CBT News Magazine September 2015

CAR BIZ TODAY

CHECK OUT OUR DAILY NEWSCAST ON CBTnews.com

The Official News Source of The Retail Automotive Industry

September 2015

Volume 2, Issue 6

Entire contents ©2015 Car Biz Today. All Rights Reserved.

GET MORE QUALIFIED

LEADS FROM WEB TRAFFIC TIM O’ROURKE

… see PAGE 12

IMPROVE BDCS ON

INBOUND SERVICE CALLS BILL WITTENMYER … see PAGE 16

REGISTRATION FOR CBT CONFERENCE OPENS Prominent football coach, leadership author, millennials expert top a diversified agenda. .... see PAGE 10

DEALERS CAN TALK TRADE-IN

EARLIER IN THE SALE

MAKE MOST OF

MARK TEWART

TRAINING DOLLARS

… see PAGE 18

PARTS DEPT. SHOULD

SERVE THEIR OWN TECHS FIRST DON REED

Nick Saban

Patrick Lencioni

Jason Dorsey

Disciplined follow-up after the training session will help ensure that new behaviors take hold. ... see PAGE 20

PRSRT STD US POSTAGE PAID Permit No. 1459 Pewaukee, WI

... see PAGE 26

EARNING THAT FIRST DEALERSHIP Once Elsie MacMillan decided she wanted to be an owner, it took years of searching and a cross-country move, but her persistence finally paid off.

CBT NEWS 5 Concourse Parkway Suite 100 Atlanta, GA 30328

... see PAGE 14

AMAZING MARKET INTELLIGENCE

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Data Sources: Sales number from IHS Automotive/Autobytel Collaborative Study based on consumers that submitted a lead through the Autobytel network. IHS Automotive is part of IHS Inc. IHS acquired R.L. Polk in 2013. “Over 50 million” leads number from Autobytel internal lead totals from 1997 – 2014. “$275 cost per sale” number based on $22 lead price and estimated average 8% conversion rate. © 2015 Autobytel Inc. All rights reserved.

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Letter from the editor

CAR BIZ TODAY MAGAZINE Email

newsroom@cbtnews.com Phone

678.221.2955 President and Publisher Jim Fitzpatrick Vice President/COO Bridget Fitzpatrick

Dear readers,

Managing Editor Jon McKenna

At a time when so much attention is showered upon the prices dealerships command when they sell, it’s easy to forget how hard many dealers had to claw to break into the business with their first store.

Creative Director Simone Tieber

Elsie MacMillan hasn’t forgotten. It took several years of deals falling apart at the last minute, dealerships pulled off the market and prices she couldn’t touch before she finally bought her own store – on the other side of the country. Fellow dealers will be able to empathize with our dealer profile on the saga of MacMillan and Sierra Toyota/Scion in southwest Arizona.

Designer Betsy Alvarez

Ever stop to wonder how much of your dealership’s investment in staff training ends up flushed down the commode as ineffective? Check out our guest articles by Glenn Pasch of PCG Marketing and Tom Kukla of Tom Kukla Credere Leadership on how to do a better job policing and planning your training.

Speaking of efficiency, you can never have too much coverage on savvy digital marketing of dealerships. We’ve got great insights you’ll want to read from Tim O’Rourke of Netsertive on improving lead quality, Amy Farley of Force Marketing on effective digital video, and Frank J. Lopes of Forrest & Blake Marketing/Advertising on customizing your website’s landing pages.

Happy reading.

Production Manager Jason Lowsy Creative Director - Digital Keith Tuggle Director of Marketing & Events Alex Branam Marketing Associate Roxanne Luhr

JON MCKENNA

Subscription Manager Tom Domagalski

Managing Editor

Advertising Director of Sales Jane Howard jhoward@cbtnews.com d 678.221.2964 c 404.452.9551

In this Issue 6 New report gives a variety of operating, sales and marketing metrics to dealers

By Jon McKenna

service department

By Bill Wittenmyer, ELEAD1ONE

18 Even if price waits for later,

By Mark Tewart, Tewart Enterprises Inc.

8 A dealership BDC needs to

fit your business model, so don’t suffer with a wrong system

20 It’s not the brilliance of the training session, it’s the follow-up effort

By Zach Klempf, Selly Automotive

10 Major CBT conference

in February offers heavyweight speakers, broad dealership agenda

Include pre-roll, programmatic video in your marketing plan

By Amy Farley, Force Marketing

12 Take steps to ensure your web strategy is yielding high-quality sales leads

By Tim O’Rourke, Netsertive

14 Arizona dealer finds road to first store rocky, but persistence pays off

By Jon McKenna

16 Failure to handle inbound calls can hamper your

CBTNews.com

32 Ask The Pros 34 Stopping turnover in sales

reps begins with creating growth culture they embrace

By Glenn Pasch, PCG Digital Marketing

22

26 Parts departments tend to overserve wholesale, underserve own techs

By Don Reed, DealerPro Training

28 If your dealership lacks a 2016 training calendar, start making one soon

By Tom Kukla, Tom Kukla Credere Leadership

CAR BIZ TODAY SEPTEMBER 2015

Click-throughs on paid ads need to land on custom landing pages

By Frank J. Lopes, Forrest & Blake Marketing/Advertising

why not discuss trade-ins much earlier?

7 Industry News

4

30

By Chris Rollins, Rollins Performance Group

36

Tailor staff handbook, policy manual to your business environment

By Steve Levine, Sigma Payment Solutions

38 On The Set With CBT

Automotive Network

39 Association News

Customer Service info@cbtnews.com

Subscriptions To subscribe electronically, log on to cbtnews.com and click the subscribe link on the side bar. Alternately, forward your company name, your name, address, phone number and email address to info@cbtnews. com or CBT News, 5 Concourse Parkway, Atlanta, GA 30328.

Please send address changes to the above email or mailing address.

Permission to reprint or quote excerpts granted only upon written request.

Advertising rates are provided upon request.

EARLY BIRD REGISTRATION NOW OPEN

SP EX O HI AV N S B I T AI OR S LA SH & BL IP E S

FEBRUARY 9-11 2016

Patrick Lencioni

Nick Saban

New York Times Best-Selling Author

Jason Dorsey

Alabama Head Football Coach

Dale Pollak

Executive VP, Cox Automotive Founder, vAuto

Sandy Schwartz

President, Cox Automotive

Best-Selling Author, Millennial Expert

Jared Rowe

President, Autotrader

THE AUTOMOTIVE INDUSTRY’S TOP THOUGHT LEADERS, TRAINERS, AUTHORS AND CONSULTANTS WILL BE CONDUCTING OVER 70 BREAKOUT SESSIONS

Joe Verde

Jeff Cowan

Erik Nachbahr Jeremy Anspach

Alexi Venneri

David Kain

Grant Cardone

Gary Tucker

Don Reed

Scott Pechstein John Fitzpatrick

Phil Sura

David Lewis

Glenn Pasch

Cory Mosley

Sean Gardner

Mark Tewart

Mike Esposito

Kirk Manzo

Jim Flint

Lee Harkins

Brian Pasch

Tom Stuker

Aaron Wirtz

Alan Ram

Jasen Rice

Joe Webb

Tony Molla

Attention Dealers, GMs, GSMs, Sales Managers, F&I Managers, Marketing Directors, Service Managers, Internet Managers, BDC Managers and Pre-Owned Managers The CBT Automotive Sales, Service and Marketing Conference & Expo addresses the needs of every area of your dealership.

The automotive industry’s top thought leaders and nationally recognized keynote speakers will present powerful general sessions, more than 70 breakout sessions and thought-provoking panel discussions in what will be the most comprehensive and information-packed event in retail automotive.

Visit CBT Conference and Expo.com for more information

REPORT: DEALER CHALLENGES INCLUDE

SHIFTING BUYER HABITS, REPEAT BUSINESS DealerSocket findings could help develop metrics and KPIs at your dealership. BY JON MCKENNA

A

variety of interesting operational, sales and marketing data can be gleaned from the DealerSocket “Dealership Action Report Fall 2015” report. It is based on information from 6,500 DealerSocket dealership customers, surveys of 19,000 dealers and certain J.D. Power information.

Among the findings of note: 1. On average, 20 percent of dealership business came from repeat business, which strikes Car Biz Today as unfortunately low.

“Stores with a high percentage of customer loyalty value long-term relationships and put forth the effort to delivery an exceptional customer experience, in and out of the dealership,” the report authors noted.

2. Dealers were asked to identify the single-biggest problem facing their businesses today, but no single headache stood out as dominant. Their replies included changing consumer buying habits (chosen by 18 percent of dealers), heightened competition (16 percent), growing their business (14 percent), a lack of prospect traffic and leads (11 percent), staff turnover (10 percent), a knowledge gap and lack of training (9 percent), an increased cost of doing business (7 percent), economic conditions (6 percent), inventory allocation (6 percent) and various other problems (a combined 3 percent).

3. When asked to identify their two top initiatives and goals for fall 2015 from a list of five, dealers most often chose customer retention and revenue growth. The other choices were CSI, employee accountability and ROI. 6

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CAR BIZ TODAY SEPTEMBER 2015

78 percent of dealership customers said negative online reviews influence where to buy or service their car.

48 percent of responding dealers said their dealerships use data mining software, 39 percent said they don’t, and 13 percent weren’t sure. Among dealerships using the software, 26 percent attribute one to 10 vehicle sales per month to data mining capabilities, 25 percent said 11 to 20 vehicles, 11 percent reported 21 to 40 units, 5 percent reported 41 to 70 units, 5 percent claimed more than 70 vehicles, and 28 percent weren’t sure.

However, failure by dealership salespeople to follow up on data-mined leads represents a missed “area of tremendous opportunity,” according to the report, with only 17 percent of prospects contacted and 3 percent of appointments set.

With 52 percent of dealerships selling fewer than 100 vehicles per month, “follow-up processes need to be fine-tuned and key opportunities identified within the sales cycle,” the DealerSocket report said.

More than 5.6 million CRM leads were analyzed for the first two quarters of 2015.

Confirmation rates were 41 percent for phone, 37 percent for online and 35 percent for the floor. Show rates were 68 percent for the floor, 66 percent for phone and 65 percent online.

“Confirmation rates are still significantly low and therefore are an area of improvement for dealerships,” according to the survey report.

— Average days until a new car is sold were 59 with a phone lead, 51 with an online lead and

25 with a floor lead. With used cars, average days to sale were 32 for online, 31 for phone and 16 for floor.

— 4.7 outbound calls were completed for an average new car prospect arising from an online lead, compared with 2.9 for a floor lead and 2.8 for a phone lead. With used vehicles, 4.8 outbound calls were needed for each Internet or floor lead prospect, and 23 for a phone prospect.

— Average total profits on a new vehicle were $5,112 for a floor lead, $2,167 for an online lead and $1,418 for a phone lead. With used vehicles, those per-unit profits were $4,437, $3,371 and $2,167, respectively.

• About 52 percent of the dealers are using “customer-facing” digital marketing for the sales department. Average total profit on marketing campaigns was reported as more than 40 percent higher on digital vs. traditional.

