers to
Using TV and online advertising in combination is a great way to reach your core demographics, such as Baby Boomers. They may be getting older, but they’re still buying cars. Unlike the generation before them, Boomers are tech savvy, with 33% spending 10+ hours online weekly. (Scarborough SeattleTacoma DMA Mar10-Feb11)
click through directly to your website – in fact, 66% of new car buyers visit a local dealer’s website when shopping for a vehicle. Research shows that 59% of consumers are online at the same time they are watching TV, and the combination of these two advertising platforms increases brand recall by 49%. So your message may be seen multiple times in
The other demo to go after is Generation Y. These children of the 80s and 90s are now young professionals wielding lots of buying power. They were the early adopters of technology like smart phones and social media, and they are not afraid to test drive the newest media trends. They also hold potential to become your largest segment of automo-
The leading strength of cable, in terms of how it can help your dealership, lies in the ability to target by zone. You can run your campaign in all 28 geographic zones across Western Washington, or focus your message in the regions that are most important for your dealership. Do your car buyers mostly live in the Bellevue area? Then you may want to spend the bulk of your advertising budget in that zone. Or maybe you want to create two commercials – one to reach local drivers in your backyard, and another to run in zones outside your immediate area. You have the ability to “Own the Zone” with cable. New partnerships have recently de12
tive buyers over the next few decades. That said, trying to reach Gen Y or anyone else through social networking sites alone is not your best bet. It can be a nice complement to your other forms of advertising, but don’t expect it to generate high levels of incremental revenue. Of more than 4,000 new and used car buyers polled last summer, only three percent said social media influenced their purchasing decision. (R.L. Polk & Co.) Technology of Today Auto dealers are smart to tap into television’s newest technologies. Both broadcast and cable are moving into the High Definition realm. The number of homes with HD TVs grew 44% over a one-year period from 2009 to 2010. (CAB Factbook 2011) The advent of HD has created new excitement about television as a whole, and reaches highincome, tech-savvy consumers – just the people you want to put behind the wheel of your latest model. Request for Information is a new service that allows viewers to interact with your commercial and request more details about your product. They do this by responding to graphic prompts using their remote, and they must opt in to receive contact from your dealership. This is a great way to develop a list of qualified and motivated leads. You can use RFI to distribute brochures or offer test drives, to name just a few options. Viewers like it: 42% exposed to an RFI commercial developed a more favorable opinion about the brand, and just noticing an RFI ad increased purchasing intent by 75%. (CAB Factbook 2011) DVRs are not a new technology, but they are becoming more popular. Some auto dealers have seen this as a distraction, but the truth is that 93% of TV viewing is still done to live television. (CAB Factbook 2011)
TV of Tomorrow In this media savvy world – especially in a technologically motivated market like Seattle – change is going to be a constant. But one medium remains strong in terms of popularity and effectiveness for auto dealers. Television is not going anywhere. In fact it’s growing and expanding, and nowhere is this more apparent than in cable. Keep your dealership top of mind with local consumers by continuing to precisely target viewers like you always have. Don’t ignore the new technologies, but use them judiciously. Having them as part of your advertising mix, along with a strong TV base, will position your dealership as a market leader – and position auto buyers at your door for years to come. Base A18+ Scarborough Data & Reports are protected under the federal Copyright Act and are the registered intellectual property of Scarborough Research & Arbitron, Inc. Any use of the Scarborough Data is subject to all limitations and qualifications contained in the Report.
Using TV and online advertising in combination is a great way to reach your core demographics, such as Baby Boomers. They may be getting older, but they’re still buying cars.
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H
Having been directly involved in the retail automobile business for over 40 years now, I have come to learn that every once in a while someone comes along with a great idea that makes a lot of sense. Some of those ideas make a big hit in the marketplace while others do not. This is largely due to choice. The free enterprise system of capitalism is by far the greatest structure of any economy we know to exist. The basic formula of supply and demand equals price is the backbone for capitalism. Capitalism and free enterprise are all about choice. This is true both on a large (nationally) and a smaller scale (the dealership level). When you really think about it, choice is something that is at the very foundation of who we are as individu-
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By Scott Dreisbach
als. It is one of our inner core, inbred, human, concepts. Starting from a very early age, we make choices, then we analyze or somehow process the results and go on about our lives only to make additional choices. This is a neverending circle of events that really takes us through our entire life cycle. As little babies we learn that we can get attention, or something we want, by crying or laughing. When we cry, we get fed or we get our pants changed. When we laugh, we get to see some more of the silly faces the “grown-ups� are making at us. As we grow into children we make more choices. Sometimes we are rewarded and other times, not so much. As teenagers the cycle of choosing continues and even accelerates. Again, we process the results and move on with more choices. As we grow older, we
hopefully learn from the results of the choices we have made along the way. Naturally, we want to repeat the good choices, whenever possible, and minimize or eliminate the bad. When we come to that proverbial fork in the road that we have never taken before, some of us delay making a choice, thereby delaying the result, whether it be good or bad. For some, choosing not to do anything, is a choice in and of itself. Choosing to do nothing is usually not the best choice. All too often this is the case when it comes to precise vehicle inventory management. Today’s technology gives us all the opportunity to make better inventory management choices and more intelligent decisions, more accurately and faster than ever before. Literally, with
a few clicks of your mouse in the right program, you can get all of the information you need to make the best possible inventory choice/decision. While it is impossible to predict economic swings, natural disasters, terrorist activities or wild fuel price fluctuations, you can phase in a “more active” inventory. Ask yourself this question: “Am I confident that my managers are using all of the tools and data available to them to make the very best possible inventory management choices?” If not, why not?
3.
Recommend some specific action that needs to be taken.
4. Make decisions based on actual data, not “gut feel”. As mentioned at the beginning of this series, there is tremendous upside potential to implementing an inventory management system for both your new and used vehicle departments. By improving your “methods of choice” the following is a partial list of benefits that you can enjoy: •
Earn a 5% bottom line
•
“Release” frozen capital
•
Increase GP PVR
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Enjoy month after month floor plan interest credits
•
60-day supply of new vehicles
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35-day supply of used vehicles
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Reduce wholesale “pain”
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Painlessly reduce variable selling expense
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Continuous training and system implementation
•
Feedback and accountability
•
Significantly improve market penetration
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The idea of any good vehicle inventory management system is to quickly give information to management that will help accomplish the following:
Easily increase closing ratios
•
1. To continually phase in what we need and phase out what we do not.
Group reports for multiple locations with different demographics
•
Reduce advertising expense
2.
•
Significantly impact return on investment
•
Improve CSI
Many of the previous articles I have written have talked about the key indicators that are the backbone of precise vehicle inventory management. These include, but are not limited to, specific model number, option packages, color, trim, individual options, average age to retail, average gross per unit, average age of inventory, seasonality, and special events. I have included the formulas, displayed examples and talked about how to assemble the information in a format that your managers could use. In many cases, I also made available various worksheets, excel spreadsheets and other tools that I would send via email upon request. The proverbial bottom line is this – If you want to increase your bottom line, (and who doesn’t) it can be done by reexamining and re-structuring the way you make new and used vehicle purchasing/ acquisition choices/decisions. It really is all about choice and the system you use to facilitate that choice.
Make it easy to read, use and understand.
Scott Dreisbach
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•
Deliver more units at higher grosses
•
Complete new vehicle inventory turn 6+ times per year
•
Complete used vehicle inventory turn 10/12 times per year
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Know your highest producing color, package code, engine, etc.
•
Use science and technology to manage inventory
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Have an inventory stocking guide by specific model #
•
Eliminate “gut feel” in inventory decisions
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Inventory decisions totally objective
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Eliminate inventory being “pushed on you”
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Know exactly what to advertise and when
•
Acquire Inventory to match current market demands
I have been working at refining and improving vehicle inventory management systems for over 20 years and am always finding ways to make the process better. Inventory management is a science. Make no mistake about it – choosing to do nothing differently will get you just that – nothing different! Making better choices will be worth the effort. There are a few good vehicle inventory management systems available from which to choose. Naturally, I would like you to choose to look at mine. If you would like to talk about it, simply send me an email or give me a call. Finally, I have developed a “Revenue Impact Calculator” that will allow you to plug in your own real numbers (in private) and will give you an idea of how much money is “on the table” for you to pick up by using a precise vehicle inventory management system. I will send you the link to the “Revenue Impact Calculator” upon request. The power of choice really does make a difference. We have all experienced it and we all will continue to do so. I will continue to choose to try and expose you to the benefits of precise vehicle inventory management and I hope you will make choices that are in your dealership’s best interest. You can contact Scott Dreisbach at Valuinsight, Inc., 561 368 7810 X 108 www.valuinsight.com, www.qrwindowstickers.com, sdrize@valuinsight.com.
