PSADA Spring 2011

OFFICIAL PUBLICATION OF THE PUGET SOUND AUTOMOBILE DEALERS ASSOCIATION

NADA U – WHY YOU NEED IT & “How To Guide” page 12

Jay Rogers on Successful Sales Strategy page 35

Moss Adams on Surfing Your Tax Wave

Steve and Vince Hanson Total Excellence Page 30

page 37

Successful Quick Lube page 40

Vol. 2011, No.2

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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 1st Vice President Jim Morino Acura of Lynnwood 2nd Vice President Sara Carter Carter Subaru, Shoreline 3rd Vice President Steve Klein Klein Honda, Everett 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 Ron Olson AYES State Manager 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

A Message from the Editor NADA University: Why You Need it! Why It Really Works!

In my 30+ years working alongside NADA, I have never seen a product as important, right on and as useful as NADA University. NADA hit a home run with this product. NADA U will save you time and money. Don’t shy away from it. It is easy to use and very friendly to navigate. You’re a dealer.

You are always “over the top” busy. So are your managers.

NADA U is quick and easy to use. You will probably want to put it on your Desktop. NADA U puts an immense amount of information, data, and resources right at your fingertips. If you need more information about anything, or want to train your people with online training, videos and webinars from top flight trainers in the nation – a quick “search” on NADA U has you in the driver’s seat in seconds. And, when I say you will find most everything – I mean NADA U is deep and rich in current, up-to-date information and training plus it includes comprehensive industry forecasts and analysis. And, NADA U comes complete with a marvelous tracking system so that you can track the performance of your employees when you ask them to access NADA U programs and materials online. Tracking is done through NADA U’s easy “admin” function that lets you enroll all of your employees into the NADA U system in an easy to use online manager which allows you to set up a management and tracking system specifically for your dealership. And the good thing about all this is that you are already enrolled in it “absolutely free” if you are an NADA member.

In this special edition of The Puget Sound Dealer PSADA is doing a comprehensive coverage of NADA University. We will take you through an easy to understand explanation of NADA U and then take you on a step-by-step journey on how to use NADA U. When you access NADA U online, keep your Puget Sound Dealer magazine close at hand because it can be used as a guide as you navigate and become familiar with the NADA U website.

NADA U can help you. A lot of the materials on the site are free and others are for purchase with immediate access. But the resource is immense and it is exceptional. Read through PSADA’s extensive coverage in this issue and then take a journey into “anything’s possible!”

James Hammond Executive Director 7 9 12 16 21 26 29 30 35 37 40 43 45 49 50 51 54

Message from the President - Jason Courter Recent Changes to the Federal Estate and Gift Tax NADA University - Power Up Your Training for Productivity and Profit Everything You Need to Know to Access and Navigate NADA U Vital Signs - Can You See Yours?

Team Member Assessment and Development Employee Fired Over Facebook Posts Backed by NLRB The Hansons - Tradition, Excellence and Community Jay Rogers On Sales - Success: Exceptional Strategy and Execution Surfing Your “Tax Wave” and Not Wiping Out! Why Express Maintenance is Not Working Sound Advice For Your Future - Personal Financial Planning Jeff Forsberg’s Perspectives - Industry Developments and Beyond Five Unforgivable Customer Service Mistakes Moving Obsolete Parts Out of Inventory The Power of Radio! Why the Growing Medium is a Good Investment!

Coffee Break - History of Nursery Rhymes

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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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PSADA’s Wage and Benefit Survey Goes Digital to Better Serve Dealers

One of the projects I wanted to complete during my tenure as President of PSADA was fully digitizing the PSADA Wage and Benefit Analysis Report (WBAS) so that data entry would be easier for the dealer. I am pleased to report that your PSADA Board and staff are in the final steps of completing this important project and that in 2012 your staff will be able to key in their data instead of submitting it in longhand. PSADA has gone to great lengths to develop an entry and delivery system that includes sophisticated security protocols to protect your sensitive data as it travels to PSADA’s secured server via the Internet. Next year PSADA will email you a secured PSADA URL and password to download your simplified and user friendly data entry form. After changing the password to your own personal password you’ll be ready to enter your data. And, yes, if you prefer, you will be able to have your dealership’s financial information entered by a second person like your Controller or Business Manager and submit it separately. The new entry application will help you keep your entries accurate. Because certain questions relate back to previous questions, the system won’t let you move forward unless the answers agree. Nice feature!

There are two other exciting new additions to the PSADA WBAS that you are going to like.

1) In 2012 the WBAS will cover the entire state of Washington. PSADA and WSADA are partnering to create a statewide document that will help WSADA further emphasize to the state legislature the importance of new car dealers to the state economy.

2) The new WBAS digitized system allows PSADA to average and analyze the financial information you send us – department by department. This means you will be able to measure your store’s productivity department by department against all other stores in your region, in Puget Sound, in Western Washington or in comparison to the entire state. And, yes, the data is presented with complete anonymity – only mean averages will be presented as a compilation of all data presented.

Considering that the WBAS always gets a 60% or more participation response from dealers, this data will be a solid and accurate representation of our state industry.

This is just another way that your PSADA Board and Staff are working hard to provide you viable and usable resources.

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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.

Nancy Kennedy

Kari Brotherton

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By Kari Brotherton and Nancy Kennedy Ryan, Swanson & Cleveland

As you are already likely aware, there were recent changes to the estate and gift tax laws. However, these changes are only effective in 2011 and 2012. In addition, proposed budgets are being discussed that would change the effective rates and limits after 2012 and may eliminate some popular estate-planning tools. So, what does this mean to you? It means that now is the time to review your current estate-planning documents, as well as your long- and short-term estate-planning goals. Documents might need to be updated. You may want to accelerate gifting plans or start a new one. Or, you may want to implement gifts that have provisions which may be altered or eliminated in the near future. In short, it is time to contact your professional advisors to discuss what they can do to help make sure you have the most effective estate plan for you.

SO, WHAT’S CHANGED? The significant provisions affecting estate and gift taxes that were signed into law on December 17, 2010 as part of a major tax overhaul include the following: •

Higher estate tax exemption. Increased from the 2009 $3.5 million exemption, the 2011 estate tax exemption is $5 million, which will be indexed for inflation in 2012. Thus, a married couple may transfer up to $10 million to their heirs, free of federal estate tax. (Note, however, the Washington state exemption has not changed and remains at $2 million per person).

•

Lower estate tax rate. Decreased from the 2009 45% flat tax rate, in 2011 and 2012 the federal estate tax rate is 35%. (The Washington State estate tax ranges from 10% to 19% and any state tax paid will reduce the federal taxable estate).

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•

•

•

Reunification of federal estate and gift taxes. This means the $5 million federal estate tax exemption can also be applied toward lifetime gifts.

While the gift tax exemption has been $1 million, it is now $5 million.

In addition, any taxable gift in excess of the exempt amount would be subject to gift tax at the lower 35% flat rate.

Generation-skipping transfer tax.

Generation skipping transfer tax (“GSTT”) is basically a separate tax on transfers of property to grandchildren and those deemed to be two or more generations below that of the transferor. There is now a 35% flat rate for the GSTT, and a $5 million GST exemption.

Estate tax portability. A new concept of estate tax exclusion amount called portability was introduced by the recent changes. Portability means to the extent the $5 million exemption is not used by the estate of the first deceased spouse, the surviving spouse may use the remaining exemption amount along with their own $5 million exemption. Thus, the federal estate tax exemption is a combined $10 million for a married couple. (Note, Washington State does not have portability).

The above changes in federal laws are effective only in 2011 and 2012, so we are again in a state of uncertainty as to what happens next. However, recent budget proposals include a reduction in the estate tax exemption back to $3.5 million, an increase to a 45% estate tax rate, and the reinstatement of the gift tax exemption of $1 million. Importantly, the budget proposals have also reintroduced changes to common estate planning tools: •

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Valuation Discounts. Many people often apply discounts in valuing

interests in a closely held business due to various restrictions placed on the shares or units such that gifts or bequests are generally valued at less than what some may consider fair market value. The administration is proposing that intra-family gifts or bequests of these entity interests will be valued without taking into consideration various restrictions, thus eliminating some of the benefit of discounts.

•

GRATs. Grantor Retained Annuity Trusts (GRATs) have been used to transfer assets to a trust in return for an annuity over the term: the value of the GRAT for gift tax purposes is less than the value of what is transferred into trust. Right now, GRATs can have a term as short as two years. If the value of the trust assets increases by more than the annuity payments, then it is successful as the excess appreciation will pass to the remainder beneficiaries. However, the administration is discussing requiring the GRAT to have at least a ten-year term. This increases the risk that the grantor will pass away during its term and all or part of the GRAT will be included in his or her estate.

Also, there is no Washington state gift tax; therefore, lifetime gifts by Washington residents are not subject to a transfer tax at the time, and the gifted property will escape the Washington estate tax.

The increased gift tax exemption can also be used to pay for large life insurance policies owned by a trust, without incurring gift tax or using loans or other complex premium leveraging techniques.

Also, if you have a split dollar arrangement involving life insurance with your employer, the higher gift tax exemption may be useful in terminating certain grandfathered “equity collateral assignment split-dollar” arrangements involving trusts, with little or no gift tax consequences.

With the increased gift tax exemption of $5 million, now is the time to make large gifts.

With the recent changes and the proposed changes, what does it mean to you?

MAKE LARGE GIFTS NOW With the increased gift tax exemption of $5 million, now is the time to make large gifts. Gifting now would freeze the value of the gifted property and would remove post-gift appreciation and income from your (potentially taxable) estate.

Combining the larger gift tax exemption with the available valuation discounts, it may be most beneficial to transfer interests in your business or real property within family now. The current state of estate tax may provide for important opportunities in succession planning.