• About 52 percent of online car shopping at these dealerships is done from desktop computers, vs. 37 percent over mobile devices and 11 percent from tablets. The average shopping session is 4 minutes and 14 seconds from a desktop, 3 minutes and 41 seconds from a tablet, and 2 minutes and 43 seconds from a mobile device.

• 29 percent of these dealers’ total leads are generated from their websites. 44 percent of their websites’ traffic is generated organically, vs. 19 percent direct-to-website and 17 percent from paid searches. 61 percent or shoppers go directly to used or new car inventory pages, as opposed to the home page or coupon offers.

News INDUSTRY

New Car Sales Approach Another Record – And A Downturn?

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ook for the average new vehicle sales to reach a new record 945 units per dealership by the end of 2015, or an annualized 17.1 million sales, according to a study by Urban Science, a Detroit-based firm that supports dealerships’ sales and marketing functions.

However, the gain of 24 sales per store is only about half the increase from 2013, so Urban Science officials believe the industry’s sales may be nearing a plateau or downturn.

As of the end of June, there were 18,011 dealerships and 31,714 franchises in the U.S., with both numbers up just a hair over the end of 2014, the report added.

Texas, California and Florida are the states that have added the most dealerships since the beginning of 2015.

Dealers Okay With Paying For Better Lender Service

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early two-thirds of auto dealers remain willing to pay a premium of 0.5 to 0.6 basis points on loans their dealerships originate in exchange for better service and processing from indirect lenders, according to J.D. Power’s “2015 U.S. Dealer Financing Satisfaction Study.”

In the survey, 63 percent of dealers interviewed said a premium of that size would be worth it to them to get faster and more reliable service for themselves and their customers. At that, the support rate was down 4 percentage points from when J.D. Power posed the question in 2014.

Anti-CFPB Bill Wins A Battle In Congress

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egislation designed to rein in the Consumer Financial Protection Bureau’s aggressive intervention on potential discrimination in used car lending has taken its first forward step in Congress.

On July 29, the House Financial Services Committee approved by 47-10 H.R. 1737 authored by reps.

Frank Guinta, R-N.H. and Ed Perlmutter, D-Colo. The bill would revoke the CFPB’s 2013 bulletin that recommends auto lenders implement controls on APR Frank Guinta mark-ups by their dealership partners or alternatively impose flat-fee compensation of dealers or a similar mechanism.

The bill apparently now will head for a House floor vote at an undetermined date. The CFPB staff and the bill’s supporters believe federal intervention is necessary to prevent de facto discriminatory auto lending by giving some buyers more favorable interest terms than others. But the National Automobile Dealers Association, American Financial Services Association and other critics believe the Board is overstepping its authority by intruding in consumer choice, and acting based on flawed data.

The bill cleared the committee just after the CFPB denied NADA’s Freedom of Information Act request seeking a copy of a memo authored by Board staff explaining how a proposed settlement with American Honda Finance Corp. would advance the CFPB’s “goal” of “significantly limiting dealer discretion,” as described by news articles on the memo.

Good News, Bad News For TrueCar

S

hortly after Santa Monica, Calif.-based TrueCar Inc. settled trademark litigation with Sonic Automotive Inc. and the dealership chain ended its ban against doing business with the online marketplace, TrueCar CEO Scott Painter resigned on the heels of a big second-quarter loss.

Under the settlement, Charlotte, N.C.-based Sonic will turn its “TRUE PRICE” and “TRUE VIEW” trademarks over to TrueCar. A Sonic executive announced the company is now open to letting its dealerships participate in TrueCar programs going forward.

Painter will not be around to see that happen. He will step down later this year once a successor is identified, as a dispute that led Fort Lauderdale, Fla.-based AutoNation Inc. to stop using TrueCar and a disappointing $14.7 million 2Q15 loss had riled his investors.

States With Best, Worst News On Loan Problems

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uto dealers, take note: Your concerns that buyers will stop paying auto loans are least necessary in Oregon, North Dakota and Washington State.

You should be worrying more if your buyers come from Washington, D.C., Mississippi, Louisiana or South Carolina.

The latest “State of the Automotive Finance Market” report from Experian Automotive showed the lowest 30-day delinquency rates in Oregon, North Dakota, Minnesota, Washington State and Idaho. The lowest 60-day rates are in Oregon, North Dakota, Vermont, Washington State and Iowa.

Highest 30-day delinquencies come from Mississippi, Washington, D.C., Louisiana, South Carolina and West Virginia. For 60 days, the order was Washington, D.C., Mississippi, Louisiana, South Carolina and Alabama.

Overall, the 2.32 percent 30-day delinquency rate nationwide was the best for the second quarter in five years. The 60-day level nudged up a bit.

AutoNation Makes Biggest Move In Years With 16-Store Deal

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utoNation made its biggest single purchase since 2001 by agreeing to buy 13 stores in Georgia, Alabama and Tennessee from Carl Gregory Enterprises; and another three dealerships in greater Baltimore from Valley Motors Auto Group.

The deals add $609 million of revenue (based on 2014 results) to AutoNation’s top line, and 19,650 sales of new and used vehicles. The company’s total franchise count will rise to 327 when the purchases close later this year, assuming regulatory review.

“We continue to seek acquisitions to leverage our scale, expand the AutoNation brand and provide a peerless experience to more customers,” CEO Mike Jackson said in a prepared statement.

The average out-the-door cost of a new vehicle has topped $33,300, according to Kelley Blue Book.

Latest Vendor News

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n vendor developments, Dealertrack Technologies Inc. agreed to sell its inventory management software business to DealerSocket for $55 million, thus clearing a regulatory barrier to its buyout by Cox Automotive … The average monthly wholesale used vehicle price dropped below $10,000 in July, reaching that level for the first time this year, according to NADA data. The average used car price dropped 2.2 percent in July, and auction volume was off by 6 percent. … Fixed ops training firm DealerPRO Training of Columbus, Ohio, and The Kintz Group formed a strategic partnership with online reputation management specialist Dealer Influence … Tony Orlando, a former exec with TrueCar and Kia Motors America, joined Boulder, Colo.-based Confident Financial Solutions as VP of partner development.

SEPTEMBER 2015

CAR BIZ TODAY

CBTNews.com

7

MARKETING

Make Sure Your CRM Is An

OPTIMUM FIT

With Your Dealership Business Model Be alert for these warning signs that your continued success needs a different kind of CRM. BY ZACH KLEMPF

Auto salespeople need to be able to easily interact with your CRM using a mobile app.

“I’M NOT JUST TALKING ABOUT SMALL INDEPENDENTS …

I SEE FRANCHISE DEALERS THAT EITHER HAVE NO CRM SYSTEM OR USE AN INEFFECTIVE ONE THAT IS NOT WORKING WELL.” 8

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CAR BIZ TODAY SEPTEMBER 2015

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oday’s car buying marketplace demands nothing less than a connected, personalized customer experience. Consumers want dealerships to know who they are and what their interests are, and to anticipate the types of cars and services they need. They want to reach their salesperson whenever it’s convenient for them, whether by voice, e-mail, video or text.

These expectations make it critical for a dealership to really leverage its customer relationship management (CRM) system. I’m often amazed when I come across dealerships that regularly use a DMS but still don’t have even a basic CRM solution. I’m not just talking about small independents, either. I see franchise dealers that either have no CRM system or use an ineffective one that is not working well.

Some of these dealerships do realize the value and potential in a CRM system, but they are not happy with what they bought and are frustrated their salespeople just aren’t using it. I’m not going to debate whether this is a principally a management or a salesperson problem, but clearly it’s a problem!

WHY CRMs ARE A CRITICAL TOOL

Before I discuss what a dealership should look for in a CRM solution and highlight warning signs with your current system, I want to enlighten holdout dealerships on the value they are missing.

At its core, a CRM system helps to manage sales and marketing processes, while delivering a more streamlined customer experience. CRMs let dealerships set workflows for their sales and BDC teams, manage Internet leads, and store valuable customer data that allows remarketing to existing customers.

For example, a dealership can leverage a CRM database as it would Internet leads, to run customized campaigns encouraging trade-ins. CRM leads are warmer, as you have more information about an existing relationship than with an lead purchased online. Also, CRM systems help both management and the sales team shorten sales cycles and turn inventory faster. Plus, manager dashboards help track overall trends and individual performance levels, while resource-specific views show each salesperson his or her open opportunities in order to ensure prompt follow-up for faster closes.

Some market research shows CRM adopters typically see a 32 percent improvement in win rate and a 50 percent acceleration of sales conversions. With that type of ROI, it’s worth it for dealerships of all sizes to explore what is possible to meet their CRM needs.

5 Signs You Should Rethink Your CRM If your dealership is unhappy with your current CRM system, did I hit a nerve in discussing any of these key criteria? Here are five warning signs indicating your CRM approach may not really be working for your dealership:

1

PRICE

2

POOR MOBILE APP

3

LEGACY SYSTEM

4

OVERLY COMPLICATED WITH “FEATURE OVERKILL”

5

GENERIC CRM

Are you paying more for your CRM than some of your sales guys’ salaries? Do you lack a clear ROI on your CRM system, and are you locked into a multi-year contract?

If yours is a smaller store selling 50 cars a month, then a CRM solution that is geared toward multi-rooftop dealers and loaded with every whiz-bang feature in the book is not the best or most cost effective highway to travel. Create a critical features checklist in concert with your sales team to cover what your dealership really needs, and do your due diligence when researching different CRM systems. Demo several of them to identify a good fit for the price and a system that works well with your sales processes.

At the end of the day, you want to trim your monthly CRM payments with a more affordable system that is right-sized for your business.

Does the mobile version of your CRM create the feeling that you’re using a brick phone? Mobile is crucial for salespeople, with statistics showing a 30 percent increase in the number of “fresh-ups” once they start using a mobile CRM. Putting everything at your salespeople’s fingertips, with faster data entry tools, improves sales productivity. Having the ability to scan both VIN and driver’s license information is the sign of a good mobile CRM. Knowing who’s calling with details of their car interests, via screen pop-ups, is also a best-in-class mobile CRM feature.

If your dealership has a CRM system that feels “clunky” and doesn’t integrate with other applications you use, consider dumping it. If the interface looks outdated and does not integrate with top social media tools, then trade in your legacy system for a newer model.

Does your CRM actually make the sales process inefficient and slow deal momentum?

Are there a zillion features, when your process really only requires a few critical ones?

You get out of a CRM what your salespeople enter into it. If the CRM just slows them down, then they will stop using it. Stick with a simple CRM solution and focus only on what your sales team really needs.

I often run into dealers who use B2B-focused CRM systems that are feature- and report-rich but are not focused on the B2C automotive industry. Your dealership CRM needs to be automotive-specific, not a general SaaS system.

DON’T FALL IN LOVE WITH FEATURES

Modern CRM systems have innovative features that give dealerships an edge over stores that don’t use one. However, technological bells and whistles mean nothing if the system doesn’t fit your dealership’s sales process and deal flow. Fit is the single most important CRM criteria; your CRM needs to align with your sales culture, workflow, deal processes and business goals.