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By Tim Saint
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Every auto dealership wants to be top of mind for customers who are considering the purchase of a new car. As dealerships compete for customers, the ones who simplify the process of conducting research on their mobile devices will win the day. With the growth of smart phones, dealerships face a golden opportunity to imbed themselves on customers’ smart phones if they make the process easy enough for these potential buyers to engage with them. Any GM who is up with the times no doubt recognizes the paradigm shift that has occurred among buyers as a result of the Internet. Gone are the days when a buyer walks onto a lot and relies on the sales person to educate him/her about the car. These days, buyers typically won’t even visit a car lot until they arm themselves loads of data gathered from online research. Increasingly, that research is being conducted on mobile devices. According to a recent Google blog post, 25% of car buyers are using the mobile web to conduct research for their new vehicle. As smart phones become more ubiquitous, that number will only grow. While “mobile” and “social media” are the sexy marketing buzzwords of the day, the average auto dealership doesn’t enjoy the luxury of hiring a computer whiz to crank out an “app” to drive mo-
bile usage. But the good news for dealers is that they can use traditional print media to engage with potential buyers in real-time—all without a lick of technical expertise. QR Codes One technology that has received a lot of attention lately is QR codes. Developed originally in Japan in 1994 by Denso-Wave, a division of Toyota, QR (Quick Response) codes can turn any printed piece of material into a website for anyone who has a smart phone with a barcode scanner. (To download a free scanner for your smart phone, visit www. sparq.it on your mobile browser, and that site will link you to the optimal scanner for your particular phone). While creating a QR code is fairly easy, dealerships should carefully consider how they use the codes to ultimately drive more sales as opposed to just embracing another marketing gimmick. Several best practices include: Reputation management. How many times have you completed a new car sale and asked the buyer to go home and like you on Facebook, knowing full well that by the time they get home, they will either forget or be too lazy to find your Facebook page? By taking advantage of the tools in some more robust QR code platforms, dealerships can enable buyers to not only like them on Facebook but also provide a quick review with a simple scan of their phone before they even walk out the door. Not only do you capture them while they’re most emotionally invested, but you significantly increase the number of reviews and likes you receive because 17
you’ve made the process much easier for your buyers. Renee Stuart, a personal brand coach with ReputationRevenue.com and 30-year veteran of the car business, implemented a QR code solution with one of her clients. “Consumers buy from people they know, like and trust,” she said. “With one scan, targeted and relevant information is delivered, making it easy for the customer to become more engaged with your business and stay connected.” Coupons. It’s hardly necessary to reference the success of Groupon and Living Social as proof that coupons drive more sales, but dealerships have a perfect opportunity to build customer loyalty with QR codes. By placing a visible code in the service area, dealerships can take advantage of that few minutes of dead time for customers waiting to pick up their car and link them to a coupon that provides $10 off their next oil change. Social Media engagement. As one blogger recently stated, “If you’re not embracing social media, you’re retired; you just don’t know it yet.” By placing QR codes strategically throughout your dealership, your customers can not only like you on Facebook, but they can tweet about the dealership, share videos of the latest hot car video with their friends or even check in on Foursquare. Lead generation. Since car sales reps’ livelihood depends on referrals and relationships, the most effective QR codes will make it easy for prospects to exchange contact information. While QR codes have traditionally pushed information one way, savvy dealerships are using them to capture contact information so they can proactively market to those prospective or repeat buyers. According to Stuart, automotive professionals are leveraging their QR code throughout every network they’re involved in (traditional & digital). “With one quick scan, a consumer has captured your photo, phone number and map to your dealership,” she said. “They’ve also read your bio and customer testimonials – then with a tap of one finger they can swap contact information. I love that feature!” Bottom line: an effective QR code could be the difference between a prospective car buyer purchasing their vehicle from you or from a competitor. With Internet car sales growing every day, why not embrace the simple technology of a QR code and bridge your printed materials with the fastest-growing communication medium: mobile phones. For more information about this topic contact Tim Saint at SPARQ.ME www.sparqcode.com 425-647-9774. 18
By Debra Oliver Environmental Investigator III, King County Hazardous Waste Management Program
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Automobile dealers face multiple hazardous waste management issues. As a field investigator for 20 years in King County, Washington, I have visited hundreds of auto-related shops. I have found that dealers who pay attention to waste reduction and management are those who excel in great customer service, employee involvement and environmental stewardship. Customers immediately recognize a well-organized service department with environmental protection, worker safety and best management practices in place. Some signs of a well-organized shop include: •
secondary containment
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no spills
•
recycling in place
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chemicals labeled and containers closed
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prominently displayed safety data sheet binders
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spill prevention plans
A good example of automobile dealers showing their ability to improve best management practices was when they banded together to increase worker safety by taking advantage of Washington State’s Worker’s Compensation Retrospective Rating Program. The dealers commitment to safety resulted in reduced on-the-job accidents and injuries and reduced industrial insurance costs. Washington State dealers are getting money back for their focus and attention. Improvements in worker safety often leads to improvements in waste management and vice versa. Reductions in waste generated and improved waste management often result in a safer workplace. The Washington State Auto Dealers Association was key in that effort. WSADA also provides education and advice that helps its members prevent environmental problems and avoid expensive, painful and time-consuming environmental accidents and errors.
Ensure your shop is up to date and in compliance with environmental protection regulations. If your dealership could use assistance, contact your association. WSADA works with a contractor to provide compliance advice to members. In King County shops can receive a similar assessment at no cost. The Local Hazardous Waste Management Program in King County provides technical assistance. If we find improvement in your dealership that leads to better waste management or improved shop practices, we can provide matching funds up to $500. We work with local businesses to keep our communities safe and healthy – and that includes keeping businesses safe and healthy, too. It’s easy to request a technical assistance visit. Give us a call at 206-263-8899. Keep the check list provided with this article. It provides a reminder of requirements for managing waste.
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Photo by Adam Buchanan
The Andersons
Photo: (l. to r.) Dean and Alan Anderson 20
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By Craig Chastain
Northwest auto icon Wayne Anderson was once asked to describe his adopted home town. “Burien, Washington,” he stated, “is the center of the known world.”
Indeed, the Seattle suburb has long been at the center of the Andersons’ personal and professional lives. Wayne and his wife Janice brought a passionate commitment to community, cars and family that continues to flourish today through sons Dean and Alan and their dealerships – Burien Chevrolet and Burien Toyota/Scion. The Anderson ties to the Puget Sound region began in the early sixties when Wayne brought his young family north from Portland to join with Chuck Olson to open an Oldsmobile dealership. In 1983 the partners bought Evergreen Toyota, changed its name to Burien Toyota and placed Dean Anderson, a seasoned car guy who had entered the business at the age of ten, in a management role. “To be honest, I didn’t even know where Burien was,” says Dean. “I walked into the showroom, took one look at the green shag carpet and went to work.” As the dealership grew, Wayne bought Olson’s share of the business and eventually sold the Toyota/Scion franchise to Alan and Dean. Alan had begun his career as a licensed CPA and, in combination with Dean’s experience, a determined and effective partnership was formed. In 2004 they bought the Chevrolet store from Tom Grant, firmly establishing two of the region’s largest dealerships just blocks from each other on Burien’s 1st Avenue South.
From the beginning, the brothers have been committed to supporting the community where they do business. Alan has been deeply involved with Highline Medical Center, including a stretch on its foundation board. He’s also found time to coach youth football. Dean is active with the Chamber and Discover Burien, follows city politics closely, and supports – along with his wife Mona - the Highline Cancer Center. “We try to pick some pet projects every year,” says Dean. “Currently we’re focused on Highline Medical and several schools – St. Bernadette’s, St. Francis and Marvista Elementary. We’ve also donated vehicles to great organizations like the Woodland Park Zoo.”