There are many more gifting options to consider now. Consider making use of the increased GSTT exemption to fund Dynasty trusts, to provide significant, long-term estate tax savings for your descendants. Review whether GRATs are a useful tool given your assets and whether you should take advantage of the current law allowing for shorter term GRATs. Smaller gifts can also still be made using the annual gift tax exclusion of $13,000 per person or paying tuition or medical expenses for the benefit of some-

one else—these gifts do not impact your exemption and can be an effective step in reducing your estate.

exemption; limited step-up in basis of assets). The decision whether to opt out of the new tax laws is complex and depends on many factors.

EVALUATE TRUST PROVISIONS If your Will contains provisions for automatic funding of a “credit shelter trust” (also called an “exemption trust” or a “bypass trust”), you may wish to consider switching to a more flexible type of Will.

A Disclaimer Will leaves everything outright to the surviving spouse, but gives the surviving spouse the option to create an estate-tax savings trust, if needed at that time. This puts off planning decisions until the passing of the first deceased spouse, when more information will be available that will affect these decisions.

We do recommend that our married clients retain either an automatic trust, or an option to create a “disclaimer trust,” in their estate-planning documents. A trust provides the advantage of sheltering future appreciation from potential estate tax and also can provide creditor protection for the beneficiaries. In addition, the new federal rules for exemption portability are effective only for 2011 and 2012. The Washington state estate tax exemption remains at $2 million and there is no provision for portability of the state exemption between spouses. Therefore, including an optional disclaimer trust or an automatic credit shelter trust in your documents will still be the best estate-planning option for most married couples.

IMPACT ON 2010 Prior to the recent changes, the estates of decedents who died in 2010 were not subject to federal estate tax, though the estates also had limited step-up in the basis of its assets. Now the estates have a choice between electing the new, 2011 tax laws (including the step-up in basis for income tax savings) or using the 2010 rules (i.e., unlimited federal estate tax

The above changes in federal laws are effective only in 2011 and 2012, but do present some important planning opportunities. Although it is impossible to predict what laws will be in effect once the new rules expire (December 31, 2012), many commentators predict that, due to budgetary considerations, Congress will be forced to enact harsher estate tax laws (i.e., a lower exemption and/or higher federal estate tax rates) to take effect after 2012. While recent budget proposals do propose limits similar to 2009, there could also be a reinstatement of the pre-2001 rates ($1 million exemption and 55% estate tax rate) if nothing is done.

With the advantageous planning opportunities and the potential complexities in our current estate tax environment, it is important to contact your professional advisors to discuss your estate-planning concerns further. It could be important for you and your family.

Kari Brotherton and Nancy Kennedy are attorneys in Ryan, Swanson & Cleveland, PLLC’s Estate Planning & Tax Group.

Kari can be reached at (206) 654.2227 or brotherton@ryanlaw.com, and Nancy can be reached at (206) 654.2233 or kennedy@ryanlaw.com.

Ryan, Swanson & Cleveland, PLLC is a

leader in providing legal counsel and representation for businesses—small and large, privately held and public, domestic and international.

In an increasingly complex world, they distinguish themselves by combining creative problem solving with a commonsense approach. Their constant focus is to provide clients with sound advice and practical solutions in a cost-effective manner.

This approach has made Ryan Swanson and Cleveland one of the primary legal firms used by new car dealers in Washington State. They also have been PSADA’s chief counsel for more than 20 years.

Since 1897, Ryan Swanson has steadily built its reputation and success by maintaining a commitment to exceptional representation and unparalleled client service.

Today, their 47 lawyers and 50 support personnel remain dedicated to their tradition of excellence. That dedication, together with their unique combination of skills, specialties and backgrounds, enables them to handle sophisticated transactions and complex multi-party lawsuits without ever sacrificing the personal attention their clients deserve.

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T

urn On NADA U! There’s something new in your dealership. It’s sleek. It’s smart. It’s fast.

And it has power to burn. All you have to do is turn the key.

You have the key at your fingertips. There couldn’t be a better time to use it.

As our industry revives and reinvents itself, NADA University—brought to you by the most trusted name in the industry—is your one-stop resource for the training and information you need for profitability, knowledge, and compliance.

In today’s marketplace and regulatory environment, you need to focus on your most important asset—your staff. Are they as productive as they can be? Are they up-to-date on the latest legal requirements? Make sure you’re getting the most out of your current employees before you hire more employees to match the increasing traffic in your showroom.

If you do need more people—maybe you downsized in the past couple of years—you’ll want to look for different skills in your new hires. Maybe, for example, you need employees who know their way around the Internet, which has become the world’s largest showroom, open and accessible around the clock.

NADA University—NADA U for short—has the same hours. The umbrella for all educational and performance management programs from the National Automobile Dealers Association (NADA) and its American Truck Dealers (ATD) division, NADA U begins with the two flagship programs that you know well—NADA-ATD Academy and 20 Group—and introduces an allnew, interactive, online component accessible to multiple users 24/7 and delivered via a learning management system that enables training, testing, and tracking to ensure accountability.

But let’s back up and show you the online “centers of excellence,” Learning Hub and Resource Toolbox, that allow you to train smart. You don’t have to take your employees off the floor and spend for travel to train them—just take a look at what they can accomplish online!

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They’ll find courses, webinars, and workshops in Learning Hub, where training is organized in ten categories, or topic libraries—Dealer/Executive, Management, Legal/Regulatory, Sales/ Leasing/Finance, Service, Internet, Parts, Body Shop, Business Office, and Human Resources.

LEARNING HUB

Our screenshots also show Dealer VT and NADA U Partners—we’ll get to them later—and they don’t show a new “Fundamentals” topic library, soon to be added as NADA U continues to evolve and respond to dealer needs.

Each topic library contains multiple courses, convention workshops, and webinars. Taking a dive into “Legal/Regulatory,” for instance, we find five online courses— four of them free to NADA and ATD members—highlighting critical compliance topics. There are also four workshops from the most recent two years of NADA and ATD conventions, and 10 webinars. Among the workshops and webinars, we find information that is additional to the courses—often breaking news on the subject.

Let’s say you want your employees to learn about the FTC Red Flags Rule.

You can direct them to an online course or a webinar—or both—in the Learning Hub. Perhaps you want them to read and absorb a complex management guide about Red Flags. That’s when you go to Resource Toolbox, NADA U’s online library.

In Resource Toolbox—where the Driven management guide publications appear in the same ten categories as Learning Hub’s topic libraries—there’s a Driven guide on the Red Flags Rule.

You’ll even find a handy job aid—a Red Flags Compliance Chart—among the NADAPerks member tips and tools.

You’ve been getting the Driven management guides for years.

Remember the bulging binders that someone had to update each month or so? Or maybe the guides, lost in the flood of mail that came to your dealership every day, never reached the binder at all. Where are they, anyway?

Now, you know where they are: online, updated, and ready for you to read and use—and to assign your staff to read as you deem appropriate.

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Let’s say you want your usedvehicle manager to read a few Driven guides—say, A Dealer Guide to Auctions: Controlling Inventory, Increasing Profits; A Dealer Guide to the Trade Appraisal Process in a Transparent Market; and A Dealer Guide to Used-Vehicle Strategies and Solutions (all located in Resource Toolbox/Driven - Sales/ Leasing/Finance)—and you ask him or her to do so. Chances are he’ll agree, truly intending to study the guides, but the press of business will intervene and he’ll just plain forget. With NADA U, he’s accountable.

NADA U’s Resource Toolbox online library contains member benefits, and a great deal more.

You’ll want your whole staff to learn from the MarketINSIGHT complimentary monthly mini-webinars, which focus on hot topics presented by industry experts. Industry Information contains the latest data and industry analysis, including NADA DATA, the industry’s most authoritative report on industry trends.

“NADA U is hands down the best value online training available,” said

NADA U is continuously introducing new features and programs. Among the most talked-about additions is “Dealer Pain Points,” which are video vignettes designed to help dealers resolve specific business challenges and create new opportunities for success.

Posted on the newly launched website NADAuniversityblog.com, the videos showcase brief scenarios reflecting real-life situations that can affect performance and profitability in all areas of the dealership. They include tips and strategies from NADA U experts to address the specific “Pain Point” and

RESOURCE TOOL BOX

You send him the assignment, including due dates, via LightPad, NADA U’s internal email system, and then track his progress via “Training Reports-User” or “Tattletale Report.” You can find out exactly what he’s completed—or not completed—because each Driven guide, and each online course, workshop, webinar, etc., contains a testing component.

What’s more, the learner can track his or her own progress with the “My Report Card” function.

NADA U uses the latest adult learning strategies and techniques to design courses with clear learning objectives, and testing that assures objectives have been met.

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Melvin Cooper, Chevrolet of Watsonville, Calif.

“It affordably allows our management team and staff to stay up-to-date on industry best practices and gives us the competitive edge.”

PAIN POINTS on NADAuniversityblog.com

And there’s more, for you and your top people. HR Essentials is a three-inone HR resource to help you develop customized job descriptions, performance evaluations, and policy handbooks.

Automotive Careers Online is an automotive job posting service.

find a resolution for it, and then direct the viewer to the wealth of NADA U resources on the topic.

“For dealers and managers addressing the everyday challenges of running their

businesses, NADA U’s Dealer Pain Points website gives clear, realistic direction on what to do to maximize performance for the long term,” said John Lyboldt, NADA vice president of NADA Dealership Operations.

“What makes NADA U unique is that it’s the single resource in the industry today that combines proven dealer-operations expertise covering all areas of the business with the convenience of web access to provide real-world, up-to-date training and education,” said Lyboldt.

Another NADA U innovation is the launch of private social networking communities for auto and truck dealers. The first was NextGen ATD, a community for next generation truck dealers to learn from one another. Academy and 20 Group communities are also designed so that participants can stay connected at all times.