If you use a UP system, then the CRM should complement it. If your business is single- or multi-rooftop, then the CRM must be calibrated to work well with those physical facilities.

A CRM needs to meet your dealership’s basic needs, have an intuitive user interface and be simple to learn. It has to be mobile and free your sales team to “work the lot” from virtually anywhere. A good CRM system provides multi-channel communication capabilities via e-mail, voice, video or text; and has integrated social media tools to stay connected TO SEE MORE FROM ZACH KLEMPF GO TO CBTNEWS.COM

with prospects. It offers your people increased visibility into the pipeline and sales trends at a glance, with dashboard-centric reporting. And, all of this must also be affordable.

Make sure your CRM is tailored to the automotive world, with modules that work with important dealership tools.

IT’S NEVER TOO LATE TO CHANGE

Thinking about all of these issues will aid your dealership management with CRM platform decisions.

Make the best possible decision by including your sales and BDC teams in crafting a critical CRM functionality checklist and walking through how the CRM will affect the sales process. If yours is not a tech-savvy team, consider bringing in an outside consultant to help evaluate CMR systems for your store and sales culture.

Change can be hard. It often takes 60 to 90 days of using a CRM before it becomes a natural process for your team. Follow the guidelines I’ve provided, and stay patient in order to maximize your CRM ROI.

ZACH KLEMPF CEO of Selly Automotive Zach’s background includes working in both automotive and high-tech industries in Silicon Valley.

As a millennial CEO, he has his finger on the pulse of that generation’s shopping preferences.

His expertise is in digital marketing, CRM and general dealership technology. Visit his website at SellyAutomotive.com.

SEPTEMBER 2015

CAR BIZ TODAY

CBTNews.com

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Nick Saban Top football coach

Patrick Lencioni Famed leadership author

Sandy Schwartz Cox Automotive chief

Jason Dorsey Millennials authority

Dale Pollak vAuto founder

CBT AUTOMOTIVE CONFERE

Will Appeal To Managers At Nick Saban, Patrick Lencioni and Jason Dorsey are just three of the featured speakers on a highly diversified agenda.

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ealership professionals will find their industry’s most far-reaching conference agenda in Atlanta in February, as they enjoy insights from experts ranging from the president of Cox Automotive to the country’s best-known college football coach.

“The breadth of our conference’s agenda will definitely live up to its name,” said Jim Fitzpatrick, founder and CEO of CBT Automotive Network, referring to the “CBT Automotive 2016 Sales, Service and Marketing Conference & Expo.”

He isn’t just referring to a powerhouse keynote speaker group. The in-process breakout session schedule will offer valuable guidance and content to virtually every manager in a new car dealership: Dealers and GMs, GSMs and new/used car sales managers, F&I managers, marketing directors, service and parts managers, comptrollers, BDC managers and more. Also, OEMs and vendors in various industries will benefit from the interaction with dealership 10

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CAR BIZ TODAY SEPTEMBER 2015

professionals and hearing about their top priorities.

“Our conference will be unique in that it offers valuable new approaches and guidance to every level of a dealership, while many other conferences in the marketplace focus only on top management or a single activity such as sales or fixed operations,” Fitzpatrick noted.

“In addition, each of those dealership professionals in attendance will be challenged to think in new ways by speakers who have a lot to say about the way their industry is run and how their jobs are performed now, and how they ought to be.”

CONFERENCE WEBSITE GIVES YOU EVERYTHING

The CBT Conference & Expo will be held Feb. 9-11, 2016 at the Omni Hotel at CNN Center in downtown Atlanta.

Early bird registration for attendees begins on Sept.

16, but CBT is signing up sponsors and exhibitors now.

Complete information, including a conference prospectus

and a registration form for interested speakers, is available and being constantly updated at www.cbtconferenceand expo.com.

A conference in the South will provide welcome relief for attendees working through the winter at dealerships in the Northeast, Midwest and Mid-Atlantic states, Fitzpatrick noted. Philips Arena, College Football Hall of Fame and World of Coca-Cola and Georgia Aquarium are just a few of the attractions situated within a few blocks of the conference. Discounted room rates at the Omni Hotel can be booked until Jan. 11, 2016 or until the conference bloc is sold out.

KEYNOTE SPEAKERS ARE A POWERHOUSE GROUP

Current sponsors for the event include EasyCare and Autotrader, and audiences for the general sessions can look forward to hearing from: NICK SABAN, head football coach at the University of Alabama and the winner of three national collegiate championships at Alabama and a fourth at Louisiana State University. Apart from being an uncompromising leader, master tactician and superior motivator, Saban also is a car dealer

WHEN: Feb. 9-11, 2016 WHERE: Omni Hotel at CNN Center in downtown Atlanta HOW TO SIGN UP: Early bird registration for attendees begins on Sept. 16, but CBT is signing up sponsors and exhibitors now. Complete information is available and being constantly updated at www.cbtconferenceandexpo.com.

RENCE & EXPO

t All Levels Of A Dealership as the co-owner of Mercedes-Benz and Infiniti stores in suburban Birmingham, Ala. SANDY SCHWARTZ, president of Atlanta-based Cox Automotive, the huge and influential company that owns Autotrader, Manheim North America, Kelly Blue Book and vAuto, just to name a few subsidiaries. He ran the Cox Enterprises group formerly known as Cox Auto Trader from 2006 to 2008, was president of the corporation’s media properties for three years and became president of the Manheim auto auctions unit in 2011, before rising to his current position. He has worked for Cox since 1985.

PATRICK LENCIONI, one of the world’s best known writers and speakers on business leadership and management.

He has authored 10 business books that have sold more than 4 million copies worldwide in 25 languages, and his interviews and guest columns in periodicals such as The Wall Street Journal and Inc. magazine attract a worldwide following from the business community. Lencioni is a onetime management consultant who founded The Table Group, a San Francisco-based organizational consulting and training firm.

TO SEE MORE ABOUT THE CONFERENCE GO TO CBTCONFERENCEANDEXPO.COM

“OUR CONFERENCE WILL BE UNIQUE IN THAT IT OFFERS VALUABLE NEW APPROACHES AND GUIDANCE TO EVERY LEVEL OF A DEALERSHIP.” JASON DORSEY, one of the world’s leading authorities on how businesses can effectively market to millennials. He is one of the world’s most quoted advisors on effectively selling to customers age 35 and younger, with book credits such as “Y-Size Your Business” and “My Reality Check Bounced!” Dorsey’s official title is chief strategy officer and millennials researcher for Austin, Texas-based The Center for Generational Kinetics.

DALE POLLAK, the founder of vAuto, an Oakbrook Terrace, Ill.-company that is a leading provider of new and used car inventory management and pricing software. The company was bought by Autotrader in 2010. Pollak also is a well known author and speaker in the automotive retail industry, with three business books to his credit including

“Velocity: From the Front Line to the Bottom Line.” He also opines regularly about dealership issues on his “Velocity Overdrive” blog at www.dalepollak.com.

BREAKOUT SESSIONS ATTRACT EXPERTS

Meanwhile, the conference’s growing list of featured speakers who will address breakout sessions currently includes experts in dealership leadership, sales management, fixed operations, digital marketing, DMS systems and customer relations, just to name a few topics.

Attendees will be able to select from 65 highly topical breakout sessions. “They will cover the gamut of topics most relevant to dealership personnel,” Fitzpatrick said. Again, qualified speakers can express their interest by completing a questionnaire at www.cbtconferenceandexpo.com.

SEPTEMBER 2015

CAR BIZ TODAY

CBTNews.com

11

MARKETING

STEPS TO ENSURE MORE OF YOUR DEALERSHIP WEB TRAFFIC IS QUALIFIED SALES LEADS Emphasize only the cars you want to sell now, reallocate your digital media spend and refine your search terms. BY TIM O’ROURKE

“IF CONSUMERS ARE SEARCHING VIA THEIR MOBILE PHONES, CHANCES ARE THEY ALREADY HAVE NARROWED THEIR SEARCH TO SPECIFIC MAKES AND MODELS AND NOW ARE HUNTING FOR DEALS.”

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ifferentiating your dealership from its local competitors is more challenging than ever.

Car buyers are bombarded at every turn by auto billboards and targeted display ads on their smart phones. Plus, dealers are approached by a plethora of digital marketing vendors that may be selling cookie-cutter strategies that focus on lead quantity over quality and don’t offer a real competitive edge. Increased website traffic won’t automatically deliver qualified leads that are likelier to become sales – and this is what really matters to dealers.

The dealership I will discuss in this article, Rentschler Chrysler Jeep Dodge of Slatington, Pa., wrestled with the issue of quantity vs. quality in online leads before pulling the plug on its volume-based strategy. Following are a few of the

This Pennsylvania dealership got results from better qualification of its online leads.

While your message may appear before a smaller group of prospects, those prospects are likelier to be searching specifically for the inventory and programs your dealership offers, making them far more qualified leads.

TAILORING ADS FOR MULTIPLE DEVICES

“DEALERS DON’T HAVE UNLIMITED RESOURCES TO SPEND ON DIGITAL ADVERTISING, WHICH MEANS THEY NEED TO DECIDE WHICH BRANDS, MAKES AND MODELS THEY MOST WANT TO SELL ON A MONTHLY AND QUARTERLY BASIS, AND WHICH VEHICLES WON’T BE FEATURED.” strategies this dealership used to drive truly motivated buyers to its website, and in turn transform a greater proportion of its online traffic to qualified leads.

EMPHASIZE MODELS YOU WANT TO MOVE

The first step any dealership should take in creating a quality-focused lead generation strategy is to identify the core inventory it most wants to sell now – your most popular makes and models.

Dealers don’t have unlimited resources to spend on digital advertising, which means they need to decide which brands, makes and models they most want to sell on a monthly and quarterly basis, and which vehicles won’t be featured. These decisions could be based on the dealership inventory, special promotions or manufacturer incentives.

Many dealers make a big mistake in using an underfunded digital marketing budget to cast a wide net. Promoting everything on your lot with a one-size-fits-all approach only dilutes your campaign’s effectiveness. I’ve found that 10 percent to 30 percent of dealer spend on digital marketing is typically wasted, usually because dealers try to promote too much inventory over too broad a geographic area.

If your goal is to reel in customers who are looking to buy, you need to be selective, identify inventory you want to move now, align that inventory with appropriate keywords, then create and test ads that focus on those specific terms.

QUALIFYING YOUR CUSTOMERS

Knowing the difference between a browser and a buyer is of paramount importance. It can be tricky to intuit buyers’ intent from their web searches alone, but you can learn a lot by spending time “under the hood” of your own website’s analytics.

Take a look at how much time people are spending on your website, and whether they are viewing a number of pages and if so which ones. Examine bounce and conversion rates to judge how engaged your customers are. Most importantly, you want to TO SEE MORE FROM TIM O’ROURKE GO TO CBTNEWS.COM

tie those insights back to the media properties on which your ads appear. Which are sending you the most engaged customers – those most likely to buy?

You can use this knowledge to commit more funds to those media that are having the greatest impact by generating truly engaged customers, who tend to be better sales leads. Success shouldn’t be measured in web traffic alone.