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On the business side, both Andersons are active in industry development in addition to their innovative leadership within their franchises. Alan is the current president of the Western Washington Toyota Dealers Association, which represents 19 stores. Dean presently oversees marketing strategies for the region’s Chevrolet dealers. Their own advertising campaigns combine traditional newspaper, radio and television resources with the latest online and social media technologies. “For us, social media like Facebook and Twitter helps us to stay connected with our customers and to talk about our great brands,” says Dean.”It’s more about relationships than selling cars.” Dean’s daughter Nichole is currently overseeing their social media. She’ll be leaving later this year to have a baby, with Alan’s son Nicholas slated to take over the role. It’s truly a family business: sister Elaine works in the business office, her son Wayne in the service department; Alan’s other son Brett can be found in the body shop; Dean’s son Andrew is in the parts department and his brother Chris is sales manager. After decades in the car business, both Dean and Alan appear to be genuinely enjoying what they do. A tour of their dealerships reveals a shared culture of friendship, service and commitment to excellence. According to Dean, a vital contributor to the excellence of their service team has been their participation in the PSADA-supported technical training programs at Shoreline College. 22
“We’re strong supporters of the PATC training programs,” he says. “My son Andrew is a graduate of the GM program and we have three trained techs in our Toyota store including our nephew Wayne. We also have students from the AYES (Automotive Youth Education Systems) in our detail and body shops who learn from and contribute a lot to our businesses.” In a family owned and operated business, it shouldn’t be surprising that good-natured sibling interaction is part of the Anderson business environment. Whether it’s posting giant images of each other on the Toyota store windows or bantering about shirt selection at a photo shoot, Dean and Alan appear to be having fun in the car business. One of their favorite collectibles is a fullsize photo of the two of them created by the Toyota dealer group which asks “would you buy a new or used vehicle from these guys?” Indeed, several generations of car buyers have made that affirmative decision. The brothers even embarked briefly in a growing motorcycle franchise (Dean is an avid rider) before their supplier – Indian Motorcycles – went out of business. They have survived and thrived through the ups and downs of the auto business while building a solid regional and national reputation and a tight-knit business family.
If you’re looking for car dealers who are doing it right, you need look no further than Dean and Alan Anderson’s dealerships in Burien – the center of the known world.
Photo by Adam Buchanan
“Community events are important to us, especially for kids and families,” adds Alan. “Festivals, car shows, Little League, soccer – we try to get involved as much as possible.”
Add
MORE
pay less.
Every business worries about how the numbers are affecting their bottom line. Whether it’s growing your latest sales numbers or trying to minimize your expenses, one number that you want to be sure to focus on is “125.” With profits shrinking and costs rising, employers are taking a second look at their Section 125 Plan to see if they are taking full advantage of this tax code.
Maximize Your Plan It’s not often that you can add more and pay less at the same time, but it’s a reality when it comes to maximizing your Section 125 Plan. By adding Flexible Spending Accounts (FSAs) to your Section 125 Plan, you can increase your savings by decreasing your taxable payroll cost. The more employees you have participating in a Health FSA and/or Dependent Day Care Account, the more dollars you’re putting into your bottom line. So not only can your employees save money, but you’ll see tax savings as well. Health FSAs and Dependent Day Care Accounts allow your employees to direct a part of their pay, on a pre-tax basis, into a special account that can be used throughout the year to reimburse them for eligible medical expenses and/or day care costs. Because their money goes into these reimbursement accounts before FICA, and federal and state income taxes are withheld, you pay less payroll taxes*. It’s that simple. Your employees are your most valuable asset, but in today’s economic climate you may not be able to afford increasing their salary. However, by maximizing your Section 125 Plan you can increase their take-home pay and/or give them additional benefit dollars. SB-22503(Text&Graphics)
Don’t Go It Alone PSADA’s relationship with American Fidelity Assurance Company gives you access to one of the industry’s leading Section 125 Administrative Service providers. Their 25 plus years of experience has earned them a level of professionalism that you can rely upon. They offer FSA recordkeeping services, Health FSA Debit Cards, and a uniform risk coverage policy for Health FSAs. The uniform risk coverage allows you to increase your employees’ FSA contribution maximum, while limiting your exposure on any unpaid contributions. As part of our services, [we/they] ensure resources are in place to cover your employees full expense reimbursements, even if their account has not accrued enough money to pay the expense. Partnering with American Fidelity gives you an array of employee benefit options through: • A broad portfolio of supplemental insurance products, • Administrative Services that include Section 125 Administrative Services**, Flexible Spending Accounts, and Health Savings Accounts, and • Enrollment solutions that include individual benefit counseling, group education meetings, electronic benefit enrollment, and enrollment reviews. To learn more about maximizing your Section 125 Plan today and the advantages of partnering with American Fidelity call:
Lela Yu
District Manager
1-877-967-5748, ext. # 3077 Lela.Yu@af-group.com * Please consult a tax advisor for information regarding your specific tax situation. **American Fidelity is a Section 125 Plan service provider, but not the Section 125 Plan Administrator. 23
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What’s New?
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Is Financial Success on Your Menu? Boost Profits, Build Customer Loyalty with Extended Service Contracts
When dealers are asked about their “dream product,” their wish list typically features three core elements: a product that makes them more money, boosts service department profits, and builds customer loyalty. But even the best products are just opportunities— they never really sell themselves. It’s up to you to drive sales. Financial success demands that you sell value beyond the vehicle. Extended service contracts, gap insurance, and road hazard insurance are products that many customers need but don’t understand unless you explain them. NADA 20 Group Consultant George Nance recommends menu selling. “Make sure that the F&I manager has a program to sell from,” he said. Colleague Dick Parrish, also a NADA 20 Group consultant, agrees. “When you have a menu and offer these products to customers, it’s surprising how many of them recognize the needs.” “Put every product available to the customer in front of the customer,” Nance said. “Explain the benefits. A single sale can multiply as the customer comes back for service, and you win his loyalty. You get residual sales— it’s win-win.” Service contracts guarantee service business—and increase the likelihood that the customer will buy his
next car at your dealership. Look at the statistics: Eighty-six percent of customers who regularly get service at your dealership buy their next car there— whereas only 46 percent of customers who occasionally come in for service return to buy their next car. And here’s your opportunity: The national average of service contract sales per new car is only 32.4 percent. Parrish suggests adopting specific performance standards or pay plans that incentivize service contract sales. “When you start measuring something and set expectations for performance, chances are you’re going to get improved performance,” he said. Are your service contract sales average or worse? NADA University can help you determine why and what to do about it. Watch the video on this Pain Point to learn more. Go to www.nadauniversityblog.com/extendedservice-contracts/. This article was adapted from NADA University’s “Dealer Pain Points” series, in which various issues, concerns, and dealer compliance obligations are addressed in short video segments with NADA U experts. The experts “resolve” each Pain Point and then the viewer is directed to the wealth of NADA U resources on the topic. Find the entire library at NADAuniversityblog.com. 25
NADA PERSPECTIVE Moving and Preventing Aged Parts Inventory Many parts managers describe aged inventory as a part that is in inventory for more than 12 months, but there are different kinds of aged inventory; they are the result of different parts acquisition processes. In parts inventory, there are only two kinds of parts. They are: Stock Parts • Purchased for future sales based on historical sales demand • Purchased via computer-generated ordering system • Parts that meet stock-status ordering criteria • Recommended by the stock order process • Controlled by the parts manager Non-stock Parts • Purchased for immediate sale • Purchased based on current demand • Purchased by people via special-order requests • Do not meet stock-status ordering criteria • Minimum phase-in not achieved • Not normally stocked We may have obsolescence in our inventory, but don’t know where it came from. Once we determine where it came from, we can make adjustments to the process by which we acquired it. If you have a lot of stock parts that are obsolete, you need to talk to your parts manager(s). They control phasein, phase-out, days’ supply, ordering parameters, and the DMS system setup. If you have a lot of non-stock parts that are obsolete, examine your special-order process. Non-stock parts are typically purchased for individuals, but in some cases, the individual may not come to pick up the part. Why? In such a case, you’ll want to review the communications between the parts department and the customer—or even the department’s entire communications process. This article is adapted from the 2011 NADA convention workshop Managing the Parts Department, presented by Jim Phillips of NADA. 26
Why Can’t I Get My Car Serviced at the Dealership? The dealership service department uses original-equipment parts installed by factory-trained technicians, and routine service is competitively priced—but isn’t always open nights or Saturdays. In a class of 35 students, typically ten tell me their stores are open in the evening for service, and four for Saturday service. How many stores are open on Sunday to sell cars? Twelve. Of those, how many are open for service Sunday? Just one. This service department operates 8 a.m. to 9 p.m. Monday to Friday, 8 a.m. to 5 p.m. on Saturday, and 9 a.m. to 4 p.m. on Sunday—and is doing it right. What about the other dealerships that are forcing their customers to go somewhere else for service? Think about it. Do you really believe that your customers will take a day off work to service their cars with you? Have you surveyed customers about convenient hours? My definition of CSI is “Customer Supplies Income.” And there’s too much competition—open evenings and weekends— waiting to take care of your customer. When you sell a new vehicle, you hold 5 percent gross. You hold 11 percent for used. Parts sales bring 38 percent gross. When you sell labor, you hold 70 percent gross. I’ve heard that dealerships make up only 6 percent of service facilities but generate 41 percent of the revenue—and that unperformed maintenance adds up to $56 billion. So why aren’t dealerships open 24/7? With that said, try this: Open service on Tuesday and Thursday nights until 9 p.m. for usedcar reconditioning and new-vehicle PDIs. Saturday, operate 8 a.m. to 5 p.m. Most dealers with Saturday service that I’ve talked to say Saturday is their busiest day. While sales sells the first car, service sells the second. All dealerships should be open until 9 p.m. Monday through Friday, 8 a.m. to 5 p.m. Saturday, and open for Sunday service if open for Sunday sales. This article was written by NADA Academy instructor Bob Atwood. For more information on Academy and other NADA University training, visit www.nadauniversity.com or call NADA U customer service at 800-557-6232.