Participants in the networking communities can take part in broad discussions with members of the full community on each site, or narrow the dialogue down to a sub-segment of each community that’s most closely focused on their specific interests. DrivingSales.com, the social network created by NADA U Partner trainer Jared Hamilton, is providing the online platform for the new initiative.

“With the market moving at 100 miles per hour, dealers can’t afford to move at 20 miles per hour,” said Hamilton. “I believe the best real-world information for dealers comes from the actual experiences of other dealers.”

Hamilton, an expert on Internet communications and founder of Driving Sales University, is one of 10 industry-

leading NADA U Partner trainers with specialized areas of expertise. Other partners offering courses include Grant Cardone and Alan Ram (sales and leasing training); LightSpeed VT (sales and leasing training, and provider of the NADA U platform); Ron Reahard (F&I training and certification); MMS Institute (sales, management, and leadership training); Jeff Cowan and Don Reed (service training); Jeff Sacks (general manager service and parts training), and EZ-HR (sexual harassment prevention training). Many of the partners offer free course segments. Learners’ progress may be tracked in all partner courses just as it is in other NADA U courses.

Even as NADAuniversity.com gives dealership professionals a new, convenient online training and education tool, full of rich and everincreasing content, 20 Group meetings and Academy classroom training and in-person seminars continue to be indispensable cornerstones of NADA’s training programs. As one participant said, “NADA U makes sure the discussions and learning never stop.”

NADA and ATD members are already enrolled in NADA U using their Member IDs. Sign in at NADAuniversity.com or call 800.557.6232. Dealers can add and

John Lyboldt, Vice President, NADA Dealership Operations

And NADA U offers dealers the opportunity to offer customized training of their own. They’re holding a place for you in Dealer VT, where you can add your own employee manual, handbook, orientation process, messages—any kind of training or communication specific to your store or dealership group. They’ll turn your material into interactive, trackable training—just call 800.557.6232.

maintain their lists of authorized employee users—ideally every employee of the dealership—whose performance can be tracked and measured at all times.

Sign in and explore your university— it’s easy to access, simple to navigate, and packed with training to help you succeed.

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S

Everything You Need to Know to Access and Navigate NADA U

Here’s where you start:

Sign in with your Member ID (see red arrow above) as both username and password. You’ll be able to change those fields under “My Profile” in the next screen.

If you are not a NADA or ATD member, you’ll need to enroll. The yellow arrow points to the “Enroll” button. Go ahead and click it—enrolling is free! Then follow the prompts to create your company account.

Once you’re signed in and enrolled, you’ll see the NADA University homepage, or “Main Menu”: In the center, the carousel shows three of the four centers of excellence.

Click the arrows to the right or left to see the fourth, NADA-ATD Academy.

To explore any of the centers, click “Preview” for a short video introduction or “Select” to get right to the content.

On your first visit, a quick video “campus orientation” will welcome you and give you a taste of what NADA U is all about. If you want to view the tour again at any time, simply click the movie film icon located just below and to the left of the graphics for the four centers.

System Modules Below the four centers are the “System Modules,” which are direct links to the places you’re likely to visit again and again.

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The top three buttons will take you directly to suites of resources within Resource Toolbox.  Click Driven to browse NADA online management guides. One click brings you to the overall

Driven category. Another click, and the library is yours to browse!  Click MarketINSIGHT to browse archives of NADA U’s monthly free webinars on current issues presented by

NADA U partners and other industry experts.  Click NADAPerks to browse a monthly digest of NADA’s accomplishments provided with a special perk for members.

The next level of buttons includes “My Report Card,” “Tattletale Report,” and “Search.”

“My Report Card” enables every user to view the tracking and reporting under his or her own username with one quick click. “Tattletale Report,” available at the management level only, allows you to view and track the usage and progress of all the employees you administer.

The “Search” function lets you use keywords to find anything that’s contained in NADA U. If you scroll down one more level in the System Modules, you’ll see three more buttons.

“My Profile” is where you can edit your own information, including your username and password. “My Favorites” takes you to the courses you have marked as “favorites,” and “NADA U Help” provides contact information when you need it.

Quick Links To the right of the “System Modules” are “Quick Links,” which are available only to dealers and top managers. You will normally see the four quick links in the screenshot.

“Training Reports – User” links the manager to all individuals and job positions that he or she administers, and enables generation of training reports. “Manage Users” and “Super User Access” are links for creating or editing users or searching for them. “Manage Users” allows access at one location; “Super User Access” allows access to all locations a dealer has included in NADA U. At “Location Settings” you can update your company contact information.

My LightPad Finally, at the upper right of the homepage, you’ll see “My Lightpad,” which is your email client within NADA U. Use it to communicate with any user at your location—to assign training, for instance—or to contact support.

Built-in Tracking

A

Accountability is the name of the game when it comes to training.

You need to know that employees are taking the training you assign them – and that they complete the training successfully.

With Tattletale Report, you know everything. The report gives you numbers—active users, sign-ins, unique sign-ins, unique users who trained, training chapters passed, failed, and viewed. And then it gets personal.

The screenshot above tells just a piece of the story. Clicking any piece of the pie, you can drill down to find out precisely who passed, failed, or merely took a look at the training. You can find out when they did what they did. And you can find out exactly what they passed, failed, or viewed—from the category, to the course, to the chapter. There’s no place to hide. Your employees are accountable.

Sometimes—with compliance issues, for example—it’s critical to be able to prove accountability. With Tattletale, you can show that your employees have completed courses on such topics as sexual harassment prevention, workplace safety, or the Red Flags Rule.

You can also use “Training Reports – User” on the Quick Links menu to track employees’ progress. Simply select the employee(s) for whom you would like to generate a user report. The report will reveal all completed training, and how many attempts have been made to pass.

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NADA U STORE The NADA U Store is where your dealership can subscribe to online training and purchase individual online courses, convention workshop recordings, webinar archives, and other products and resources.

You can reach the store from the homepage or from any other page you happen to be on.

Clicking NADA U Store links you to the products, which shows you all the categories you can make purchases from.

Click “Online Subscription” to get to

NADA VT, Learning Hub Individual Courses and NADA Partner VT. Here’s what you should know about subscriptions:

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Membership Benefits

Membership Subscriptions

NADAvt

All NADA and ATD members receive the following as part of their membership:  In Learning Hub: 6 essential online courses provided free to members as a limited-time introduction to NADA University—includes “Dealership Safety and OSHA Compliance,” “The Buck Stops Here,” “Cash Management for Heavy Truck Dealerships,” “Complying with the HAPs Rule,” “Red Flags: Stopping Identity Thieves Before They Strike,“ and “Working in Harmony.” Plus, members have access to 6 NADA U Partner courses!  In Resource Toolbox: All Driven management guides; NADAPerks monthly tips and tools; MarketINSIGHT monthly miniwebinars; industry news, trends, and special studies; and NADART and Used Car Guide product training  Employee profile setup, “My Report Card, and “Tattletale Report”

If you want to get the most out of NADA University, NADAvt is the best value, hands down. An annual subscription to NADAvt gives all employees under your account access to all NADA and ATD online training for the entire year. In addition to the NADA U features that are complimentary to all members, NADAvt includes:  All NADA and ATD online courses  All available NADA and ATD convention workshops online (two years)  All educational webinars produced  All webinar archives available (two years) Call 800.557.6232 for introductory pricing for NADAvt—we promise you will be amazed at the value!

A La Carte options include:  Learning Hub individual online courses  Learning Hub webinars  Learning Hub Convention workshops online  Other products and subscriptions, including Automotive Careers Online and HR Essentials

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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 20

H

HDL, LDL, PSA, CBC, HGT/ WGT, BP, RHR, are all acronyms for specific values, key numbers and indicators that we, as responsible human beings, should be aware of for our own bodies. Most of you probably are aware of at least a few of your own personal key indicators and are doing something about those that may be trending in an undesirable direction. This usually happens when you finally decide that this can wait no longer. That is our mentality of decision-making…when it finally rises to the top of our decision-making plate, then and only then, will we really apply ourselves to it, deal with it and move on to the next thing.

By and large, cars dealers are responsible human beings with a lot of other interesting qualities attached.

We love challenges, family, people in general, a wide variety of hobbies and interests and also growing our individual, ongoing, operations. Unfortunately, accomplishing some of these tasks through operating dealerships requires personal risk. Those risks come in many forms. I know some of you are wondering where this is going especially

By Scott Dreisbach

after a title with the words “Vital Signs” in it. Deciding on writing this article literally came to me in the middle of the night without warning.

The same thing will happen for your dealership if you are not paying close attention to your store’s “vital signs” and doing something about them in a pro-active way prior to your ultimate day of reckoning. In exposing people to the benefits of Inventory Management, I have always professed to everyone that it is much more important than you may think to pay close attention to your key indicators and numbers. I forgot about applying the same strategy to myself.

As a car guy all my life, I did most of the same things you do or have done. You know, taking the team out frequently to “celebrate something”, traveling to meetings that require after hours “socialization”, attending manufacturer “sales contests,” “prize point pressure” sign up meetings, new model announcements, and generally Hence, this article is about your store’s living a pressure packed lifeinventory health and the real importance style that did not allow a lot of of getting the decision-making process time to pay much attention to personal numbers including the moving toward the top of your decisioncumulative effects of smoking, making plate...once and for all. eating, drinking and generally living life in the fast lane.