Another way dealers can refine their leads is to analyze where engaged customers come from geographically. A dealer who is attracting customers from an 80-mile radius might conclude that, since he operates in a metropolitan area, a focus on a 20-mile radius will produce better results without wasting marketing spend.

ADS NEED GRANULAR SEARCH TERMS

Once a dealer has identified target inventory and key customers, and how best to reach those customers, staying in front of them with relevant messages is critical. According to Google, advertisers should strive to achieve at least 50 percent share of “voice,” meaning your ad is one of the three appearing in a customer’s search half the time or more. To achieve this, you’ll need to focus on relevancy. How can you build more relevant ads?

Specificity is key. While many dealers assume that creating an advertisement that fits a broad range of search scenarios – for example, investing in terms like “Jeep Cherokee Allentown” – will yield more traffic and better results, I’ve found the opposite to be true. A dealer who invests in “2015 Jeep Cherokee Lease” will almost always receive better ad positioning. This is because Google favors the ads that best reflect consumers’ actual searches.

Another major mistake I have seen dealers make is catering only to consumers who search on their desktop or laptop computers, at the expense of smartphones and tablets. If you aren’t targeting customers across all devices, you’ll be left behind.

According to AutoTrader.com’s “2015 Automotive Buyer Influence Study,” 42 percent of 2015 car buyers used multiple devices to shop, up from 24 percent in 2013. And, 65 percent of the people who use a smartphone in their car search do so while they’re actually visiting a dealership.

Catering to the mobile shopper requires more than a mobile-optimized website. If consumers are searching via their mobile phones, chances are they already have narrowed their search to specific makes and models and now are hunting for deals.

Ensure your dealership is reaching these customers as they make purchase decisions by including a strong call to action that utilizes specific, relevant keywords.

LEVERAGE MANUFACTURER PROGRAMS

Tapping manufacturer resources for your digital marketing strategy is smart business, because a plethora of funding and campaign materials is available to support your efforts. Manufacturers offer everything from pre-built, optimized landing pages to customizable digital ads that are centered on specific and feasible incentives. Dealers who leverage these assets can capture the attention of a broader base of customers who are specifically looking to buy during the near-term timeframe.

A recent study conducted by Borrell Associates and our team found that 90 percent of dealers are buying online advertising using manufacturers’ co-op funds. Those dealers cite SEO/SEM (86 percent), display advertising (73 percent) and mobile media (57 percent) as their three most effective digital strategies.

While collaborating with manufacturers to boost lead generation performance is a no-brainer, many dealers don’t realize they can work with manufacturers on digital video advertising and promotions in order to drive more qualified leads. Digital video helps you reach customers farther down the buying path, and Business Insider reports that video ads boast a higher click-through rate than any other digital ad format. Nearly half of consumers report visiting a local retailer after watching a video ad online, according to Google. Meanwhile, promotions help dealers reach consumers with special incentives during the times they are most likely to buy.

Using the approaches I’ve reviewed in this article, Rentschler saw a 15 percent increase in combined conversion rates and a 22 percent decrease in bounce rates over its prior quarter. In addition, the dealership enjoyed a 30 percent increase in its average form submission rate and a 4 percent gain in average time spent on its website. Although website traffic volume declined slightly, the visitors tended to be more qualified, resulting in a higher conversion rate.

TIM O’ROURKE VP of Automotive at Netsertive Tim has worked with Netsertive for three years, building a sales organization and digital marketing intelligence platform for the OEM, Tier 2 and dealer level. His company works with dealers and OEMs on digital marketing and sales strategies. Previously, he worked in sales management positions with Manheim and AutoTrader.com. Visit the website at www.netsertive.com.

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DEALERSHIP PROFILE

A NEVER-GIVE-UP ATTITUDE GOT AN ARIZONA DEALER HER OWN STORE Shot down repeatedly on the East Coast, Elsie MacMillan needed years and a cross-country move to break into ownership. BY JON MCKENNA

MacMillan in the Sierra Toyota/Scion showroom.

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he sunny side of the auto dealership industry is the supercharged prices and soaring blue sky valuations given to dealers who sell their businesses during boom times like now. However, for every dealer striking it rich there’s also an Elsie MacMillan, clawing to get her hands on her first store and feeling like she’s trying to break into a bank vault.

By her own conservative estimate, MacMillan pursued at least 14 dealerships on the East Coast over a six-year period and was shot down each time before she spied an ad and moved out west to take over an aging Toyota store not far from the Mexican border.

Her odyssey had nothing to do with chauvinism in the industry, MacMillan insists. It’s simply a tale of bad timing, bad luck, bad fits or someone else having the inside track – and of dogged persistence on her part.

“I always feel like things happen in life for a reason, and maybe there was a reason for me to come to Sierra Vista,” she said philosophically. “I really like it here and I’m not sorry I did things the way I did. It was the right time and place.”

MacMillan with Army soldiers involved with her dealership’s “Thank a Hero” program.

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46 YEARS IN DEALERSHIP BUSINESS Sierra Vista (Spanish for “Mountain Range View”) is a city of about 45,000 in southwest Arizona, about 75 miles southeast of Tucson, the population and business center of Cochise County. It’s where a 68-year-old transplanted New Jerseyan runs Sierra Toyota/Scion, a dealership that sells more than half its new and used vehicles to active and retired military and contractors connected with the Fort

Huachuca Army intelligence training facility.

MacMillan has 46 years of experience in retail automotive, having gone to work shortly after graduating high school as a bookkeeper for Prestige Mercedes-Benz in Paramus, N.J. It was a new dealership when she started, and over time her dealer entrusted her with learning the service, parts and other sides of the business than accounting.

In fact, in 1981, her 13th year with the dealership, she had developed enough relationships and had broad enough experience that the dealer named her GM. That freed the dealer to add more stores and nameplates including BMW, Chevrolet, Cadillac and Jaguar. MacMillan worked with him on unifying the accounting across the group.

In 1991, she was named GM of the Prestige Lexus store. It was a big dealership and things went well for a few years, but eventually some of the group’s management persuaded the owner that his old guard needed to go. MacMillan was squeezed out in 1995.

SEARCH STARTS FOR HER OWN STORE “I had a hard time looking for a job being that I was a woman in the business and I didn’t come out of the sales side,” she recalled. But MacMillan didn’t want to be a salesperson or GSM. At this stage of her career, she wanted to be at minimum a GM, or even better a dealer.

This began a stretch of several years in which MacMillan worked various dealership and consulting jobs at the same time she was hunting for her own store. Just as she was leaving Prestige Lexus, Ray Catena, the owner of a Toyota dealership in Westchester, N.Y., approached her dealer about buying it, and MacMillan quickly got enrolled in the Toyota dealer development program (with manufacturer financial participation) and put together an offer.

However, it didn’t work out because Catena was undecided about whether he wanted to stay in the business or possibly have MacMillan partner with his GM. She began consulting for a dealership in Raleigh, N.C., and liked the area well enough to persuade her husband Paul to move there with her. She got a job in sales for Fred Anderson Toyota there (“Sales is not my cup of tea, but I needed to get the sales experience”) and helped develop the store’s BDC.

“I ALWAYS FEEL LIKE THINGS HAPPEN IN LIFE FOR A REASON, AND MAYBE THERE WAS A REASON FOR ME TO COME TO SIERRA VISTA.” OPPORTUNITIES DON’T PAN OUT Meanwhile, MacMillan was working with different brokers trying to find a dealership to buy in the South. She tried to increase her credentials by enrolling in Toyota’s southeastern dealership development program, so that she had two manufacturer programs to tap.

“But, it was tough. You had to have at least 20 percent of the [purchase] package personally. That meant I needed to look for a store in the $3 million range, maybe doing 300 new cars a year, a smaller store. And when you found one, sometimes the dealer said he was ready to sell and really wasn’t.”

An opportunity in Goldsboro, N.C., fell through.

A store in Frederick, Md., looked so promising that the MacMillans moved there, but it wound up sold to the Darvish family. She looked at four more Toyota dealerships seriously, another six somewhat less intently. No deal. It didn’t help that AutoNation was aggressively buying up dealerships at the same time and driving up prices.

MacMillan got a job with a Volkswagen Saab Land Rover store in Laurel, Md., as service manager. A broker introduced her to a Toyota dealership in Hartford, Conn., but two days after the meeting the dealer took it off the market. At long last, “I was ready to say, ‘It’s just not meant to be, Paul.’”

FINALLY, A DOOR OPENS However, a short time later she saw an ad in a trade magazine about a Toyota store up for sale “in the Sun Belt,” with only a P.O. box listed. MacMillan found out that meant southwest Arizona, a region about which she knew nothing. But, the $2.5 million-$3 million price range was reachable, the volume (250 to 300 new cars per year) was manageable, and the owner had a good reputation locally.

Still, there was work to be done after she closed in

mid-2002. She decided to replace the sales manager, and the service manager left of his own accord. The 11,000 square feet of buildings were old and seemingly thrown together without a plan, and the showroom was so small it could only display three cars.

“I knew sooner or later, Toyota would be putting the push on me for renovations.” So MacMillan in 2005 bought the site next door of an abandoned hotel and restaurant, began building a dealership using a then-new Toyota design plan, and in 2007 moved in her business. As opposed to the original purchase with which the manufacturer program helped, the approximate $8 million deal was entirely on her.

In part because of the debt and in part because she’s late in her career, MacMillan isn’t interested in buying more stores. The dealership is doing well enough to be DealerRater’s top-ranked Arizona Toyota store the past two years. The Sierra Vista business community is actually thriving, she said, even though some purchases require a drive to Tucson. She has made inroads with the Rotary and other local business groups.

“Our community has been struggling to rebound with the economy, and 2014 wasn’t our finest year, but we are tracking as of July to hit 525 new unit sales and 450 used this year,” MacMillan said.

SIERRA TOYOTA/SCION AT A GLANCE Total dealership revenue: $26.1 million Vehicle sales revenue: $22.4 million Service revenue: $1.5 million Parts revenue: $1.8 million F&I revenue: $300,000 New vehicles sold: 477 Used vehicles sold: 397

The redeveloped Sierra Toyota (right) is a far cry from the aged buildings bought 15 years ago.

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FIXED OPS

This service advisor may depend on quality phone leads from the BDC.

The Need To Promptly Handle Inbound Service Calls

CAN’T BE OVEREMPHASIZED

Start with a small BDC team and then take additional steps to catch all customer phone calls. BY BILL WITTENMYER

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uring several of my recent speaking engagements, much debate has arisen over how to handle inbound calls for the service or fixed-ops department. I’m often questioned about the quickest and most effective way to improve inbound call handling, and it’s an easy answer. Dealers must make sure incoming service calls are handled by a BDC, whether it’s a virtual third party or an in-house group. That is the first place to start.

Everyone knows the service department is a dealership’s lifeblood for profitability. Most service advisors do a fantastic job up-selling to customers in the lane. In fact, many possess the same characteristics and qualities as a front-line auto salesperson (even though most service advisors, who view their role as consultant/advisor, would probably disagree). I constantly hear how different their role is from when I used to work in the dealership environment. However, contrary to that opinion, advisors are exactly like salespeople in the dealership. They possess the same traits, they just get leads differently.