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Proven Elements of Success
For years, training new people in the automobile industry has consisted of “shadowing” the most successful sales professionals in order to decode and replicate their practices. These high performers typically represent the top three to seven percent of the sales organizations. They sell at a rate three to five times the average. We want to understand what they believe, how they think, and how they interact with their customers and colleagues. Shadowing top-performing sales people quickly leads us to some interesting observations. Generally, they don’t rely on conventional selling techniques and they rarely follow their company’s standard sales process. They are neither using the company’s sales brochures and other material, nor reciting prepared pitches and presenting; they also do not manipulate customers in an overt effort to close sales. It would seem the top performers are not selling… at least, not in the conventional sense of the word. In most cases, top performers are often a mystery to their employers and their colleagues. They are considered anomalies – rare exceptions to the rule whose success is a natural phenomenon
that cannot be reproduced. Moreover, many top performers can’t clearly articulate the reasons behind their own success. When asked why they do what they do, you hear things like, “It just seems to work” or “It felt like the right thing to say.” They are, simply put, Natural Born Sales Professionals.
1. A process is a set of procedures and an organized approach to sales that leads to a repeatable, consistent, and predictable result. It is the “what to do” part of the sales environment. 2. Skills encompass the sales professional’s knowledge and ability to utilize the tools and techniques needed to succeed. These represent the “how to” and enable sales professionals to execute the process.
Over the years, many sales companies have worked very hard to translate “seems to work” and “felt like” into tangible and teachable principles and Engaging theory and best practices practices. Engaging have enabled sales training theory and best practices have enabled sales companies to develop and refine a training companies, such format for sales which companies as mine, to develop and can adopt and adapt into an refine a format for sales organizational capability and a which companies can adopt and adapt into an sustainable, competitive advantage organizational capability in the marketplace. and a sustainable, competitive advantage in the marketplace. 3. Discipline is the mind-set of the sales professional; it is his or her This format is really very simple attitude, standards of performance, and consists of the same three primary elements that define all successful sales and mental and emotional stamina. professionals: processes, skills, and Discipline is the inner strength and disciplines. courage that supports the “will do” of a successful sales professional.
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A professional sales person must be proficient in all three in order to be successful. All professionals, regardless of their craft, must learn, practice, and master each of these elements. Having a process in today’s industry means to have an organized approach to selling that is used by everyone in the dealership. Too many times we leave it up to the sales person to “show us what you can do.” Requiring your sales professionals to train and use a consistent sales process will allow them to develop skills that much faster. Remember, the sales process is the “what to do” element of the sales approach and includes items such as: •
•
•
•
•
•
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Meeting a customer and developing rapport and trust early in the sales process. Learning the customer’s needs and wants, while understanding the difference. Taking those wants and needs and applying them to a vehicle that closely fits as many as possible in order of importance. Providing the customer with a presentation and demonstration that brings out the best in the automobile and the customer. Assisting the customer in determining the value of the car they are selling to the dealership and working for them to get them the very most you can. Showing them the value of the organization the customer will have after the sale, including the things that are going to help during the time he or she owns the vehicle. Creating a long term client relationship.
•
Making the customer feel confident that he or she received the very best value for their money.
the proper mindset or point of view, the best processes and skills cannot be consistently executed.
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Making a delivery experience an event the customer will remember forever.
Three statements summarize the mindset or discipline needed to succeed in sales in today’s automotive industry.
Remember, it is a process done with the customer in a very transparent fashion, not a process done to the customer in a covert manner. Developing the right set of skills, or “how to”, helps sales professionals answer critical sets of questions that are present in every sale: •
How is value created within your customer’s mind
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Who are the decision makers and are they there
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The most successful sales professionals recognize that a sale is, first and foremost, the result of the customer making a decision to buy.
Developing the right set of skills, or “how-to”, helps sales professionals answer critical sets of questions that are present in every sale.
•
What are the reasons prompting the customer to look at a new or used automobile
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How does the decision effect the customer’s financial situation
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What are the obstacles in delivering the customer a new or used vehicle today
Note the distinction: Sales processes are aimed at moving goods and services, while a decision process is aimed at assisting the customer in making the best choices. Further, helping manage all the decisions customers make during the sales engagement add up to one thing: whether or not to buy. •
Asking the right questions at the right time helps sales professionals develop conversations in which the customer’s self-esteem is protected, communication is stimulated, and mutual value is generated. Active listening skills are crucial and play an important ancillary role in sales questioning. The discipline, or “will do”, for mastering sales is the most important of the three elements. Without it, a sales professional will not have the drive to succeed at the other two elements, much less focus on the outcome. Without
The second focus of the most successful sales professionals is on the development of the customer’s ownership period. A sales professional who adopts this aspect of the sales process becomes a contributor and advisor to the customer and starts to build the foundation for a mutually beneficial long term relationship.
•
Thirdly, most successful salespeople build customer relations based on trust and cooperation.
According to research done during the mid-1990s, this element is usually missing from the salesperson-customer relationship: only 4% of those surveyed said they completely trusted their salesperson. In contrast, 61% said they did not trust the salesperson at all, or only rarely. With this is mind, how do we do a better job of building customer relationships based on trust and cooperation? •
By studying and learning the customer’s unique condition and situation and becoming a contributor in providing the solution
•
Continually looking out for the customer’s best interest
•
Seeking first to understand the customer and their needs through the power of observation and the process of questioning and clarifying everything they notice.
Processes, skills, and disciplines are the foundation for a successful sales organization. Regardless of the product you may be selling, your customers will not experience the best you have to offer in terms of product or service without these three elements. Customers expect excellence and want to do business with those that represent it. Jay Rogers is President of the Jay Rogers Group. Jay has a significant reputation as a sales and F&I expert and trainer across the nation. The number of dealers he has helped number in the hundreds. He is a long time friend and counselor to Puget Sound Dealers. Jay was one of the original trainers that helped PSADA launch F&I and Sales at the Professional Automotive Training Center at Shoreline Community College. Jay is well known in the Pacific Northwest. To contact Jay please call 641-895-3780 or contact him at NJRogers@JayRogersGroup.com or logon to www.JayRogersGroup.com.
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People are talking about dealers online, but do you know what they’re saying and where they’re saying it? According to Les Abrams, NADA Academy Instructor, dealers must act to protect their reputations. “Google is assembling the reviews it finds and putting them into Google Maps,” Abrams said. “They’re integrating Google Maps into Standard Google, so dealers and customers alike can see the reviews and ratings in one place. If you want to see what is being said about you, look at Google Maps.” He pulled Google Maps up on his screen. “Here’s a review that reads, ‘It was a wonderful experience.’” But here’s another: “I wish I could rate this place even lower.” Abrams urges dealers to Google their dealership name regularly. They should see the map and what shows beneath their name. “We call it Page One Management,” he said. Abrams knows whereof he speaks. He is the Academy’s lead instructor for Variable Operations 1, which includes brand management. Abrams said that often you’ll see a negative YELP review right beneath the dealership’s name. He showed a review that read, “Worst car service I have ever dealt with” and explained, “Customers have virtually no choice—they’ll click on it to check the dealer out. Meanwhile, the dealer isn’t even aware that this review is there!” That’s not an isolated instance. Abrams said web review sites make themselves very visible to the search engines. So what should dealers do? “Dealers can take charge of their Page One Management and create sites that will optimize better than these review sites,” Abrams said. “An example would be videos. Google owns YouTube. If I were a dealer with a negative review, I would flood YouTube with quality videos.” Another Page One Management technique: Solicit written customer reviews to develop a library for future customers. This article was adapted from NADA University’s “Dealer Pain Points” series. Visit www.NADAuniversityblog.com/2011/01/brandmanagement for this Pain Point.