Hence, this article is about your Over time these decisions and this lifestore’s inventory health and the real style does add up and one day the results importance of getting the decisionof these decisions will show themselves. making process moving toward the top My personal day of reckoning came of your decision-making plate...once and Thursday, June 24, 2010. The cumulafor all. Of course, most of you think tive effects of not paying close enough attention to my “Personal Inventory you already have what you need in place Indicators” became acutely clear…Heart and that your store is “covered”. You Attack. may have something, and you may be

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Scott Dreisbach

paying a lot for it, but is it taking you where you really want to go? Over the years, how many things did you buy with good intentions that you were never able to fully implement? Are you and your team using the technology as designed, or does it just make you feel a little better knowing that something is in place? Managers fight change and accountability. It is natural.

vehicle retail gross profit plus total vehicle wholesale gross profit, divided by the sum of the cost of those sales plus the current actual vehicle dollar inventory.

This is displayed as a percentage and, as the name implies, is measuring the gross return of the total inventory investment.

In total, this is a relatively easy number to calculate. It is also relatively easy to compare this indicator for cars and trucks.

Unfortunately, that is usually where most stores stop and in actuality, this is where we should all just begin. The formula to calculate this key indicator with an example looks like this:

years. It is also a given that some of your sales segments and model years perform better than others. Do you know, without a doubt, which ones those are?

Do you know your quickest turners? By segment? By model year? By make?

Do you know, without a doubt, if more inventory in those segments and model years would be better? Do you know the point of diminishing return for each investment? By monitoring and tracking the GROSS RETURN ON INVESTMENT you can get definitive answers to these questions and more.

It is in your best interest to invest another few minutes of your time and contemplate what today’s technology can do for you.

By far, the single most important and underused key financial indicator for both the new and the used vehicle inventories is “return on investment”.

That is what you are in business for – a continuously growing return on your investment. This drives the value of your entire business. It is used to calculate multiples of earnings, establish values for potential “Blue Sky”and a whole number of other important business indicators. For purposes of this article, and as an indicator that most dealership management personnel can understand and relate to, here is a modified version of this – it is GROSS RETURN ON INVENTORY INVESTMENT. This is a quality measurement indicator and is measuring the total gross profit return (both retail and wholesale) compared to the total investment required in the inventory to generate that return.

The formula used to calculate this key financial management indicator is total 22

It is also important to keep in mind that this indicator is for the period measured. If the above example was for a month, to annualize this indicator, simply multiple by 12. A good target to strive for with this indicator is 10 per cent per month, or 120 per cent per year.

It is a given that the inventory is made up of many different types of investments – small cars, sporty cars, mid-sized cars, full-sized cars, as well as all of the different types of trucks, vans and SUVs. Within each of these sales segments reside the individual model

As you know, part of management’s responsibility is to manage the activities of the managers. Buying a system and telling them to use it is not management.

Change will not happen by itself. Over the years this has become so evident to me that an integral part of the Valuinsight Vehicle Inventory Management System is weekly, 30-minute, revenue impact meetings insuring that your people are taking full advantage of the tools and being held accountable for progress and improvement. The entire Valuinsight team is dedicated to making sure your team is using the tools and you are getting a measureable “Return on Investment.”

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The traffic count that drives by your store every day is, by and large, the same traffic every day. The key to getting more of that traffic to turn in to your store is stocking more of what your demographic is looking for.

Increasing vehicle turnover is simply having more of the right product on the lot more of the time and less of the wrong product taking up “shelf space”.

This sounds easy and, with a well thought out system, it can be accomplished. At the very least, develop and implement a system that will separate your sales, gross and inventory by categories of vehicles (small cars, mid-size cars, sporty cars, etc.) and by model years within each category (used vehicles) or specific model numbers within each new vehicle sales category. Your stocking guide needs to include your target supply number for each type of vehicle (45-day supply for used and 60-day supply for new) based on the actual sales rate, not a forecast. Not only do you need to know how many units you should have on the ground, but also, you need to know what dollar value those units need to be that turn the quickest for your store. The decision to determine your stocking guide number of units and corresponding investment can largely be determined by your GROSS RETURN ON INVENTORY INVESTMENT. Suffice it to say, if it has been good, let’s try doing a little more of it. Alternatively, if it has not been so good, let’s do less of it.

Over time, you will be able to identify optimum inventory levels for the sales segment, the model years and the ready to go ACV that best suits your customers demographics. We must come to the realization that we cannot be all things to all people.

Other Key “Inventory Health” Indicators • Days supply units versus Days Supply dollars • By model number for new vehicles • By year and category for used • Purchase vs. trade ROI • Today’s water in inventory • Target supply versus actual • Market pricing • Internet generated activities including actual clicks, demo drives, sales • The speed of “your money” • Quickness of turn by price bucket at cost The Bottom line is this:  You must have a serious process in place to monitor your key indicators  You must do something about these indicators on a regular basis  You must come to the realization that your future is in your hands Don’t wait for your “wake up call”.

For a free excel stocking guide that you can begin to use immediately, simply email me and request the used vehicle stocking guide. I will email it back to you directly.

For more information, please feel free to contact Scott Dreisbach at Valuinsight, 877-269-4491 Toll Free, 561-368-7810 X108 direct, sdrize@ valuinsight.com, or logon to www. valuinsight.com.

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Managers are responsible for the development of their people – leading to greater contributions to the organization’s goals and objectives. By helping them “do better” we help the organization “do better.” Increased profit is the ultimate goal – to get there we focus on helping our people be more productive – get more done quicker, more effectively and more efficiently. This why I believe: Team member development is a manager’s most important responsibility!

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So what’s the best way to develop team members?

How can you as a manager get your people to be more productive – get more done quicker. More effectively and more efficiently?

Take a few minutes and read the sample Team MemJohn Strom ber Assessment & Development Plan* that accompanies this article. It’s an example of one that a Sales Manager might have done on his people. [Do it now – then continue reading.]

Does it make sense to you? Can you see how doing this with your people would lead to their development in the key performance areas of their job? How would your people react to you working with them in this regard? What are the benefits to you and the organization of you taking the time and effort to do so?

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Strengths (Do well…) – aspects of their job where their performance is excellent (…exceptional).

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Come up with three key strengths – areas where you and others have observed their performance to be excellent…maybe even exceptional. They’re ‘a natural’ at it. – it’s easy for them to perform exceptionally. They learn it easily; they continue to do it well.

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These are areas that significantly contribute to their success in the job. These are areas where they demonstrate some ‘best practices’ – where they set a high standard for performance.

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As you can see from the sheet, I recommend you focus their development on ‘doing more of’ one of these at a time. Keep the development ‘focused.’

Begin with focused assessment Developing your people is a continual process that will produce the best results when it begins with what I call “focused assessment”. By ‘assessment’ I mean that both you and your team member (…along with others whose input would be valuable to the development process) think about, gather supporting evidence of, and share your opinions of the team member’s current performance level. By ‘focused’ I mean that it needs to be focused on “the most important parts of the team member’s job” – those activities that will have the most impact on the most important goals and objectives of the organization – productivity, profitability, customer engagement, retention of both clients and team members.

Improvements (Improve doing…) – important aspects of their job where their performance is limiting their success.

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Come up with two key improvement areas – areas where you and others have observed their performance to be less than it needs to be for them to be a truly ‘high’ performer.

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Be cognizant of the reality that they will very likely not be able to achieve ‘high’ performance in these areas. You’re probably just trying to help them achieve ‘good’ performance in these areas. These are areas where they may ‘naturally’ struggle – they don’t learn about these easily, they have difficulty sustaining performance.

•

Again I recommend focusing development on just one of these at a time.

Let me make a few comments about each of the columns on the sheet:

Performance (high, medium, low) – this is the overall assessment of the team member’s current level of performance.

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You can set whatever criteria you want for this assessment. I recommend assessing relative to the top performers in that job, not relative to your other team members (unless you have a top performer on your staff).

Consider performance in ALL areas – productivity (their numbers), profitability (both the money they make you and the costs they save), customer engagement (how many ‘customers for life’ are they creating and sustaining? Call these ‘clients’ rather than ‘customers’) and team member relations (are they promoting high performance in others or hindering it – are they good ‘team members’?) You should only rate them ‘high’ if they’re ‘high’ performance in ALL areas.

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Have them take responsibility for their development It’s vitally important for each team member to take individual responsibility for the development. You’re there to coach – to celebrate success, help with implementation challenges, remind them of actions they’ve committed to taking.

Development Actions (What to do?

When to do it? What result?) – actions they will take to develop the one strength and one improvement area.

•

Ask them first what they’d like to work on; then offer your suggestions.

•

Ask them what actions they’d like to take; then offer your suggestions.

•

Come to an agreement of specifically what they’ll do, when they’ll do it and what the result will be. Have them ‘read back’ what they’re committing to.

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Be a coach throughout – celebrate, help, remind them.

•

Most importantly, hold them accountable for their development.

One last question for you: Are you going to do this? * If you would like an easy-to-complete Word ‘form’ version of the Team Member Assessment & Development Plan, good to use throughout the dealership, call/email me – 775-848-8384 jstromsa@gmail.com.

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 singlepoint and multiple franchise operations, including General Manager. His company, Strom & Associates, is a member of the Performance Development Group. To learn more as about their services, visit www.perdevgrp.com.

Employee Fired Over Facebook Posts Backed by NLRB

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By Rick Lentini Ryan Swanson and Cleveland

The NLRB alleged that American Medical Response of Connecticut, Inc. engaged in unlawful laborpractices by discharging an employee for criticizing her supervisor on her Facebook page. The NLRB alleged the Facebook posts by the employee, Ms. Dawnmarie Souza, were made in regards to discussions of the terms and conditions of her employment with co-workers and constituted protected concerted activity. Ms. Souza posted negative remarks about her supervisor on Facebook after her supervisor threatened to discipline her for requesting a union representative for an investigatory interview concerning a customer complaint about Ms. Souza’s work. Ms. Souza’s co-workers responded to her Facebook posts, leading to further negative comments about the supervisor. Ms. Souza was suspended and later terminated for violating the company’s internet policies.