With the majority of an advisor’s leads obviously coming from the service lane, phone-ups are a close second. Some leads are trickling in from Internet requests, as more and more consumers move to online scheduling and alternative ways to communicate with dealerships.

However, the same attributes or behaviors that make service advisors and salespeople successful are the same ones that sometimes hold them back – especially when communicating with consumers by phone.

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GAP WITH PHONE SKILLS Most salespeople, and thus most service advisors, do a great job with face-to-face communication.

Most display strong, assertive personalities. They can take “No” for an answer but they also have the ability to stay persistent with strong product knowledge and advice, while still making consumers feel comfortable.

However, many people in sales characteristically lag in organization, patience and attention to detail.

And, while they communicate well in person, that does not always translate to good phone skills. Plus, most service advisors are successful in their jobs, which means they are with customers during times of high phone traffic and unavailable to answer calls. It’s a perfect storm for missed opportunities on inbound service calls.

A recent sampling over a 30-day period of 120 dealerships that use the ELEAD Contact Center for service calls found that more than 70 percent of

inbound calls result in an appointment, when those calls are answered and handled properly. The most important thing – and this is where some dealers falter – is to have a live person answering calls.

On average, dealerships miss or fail to answer more than 100 calls during a month, and that is only taking into account before- and after-hours time periods. How are incoming service calls handled during peak time periods at your store? You know the times I mean – the early morning or evening hours when most people are in the service lane either dropping off or picking up their vehicle. Service advisors will be with them, providing excellent customer service. But, the customers on inbound calls must leave it to chance that they will receive a callback or follow-up. Maybe they will quickly move on to a competitor.

FIVE WAYS TO CATCH MORE INBOUND CALLS Henry Ford built an empire on specialization. However, his automotive industry has, at times, gotten away from this mindset. Developing a strategic and customer-centric process for handling service calls is a great way of getting back to the basics.

“MOST SERVICE ADVISORS DO A FANTASTIC JOB UP-SELLING TO CUSTOMERS IN THE LANE. IN FACT, MANY POSSESS THE SAME CHARACTERISTICS AND QUALITIES AS A FRONT-LINE AUTO SALESPERSON.”

Following are some key processes that your store can implement today to increase service appointments and market share. Also, remember that multi-tasking is just the equivalent of doing several things poorly and not creating success in a single area.

1. CREATE A DEDICATED INBOUND CALL TEAM FOR THE SERVICE DEPARTMENT, OR OUTSOURCE THIS ACTIVITY TO A SPECIALIZED PROVIDER. When starting out, most dealerships don’t require a large BDC team to concentrate only on service. A small team is an easy way to test the waters, and don’t forget, that team will immediately enjoy success just by answering all the previously missed calls.

A small team consisting of one or two people can cover peak time periods as well as normal business hours. Once you have the chance to monitor phone traffic, there is always the option to expand the team to cover after-hours.

2. MAKE SURE THE INBOUND CALL TEAM HAS ACCESS TO THE SERVICE CRM AND ONLINE APPOINTMENT SCHEDULING TOOLS. If possible, try not to limit customers to specific appointment times, but rather always ensure the service lane can handle the schedule’s capacity. Do not overbook, as this only facilitates bad customer experiences.

Customers want options, not obligations. Most importantly, they require convenience.

3. FOR THOSE OF YOU WITH AN AUTO ATTENDANT ON THE STORE’S PHONE SYSTEM, MAKE SURE TO INCLUDE AN OPTION THAT SPECIFICALLY LETS CONSUMERS SCHEDULE THEIR SERVICE APPOINTMENT. You need a process

designed only to streamline appointment calls to the inbound call team, which ensures they do not get bogged down with other inquiries.

Alternatively, for those of you with a live operator, coach that person on additional questions to ask when answering calls, in order to help clarify appointment-setting calls vs. other inquiries. Make sure the operator is well versed on how to route calls accordingly.

4. EVERY DEALER SHOULD HAVE CALL-TRACKING CAPABILITY THAT IS TIED TO HIS OR HER CRM OR DMS, AND IS SPECIFIC TO SERVICE CALLS AND CAMPAIGNS. It’s vital to review the actual number of incoming calls, those answered by your team, time spent on the

call, and the corresponding number of appointments scheduled.

Such reporting enables you to monitor effectively, manage staff performance and make any needed adjustments. You will also gain insight into higher-traffic times, other missed opportunities, and metrics that can provide great feedback or coaching points to maximize the team’s performance and execution.

5. PROVIDE THE INBOUND CALL TEAM WITH SPECIFIC WORD TRACKS AND SCRIPTING. That way, consumers receive a consistent experience across every touch point, and you achieve set goals.

Keep it simple, and always give the team a lifeline (access to or a way to instantly contact) the service director or service advisors in case of inquiries that are in-depth or require more details.

BILL WITTENMYER Partner at the ELEAD1ONE division of Data Software Services LLC Bill has over more than 20 years of experience in the automotive space and currently manages multiple divisions within his organization including sales, marketing, OEM relationships and large-client accounts. He speaks at several prominent automotive forums each year. Before joining ELEAD1ONE, he spent several years in dealership operations management.

SALES

The possibility of used car on the discussed before the looks at the new car

WHY YOU WANT

To Discuss A Customer’s Trade-In Well Before You Start Negotiating Price Addressing the current vehicle before looking at a new car makes strategic sense, for a lot of reasons. BY MARK TEWART

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here is a lot of talk in our industry today about speeding up the sales process. With all the improvements the industry has made over the last few years, the average consumer still dislikes how long the current sales and transaction processes take.

One change that can be made immediately to speed up the sales process and make it more transparent to the car buyer is in the way your dealership handles trade-ins.

Most customers trade in their current vehicle when they buy a new one from a dealership. Most stores address trade-ins near the end of the sales process, after the salesperson has helped the customer pick out a vehicle, and presented and demonstrated it.

However, in today’s market, most buyers will have performed research online before ever contacting you, and often will have looked up possible market values of their existing vehicle. Given that reality, I think it’s a big mistake for the salesperson to wait until the sale is nearly concluded to have a manager perform a physical appraisal. Let me explain why.

STAYING IN CUSTOMER’S COMFORT ZONE

Most people spend the majority of their lives in three places – their home, workplaces and vehicles. They are 18

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the car buyer’s comfort zones and he or she is bringing one of those zones to you! So, why would a dealership fail to utilize one of the customer’s comfort zones?

I think that in the digital age, shifting the trade-in to the front of the sales process becomes even more strategic because it conveys transparency and helps increase the customer’s trust. In such an updated sales process, once the salesperson has begun to build rapport and is asking questions intended to craft a better customer/buying profile, I suggest discussing the trade-in before even looking at a new car.

As you talk with your customer, I invite you to say the following: “Mr. Customer, before we go take a look at the vehicle you are interested in, I want to walk over to your current vehicle, for two reasons. First, I want to verify the serial number and get a complete description of the vehicle. The reason is, our management will input the information to some web-based software that searches over several hundred miles for the most comparable vehicles for you. This will provide you with the real-time market value of your vehicle and save you a lot of time!

“Secondly, as I get the information, with your permission I would like to ask you a couple of questions.

Question such as: What do you like most about the current vehicle that you will want on the new vehicle? What do you dislike about the existing vehicle that you want to avoid on your next vehicle? What may have changed since you bought your last vehicle that might influence your decision this time?

“Mr. Customer, this often gives me ideas that can save you money!”

This amounts to a trade-in evaluation, not a tradein appraisal, at this point. The dealership might decide to share a specific trade-in value, or range of values, with the customer right now, but that is an option. Other dealerships might opt to inform the customer why they are looking at the existing vehicle, and how and why the related information will be entered into software, and leave it at that.

WHY TO TALK TRADE-IN FIRST

Let’s take a look at why this approach represents a major improvement over the usual sales process.

trading in the left should be customer ever on the right.

You are taking customers to their comfort zone.

I t is clear to customers that you are you are addressing their issues and fears right up front, which creates an image of proactivity and transparency.

You are using anchoring phrases like “saving

time” and “saving money.” Every customer wants to accomplish those two things, and most dread the shopping and buying processes because they believe they take way too long.

You will establish better rapport, which should lead to a better relationship.

You wind up with a better profile of the customer to assist you in landing him or her on the right vehicle.

You will slow the customer down, which in the end speeds up the sales process.

If you have to negotiate, you will have better information with which to provide value and raise the discussion to a higher issue than money.

• You are letting customers know that whatever tool online tools they may have used to approximate trade-in value, yours compare all vehicles in the market for several hundred miles.

• You will be able to ask more questions up front before giving a more tailored presentation of the vehicle, as opposed to a one-size-fits-all description.

• You will spend more quality time with a customer at the start of the process, forging more rapport, relationship and trust.

• You are creating “cognitive disassociation,” i.e. separating yourself in the customer’s mind from other dealers and salespeople as well as their practices.

• You have a better opportunity to effectively present your specific defining proposition (SDP), or what makes you, your dealership and vehicle the unique and better choice.

• You are creating a “category of one.”

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A MORE ETHICAL STRATEGY

As prices have become readily available online, it has taken much of the mystery out of a new car purchase.

At most dealerships, this trend has squeezed gross profit at every turn.

The trade-in is a negotiable item. Your dealership is providing a service on taking the trade-in, vs. the customer having to sell the vehicle on his or her own. Because of this, it is ethical and moral – as well as good business practice – to take the trade-in at wholesale value.

If you watch the cable show “Pawn Stars,” the shop owner does a great job of explaining this to customers and he has no issues in giving it to them straight!

Somehow in dealerships, we have become afraid to share with customers why they are receiving a particular trade-in value. By addressing the issue up front, you will greatly minimize what usually is a bone of contention with the customer.

Again, I want to be clear: You are addressing the issue up front, not necessarily giving customers a spe-

cific trade-in value at this point, unless that is your dealership’s choice and approach.

TRANSPARENCY IS A DIFFERENTIATOR

Dealerships that segue to the trade-in at the beginning of the sale create a cleaner, more up-to-date and transparent-feeling process for their customers.

Meanwhile, they are differentiating themselves and providing better value.

They actually have speeded up the overall sale by slowing it down at the outset. In the Internet age, people who preach about faster sales and faster buying often miss the point by trying to create a transactional process. Dealers who seek both speed and transparency should not forget their mission should be to make the shopping and buying processes transformational, not transactional.

Utilizing the trade-in discussion properly lets you modernize your process and create a “Wow!” experience for your customer. At this point, people still buy cars from people.

“SOMEHOW IN DEALERSHIPS, WE HAVE BECOME AFRAID TO SHARE WITH CUSTOMERS WHY THEY ARE RECEIVING A PARTICULAR TRADE-IN VALUE. BY ADDRESSING THE ISSUE UP FRONT, YOU WILL GREATLY MINIMIZE WHAT USUALLY IS A BONE OF CONTENTION WITH THE CUSTOMER.” MARK TEWART President of Tewart Enterprises Inc. Mark is a sales expert and professional speaker, trainer, consultant, entrepreneur and author of the best seller “How to Be a Sales Superstar – Break All the Rules and Succeed While Doing It.” He has a 27-year career ranging from sales to becoming an executive manager at age 27, to founder and president of four successful companies. He is a professional member of the National Speakers Association and the Author’s Guild. Visit his website at www.MarkTewart.com.