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OWN YOUR ZONE
with fuel-efficient ad performance Whatcom
Cascades 79% of new car sales come from just 4Bellingham cableNorth zones* Nat’l. Park
W H AT C O M
Advertising Waste
New Car Buyers
La Conner
SAN JUAN
Skagit
SKAGIT
Skagit
ISLAND
Camano
Whidbey
Port Angeles
SNOHOMISH
North Snohomish Port Angeles Skagit
CLALLAM
Everett
Port Townsend
Dealer Location
Kitsap
JEFFERSON
PA
Hood
Bellevue-Issaquah B Bel e
Kitsap
Burien
KITSAP Burien
CIF
Tacoma
KING Tacoma
IC
Ocean Shores
(Downtown)
Seattle Se eat ea e attl at a tttlle e Bellevue
Port Orchard
M A S O NCanal
G R AY S HARBOR
North S o o s Snohomish
South Snohomish
Olympic Natt ’ll . Pa a rkk
Echo Lake E
Federal Way
Tacoma Tac T accom oma a Click Click Cli Cl k
Thurston
Olympia O
Grays Harbor
East Pierce
Eastt Pi E Pierce PIERCE
Grays Harbor
Thurston
OCE
Rainier
THURSTON
Grays Harbor Comcast Spotlight allows you to advertise Geo Targeting from on air and online only in the zones where your customers are located. Centralia Mt. Ra Mt Rain iniier in ier
AN
Grays H b Harbor
Nat’ Na t l. l. P Par arr k
To learn more about advertising fuel efficiency contact Jeff Kent. PA C I F I C
206-270-4748
Source: Polk Insight Jan-Dec2010, sales based on Comcast Spotlight zones.
jeffrey_kent@cable.comcast.com WA H K I A K U M
LEWIS
www.comcastspotlight.com
By Bob Hinton, CPA Moss Adams LLP
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Over the years, I have had a chance to watch many successful dealers develop, grow, and manage their businesses into very successful operations. It’s almost like watching a tree grow. Over time, the tree emerges from the ground, grows stronger, and branches off into different directions. For example, the dealership acquires real estate, a new franchise, a new location, and ultimately grows more revenue and income. This income then is often reinvested into the business and into new investments. Some investments are made into unrelated ventures like rental realestate, portfolio investments, and unrelated businesses, and so on. The great thing about this kind of tree is that it produces income! To visualize this better, try to draw your own personal income tree. If you are not an artist (I’m not), a stick tree will do. Try to identify all types of separate branches (investments) you may have. This process is often interesting because it gives you a good “one page” picture of your business and investment life that can be put on one piece of paper. From a “big picture” management standpoint, once your tree is done, I like to suggest that you grade (A,B,C) the rewards each branch of your income tree is providing to you. This can be done very quickly and often is a great way to evaluate the production each branch is providing. Be realistic, because it’s your tree to manage. Next, I would suggest that you consider writing down one or two key things you want to accomplish over the next year, specifically, for each branch of your income tree. For example, I want to invest more time and money into one branch and possibly sell or “prune” another. The bottom line is that this exercise is a fun, quick way to manage your business life from a different vantage point.
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From an accounting and tax perspective, your income tree takes on new meaning. Conceptually, each branch of your tree needs to be accounted annually for financial reporting purposes and reporting to the IRS. This is where spending more time understanding the details of your income tree become very important. I can’t tell you how many times we as CPAs stumble across a “branch” of income that we didn’t know about because it was new or forgotten about when year-end documents were provided to us. This is why I love to have our clients develop their income tree and see it from a reporting standpoint. The bottom line is that each branch of your income tree needs to be evaluated from a tax standpoint each year. From a tax planning perspective, this takes on even more importance. Generally, each complex income tree needs to have an excel model that accounts for each income branch and determines how it is taxed and who will be impacted by the tax. Most of the time, LLCs and S corps will flow income down to the owner of the tree whether or not cash flow was provided to pay the tax. Managing your cash flow in a complex tax environment without this kind of modeling is almost impossible. Further, when you add additional complexities to the ownership structure through succession planning, you need even more detail into your template to accommodate the income estimates for minority owners and additional entities, including many different kinds of trusts. Once your income tree template is completed, it becomes a 32
very easy process to use each year for: 1. Income estimates 2. Distribution estimates 3. Tax planning 4. Personal cash flow management 5. Asset management Your Next Step? Start by developing and grading your income tree annually. Next, invest time integrating this concept into your annual financial reporting and management process. Finally, work with your tax advisor to develop a comprehensive income tree excel template to grow and manage your income tree effectively. Please note this article does not constitute tax advice or any form of tax opinion. Please consult with your tax advisor directly. Bob Hinton, CPA, Managing Partner, is chairman of the Dealer Services Group with Moss Adams LLP and specializes in providing consulting services to auto dealerships. He can be reached at (253) 284-5232 or bob.hinton@ mossadams.com
From a tax planning standpoint, this takes on even more importance. Generally, each complex income tree needs to have an excel model that accounts for each income branch and determines how it is taxed and who will be impacted by the tax.
Smart Management
By John Strom
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This is the first in a series of columns designed to help you look at how you manage key aspects of your business. Each piece will offer some insight, some suggestions and a short assessment of that area. The first covers Operational Systems. These systems provide the foundation for an organization. They provide the organization and structure that help ensure efficient daily operations that lead to the achievement of organizational goals and objectives. When well thought-out, thoroughly documented, and readily available to people as they perform their jobs, an operational system will: •
Clearly State Expectations – who is to do what, when, where, why, how, and with what result.
•
Establish and Communicate Standards – work flow, documentation, timing.
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Communicate Policy – the organization’s position on business issues.
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Provide/List Resources – forms, flow charts – tangible items needed to get the job done.
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Coach Activities – reference for people as they do their jobs.
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Help Ensure Consistency – throughout the organization.
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Provide the Basis for Training – orientation of new employees, self-study for those new to the organization and/or position, development for those aspiring to a position.
Establishing and documenting operational systems enables you and your managers to be on-the-job with your people at all times. continued on page 34 33
Systems Documentation To achieve these objectives, every activity that takes place regularly in the organization must be fully documented. While this may appear to be a formidable task, it becomes manageable by involving all managers at all levels throughout the organization in the process. As they create this documentation, operational deficiencies are uncovered that are corrected in the process. This process can be eased by taking advantage of the many pre-developed systems available from outside sources and by sharing what is developed throughout the organization. Today’s computer technology facilitates this development and sharing. Once developed and documented, this systems documentation is assembled in Operating Guide binders appropriate to each department. These are located strategically throughout the department for people to refer to as they do their job. They are also available online. Organizational Development Many organizations have an Organizational Development Director and/ or established an OD Department to facilitate systems development and documentation. They are responsible to coordinate and assist everyone throughout the organization with this process. This is rarely seen in our business, however. Instead, it may be appropriate to hire this work out-ofhouse as needed. The Bottom Line Using operational systems in your organization will … … enable and empower your people to be more efficient and effective, … improving productivity and profitability, thereby … … contributing to the success of your people and your organization! Use the Operational Systems Checklist to inventory your current status. It is recommended that each manager complete a checklist for their area of responsibility. John Strom has been helping retail automotive managers improve their performance for over 25 years. He has held a number of management positions in both single-point and multiple franchise operations, including General Manager. His company, Strom & Associates, is a member of the Performance Development Group. To learn more about their services, visit www.perdevgrp.com.
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Use the Operational Systems Checklist to inventory your current status. It is recommended that each manager complete a checklist for their area of responsibility.
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a Winning team Get a CPA firm with a winning record on your team.
Peterson Sullivan LLP, one of the nation’s most successful specialists in auto dealership accounting, serves more than one hundred dealers in the Pacific Northwest. We are one of only a few CPA firms approved to perform audits for GM Motor’s Holding Division. And we are the only Washington State member of the exclusive AutoCPA Group. Following are only a few of the many areas where we are trusted advisors to our automotive industry clients: • Cash controls • Internal controls • Cost segregation • IRS reporting requirements • Dealership valuation • Sales and B&O tax consulting • Estate and succession planning • Tax planning • Financial statement analysis We believe strongly in building long-term relationships with our clients. We aim to understand your business so well that our advice becomes indispensable. Please contact Kevin Allison to see how we may assist your business needs at (206) 382-7777 or by email at kevina@pscpa.com. Peterson Sullivan. Driving your success.
Peterson sullivan llP 36
News on the Tax Front By Brian Kennett, Partner Peterson Sullivan LLP
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If you asked me what’s going on in the tax world, as many of my clients do, here is what I’d tell you now: Audits, audits and more audits! Along with the audits, there is a fair amount of uncertainty about potential changes (one big one in particular) in the tax law as Congress and the President grapple with the debt ceiling and current and future deficits. The same is true in Olympia, as well, but with a lesser impact. So let’s get right to it. AUDITS - FEDERAL In 2009, the Internal Revenue Service (IRS) underwent a massive hiring of 3,500 employees; more than 2,500 of these were auditors and collectors. The result of this increase has been significantly increased audit activity. We have seen a marked jump in the number of audits over the last year or so, which is no doubt a direct result of this mandate to increase compliance and collection. So who is being audited and why? Those are good questions. What I have observed in the audits that have worked their way through our office is varied. However, they generally have fallen into two distinct groups. The first is what the IRS calls the National Review Program (NRP). The second is what we call an “issue audit,” meaning that there was a specific reason for the return to be selected based on the amounts reported on the return.