The NLRB allegations were subsequently settled. In a February 7, 2011 press release, the NLRB noted the company maintained overly-broad rules regarding Internet postings and communications between employees.

Specifically, the Internet policies were required to be revised to ensure they did not improperly restrict employees from discussing their wages, hours and working conditions with co-workers and others while not at work.

The American Medical Response of Connecticut, Inc. complaint reflects the NLRB’s conclusions that Facebook postings discussing wages, hours and working conditions with co-workers directly impact the terms and conditions of employment and are protected activities. However, where an employer disciplines an employee for Facebook posts that do not implicate terms and conditions of employment, such discipline will not violate the National Labor Relations Act. Employers should be aware of this latest NLRB complaint and settlement and review their Internet policies to carve-out the protected activity identified by the NLRB. While discipline for out of work discourse that does not relate to the terms of conditions of the workplace will not support a retaliation claim under the Act, this latest NLRB complaint should serve as a warning to employers to review the facts and circumstances of such activity prior to issuing any discipline.

Please contact us if you have any questions: Rick Lentini, Lentini@ryanlaw.com Teru Olsen, Olsen@ryanlaw.com 29

30 Photo by Adam Buchanan

Ask Steve Hanson, a man who has represented some of the world’s great automakers, about his first car.

He’ll tell you with a smile it was a Chevrolet.

“A 1932 Chevy sedan with push-and-pray brakes,” he says. “I was 13 when I got it - that car and I grew up together.”

Photo by Adam Buchanan

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By Craig Chastain

Growing up on a working dairy farm in Washington’s Skagit Valley, Steve was fixing up and driving cars, trucks and tractors at an early age. He gave a brief thought to an engineering career after high school, but discovered early on that his first love was cars. By age 27 he had his first dealership.

“I learned the business from the ground up at McDowell Volkswagen,” he says. “When we opened a store in Oak Harbor, I got involved with the entire operation – sales, service, marketing, everything – and the time came when I was ready for a dealership of my own.”

Steve bought Brewington VW in 1974, renamed it Hanson VW, and launched a Northwest institution that has connected the region’s car buyers with quality automobiles from both sides of the world. At Olympia’s Auto Mall – their home since 1986 - Hanson Motors now showcases an international mix of world class vehicles including Volkswagen, Subaru and Kia. “The Auto Mall has been a great home for us,” says Vince Hanson, Steve’s son and the general manager of the dealership. “We’re in the heart of a public sector economy, with all the state workers here in Olympia and Joint Base Lewis-McChord just north of us, so over the years we have seen fewer economic ups and downs.”

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Photo by Adam Buchanan

Like his dad, Vince learned the business by doing everything – from lot boy to janitor – between high school classes and during summers away from studies at Central Washington University.

He proudly holds the unique family distinction of helping build the Olympia store – literally - from the ground up.

service center, an expansive used car inventory, and three of the industry’s top brands, Hanson Motors is a standout at the Auto Mall and beyond. Their experience and instincts have served them well as they partner with German, Japanese and Korean manufacturers.

“Each carmaker – Volkswagen, Subaru and Kia - has their own culture and ways of doing business,” says Vince. “The one thing they have in common is the quality of their product. We’ve visited their factories and seen their commitment to making world-class vehicles.”

Today, that foundation, built and maintained by father and son, supports one of the most successful and respected dealerships in the Northwest. With 60+ employees, a state-of-the-art

A vital part of their marketing is their focus on the region’s large military population. For the Hansons, “support our troops” also means giving them a great deal.

Photo by Adam Buchanan

“Vince was a “hod carrier’ during construction of this building,” says Steve. “He was part of the bricklaying team that built the walls and foundation for Hanson Motors.”

Like the cars they sell, the Hanson team works diligently to build and maintain the Hanson “brand.” Their marketing uses the new technologies of the Internet along with more traditional but still effective print and broadcast advertising. A drive through the Auto Mall demonstrates that they, along with their neighbors, still use many of the classic dealership tools – from balloons to banners – that have always worked in the car business.

Steve (left) and Vince Hanson, Hanson Motors, Olympia 32

That focus on exceptional service extends to the work done by the Hanson team in their community. Their current focus is on the needs of seniors, from providing vehicles for the Meals on Wheels program to spearheading food drives and other outreach projects. Steve describes their commitment on the company website: “At this time of great need, Hanson Motors is proud to extend their support to those who gave so much throughout their lives and careers.”

Community service, along with a shared commitment to excellence, helps keep the Hanson team a “family” of loyal and committed colleagues. Their current office manager, Rozanne Nurmi, has been with the team for 39 years and is currently training Steve’s daughter, Kim, to transition into that position.

It’s too early to predict whether Vince’s two children – Britannia and Ryan – will carry the Hanson tradition to a third generation.

Family traditions extend to those rare and precious times away from the showroom. Steve, Vince and now Ryan share a love of fishing and spend time together each season on waterways in Alaska and around the state. Steve has been “retired” since 2005 but is still a strong presence at the dealership.

not here I’m usually at our warehouse working on a car.”

Indeed, the man who fixed up and drove his first car at 13 maintains that passion today.

Steve’s collection of classic cars – including a stunning 1932 Ford Phaeton - has been seen and honored at car shows throughout the West.

Most importantly, he drives each vehicle to each event.

“If it’s on a trailer, it must be broke,” he says firmly. “Cars were made to be driven.”

Photo by Adam Buchanan

“We market extensively to Lewis-McChord,” says Vince. “We’ve always believed our military families deserve special attention and consideration.”

Today, after five decades in the automobile business, the Hanson passion for cars can be felt in every corner of the dealership.

“We’ve learned the business is cyclical,” says Vince, “but we believe the future looks great for our business and we have fun doing what we do. We’ve got some of the world’s best cars and a market that’s looking for quality and value.”

Northwest car buyers will find both – along with a tradition of excellence – under the Hanson sign at Olympia’s Auto Mall.

“I come in most every day to stay connected and pick up my mail,” he says. “When I’m

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V

Value still remains the most important, but least understood factor of today’s automotive sales. Dealers continue to invest in high-value solutions designed to solve customers’ problems, fuel profitability, and separate themselves from their competitors. In short, one of today’s challenges is in value clarity.

Dealerships continually have difficulties in sales because of the increasing disconnect between the value of their product and the customers’ situations or needs. The more complex the customer situations, and the solutions that can address them are, the more uncertain the customers become. The uncertainty manifests itself in decision paralysis resulting in a lost opportunity. To put it plainly, when a sales person is unable to provide their customer with value clarity they have no alternative but to cut prices or make other dealer concessions. The end result is loss in revenue and potential profits for the dealer.

Developing, enforcing, and monitoring a specific sales process that converts the conventional sales solutions-based approach into a diagnostic, customer-

To provide a value-based sales profirst approach, will assist in eliminating cess there are several things that should obsolete sales practices that are driven be considered and implemented: by premature presentations, debate,  Stop selling and start managand confrontation. In doing this, it will ing decisions. All good sales replace them with a step-by-step process people have a sales process and of mutual confirmation between the sales all customers have a buying team and the customer. It will transform the customer’s stereotypical impression of salespeople A smarter way to sell would be to stop as predators into selling in the conventional sense and one in which salesinstead become a counselor, helping people are seen as guide the customer through a decision valued automotive consultants who process that results in a long term bring creditability, relationship that continually brings the integrity, and decustomer back. pendability to the dealer customer relationship. In short, a smarter process. The problem is that way to sell would be to stop selling they invariably have conflictin the conventional sense and instead ing objectives that create an become a counselor, helping guide the adversarial relationship. We customer through a decision process that need to set aside confrontationresults in a long-term relationship that al processes and replace them continually brings the customer back to with a collaborative decision your dealership for any of their automoprocess, provided by the sales tive needs. professional.

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 Stop just trying to meet needs and start managing expectations. Just because we see a need does not mean that our customer sees it, or understands it as clearly as we do, and will do something about it. We need to clarify our value by connecting it to the customer’s needs and the value impact it will have in the future.  Stop creating transactions and start managing relationships.

All too often in the rush to close the deal, we forget the human factor and squander the longterm opportunity. We need to address the hopes, fears, and aspirations of our customers and create mutually beneficial relationships.  Stop rote talking points and move towards interactive conversations. Too often, we react to customers with fixed canned responses, without asking for clarification or explanation.

As a result, we sound just like every other sales person the customer has met with. We need to communicate at a level that fosters clear mutual understanding of our customer’s challenges and objectives in order to provide them with the best solution and customer service.

Developing a sales process for your organization is not going to be the difficult part of taking your sales to the next level. There are literally hundreds of companies that profess to having the best, most up-to-date, and customer friendly sales processes in the market.

However, like customers, there is not a one fits all type sales program. When implementing a new sales process, the company that is implementing the change needs to take time to evaluate the 36

dealers expectations, goals, philosophy of business, and customer characteristics.

They should make sure that the program they are offering fits within the structure and culture of the organization. They should also take time to interact with current or previous customers to find out about their buying and service experience with that particular organization.

Evaluating the likes and concerns with current customers will help in modifying your approach to future customers. Implementing a sales process is no different than trying to earn the business of a customer. It must be tailored to the needs of the organization.

Once identifying the program that best fits the goals of the organization, implementation, enforcement, and monitoring will insure its success. It is a natural assumption that everyone who will be responsible for executing the new sales process believes in it and sees the value in it as much as we do. They, too, must be shown the value clarity of the new program and what it will mean to them personally. Without the enforcement and continual monitoring of a new program, it will slowly fade away and leave skeletal remains of what was probably a great and effective process.

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 in 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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By Bob Hinton, CPA Moss Adams LLP

Over the past 20 years, tax laws and regulations have been changing faster and faster. They’re also becoming more complex and extremely difficult to predict. Legislation is often enacted, changed, and then challenged in the courts. The good news? It makes tax planning challenging but never boring.