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LEADERSHIP

A Disciplined Approach To Follow-Up Helps Ensure

A DEALERSHIP’S INVESTMENT IN STAFF TRAINING IS MAXIMIZED If you’ve been assuming training lessons are automatically absorbed, stop; plan their successful implementation instead. BY GLENN PASCH

The staff team should be involved in discussing how to implement training-driven changes in their daily routines.

“EMPLOYEES NEED TO BE PART OF THE SOLUTION AND THE ONES DECIDING WHICH PART OF THE TRAINING TO IMPLEMENT FIRST. PEOPLE ARE MORE WILLING TO ATTEMPT ANY CHANGE IF THEY FEEL PART OF THE DECISION PROCESS.”

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he dealership’s day began with a quick sales meeting. Twelve salespeople and their GSM huddled around a large TV screen to watch the daily installment from a sales trainer’s learning platform. When the trainer began to pose questions, the GSM repeated the choices in order to answer the questions.

As I watched the interaction, I noticed two of the 12 were answering all of the questions for the team. It seemed as though the GSM was less interested in getting everyone to participate than in finishing. Once the Q-A was done, the GSM said, “All right. Let’s apply what we went over. Let’s have a great day.”

Off the salespeople went. Sales training now could be checked off the manager’s task list for the day.

The information this trainer shared was excellent; it could be very useful to the sales team. However, the next step in the training process – making sure the new material was actually implemented into the salespeople’s

ROAD MAP FOR IMPLEMENTATION

Following is a follow-up framework that you can apply to any training session or desired change at your dealership.

By following this checklist, you should see a better return on your training investment. Later in this article, I will use this checklist to discuss how the dealership mentioned previously could have been more successful in making its training stick.

1. Preparation Stage

A. W hy is the group having this training? What behavior(s) are you expecting to change? What are the expected outcomes?

B. Is your team aware of the training and what is expected?

C. Is there a handout with bullet-pointed key takeaways given to each participant BEFORE training begins?

D. H ave you discussed with the trainer (if you are bringing in someone from outside) what the training process will be? What are your expectations? How long will the training session last?

2. Involvement Stage

A. Is everyone affected by this training attending the session? If not, how will those who are absent be trained, and by whom?

B. I s upper management attending? If not, it sends a signal that the training is not really that important.

C. H ave the trainees explain what each point in the new procedure would mean in their daily routine.

D. A sk each trainee how he or she would apply the training in the day-to-day.

3. Implementation Stage

routine activities – seemed to be missing. Who was making sure the salespeople really understood what was just taught? Where was the follow-up to ensure what the GSM expected was exactly what the salespeople understood?

Over the next two days, I saw no effort by the GSM to check up on the new skills. The following day, another training video was watched and checked off the task list, and no follow-up was performed with its material, either.

When I asked the GSM why not, his response was one I had heard many times: “They know how to sell cars and

FOLLOW-UP IS UNAVOIDABLE

The attitude among dealership management that employees undergo a training session, the information will magically stick is not unusual. I disagree. It takes me multiple practice sessions to make sure my classes truly absorb material. So, what can dealers do on their own to provide a structure that maximizes results and return on their training investment?

No matter how it is delivered, outside training resources typically cost a dealership thousands of dollars per year.

Factor in the time a manager spends overseeing internal training and you see that the direct and indirect costs of improving employee performance add up. Yet, productivity and efficiency gains are not arriving at the pace one would expect, due largely to the lack of focus on long-term implementation.

Let me be very clear: Change is not easy to accomplish, and this is why many trainers do not focus on implementation; they leave that to the dealership’s managers and employees. How, then, can the management team and staff do a better job implementing the new information?

TO SEE MORE FROM GLENN PASCH GO TO CBTNEWS.COM

A. Ask each trainee to choose one aspect of the training he or she will especially focus on, and to identify action steps to implement it.

B. Who will help to implement this new training? Are they qualified to do the implementation?

C. Does this training affect other departments, and if so how will the new change be communicated?

D. W hat documentation has been created for the training and implementation, e.g. process documents and training guides?

4. Follow-Up Stage

A. Who will follow up on this new training?

B. How often will the follow-up be handled?

C. E xplain to the trainees who will follow up and how the results will be documented.

D. W hat retraining process will be put in place to help those who are not adapting as quickly as expected?

WHAT THE DEALERSHIP DID WRONG

The dealership I discussed at the beginning could have done a great deal to make sure its training stuck. Even if stages 1 and 2 from my checklist were handled perfectly, the dealership’s lack of focus on actually implementing the sales training on the floor, and on following up, eventually would negatively affect on employees. They would decide listening to training videos was wasted time, and then friction would arise later as management expects new results.

In my opinion, the dealership’s managers failed. One thing they could have done better to make the training stick was to get the team involved in the process of inserting changes into their daily routines. Employees need to be part of the solution and the ones deciding which part of the training to implement first. People are more willing to attempt any change if they feel part of the decision process.

This implementation approach also would let the manager/trainer follow up on agreed-upon targets, as opposed to a different metric that could cause confusion or resentment. Too many times, an employee will work diligently on something he or she feels is important, only to be told it’s wasted time because the manager’s priority was different.

I am never one to tell dealers to stop investing in training. But, if you are not investing the necessary effort in implementation, then you are wasting money, time resources and potential customers.

“THE ATTITUDE AMONG DEALERSHIP MANAGEMENT THAT EMPLOYEES UNDERGO A TRAINING SESSION, THE INFORMATION WILL MAGICALLY STICK IS NOT UNUSUAL. I DISAGREE.”

5. Measurement Stage

A. What reports will you now use to track these new results?

B. What metrics will you be using?

C. Does the team know and understand these new metrics?

D. How often will you be checking these new metrics?

E. How will you communicate results?

6. Long-Term Success

A. N ever stop following up. You may increase the time in between inspections, but the moment you stop inspecting, the team will no longer think this new process is important.

GLENN PASCH CEO of PCG Digital Marketing Glenn is a trainer at heart. He is a highly sought-after speaker, writer, coach and operations strategist, as well as a customer service fanatic. He has spoken throughout the U.S. and Canada, educating audiences on a variety of topics including business leadership, change management, digital marketing and the impact of this new technology on culture, business and society. Visit the website www.pcgdigitalmarketing.com

SEPTEMBER 2015

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MARKETING

The benefit of pre-roll video is that advertisers only pay if ads are viewed.

PRE-ROLL AND PROGRAMMATIC VIDEO

MUST BE PART OF YOUR MARKETING ARSENAL

Online video coupled with traditional advertising enhances your targeting of qualified, in-market prospects. BY AMY FARLEY

O

nline video is engaging, effective and growing tremendously, as more and more companies in more and more verticals become aware of these benefits. Does your dealership utilize online video in its advertising strategy? If not, then now is the time to evaluate how video can fit into your existing marketing plan.

Why should dealers allocate marketing budget to online video? Simply put, it’s all about consumer behavior. Both the number of people who watch videos online, and the number of videos they watch, have been rising steadily in recent years.

“IF YOUTUBE PRE-ROLL VIDEO ADVERTISING CAN BE COMPARED TO SEARCH ENGINE MARKETING, THEN PROGRAMMATIC VIDEO CAN BE COMPARED TO ADVERTISING ON TELEVISION – EXCEPT THAT IT’S MUCH MORE TARGETED AND TRACKABLE.” story contnues on page 24

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RDE SAL VE ES E

EXCELLENCE

JO

“Our units are up from 80 to 130 and gross profit up $200,000 per month.”

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198 5 – 2015

C.

Proven Results!

30

JOE VERDE TRAINING WORKSHOPS Learn How To Train – Coach – Manage Salespeople Management Workshops

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n Managing For Growth & Profit Our ‘Team Leadership’ workshop is the critical class managers never got on “Managing Salespeople & Profits”. Attend this workshop first. n Working Deals (Negotiation) Improve your sales and gross with this easy ‘customer friendly’ 3-Step Process on every deal you work. n Learn To Hold Effective Training You train M-W-F for 2 reasons, to improve & grow.

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The statistics don’t lie

TWO-THIRDS

2/3

of the U.S. population views online videos.

(Statista)

MORE THAN HALF

of auto shoppers now watch 30-plus minutes of video while researching their purchase.

(Google)

That’s not to say that people aren’t still watching TV or listening to the radio – they are. It’s just that they’re also devoting a lot of time to the Internet and online video, sometimes at the same time.

Nielsen found that 86 percent of U.S. smartphone users say they use their devices as second screens while watching TV at least once a month, and Wowza found that 39 percent use those devices while watching TV once a day.

The customers whom you hope to drive to your showroom are spending time online watching videos, and studies show online video advertising influences them. You would be remiss to neglect such a large portion of your potential customer base, when there are targeted and trackable ways to reach those people.

YOUTUBE PRE-ROLL

Pre-roll video is likely the first thing that pops into your head if you’re asked to think about online video advertising – the ad spots that run just before the videos you choose to watch on YouTube.

The best way to think of this type of video advertising is to compare it to search marketing on engines such as Google and Bing. After all, YouTube is the second-largest search engine in the world, processing more than 3 billion searches each month.

The way that video pre-roll advertising works is this: Users search for something on YouTube and also are served relevant video results. Advertisers can target subsets of users by age, interests and other metrics, and then use that targeting to show them video ads judged to be relevant to them as well as to their search term.

The big benefit of pre-roll advertising is that it’s self-qualifying, meaning that advertisers only pay when users view their ads. This way, unqualified consumers are automatically filtered out. It also allows dealers to target parts of the sales funnel as they see fit.

For example, someone searching “new Chevrolet for sale” is likely to be low in the funnel and primed to make a purchase, so a dealer who wants to drive sales may choose to target a pre-roll ad to him or her. Likewise, a dealer who is focused on branding could target high- or mid-funnel keywords such as “Chevrolet Cruze features.”

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ONLINE VIDEO

is the top-performing ad format for driving brand consideration.

(Google)

U.S. Internet users view

20 BILLION video ads per month. (comScore)

NISSAN GETS BIG RESULTS

Particularly when combined with other video strategies, pre-roll advertising has produced success for dealers and auto brands alike. Late last year, Google released a case study in conjunction with Nissan Canada. In order to drive brand awareness for new Nissan models, the company had implemented an array of online video strategies including a Nissan virtual showroom YouTube channel, an engagements ad campaign for three different models, YouTube Masthead campaigns, and TrueView (or pre-roll) ads using YouTube video.

Over the course of the study, Nissan Canada saw more than 900,000 overall advertising engagements, with engagement rates for all campaigns clocking in at about 120 percent better than benchmarks in Canada. What’s more, the automaker experienced a 21 percent overall lift in brand awareness, the primary metric it was aiming to improve. The results of the Nissan campaigns indicate that online video advertising can be very effective in capturing auto shoppers’ interest.