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The NRP is a full scale audit, where the unlucky (literally) taxpayer has to prove every number placed on the tax return with back up. With a complex tax return, as many of the ones I see are, this is particularly unpleasant. For NRP audits, returns are selected randomly (think lottery), with no regard to what was actually on the return. There is no “trigger” to the audit; your number just comes up. The IRS uses NRP audits (and the adjustments that come from them) to develop a database of the types of errors found when certain amounts are reported on the returns or based on ratios calculated from the amounts. The IRS then uses this database in selecting other returns that potentially may have the same types of errors. A return may be subject to an issue-based audit in part as a result of the NRP audit data. These audits make up the majority of the audits we see. The IRS has developed a scoring system called the Discriminant Function System (DIF) score which rates the potential for an adjustment based on past IRS experience with similar returns. The DIF scoring technique remains top secret within the IRS, but it further illustrates the commitment by the IRS to use their increased budget in the last couple of years to increase collections. Once selected under the DIF scoring method, the return is reviewed by an IRS agent, who selects specific items for audit. Unlike the NRP version of audits, this type is typically less burdensome on the taxpayer, as it is significantly narrower in scope. There is no good way to steer clear of an IRS audit altogether. Your best defense once you are selected, however, is to have a properly prepared return -working with an automotive CPA helps -- and good records to support it. That way when the IRS comes knocking on your door, you can still sleep at night. 38
AUDITS - STATE OF WASHINGTON Just like the Federal government, the State of Washington is staring at a huge budget deficit and has pulled out all the stops for increasing revenue. This includes increased audit and collection activity by the Department of Revenue (DOR). In the early 90s we could almost be assured of a DOR audit every four – five years, but activity has slipped over the past couple of decades. Now it is back up, and rest assured, if your dealership hasn’t been audited in the last few years, it will be soon!
exempt sale. Use tax on direct mail is an interesting one. The DOR will tax direct mail if you do not have an agreement in place with your advertising agent (direct mail marketer) stating that advertising services were rendered in connection with the direct mail campaign. There is a fine line between purchasing advertising services versus purchasing tangible personal property (the direct mail piece itself). As for service contract income subject to B&O taxes, the law was changed in 2006 to treat these sales as retail sales for sales tax purposes. I see a few returns now and then, though, where B&O tax is being paid at the retail rate on the full amount of the sale, rather than at the B&O rate for other income on the gross profit only.
Unlike most IRS audits, there is no trigger for a notice from the DOR. It is no secret that automobile dealerships collect and pay a tremendous amount of sales, use and business and occupation (B&O) There is no good way to steer clear taxes each month, more so than almost any other of an IRS audit altogether. Your taxpayer. This means that best defense once you are selected, you are potentially “low however, is to have a properly hanging fruit” for the prepared return - working with an DOR in the collection of even more taxes, and it’s automotive CPA helps - and good my expectation that 100% records to support it. of Washington dealers will be audited in the next few years. Here are the issues I see in practice that generate the most adjustments: 1. Exempt sales (out-of-state and Native American) 2. Use tax on direct mail services 3. Reclassification of service contract income to other income for B&O tax purposes The exempt sales category is listed first for good reason -- it has the potential to be the most costly. The DOR is picking up on this and is checking to see that the dealership has the proper documentation on file to support the
So how do you sail through your DOR audit successfully? The first thing I recommend is to “self-audit” your exempt sales to ensure that all the documentation is there and properly filled out, including all the signatures. I also recommend that you have an automotive CPA who is familiar with State of Washington excise taxes review your return periodically to ensure that it is being done correctly. Most returns are prepared by the controller or office manager and are never subject to an extra set of eyes. Who knows, your CPA may find that you’ve been paying too much, and will assist you in preparing a refund claim as well!
PENDING FEDERAL TAX ISSUE AND A FAVORABLE RESULT The federal tax budget deficit and the nearing of the total federal debt limit have Congress and the White House scrambling to close the gap between revenues and expenditures. While they search for solutions, one of the tax benefits on the chopping block is the use of the LIFO method of inventory. While the method has been under attack in recent years, it is even more vulnerable now. LIFO is the single most effective tax strategy that dealers have, and many of my clients have accumulated millions in LIFO reserves. The elimination of would be extremely detrimental to an industry still trying to regain its footing after the difficult times of the last couple of years. The NADA is working hard to preserve LIFO’s existence. Let’s hope they are successful. On the good news side, the IRS, NADA and other industry tax experts agreed last year to a single method for computing the Uniform Capitalization (UNICAP) of costs for inventory, resulting in the issuance of a revenue procedure providing “safe harbors” for the annual calculation. This is a very good thing: before this agreement there were disputes over what needed to be capitalized and how much. This resulted in several IRS audits with adjustments in the six figure range for the unlucky dealers. The new guidance yielded a very favorable result for dealers and reduced audit anxiety by defining certain parameters for the calculation. As a result, many of you have seen, or will see, an extra form included in your returns this year to change your accounting methods to elect into the provisions of the revenue procedure. In most cases that I’ve seen, the safe harbors have resulted in the capitalization of less than $10,000 or so of costs -- a far cry from the hundreds of thousands of dollars contemplated by the adjustments asserted by the IRS before the agreement.
THE TAKE-AWAY So what should you do now to protect yourself or at least minimize your exposure to the above tax hazards? Here are a few of my recommendations: •
Make sure that your income tax returns are prepared by a CPA who is aware of, and understands, the federal tax issues that affect auto dealerships.
•
Self-audit your exempt vehicle sales for the current year and the four prior years (the statute of limitations in the state of Washington) to ensure the documentation is there and properly prepared.
•
Have your automotive CPA familiar with Washington state excise taxes review your excise tax return preparation to ensure proper treatment of all items subject to tax.
•
Support the NADA’s efforts in preserving the LIFO inventory method.
Have your automotive CPA familiar with Washington State excise taxes review your excise tax return preparation to ensure proper treatment of all items subject to tax.
As always, feel free to call me or anyone of our automotive specialists here at Peterson Sullivan if you have any questions about your individual situations. For more information on these topics, Brian Kennett can be contacted at 206382-7777.
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By Rebecca Lambert Adelante Media Northwest
The new census data is in and while the 2000 census surprised us, the new numbers only confirmed what we had been thinking all along – we have a very rapidly growing Hispanic market in Washington State. Because of Hispanic growth, we have earned a new congressional seat extending from Seattle’s Union Street to Burien, Tukwila, Renton, SeaTac, Normandy Park, Des Moines, Kent, Federal Way, White Center, Boulevard Park, and Bryn Mawr-Skyway. These areas have experienced The extensive Hispanic growth.
Population vs Density The 2010 census figures estimate that the Hispanic population in Washington State increased by 71% from 2000 to 2010. Western Washington Latino figures are set at over 9%, but take a deeper look at that figure. It can be deceiving. Population is different than density. The Hispanic population of Yakima is 45%
Latin boom is larger than the Baby Boom ever was. Hispanics total 50 million in the United States, and by 2037 it is estimated that they will equal 100 million!
The national Hispanic market value is now equivalent to the gross national domestic product of Canada – roughly one trillion dollars. Hispanic buying power is growing at twice the national U.S. average. Unfortunately, most businesses do not know how to best serve this rapidly growing community.
The first step us understanding the market. Who is this community? Why should auto dealers be pursuing a customer that requires addressing cultural and language differences? Is it really worth the trouble hiring Spanish speaking sales and finance people? Yes. You can’t afford not to.
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which equates to 109,740 people. King County Hispanic population is 8.9%. This equals to 172,378 people. This larger number certainly helps drive home the point that the Hispanic market is important. But even that larger number doesn’t show the entire picture. To see the full picture you need to take into account the density in the area of your business – Fife (17%), Mt. Vernon (30%), Kent (16.6%) Tacoma (11.3%) and Everett (14.2%). These communities have very large Hispanic communities and they are growing.