Below are a few tips to keep in mind as you consider ways to help insulate your business from tax surprises.

Always Look Three to Five Years Ahead It turns out that how you plan for potential tax changes is almost as important as the actual change itself. It pays to create what-if scenarios to project the positive or negative effects potential tax law changes may have and how they may affect cash flow over a three-to-five-year window. Too often business owners get “tax tunnel vision”—that is, they see only today’s tax issues— and miss huge timing or rate differences a few years down the road. The bottom line: Be prepared.

Timing Is Everything Let’s face it—tax rates are likely going up over the next few years, which means timing tax deductions is extremely important. Because most dealerships are generally held in S corporations or LLCs, taxable income is usually passed through and taxed at the individual level. Therefore, most tax-saving strategies will directly benefit the owners, who often have additional complex tax issues.

This makes the planning process even more valuable.

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Understand Your Total Tax Deferrals Do you know yours? Hint: You likely won’t see this number on your tax return. Your total deferral is often called your “tax wave” because it’s the total amount of unrecognized taxable income you’re pushing into the future. For example, if you totaled all your tax timing differences (such as benefits from cost segregation and accelerated depreciation over book), this would be your tax wave (based on today’s tax rates). If you do know what your tax wave looks like, do you have any idea what these deferrals will be worth next year or a few years later? Is your tax wave growing or likely to shrink over the next few years?

Manage Your Deferrals Do you know how much income you want to defer over the next three to five years? If so, you may want to accelerate income into a “closer” year based on your anticipation of taxable income and rates in the future. The worst thing that can happen is to be unprepared for your tax wave to crash (reverse) in a high-income year when cash flow is tight. Because these liabilities often aren’t recorded on your balance sheet, they can sneak up on you.

Graph Out Your Tax Wave If you don’t know what your tax wave looks like, work with your tax professional to develop a graph of your cumulative deferrals. This should approximate how much taxable income has been deferred that will be moving into next year, showing the type and estimated dollar amount of the deferral. This computation needs to be computed for the entire ownership group and should include related business or family assets that generate tax timing differences.

Project Your Wave Forward Once you’ve computed your tax wave, you can begin predicting taxable levels for 2011 through 2015. Armed with this information, you can better evaluate rates, assumptions, and risk and then implement strategies to handle them. Your projection will show the amount and type of tax deferral you currently have and the cash flow

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benefits you can realize from them. From here, you can predict the potential value of these deferrals based on the estimated tax rates of the owners and anticipated reversals or “crashes.” Additionally, long-range tax planning opportunities may become more obvious when you analyze your graph. You might see opportunities to mitigate ordinary income recapture issues or generate long-term capital gains or losses in more favorable years. These kinds of opportunities can generate permanent rate differences that could generate large tax benefits to you down the road.

Conclusion Looking at tax planning through the window of your tax wave gives you the opportunity to make long-term decisions now. It also lets you prepare for unexpected cash flow problems. Further, the opportunities to anticipate rate changes or make proper elections can give you a competitive advantage as you manage forward through an uncertain economic cycle. And finally, if you’re contemplating any type of succession planning, you need to consider where—and when—in your tax wave a successor will take over. But no matter what, the time to begin doing this kind of planning is now. As they say, surf’s up.

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

“THEY’RE ALWAYS KEEPING ME IN FRONT OF SHOPPERS’ EYES.” Tammy Darvish Vice President

Ronda Nassib Advertising Consultant Greater Washington, D.C.

MARKETING THAT WORKS FOR TAMMY Tammy is a people person. And the more people in the D.C. area

sponsorships of MLB on FOX, NASCAR on FOX, NFL on FOX,

who see her cars, the better. So she knows that our high-profile

BCS on FOX, as well as the NBA on TNT will attract millions

ads in the biggest shows on the biggest networks are important in

more. Hey, like Tammy says, “We are in this together.” For videos of

attracting millions of customers to her 27 dealerships. And our proud

success stories from dealers like Tammy, visit results.autotrader.com.

©2009 AutoTrader.com, Inc. All Rights Reserved. “AutoTrader.com” is a registered trademark of TPI Holdings, Inc. used under exclusive license. New England Patriots trademarks, including the Patriots logo, are the property of New England Patriots L.P., and are used pursuant to a licensing agreement with New England Patriots L.P.

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Think About it

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Why Express Maintenance is NOT Working

By Peter Barram and Dan Murray

As we talk to Principals and Service Managers of dealerships we hear an all too common statement. “Knowing that I needed to fix my Express Maintenance offering is the easy part. Fixing it is the hard part. So far everything I have tried is expensive and produced little or no results.” So what is a dealer to do?

Let’s begin with some facts that market research involving blind surveys, focus groups, and one- on-one interviews tell us: • Only 20% of consumers use the dealership for an oil change.

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70% of services are now generally considered maintenance. They are most commonly performed outside the dealership in the aftermarket.

These other services include, but are not limited to, tire, brakes, transmission, gear boxes, radiator, air conditioner recharges, and similar services.

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Dealers generally agree there is a 50-70% defection rate of new car purchasers that DO NOT return to the dealer for oil changes or routine maintenance.

•

Many studies show that the routine oil change is NOT price sensitive to a vast majority of the market.

So it really makes sense to go after the 80% that we never see. We need to figure out why the aftermarket is getting so much of the “maintenance” work and how to keep the defectors from defecting. We need to realize 40

that consumers will pay for speed and convenience so we don’t need to give it away.

The old statement that “If you give the consumer what they want, they will come” is especially true for a fast oil change service and other services now considered maintenance. Conversely, if you do not give the consumer what they want, they will not come.

Today’s consumer lives in a “Drive-Thru” world. Whether it is drive-thru fast food, drive-up banking or drive-thru dry cleaning, consumers live a “Drive-Thru” lifestyle.

Most of the “80% group of consumers” regard an oil change as a “periodic impulse item”. They know they should be getting the oil changed, so when they see a fast lube they think: • Do I have 10 – 12 minutes?

•

Can I drive in and out safely?

• Does it look like a safe environment?

• Is there a line?

We have identified four components of the oil change service necessary to meet 100% of consumers’ expectations 1. Consumers want speed and convenience. o Consumers have come to expect a 1012 minute service from the time they drive over the bay until they leave. o Most expect to stay in the car during the service. They want to keep the kids and the dog inside the vehicle.

o They realize that if they are in the driver’s seat then a tech with less than clean work pants will not sit in their seat. This is especially true for women which make up half of the customer base. o They have been trained that no appointment is necessary. Just drive up! o Consumers want to service all their vehicles once they are comfortable with a facility.

2. Consumers want information and data that is faster than the service itself. o Consumers rely on the window sticker to remind them when it is time for an oil change. o Consumers have come to expect total software interaction that is faster than the time it takes for the oil to drain. o They expect their fast lube management system to have data for all their other vehicles, not just the OEMs. 3. Consumers have come to expect proven oil change procedures and processes. o They have been taught over the last 30 years that they can be involved in the service. o They can hear the interaction between the upper and lower techs as they service the vehicle. o They can confirm the oil draining, the filter being handed down to the lower tech, and the oil level being confirmed at the end of the service. o They can see that the air filter was indeed removed and examined, and even shown to the 41

owner through the driver’s side window.

4. Consumers have come to identify what facilities are indeed fast lubes. o Most expect a stand-alone facility with two glass overhead doors for full visibility. o They expect to drive around to the rear and get in line.

The day it opened there were 16 cars in line. This continued until a new older experienced service manager was hired.

Following his previous experience the service manager quickly eliminated the back-up line along with the customers.

He required every customer to meet with a service advisor and wait in the customer lounge while a porter moved the car through the oil change facility.

The number of oil changes soon reverted to the level the dealer was doing before the addition of the facility.

did not expect a service writer, just an oil change and tire rotation. In a short time 80% of his customers were new to the dealership.

Ron understands that his fast lube techs can be taught to identify additional maintenance work the customer needs and have the opportunity to pass it on to the Level Two service area.

Ron also recognizes that an oil change is not ‘price sensitive’. “In fact,” Ron comments, “ I get fewer objections

o They expect clean facilities and competent employees. o They have been taught that lifts are slower than basements or Zip Pits. o They have been conditioned to use fast lubes just like they have been conditioned by experience to use the check-out system.

We have seen many installations with one or two of these components implemented and the dealer wonders why it hasn’t met their expectations.

Meeting three out of four Successful Quick Lane facility at Ron Claudon’s Valley Buick GMC in Auburn, WA components doesn’t mean they can expect 75% success. Experience has to the cost of an oil change now that I In the opposite situation Ron shown that when you fail to meet ALL have the Quick Lube than I had before, Claudon, Principal of Valley Buick the components you should expect less even though I now charge more.”

GMC in Auburn, WA decided in 2003 than a 25% increase in success. We have that a Stand Alone Quick Lube would seen this time and time again. meet his existing customers’ oil change A visiting dealer walked up to one Some dealers have discovered that the of Ron’s customers and asked, “How needs while increasing his desire for new customer interface in a fast lube situation much are you expecting to pay for this customers frequenting his dealership. does not require a service writer and in oil change?” The customer thought for This allowed him a chance to get “the fact the service writer complicates the rest of the business.” a moment and answered that he didn’t process unnecessarily. know.

He understood that it was OK if the One dealer that installed a four bay oil change customer was not greeted by Ron chose a modular stand-alone five modular fast lube is a good example. a service writer. After all, the customer facility that was erected quickly, thereby 42

reducing the disruption to his dealership.

It was complete with training and the software. He placed it up front where the public could see it in the middle of his used cars so the oil change customers had to drive through Ron’s used car selection.