PROGRAMMATIC VIDEO ADVANCES

The other main type of online video advertising is programmatic video. It utilizes advanced data to help a company identify a better audience for its ads, and algorithms to determine which ad will be shown to which user.

A programmatic platform helps decide the ads that are most relevant to a given user, which in turn increases the likelihood that the user will engage with the ad by watching the entire spot and/or taking an action.

If YouTube pre-roll video advertising can be compared to search engine marketing, then programmatic video can be compared to advertising on television – except that it’s much more targeted and trackable. Unlike television, on which ads are bought and sold in blocks, the ad-buying process in programmatic is automated and individual. Because the videos are online, it’s possible to track not just who views an ad, but where they view it, how many times, and what actions they take because of the ad. These analytics are benefits that more traditional kinds of advertising like television simply can’t offer.

Because of this, programmatic video is a boon to dealers who want to ensure they’re delivering their message to the right prospect at the right time. Programmatic algorithms help dealers focus on serving relevant ads to the most qualified, in-market customers, resulting in a much more efficient ad spend.

BOTTOM LINE WITH ONLINE VIDEO

In the end, it’s not an either/or situation for dealerships. It’s not a matter of pitting pre-roll advertising against programmatic advertising, or online video against the traditional media strategies that have been working for dealers for years.

As ever, the key to a successful marketing strategy is investing in a diversity of methods that complement each other and help you capture a broad base of potential customers. Using video pre-roll and programmatic video, alongside the more traditional and direct marketing methods you’re already utilizing, can help you reach auto shoppers at all stages of the consideration process.

It sets your dealership on the right course to the future of advertising.

“THE CUSTOMERS WHOM YOU HOPE TO DRIVE TO YOUR SHOWROOM ARE SPENDING TIME ONLINE WATCHING VIDEOS, AND STUDIES SHOW ONLINE VIDEO ADVERTISING INFLUENCES THEM.” AMY FARLEY Media and Communications Manager at Force Marketing Amy is a skilled writer and editor with a keen interest in digital trends and topics in the automotive industry. She utilizes her knowledge of what is new in retail automotive marketing to help Force – an automotive digital, direct mail and email marketing firm based in Atlanta – with its evolution of the dealer-to-customer shopping experience. Visit the website at Forcemktg.com.

TO SEE MORE FROM AMY FARLEY GO TO CBTNEWS.COM

ATTENTION DEALER PRINCIPALS Zurich North America and CBT Automotive Network invite you to join New York Times Best-Selling Author and Leadership coach

JOHN C. MAXWELL and industry leaders to discuss:

THE FUTURE OF THE CUSTOMER BUYING EXPERIENCE

John C. Maxwell New York Times Best-Selling Author and Leadership Coach

OCTOBER 15, 2015

8:00a.m.-12:30p.m.

Four Seasons Hotel Chicago | 120 E. Delaware Place | Grand Ballroom | Chicago, IL

Morning following the 2015 Best Dealerships to Work For Gala

A panel discussion with some of the top industry leaders led by Jim Fitzpatrick, Founder and CEO of CBT News will precede Mr. Maxwell’s presentation.

Jim Fitzpatrick Founder and CEO of CBT Automotive Network

Jared Rowe President of Autotrader

Raj Sundaram Co-Vice President of Dealertrack Technologies

Rachel Richards CMO, Sonic Automotive Group

To register for this exclusive dealer principal event, visit www.zurichna.com/CustomerExperience

Collin Sewell President of Sewell Family of Companies

David Putz Head of Direct Markets, Zurich North America

SALES

Husting parts to your dealership’s techs is smart business for the parts department.

YOUR PARTS DEPARTMENT’S NO. 1 MISSION NEEDS TO BE SUPPORTING YOUR OWN TECHS Parts managers who overemphasize wholesale business may do so at the expense of total dealership profits. BY DON REED

W

hat is a dealership parts department’s primary mission? The key word there is “primary.” We all know a parts department is responsible for providing parts to essentially three categories of customers: 1) Service customers, 2) retail counter customers and 3) wholesale customers.

While all three of these customer categories are important and must be provided the highest level of service each and every day, the parts manager and staff still must prioritize their efforts to ensure they achieve their primary mission. I define that primary mission as follows: The primary mission of a parts department is to support the dealership’s technicians.

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A REVEALING CONVERSATION

During one of my workshops, I reviewed the definition I mentioned earlier with an audience of dealers, GMs, fixed-ops directors and a few parts managers. All of them agreed with my definition except for one parts manager, who pointed out that his wholesale parts operation was substantial and more of his parts were sold wholesale than retail on repair orders.

“Are you sure about that?” I asked. “Yes,” he replied.

Me: “How much do you sell per month?” Him: “I average about $144,000.”

Me: “Okay, good job. What is your profit margin?” Him: “12 percent.” Me: Okay, that 12 percent produces about $17,000 in gross profit. How many trucks do you have?”

Him: “Two.” Me: “Okay, how many support personnel do you have?” Him: “Two drivers; two others who man the phones and stock/pick parts; and myself.”

Me: “How far will you drive to deliver a part?” Him: “Up to 50 miles.” Me: “Do you deliver parts to your technicians?” Him: “No.” Me: “Okay, how many back counter personnel do you have supporting your 12 technicians?” Him: “Two.”

FLAWED LOGIC BEHIND WHOLESALE-FIRST

Can you see where I’m going with this? Let’s recap this proud parts manager’s profit-producing strategy: 1) Tag, title, insure, depreciate and fill the gas tank on two trucks 2) Employ two drivers and two support personnel, not counting the parts manager 3) For those four employees, he pays wages, Social Security, unemployment and fringe benefits.

4) Deliver parts in up to a 50-mile radius of the dealership 5) There is no time to deliver parts to the technicians.

GOOD REASONS TO PUT TECHS FIRST Why do I put the dealership techs ahead of other customers in the priority order? For these reasons:

1. The techs place more parts requests than any other category of customer.

2. The techs generate more parts sales than any other category of customer.

3. The techs produce more parts gross profit than any other category of customer.

4. The techs service more dealership customers than any of your other parts customers.

5. T he techs, along with their advisors, have the highest impact on the dealership’s CSI rating.

Simply put, a parts department would not exist without a service department, and conversely a service department cannot exist without parts. So, obviously they are interdependent, and as such the techs must be considered the parts department’s No. 1 customer. Therefore, the parts department must provide them with the highest level of service possible. That simply means delivering a part to the technicians in the shortest possible amount of time, and not assuming you can coast because it’s a co-worker.

Now, out of that $17,000 in gross profit he is so proud of, how much do you think is left over after he pays for the direct costs listed above? I’m guessing that third-grade math will give you the answer. He has four support personnel with two trucks and himself to support $17,000 in gross profit. Compare that strategy to the fact that a good technician can produce about $17,000 a month in parts and labor gross profit, multiplied by the 12 techs in his shop. That would mean the dealer makes $204,000 after the technicians are paid! Hello!

Okay, let’s concede that maybe your techs are not quite that good and can only be 60 percent productive. You would still end up with over $100,000 vs. $17,000!

STANDARDS FOR SERVING YOUR TECHS

I’m not saying you should get out of the wholesale parts business. I’m saying that if you think like this parts manager does, you must get your priorities straight to achieve your primary mission. Supporting 12 technicians with two counter people, and failing to deliver the parts to the techs, is not conducive to maximum shop productivity and net profits.

Ideally, you want the techs to get the parts they need when they ask for them, at least 90 percent of the time. If the desired part is not in stock, then what is your process for getting that part as quickly as possible? In most cases, a daily stock order will get that part delivered the following day. If not, your choices are to buy in the aftermarket or from another franchised dealer.

Parts fill rate is crucial to attaining a high level of shop productivity, which should be no less than 120 percent.

Obviously, technicians waste time waiting on parts, putting the vehicle back together to get it off their rack and then loading it back on the rack the following day, only to disassemble again. Plus, those techs only get paid on flatrate hours to do that once.

Another opportunity to increase shop productivity is to have the parts personnel deliver to the technicians at their bays. I am forever amazed at how many parts departments will load up their truck and drive 10 or 15 miles to deliver a wholesale part, at a 12 percent to 14 percent profit margin, but refuse to take the time to walk 50 feet to hand-deliver a part to a technician who produces a 40 percent to 45 percent profit margin.

Lastly, by increasing the speed of parts delivery to your techs, you also will reduce your repair cycle times, increase technician productivity, improve CSI and improve owner retention. Circling back to the beginning of my article, the key word to remember is “primary.” It simply means “most important,” which of course leads to providing your customers with a higher level of service with each visit to your service department.

TO SEE MORE FROM FRANK J. LOPEZ GO TO CBTNEWS.COM

Maximizing parts fill rate will avoid costly assembly and disassembly.

DON REED, CEO of DealerPro Training After 26 years in the automobile business as a dealer, GM, sales manager, service manager, service advisor and salesperson, Don began a new career as a consultant and trainer. As CEO of DealerPro Training and founder of The Don Reed PRO Training Network, he has worked with hundreds of dealerships and major dealer groups across the U.S., Canada and the U.K. to increase profits in their fixed operations. He was rated a Top 10 Speaker at the NADA convention for four consecutive years. Visit the firm’s website at DealerProTraining.com.

SEPTEMBER 2015

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LEADERSHIP

CREATE AN ANNUAL TRAINING CALENDAR To Actively Plan, Manage And Track Your Dealership’s Investment Development of a calendar for 2016 should be starting within a few weeks. BY TOM KUKLA

“IT IS DIFFICULT TODAY TO ANTICIPATE ALL OF YOUR DEALERSHIP’S TRAINING NEEDS FOR THE COMING YEAR. WITH THAT REALITY IN MIND, THESE CALENDARS SHOULD BE BUILT TO BE FLEXIBLE.”

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I

t’s Sept. 1, your first day on the job as HR director at the county’s largest dealership. As you settle in at your new office, you muse about why you were hired. In the final interview, the last thing the owner said as you stood up to leave was, “And Job One is going to be to ‘fix’ the training we got going on around here.”

That comment sets your marching orders for the next few months. When it comes to the dealership’s staff training, you know the first places to start are to: Develop a tool that maximizes training resources I dentify and record the training progress of all staff throughout the year So, then, your first task is to create an annual training calendar for 2016.

THE CALENDAR BECOMES A STRATEGIC TOOL

That annual training calendar is an invaluable strategic tool for numerous industries. From a dealership perspective, it accomplishes at least two important things. It provides a record of previous training, which helps to answer performance questions and compliance issues; and it helps guide budgetary and development decisions about future training.

There is strategic value to setting the calendar well in advance. An annual calendar, completed and communicated to the staff before the end of the year, helps with staffing decisions, vacation planning and meeting planning for the entire upcoming year. Plus, it shows the staff the dealership is interested in investing in their growth and development. This practice alone aids in staff retention!

If your dealership chooses to develop an annual training calendar, then it should be shown to the entire staff no later than mid-December. By the way, if you are planning to create one for 2016, you should be starting the process no later than September or October of 2015!

WHO HELPS SHAPE A CALENDAR?