The Next Generation Look at the population figures from our public schools. The average percentage of Hispanic students in western Washington schools is 15 percent. Areas like Mount Vernon are at 49 percent Hispanic students. Let’s take a more in depth look at Mt. Vernon and its high density of Hispanic students. Twentythree and a half percent of them are in transitional bi-lingual (ESL) educational programs. They are still building brand awareness – but, the brand awareness is in Spanish. Now consider Eastern Washington which has had one of the fastest Hispanic growth rates in the United States. Eighty-seven percent of the stu-
dents in the Grandview School District are Hispanic. As these students age, the western part of Washington State will see a large influx of young eastern Washington Hispanics moving into the region looking for opportunity and education. The Latin boom vs. the Baby Boomers How many of your customers are from the Boomer generation? Despite their advancing age and the emergence of the giant Generation Y, baby boomers
continue to be an extremely powerful force in the marketplace. The United States has an estimated 40 million people age 65+. By 2040 this group will grow to 80 million. Many issues accompany the aging of Boomers such as decreased tax revenue, increased health care costs, and decreased home sales – not to mention that eventually Boomers will age themselves out of the consumer market. Currently over half of the babies being born today are to minorities. By the year 2047, minorities will be the majority in the United States. The Latin boom is larger than the Baby Boom ever was. Hispanics total 50 million in the United
States and by 2037 it is estimated that they will equal 100 Million! Selling Cars to Latinos There are many auto dealers who have successfully and faithfully worked with the Hispanic community over the last ten years. These are some of the reasons for their success: 1. They engage themselves and their stores with the Hispanic community.
Community is important to Latinos. Successful dealers have a sincere and genuine relationship with the Latino community that is very visible and consistent. 2. They know that Latinos don’t do business with just anyone. In Mexico people usually won’t do business without an introduction from someone they know. Being involved in the community equates to an introduction. 3. They understand that Latinos like to negotiate Many also like to pay with cash so it is good to have an inventory of cars that can be purchased for cash.
4. They understand that Latinos are the fastest growing internet users, but on their SmartPhones. To reach the Hispanic community you need to have a social/mobile media presence and a good Spanish or Spanglish website. Remember, because many immigrants do not qualify for a social security numbers, they apply for an Individual Taxpayer Identification Number (ITIN) continued on page 44
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Take a Closer Look
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There is little doubt that almost every business is affected by economic conditions, and the condition today is without exception. As a result, bottom lines become tightened making it difficult for many auto dealers to continue providing adequate benefits for their employees.
By Darrell Strong
Similar issues were present in 1948 when auto dealers from across Washington State came together to form WSADIT or, Washington State Auto Dealers Insurance Trust. The goal was the same as today, to provide member dealers access to employee benefits at a reasonable cost. Though WSADIT remained successful for a time, government mandates and economic situations eventually forced the trust to make some critical changes. In 2008, board members realized a hard truth. Without a new insurance solution, WSADIT was heading towards becoming financially defunct. The self-funded benefit plan was paying out more money in claims than it was receiving in premiums. Every month more dealers were leaving the plan. Medical plan designs were unattractive to dealers when compared to other plans in the market. Also, the cost of running the WSADIT office was getting far too expensive for a trust of this size. As a last resort, WSADIT contacted Western States Benefit Planning (WSBP). This was just weeks—three weeks to be exact—before the decision needed to be made to shut down the trust. With the clock ticking down, Western States Benefit Planning was able to present a solution that would again make WSADIT financially viable as well as offer a competitive and quality employee benefits package. 43
employee booklets that communicate With the guidance of the trusttheir benefit plans to their employees. ees, WSBP recommended closing the These contain all employee communiWSADIT office and subcontracting cations required by health care reform, all of these tasks to Benefit Solutions, information about a dealer’s pension Inc., a Third Party Administrator in plan, and any other benefit plan even Mukilteo, Washington. Benefit Soluif it is not part of WSADIT. tions, Inc. was able to provide the trust with better billing and enrollment Each member dealer is given services than WSADIT was achieving access to a personal account manager in running their own office. Better yet, from WSBP. They specialize in prothey could do the job at only 20% of the cost of maintaining the WSADIT office. By looking Partnering with WSADIT, for more efficient ways to do business, WSBP was able stability and success to make the WSADIT plan can be found within competitive in the market “dealers helping dealers”. again. “Dealers helping dealers” became our guiding philosophy. We thought that if dealers were to pool together, their size would provide stability as they dealt with the unknowns of health care reform and the economy. We found the core to our solution by creating a non-traditional hybrid plan. By selecting insurance plans with higher deductibles and then having dealers reimburse a large part of this deductible back to the employee, we saw a dramatic reduction in premium costs and lower out-ofpocket expenses for each employee. Within the first few months, many dealers were transitioned into the new plan. After just two years, WSADIT more than doubled in size, and member dealers have seen premiums increase at just half the rate of plans in the general insurance market. And, by listening to dealer feedback, plans continue to be refined and improved. Since partnering with WSADIT, WSBP has streamlined the billing and enrollment process and now offer online enrollment and billing for the dealers that want this feature. Each member dealer is given customized 44
viding answers to any human resource questions, resolving employee claim issues, and helping each member dealer manage all the new requirements for Health Care Reform. In the next few years there are a lot of changes for which each dealer will have to adjust. These will affect how insurance benefits are provided to employees. As a dealer trying to solve these challenges on your own, they can be daunting if not impossible to overcome. However, by partnering with WSADIT, stability and success can be found within “dealers helping dealers”. WSADIT is adding new member dealers each month across the state. Within the last few months, three new dealers have been added to our trustee board. If you are interested in joining, please contact Kathy Malcom at (509) 946-2634 or kmalcom@ws-bp.com.
Hispanic Market continued from page 41
which can be used in place of a social security card to acquire a loan. Because most financial institutions require at least two pieces of identification, Hispanic immigrants often use their CID Identification Card (which is their Matricula Card issued by the Mexican Consulate) as one of their two pieces of identification. The other piece of ID is frequently a Washington State driver’s license. Washington State is one of only two states that do not require a social security number to acquire a driver’s license. Again, just remember – the Hispanic community is about relationships and community. Sincerely engage their community and they will engage you. And, most of all, be patient – then you can enjoy being part of the fastest growing minority population in the State. Rebecca Lambert is a Senior Account Executive of Adelante Media Northwest and works very closely with the Hispanic community. For more information about this article please contact Rebecca at 253-905-6552 or rlambert@adelanteme diagroup.com.
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Hitting a
Home Run in Workers’ Compensation
By Richard Weeks
“Lets play ball!” Baseball season is underway once again and while some teams will win big others will go home, hanging their head, possibly, for not paying closer attention to the need for preparation and practice.
and then communicating standards and expectations clearly you will see the number or severity of on-the-job injuries drop. Below are just a few tips on how to get started training on defense!
• Open and Regular Communication about Safety (WAC 296-800-130) Have regular meetings specifically about safety. *More info visit www.icmoly.com or www.lni. wa.gov/Safety/Basics/Steps/
Regardless of whether you like baseball, you probably know a thing or two about it. Just as in baseball, the amount of effort and preparation given to workers’ compensation before, during and after an injury and claim is filed often indicates what the outcome will be. “Offense wins games, defense wins championships.” Defense! When trying to contain your workers’ compensation costs the first place to start is by finding ways to prevent injuries from occurring in the first place. This is your defense! You must identify hazards to prevent injuries. This practice is not only smart but is required by WA State safety code. By doing this first
Required and Recommended Safety Tools: • Written Accident Prevention Program (WAC 296-800-14005) Covers a multitude of different aspects of your on-site safety • Proper Training, Hazard Awareness, and Safety Enforcement (WAC 296800-14020) • Safety Incentive/Reward Programs can often motivate employees to work safely
“The top of the lineup, the middle of the lineup and the bottom of the lineup are all doing their jobs. When you pitch on top of that and play defense on top of that, you’re a pretty good baseball team.” - Tony Robichaux There is no doubt there are two parts to winning a baseball game and while
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defense is important we cannot get ahead of the game without playing some offense. When an injury occurs (and it will occur) we must make sure to have at least the basic understanding of how Washington’s system works. Understanding how your insurance works and the rights you as an employer have can potentially save you thousands in premiums paid to L&I. Lets take a look at a few of the most commonly misunderstood facts about workers’ compensation in WA and then some tips to keep in mind for your business to take an active role in your claims. WA State Workers’ Compensation: • WA is a state run workers’ compensation system – meaning unless you qualify to self-insure every business must by insurance through the state of WA Dept of L&I. • WA has a ‘no fault’ system meaning whose fault it was that caused the injury is NOT considered during a claim • Employers have 60 days to protest a claim allowance after the order is issued as well as other protest rights throughout the life of a claim • Employees are covered even if they do not report the injury to their employer. Tips to Save on Claims: • Always submit wage information to L&I timely • Prepare multiple Light Duty positions now to utilize later as needed • Create Modified Jobs whenever possible • Offer Kept On Salary (KOS) program to injured workers • Obtain full work history for every hire; this becomes valuable for claims which develop over many years 48
• Stay in communication with your workers who are off work due to injury; statistics show they are more likely to heal quicker and return to work • Gather and keep record of all correspondence and/or witness statements relating to an injury These are just a few of the many tools you can potentially use to manage your claims. The more familiar you are with your claims the more you will be able to anticipate and utilize these tools and others to get ahead! Beyond just playing offense and defense there are individual positions that need to be played! In workers’ compensation and your claims there are also multiple ‘players’ each having their own specific abilities and limitations.
the claim as requested; provide RTW when possible. Integrated Claims Management (ICM): Hired by employers to advocate on their behalf; counsels, assists and trains employers on their options for getting an IW through the claims process as smoothly as possible; manage and track claims for the best outcome; and assist employers with their safety and injury prevention programs. In the end, workers’ compensation is a complex system and having a basic foundation to start your game plan increases your chances for success. If you are interested in learning more about your workers’ compensation costs or want to see if you could be saving money contact ICM today!