Ron now sees many more people in his dealership and most of them pay him to drive onto the dealership. He increased the number of his daily oil changes from 20 to 70. And 40% of these vehicles are not GM brand which offer him additional opportunities for Level Two service work as well as sales of new and used vehicles .

There are enough success stories to see how it works. There are also enough partial success stories to see how it almost worked.

Now dealers can finally make money changing oil while at the same time meeting their customers’ expectations.

It all comes down to listening to the consumer and putting in exactly what they want.

Peter Barram and Dan Murray are with ModuLube, LLC which provides complete turnkey fast lube and Level 2 systems for dealerships. For more information about this topic you can contact Peter Barram at peter.barram@modulube.com or Dan Murray at daniel.murray@modulube.com or logon to www.modulube,com to learn more about the future of maintenance services.

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A personal financial plan serves as your playbook for organizing your personal financial goals and objectives in an easy-to-understand guide. Once a financial plan is in place, it is easier to focus on each individual goal and fully understand what you need to do on a continuing basis to reach it.

The purpose of developing your own financial plan is to prioritize each of your financial goals into needs, wants, and wishes. The financial plan should clearly show how all the goals are interrelated, yet prioritized. The plan should also address which goals you would only be able to partially fund if the resources are not adequate to fund them all. A properly constructed financial plan should complement and promote your strengths, while highlighting any shortfalls or deficiencies you may have. The plan should then provide clear, actionable items regarding how to make the necessary changes to achieve your goals within the appropriate period.

A comprehensive personal financial plan can enhance the quality of your life and increase your satisfaction by reducing the uncertainty about your financial future. It can help you build your personal financial resources during your working years and reduce the pressures on your dealership when you leave the business. A financial plan allows you increased control of your financial affairs.

It can prepare you for the unexpected, guide you during economic downturn, and help you avoid dependence on others.

Retirement can cause you stress, fear, and insecurity.

Developing a well-structured financial plan will not only give you peace of mind; it may even help improve personal relationships within your family structure as you define an economical way to transition the dealership that also allows you to meet all your financial goals.

Knowing you will have the financial ability to achieve your goals in the face of the unknowns associated with longevity is well worth the time and effort of completing a plan.

continued on page 53 43

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NADA 2011 San Francisco I can report from Moscone Center in San Francisco that industry optimism helped deliver 20% more NADA customers over last year’s convention in Orlando, a positive sign for an industry that is looking to profit from 13 million total new vehicle sales in 2011. Helping dealers improve profitability is the driving force behind the NADA convention, flush with exhibitors menu-selling a wide range of products and services that would be the envy of F&I managers.

Social Media Among your potential customers, there are approximately 150 million users of Facebook (as of January, 2011).

As depicted in the chart, most fall within the 18 – 54 age range. In other words, social media websites like Facebook are fertile ground for finding customers and keeping them. Although this emerging form of dealership marketing has so far produced more buzz than vehicle sales, online relationships have yet to be fully harvested. The point of charting Facebook is that 80% of your customers will go online before they buy from you.

The end game, for now at least, is to ensure that buyers find your dealership and gain a favorable impression of it.

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Think of social media as “electronic-word-of-mouth.” Early efforts at harnessing its potential have centered on Search Engine Optimization (“SEO”) and Reputation Management, in that order -- your customers have to find you before they can learn about you.

Even though Facebook is claiming the prize for most eyeballs among social media websites, Google may be the one to watch.

As this article goes to print, Google launched a new social media initiative, simply “+1.” It is similar to Facebook’s “Like” feature. If it gains traction, Google may have an edge with its installed base of Gmail accounts combined with its search predominance.

As your customers are likely to begin their search on Google, Gmail users with whom your customers are acquainted will see how many +1 ratings were awarded by trusted friends (Note that existing Gmail users will need to add a public profile on Google. To learn more, see: http://www.google.com/+1/button). When it comes to helping buyers find you on the Internet, there is no substitute for testing and monitoring your search results and knowing the difference between a short tail and long tail search.

Jeff Forsberg at NADA San Francisco

Reputation Management ensures that all your SEO efforts are rewarded with positive, plentiful and authentic reviews. First impressions count: Google Instant is a search enhancement tool that displays search results as your customers type.

As part of the search, the Google Places feature clearly presents a dealership’s total number of reviews with an overall 1/5-star rating system as a live link right on the first-page results. It also presents live links to the individual websites where the dealership has been reviewed, so customers can effortlessly read what your customers are saying on Google’s first-page. And your customers need to find you on page one of search results, because 95% of your customers do not look on page two.

With an effective SEO strategy, your website gets first billing and is highlighted with positive reviews, as aggregated from the various rating services (Dealerrater, Edmunds, Yelp, Insiderpages, Judysbook, and others). Fortunately, dealers have a surprising degree

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of control over both the scores and the number of reviews published.

Because people are more inclined to write a negative review, dealership consultants recommend a proactive approach by dealership employees to elicit positive reviews to counter the tendency of negative ones. And it’s worth pointing out that paid online ad placements are far less effective than reviews submitted by your customers. In fact, more than 80% of all clicks come from organic content, not pay-per-click ads located at the very top or off to the side. Call me for a recommendation of SEO consultants who can make an immediate impact to your search results and overall dealership ratings.

QR Codes: Something New No, this isn’t a Rorschach blot: This is new tech. Generation X, Y & Z is more dialed in to new technology, so QR (“Quick Response”) codes may be worth learning more about.

Simply, the image can contain information about a vehicle, your dealership, your salespeople, etc. The data contained in the code can be links, text, photos, and more. For example, a QR Code can be added to each new and used vehicle WHAT IS IT? sticker, conveying more details about a vehicle in which a customer has interest. The customer can simply take a photo of the QR code with his or her smart phone (courtesy of free, downloadable apps). Whether it’s after hours or an inattentive staff, the QR code can assist your “virtual salespeople” efforts, directing the shy customer to a specific page on your website for more information. In the process of connecting to the dealership, the customer can leave contact information for follow up, growing your customer list. QR codes can be generated online for free. Creating a QR code is both easy and free (http://qrcode. kaywa.com); they may even be placed on the backside of business cards.

On the other hand, predicting adoption rates of new ideas is always a coin flip and QR codes could wind up as another “solution looking for a problem.” Try the one above out for yourself – your Smartphone should direct you to PSADA online upon launching the QR Reader app.

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Oil Service Plans: Lifetime Revenue or Lifetime Expense?

It’s all about customer retention, and lets face it, your customers are free agents after the sale. Great customer experience will create loyalty, but their allegiance is tested each time they visit. NADA featured Oil Services among its “20 Group Best Ideas” as one of the dealer’s best low cost tickets to keep your customers returning. I agree.

I have long been a proponent of a very small oil service agreement that doesn’t require an attorney or a “hard close.” It’s best to make it easy and inexpensive, both of which rule out Lifetime Oil Plans, which are accounting quicksand and costly. In my experience, the path to least customer resistance is a prepaid oil service card. Follow Starbucks’ lead and package five oil changes together, incentivized by a meaningful discount, say 15% to 20%. It’s a safe bet the customer will not allow the prepaid services to go unused, giving your dealership five chances to win continued loyalty with your customers. As the costs of labor and oil increase, you have the flexibility to adjust your pricing to preserve your gross margin.

Unlike prepaid plans, I dread the sight of “Lifetime Oil Plans” on your books. The computer schedule tracking customers and costs is usually out of control, running into pages of misery. Further, the liability on your financial statements is often understated by six figures. Long term, it is very doubtful that dealerships realize any gross profit from Lifetime Oil Plans. With prepaid oil services, the dealer has better control over the costs without any sacrifice to your customer retention strategy.

Annual DMS Update: “Is MSDMS a Window to the Future?”

Dealer management software (“DMS”) continues an evolutionary path and the choices are largely unchanged from last year. Paul Gillrie, of the Gillrie Institute, picked up on the growing instant communication features of social media and the integration with your DMS. “We believe this is just the beginning of a trend that will revolutionize the industry over the next five years.”

Dealers were teased years ago at NADA with a new “Microsoft DMS,” leading some dealers to think that software engineers in Redmond were toiling away on their behalf. The reality is that Microsoft is only selling its software database products to DMS developers. In fact, Tier 2 DMS providers (e.g. ACS, DealerBuilt, and others) have long been using Microsoft software. The new development is that a “Windows DMS” has taken the name of “MSDMS” and has moved beyond vaporware. The current iteration of MSDMS is a rewrite, rather than an update of the European product on which the early demo was based. Further, the MSDMS technology is based on Microsoft’s Dynamics AX, an advanced platform that is state of the art for business reporting.

To those rightly skeptical of perennial launch promises that prove empty, ACS, a company that has for years operated a Tier 2 DMS by the same name, is leveraging its experience in the development of MSDMS. Management is confident of a roll out at next year’s NADA. MSDMS will be positioned as a higher-end solution designed for larger and multi-store dealerships. The saying “hope springs eternal” is applicable here.

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By Nancy Friedman The Telephone Doctor

We all know we’ve left companies due to poor service. And we know, too, there are more than five unforgivable customer service mistakes. These, however, have been culled together from the many emails and comments we received over the years.

While it’s all common sense - we know that common sense is not all that common. So we continue to share this information with you in the hopes we can make some inroads around the world.

1. Not being friendly enough – Without exception, this is the number one customer service mistake. Customers should be treated as welcomed guests when they call or visit your business. As we’ve all experienced, sometimes we’re treated as an annoyance or an interruption. Remember the Telephone Doctor motto: “Be friendly before you know who it is.”

2. Poor eye contact – Heads that twirl on a spindle while working with a customer are a big mistake. It’s a sure sign the person you’re talking with isn’t holding your interest when you’re glancing around and they will notice it very quickly.

3. Talking with co-workers and ignoring or not acknowledging the customer – This customer service mistake unfortunately happens a lot. Drop the internal conversation as soon as you see the customer.

While talking with a customer on the phone, it’s a big no-no to continue your conversation with someone in the office.

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4. Being rude – No one thinks they’re being rude; certainly not on purpose. However, the customer can perceive many things you do as rude. And as they say, “perception is reality.”

5. Poor product knowledge – When working with a customer, if you’re not familiar with the products and services your business offers, you’ll be making a big mistake. Take the time to learn about your company. Customers don’t care if you’re new, working on a temporary assignment, or if it’s not your department. All they want is help and information. Ask to be trained. Ask for more information from your company.

Again, there are certainly more than these five unforgivable customer service mistakes – we know that. However, these consistently keep rising to the top when I speak at conferences so I feel they are very important.

Based on how much business is lost due to poor service, if we can combat these five mistakes we’ll be on the way to much better service.

Post this list where your folks can see them; have a meeting to discuss them; talk about how to avoid them.

It’s all doable!

For more information about this article, contact www.telephonedoctor.com

Moving Obsolete Parts Out of Inventory

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You’re probably aware of how parts move into and out of your inventory. You may even take precautions to make sure the special-order process is tight in your dealership. But at the end of the day, you may still have some obsolete parts in your inventory. So the three million dollar question is: “How do I get rid of them?” I have some ideas, starting with the least expensive, moving up to the most expensive.

First, ask for a special, one-time return to the manufacturer. Although manufacturers have specific policies for parts returns, they’ll often allow a one-time return to help you clean up your inventory. This varies by manufacturer, but you’ll never know if you don’t try. This is your best option, since you can return parts and get money for them.

Next, you can try to sell parts for less than 100 cents on the dollar in a garage sale. Simply gather your obsolete parts and sell them in the dealership or online. If you decide to sell parts on an online auction site such as eBay, you’ll need to provide clear pictures and descriptions of each item. I’ve seen dealers have limited success with this, but it does take time to do.

There are also locator services that you can use so people can find your parts. Again, no 100 cents on the dollar, but it’s better than just giving them away.

You can trade or sell parts to another dealer as well, and possibly get 50, 60, 70 cents on the dollar. You should also consider selling those parts to your own used-vehicle department. It’s always better to sell a part at cost than to just give it away.

But if you can’t sell the parts, you may have to give them away. If you decide to take this route, make sure you get a tax break. I see many dealers donate obsolete parts to technical schools and get a nice tax deduction as a result.

If you can’t give the parts away, you have to throw them away. Just get rid of them, write them off, and be done with them. Once you clean up your inventory, you can make room for the parts that will make you money.

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The Power of Radio!

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Why the Growing Medium is a Good Investment!

Think about this….Consumers have moved from checking the newspaper to checking the Internet when they start thinking about a new or used vehicle.

Dealer websites are important now more than ever to showcase inventory and reduce expense of buying leads and online classifieds. Social media also plays a big part in this, especially for brands appealing to younger demographic buyers, the heaviest social media users. Social media is really a new twist on what radio has done over the years… broadcast word of mouth to more consumers than can be reached in conversations over the fence... or even online.

The fact is Radio impacts cconsumers’ online searches. And, we have the facts to back it up! Here are some incredible statistics - 23.7% of all adults have initiated an online search based on hearing something on radio; an even higher amount, 38.9% of regular radio listeners, have done so. ** Furthermore, research by Harris Interactive comparing radio and Internet advertising reveal that unaided brand recall jumps from 6% to 27% when radio is added to the mix – that’s four-and-a-half TIMES better recall, simply by adding radio to your online campaigns. That recall extends to your

By Laura Rieder

URL, with 62% reporting that radio helped them remember a web address to look up later. By the way, this survey was conducted BEFORE the explosion in the use of smart phones and IPads which allows the consumer to take radio and the internet wherever they go.

Importance of Branding There is a place for digital advertising AND traditional media. Anne Holland of Marketing Sherpa recommended advertisers move all of their advertising to the Internet in 2000.

And it worked. Many of her advertisers saw impressive gains in sales.

But by 2005 she saw those advertisers’ results plummet because they no longer had top of mind awareness among consumers.

Today she says it is important to brand with traditional media and call consumers

to action with Interactive advertising.

Branding causes consumers to think more favorably of your dealership. Plus branding translates to higher net. Radio

Radio is rapidly growing as listeners respond to popular new programs

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has helped many companies brand their product at an affordable price.

Brandtailers, a research and consulting firm, conducted a study of non-luxury dealerships during 2010.

Their research shows dealerships with no awareness averaged profit of $1,456 per vehicle. While the opposite end of the findings show when consumers shopped a dealership because of positive or very positive awareness the average profit grew to $3,091.

The Value of AIDA AIDA – Attention, Interest, Desire and Action; few can argue with this process. As important as showcasing your inventory online, it is just as important to keep in mind the buying process and the value of each medium for what they bring your overall marketing campaign. First you need to get the attention of the consumer. Once you have their attention, you move to getting their interest. You lead them to desire your product. Once consumers have a desire they are often spurred to action.

John Potter, VP of Training for the Radio Advertising Bureau gave a great example of AIDA. A driver on the way to work in a seven-year old vehicle has no desire for a new car. This one is running fine and it’s paid off, and that’s a good thing. He hears a radio commercial saying your dealership has the newest, most reliable vehicles on the road and you are offering attractive trade-in allowances for 6 to 8 year old vehicles.

OK, you have his attention. Listening to the radio in the office he hears your commercial saying new low interest rates have become available, making this the best time to buy. Now he’s interested. Driving home that afternoon he stops for gas and shortly afterward hears your commercial that you have a wide selection of fuel efficient vehicles that can save hundreds of dollars a year 52

in fuel costs for the average driver.

Now he has a desire for a new car. He walks into the house and tells his wife: “Honey, I think this is a good time to buy a new car,” and he heads for the computer to check out your website.

That’s the action many consumers take.

The age-old problem is determining what advertising is working? It would appear the Internet brought in the lead, but without a consistent radio campaign, your dealership would not have created attention, interest and desire before the consumer took action.

Laura Rieder is the Executive Director of the Puget Sound Radio Broadcasters Association. If you would like more information on Radio, you can contact me at laura@psrba.org any time. ** Source: BIGresearch Simultaneous Media Usage Study (SIMM17) – December 2010; Adults 18+. The sum of the % totals may be greater than 100% because respondents can select more than one answer. *** Source: RADAR 108, March 2011 Copyright Arbitron, Monday – Sunday 24-Hour Weekly Cume Estimates.

Consistent branding provides strong brand recall which turns into qualified leads and finally sales. Major advertisers have found consistency in advertising is critical to capture the awareness of the consumer who finds himself in immediate need for a product.

Radio is affordable and allows for a consistent, year-round campaign.

And finally…

“The Rumors Of My Death Have Been Greatly Exaggerated” Radio is a medium that continues TO GROW every year.

Contrast this to other traditional media like print, yellow pages and direct mail. This annual gain translates to customers coming through your door. In spite of IPods, online music stations, satellite radio, and other distractions, Radio has more listeners today than any other time in its 100 year history. Over 93% of every man, woman and teen in America listen to radio every week***, all potential customers of the auto industry.

Sound Advice continued from page 43

You will need to gather and prepare the following information to begin your personal financial plan: 1. List of personal financial goals and their projected costs, with time horizons to achieve them 2. Personal and/or business financial statements 3. Personal budget (annualized savings and expenses) 4. Current copies of all investment accounts 5. Your current investment risk tolerance 6. Copies of insurance documents (life, disability, health, long-term care, property and casualty, and liability) 7. Copies of wills, trusts, medical directives, and powers of attorney Once you have gathered the information, your financial planner should take you through a formal process to develop your plan. The following six-step financial planning process was developed by the Certified Financial Planner Board of Standards, Inc.: 1. Determine your current financial situation

2. Identify and prioritize your personal financial goals into needs, wants, and wishes

3. Confirm the achievement of your financial goals 4. Evaluate and identify alternative courses of action as necessary

5. Create and implement your financial plan of action

6. Review, monitor, and update your plan as needed to stay on track This article is excerpted from A Dealer Guide to Business Succession Planning, NADA University’s latest Driven management guide. Personal financial planning is only one of five elements that you need to consider in building a working business succession plan. Please sign in to www.nadauniversity.com and visit Resource Toolbox to access this and other Driven guides.

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Coffee Break History of Nursery Rhymes

Peter, Peter Pumpkin Eater Peter was a poor man who had an un-

faithful wife. She kept cheating on him (couldn’t keep her), so he had to find a way to stop her running around. His solution, fairly common in the middle ages, was a chastity belt (pumpkin shell). For those who don’t know, a chastity belt is roughly a pair of metal underwear with lock and key. And as the rhyme goes, once he put her in that belt, he kept her very well.

Rubba-Dub-Dub, Three Men in a Tub Why would these three men be sharing a bath? Not enough water for three individual baths? No, this is a case of not hearing the whole joke, just the punchline. The part of the story we aren’t getting was the setting. A fair side-show, where three young, beautiful women were sitting in a bath-tub, entertaining a mostly male audience, when three of the men jumped up and climbed in with the girls, to be promptly thrown out again by the fair manager. Yes, the butcher, the baker, the candlestick maker.

Jack Be Nimble, Jack Be Quick This one doesn’t have any intrigue or politics in it, just part of a celebration. A wed-

ding celebration, in fact. During the festivities, a candle was set up, and people took turns trying to jump over the candle. If you extinguished the flame, you were due for a year of bad luck, but if the candle remained lit, a year of good luck was to follow. Of course, another part of wedding celebrations was drinking alcohol, so the people who got really drunk would likely be the people stuck with the bad luck.

Above assembled from Internet sources. Authors unknown. Google Images.

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