Your starting lineup… WA State Department of Labor and Industries (L&I): Make decisions on claims such as allowance/rejection; pay for necessary medical and partial wage compensation; regulate when parties are acting outside WA law. Injured Worker (IW): Responsible to get and follow recommended medical treatment for industrial injury; communicate and cooperate with Health Care Provider, L&I, and Vocational Staff as needed. Attending Physician (AP): Provide objective diagnosis & treatment plans; must follow state requirements for forms and updated medical documentation and maintaining communication with L&I. Employer of Injury (EOI): Provide & maintain a safe work environment, accurately report hours and pay premiums on time; supply accurate information regarding claims throughout
Richard Weeks is President and CEO of Integrated Claims Management, Inc.(ICM). Weeks has more than 28 years of experience in the Workers’ Compensation field. He began his career in 1978 as an Industrial Relations Manager with ITT Rayonier. In 1985 he developed an integrated systems approach to controlling employers’ Workers’ Compensation costs and started a consulting firm called Integrated Claims Management, Inc. Presently his company manages seven group retro programs which total over 2,300 employers and collectively send L&I over $100 million dollars in annual premiums. Weeks holds a B.A. in Business Administration and a Masters Degree in Business from City University. He is a published author and his column, under the pseudonym “Professor Risk”, has an estimated readership of over twenty thousand employers. For more information contact ICM ph: 360-7861378 www.icmoly.com
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Resource Toolbox 50
Global Journeys
With Janet Maines
L
London, with all the pomp and circumstance, remains one of the most popular tourist destinations in the world. In the 1960s, “Swinging London” was a catch-all term applied to a fashion and cultural scene that flourished and created a youth oriented phenomenon. The recent royal wedding of Prince William and Catherine Middleton this past April has unquestionably highlighted the city once again and brought more attention to an already desirable destination.
Hill is a cosmopolitan district with a contemporary reputation as an affluent and fashionable area. It is home to the Portobello Road Market, one of the most famous antique street markets in the world. Piccadilly Circus is London’s answer to New York’s Times Square.
London’s most prestigious and Europe’s largest department store.
Ablaze with neon advertisements, noise and traffic, Piccadilly Circus is a popular meeting place for all and sundry. Bond Street is a major shopping street in the West End. No shopping trip would be complete without a stop at Harrods,
main Royal London home. A tour of Buckingham Palace and Windsor Castle combined with the changing of the guard is a must see tourist attraction. Kensington Palace is a working Royal residence and a favorite residence
For those seeking the “royal experience” there are several icons worth visiting. Buckingham Palace is Queen Elizabeth’s official and
London, the capital of England and the United Kingdom, is the largest city in the European Union. Upon arrival and once you have settled into your hotel, take a tour of the city to get acquainted. A hotel that is centrally located and close to a tube station is highly recommended and will save valuable time in exploring this large metropolitan area. The London Underground, or “the tube” as it is best known, is often the quickest and easiest way of traveling in London. London’s eclectic neighborhoods each feature their own personality and some feature some of the best shopping in the city. Notting
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of successful sovereigns until 1760. Princess Diana lived at Kensington Palace as will the Duke and Duchess of Cambridge.
Wimbledon, and even catch a match during the late June tournament. If soccer is more your style, check out an Arsenal or Chelsea game.
The Tower of London has played a prominent role in English history. The castle was used as a prison but its primary purpose was as a royal residence. Visit the Jewel House where, under armed guards, the crown jewels are housed.
Of the many attractions the city has to offer, several of the finest gems are the museums. The world-famous British Museum showcases the works of man from prehistoric to modern times from around the world. The crowning glory of Trafalgar Square, London’s National Gallery is a vast space, filled with Western European paintings from the 13th to the 19th centuries. The Victoria and Albert Museum celebrates art and design with 3,000 years worth of amazing artifacts from around the world.
The Houses of Parliament and the clock tower commonly called Big Ben are among London’s most iconic landmarks. Actually, Big Ben is the massive bell inside the clock tower, which weighs more than 13 tons and is not open to the general public. Take note, the clock tower looks spectacular at night when the four clock faces are illuminated. And for a unique view of this scene, take it and the rest of the city in from the London Eye. The London Eye or Millennium Wheel, the tallest Ferris wheel in Europe, is situated on the banks of the River Thames. Flowing throughout Central London, the river Thames reflects London’s diversity from the peaceful countryside to the city’s urban vibe. The 2,000 year old river harbors much of London’s history, as well as providing ongoing inspiration for artists, musicians and writers. There’s also a host of sporting and leisure activities you can do on and around London’s waterways. Londoners love their sport, and you can soak up the atmosphere with fellow fans by relaxing in a neighborhood pub enjoying a stout and an order of fish & chips. From smaller, traditional pubs to venues with flat screens and larger sports-minded crowds, there are many ways to enjoy the sports you love. Also, just a short day trip away, tennis fans can tour the courts of 52
Contemporary and modern art lovers should not miss the Tate Modern, located on the banks of the Thames. After completing your visit to this national gallery of international modern art, walk across the Millennium Bridge. The Millennium Bridge. officially known as the London Millennium Footbridge, is a steel suspension bridge for pedestrians crossing the River Thames. For those with curiosities about science and nature, the Natural History Museum and the Science Museum are perfect stops. The Natural History Museum boasts a permanently fascinating collection of dinosaurs, the biggest, tallest and rarest animals in the
world. At the Science Museum you’ll find activities that have your brain perform Olympic-standard mental gymnastics. See, touch and experience the major scientific advances of the last 300 years and don’t forget the awesome Imax cinema. At Madame Tussauds, you will come face to face with some of the world’s most famous faces. From Shakespeare to Britney, you’ll meet influential figures from showbiz, sports, politics and even Royalty. After several hours touring galleries and museums, taking in a sporting event or shopping, it’ll be time for a bite! London is a melting pot of different types of food, from traditional English fare to contemporary, global cuisine. Snack on sushi or samosas, or have an afternoon meal of tea and crumpets. Many places will serve a traditional tea with a full pot, scones with cream and jam, finger sandwiches and dainty cakes... nothing could be more British than afternoon tea in London. At the top London restaurants, advance booking is often essential and smart dress codes may apply. London will be host to the 2012 Olympic and Paralympic Games. This will mark the third time London has hosted the modern Olympics. It will provide a perfect opportunity to share in this unforgettable worldwide athletic competition experience for London, Londoners and visitors to the city! About Janet For more than 20 years Janet has been handling travel arrangements for the auto industry. She specializes in corporate meetings, leisure vacations and cruises, group conventions and incentive travel. For more information about this article or to have Janet help you plan your next get away, contact Janet Maines & Associates, A Full Service Travel Agency, 206-7820576. Toll free: 866-294-8747. Email: janetmassociates@aol. com or on the web at www.jmtravelco.com. 53
Coffee Break Ooooh, my! Just Plain Leonardo Leonardo da Vinci got his last name from the Italian town where he was born – Vinci, in Tuscany. “Da” means “from” in Italian, so his full name was “Leonard from Vinci.” That’s why when you look him up in books, he’s always under the L’s. Speaking of Healthy Habits – Hellooooo Henry! Did you know Henry Ford was a vegetarian? Meat was expensive at the time; his decision to eat vegetables characterized his moderate lifestyle. Well, not too moderate: as his automobile empire grew, he and his wife Clara moved to a 1,300-acre property. Of course, they had it landscaped to include a huge vegetable garden. Thank You Sir, May I Have Another? The delegates at the American Constitutional Convention had more than the country’s well-being in mind when they were preparing the Constitution. A party bill from two days before the official signing shows the boys – only 55 of them, mind you – made quick work of 156 bottles of liquor, including eight bottles of whiskey. If you enjoyed these tidbits, go to your favorite bookstore and purchase “Uncle John’s Bathroom Reader Plunges Into History” published by Portable Press 2001 ISBN: 1-57145-697-X
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