Typically, if a dealership employs an annual training calendar, then the HR director or training director coordinates and develops it. However, populating it should be a team effort.

The dealer, general manager, sales manager, service managers, office managers, other department managers and trainers all should all be asked for input. Gaining consensus of key players generates the necessary buy-in with the final product, and that buy-in will help ensure that the training programs are fully attended by enthusiastic participants. Final say about the calendar content should rest with the HR director or the dealer.

HOUSING AND USING THE CALENDAR

If training is an HR function, then the annual calendar ought to be accessed through the HR website. It should be available to the entire staff but be “read only.” It can be reposted and redistributed whenever there are significant updates.

An annual training calendar of this nature is especially well suited for recurring training programs – e.g. sales, F&I and service-type programs that are held annually or every other year. The annual calendar also is very well suited to manage new training initiatives such as a leadership development program for emerging managers.

Although it is strategically beneficial to have a training calendar built a year in advance, dealerships need also to

Elements Of An Effective Calendar At least 10 critical fields should be filled out for each program listed on an annual training calendar. I’ve included a calendar excerpt with this article, for illustrative purposes. Those 10 fields are: A. Dates and length of training B. K ey objective(s) of training (what the dealership wants to happen as a result of the training) C. Participants/departments D. Instructors E. Skill and topics covered – Be as specific as possible here. Hypothetical examples are listed below: 1. Sales skills 2. Management skills 3. Leadership skills 4. F&I topics 5. Telephone skills 6. HR skills 7. Customer service skills 8. Technical skills (service) F. Pre-work required – Managers of participants should be held accountable that their people are prepared.

G. Post-program follow-up – If your goal is to maximize training, then follow up to determine if the training lessons “stuck” with participants as you intended.

H. Training location (someone should be responsible for booking off-site locations well in advance, so there are no surprises) I. Total number of participants (driven by budget and availability) J. Budget assigned/per-participant cost – This is critical to maximize your budget and to make sure the right folks are getting trained. be highly adaptable. It is difficult today to anticipate ALL of your dealership’s training needs for the coming year.

With that reality in mind, these calendars should be built to be flexible, in case for example: A new program must be added for new employees or staff who change jobs mid-year.

T he factory, market conditions or a dealership expansion dictate suddenly adding a training program.

Updated content is added to a training program.

IN CONCLUSION

Developing an annual training calendar provides much needed clarity to the training function in auto dealerships.

With a training calendar appropriately focused on the future, you can see which department is taking proper advantage of training opportunities, where gaps exist in programming, where the training dollars are going, and who is doing most of your training.

Good selling and good training!

TOM KUKLA Principal and Founder of Tom Kukla Credere Leadership Tom is a highly experienced leadership coach, speaker and trainer. Prior to founding Credere Leadership, he spent 38 years in retail and medical sales, sales management, and management and leadership development. He developed a world-class management-training program from the ground up in the highly competitive pharmaceutical industry that served hundreds of sales and marketing colleagues. As a John Maxwell-certified coach, teacher and speaker, he offers organizations management and leadership workshops, seminars, training and coaching. You can reach Tom at tom@credereleadership.com and visit his website at LeadershipIsInfluence.com.

TO SEE MORE FROM TOM KUKLA GO TO CBTNEWS.COM

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MARKETING

CUSTOMIZE LANDING PAGES

TO ENSURE CAR SHOPPERS ARE GLAD THEY CLICKED ON YOUR ONLINE ADS If searches don’t take them directly to the relevant message for that make and model, they will keep looking elsewhere. BY FRANK J. LOPES

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“BE SURE THAT ANY LANDING PAGE PROMINENTLY DISPLAYS THE MAIN MESSAGE, I.E. THE REASON SOMEONE JUST CLICKED. IF A CUSTOMER IS RESPONDING TO A PRICE OR PAYMENT OFFER, THAT PRICE OR PAYMENT NEEDS TO BE PROMINENTLY DISPLAYED.”

H

ow does your dealership measure user satisfaction when it comes to your website? Is it based on the number of inventory searches, or the number of vehicle views? Do you regard the length of time a visitor spends on your site as the most important metric, or do you cover lead submissions more?

Ask 10 different dealers how they evaluate website experience and you’ll probably get five different answers (the other five will more than likely answer honestly, “I don’t know” – such a shame!). I can tell you with 100 percent certainty that by properly but aggressively using custom landing pages (those designed with the main purpose of providing relevant and targeted information, in response to a search or other click prompt), the levels of interaction, engagement and leads all will increase. Positive results in these three areas are sure indicators of heightened customer satisfaction with your website offerings.

Logically, a dealer thinks the website homepage is where potential customers begin an online experience with their dealership. However, shoppers who already have zeroed in on a make and model only want to decide where to buy, so they may welcome your home page with the same feeling as when you realize the store you want is on the opposite side of a long mall. The last thing you want is for your website’s navigation bar to be read with the same impatience and frustration that those color-coded mall kiosk maps get (“So we are in Zone A, and Macy’s is in Zone F?”).

PAID-AD CLICKS SHOULD BE DIRECT

Yet, we set up a similar scenario every time a customer searches for a specific make or model and click on a dealer’s paid ad, only to be brought to an inventory search results page (SRP). It’s the equivalent of a customer walking into a Toyota dealership asking to see a salesperson who can discuss a new Camry, and being told to drive over to the storage lot and pick out a Camry in the back corner and wait for someone to come help. The frustrated customer would simply leave and find another dealership.

And, the same negative outcome arises when a potential customer clicks on an SEM (search engine marketing) ad that shows his or her desired make and model at an advertised price, and the click goes to an SRP page with the aforementioned price nowhere in sight. That shopper probably immediately thinks, “Eh, typical car dealer shenanigans” and moves on to the next ad. It’s even worse if the price that came up on the search page doesn’t match

the one on your website; now that customer thinks your dealership doesn’t pay attention to details.

DEALERS NEED TO MANAGE MARKETING

Misdirected and misguided clicks have been a problem ever since search marketing first appeared in dealer’s advertising budgets. But, it never had to be this way. The problem persists due to the naiveté of dealership marketing personnel, the laziness of digital marketing companies (yes, I wrote “laziness”) and many dealerships’ lack of investment in true website optimization. I believe that once a dealer finishes reading this article and pays attention, the third factor should stop applying.

Be sure that any landing page prominently displays the main message, i.e. the reason someone just clicked. If a customer is responding to a price or payment offer, that price or payment needs to be prominently displayed. And, to establish integrity in the offer, use full disclosure and provide a complete explanation of how you arrived at that price. Try displaying a photo of the actual vehicle (taken from your website) that will be offered at that price; and provide links to an SRP for that model, a third-party review and e-brochure.

TOUT YOUR DEALERSHIP, TOO

This is a prime opportunity to feature not only your vehicle but also you, the dealership. So, make sure the landing page also includes your value-added message and unique selling proposition, in graphics that click through to separate landing pages created for both of these items (yes, you need additional landing pages!).

On top of that, try including a quote from a very recent review of your dealership from either DealerRater or Google, and make the quote clickable to its first organic appearance. Don’t cheat and put in an auto-feed of scrolling reviews; customers don’t believe these and will assume you have filtered out the bad ones.

Critically for both the customer and your dealership, provide multiple invitations for the reader to contact you.

For example, add text across the very top of the page reading, “Questions? Please feel free to call us right now at 1-800-XXX-XXXX. We’re here to help and won’t harass or

“MISDIRECTED AND MISGUIDED CLICKS HAVE BEEN A PROBLEM EVER SINCE SEARCH MARKETING FIRST APPEARED IN DEALER’S ADVERTISING BUDGETS. BUT, IT NEVER HAD TO BE THIS WAY.” Dealers are becoming increasingly aware of the direct relationship between a customer’s website experience and phone leads, Internet leads and showroom visits.

A digital marketing program that effectively and efficiently uses landing pages will get potential customers to the information they are looking for quicker, with less stress and fewer clicks. It cuts down on the time a customer spends digging and navigating your website, and increases the time spent gathering useful information and getting important questions answered.

Most importantly, strategic use of landing pages makes your dealership more valuable to that customer. You begin to lay the groundwork to becoming that customer’s “go to guy,” the preferred source of car-related information, sales and service.

CONSISTENT PAGES, WITH NO. 1 MESSAGE

So, it is vital that your landing pages are constructed to compliment all of your other marketing efforts. They should have the same look, feel and writing style as the rest of your website (which, by the way, should be styled after all of your other marketing).

bother with unnecessary calls back.” You should welcome calls in which you can be of service to your customer, not demand outreach with a false sense of urgency like “Call now before someone else does!” (No, I didn’t make that up, I actually saw it on a dealer’s website.)

DISCIPLINE LEADS TO MARKETING PAYOFF

The main thing to remember when conceptualizing and building these landing pages is: Keep the main thing, the main thing. If the page’s primary purpose is to feature a special offer, then craft that page around the offer. If your goal is to announce a special holiday rebate or incentive, then create the landing page accordingly. While all other elements on the page are secondary, each still needs to be valuable to the reader.

Making landing pages an important element of your marketing strategy will pay off. It will take a lot of planning, creativity and disciplined execution. But in the end, your potential customers will find the information they want quicker and with fewer searches. Your dealership has provided them with a desirable online experience, which is exactly what you are looking for as well.

FRANK J. LOPES, Vice President of Forrest & Blake Marketing/Advertising Frank has more than 20 years of experience in auto dealer marketing and has created multiple award-winning campaigns for various retail and e-commerce clients. He also is a frequent writer and speaker at industry events.

TO SEE MORE FROM FRANK J. LOPES GO TO CBTNEWS.COM

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ASK THE ?

PROS

A

t CBT News, we are fortunate to partner with the best trainers in the industry.

Whether it’s information on sales,

F&I, marketing, management or fixed ops, our contributors are the go-to professionals for reliable, relevant advice for dealership personnel.

You have access to the foremost authorities in the retail automotive industry. Need a new closing technique? Wondering what’s the best way to increase sales in the service lane? Send us your questions at AskThePros@cbtnews.com. We’ll forward your inquiries to our ensemble of experts.

Q

OUR STORE IS GROWING FAST, AND WE’RE THINKING ABOUT CREATING AN ASSISTANT GM’S POSITION FOR THE FIRST TIME. IT WOULD BE SOMEWHAT LIKE A GSM IN THAT IT WOULD OVERSEE THE SALES DEPARTMENT, BUT THIS PERSON ALSO WOULD WORK CLOSELY WITH THE GM AND PERFORM SOME GM DUTIES, BECAUSE HE/SHE IS BEING GROOMED. WHAT DO YOU SEE AS THE POTENTIAL PROS AND CONS OF NAMING AN HEIR APPARENT, ON THE OBVIOUS FACTORS LIKE STAFF MORALE AND CROSS-TRAINING? – Marty B., Columbus, Ohio

A

Mark Tewart,, President of Tewart Enterprises Inc.: It sounds like you are moving toward staffing your dealership with a general sales manager and also a general manager. This is tricky move that should only be done when it’s apparent that it is overwhelmingly necessary. The GSM will be in charge of the variable operations such as new and used car sales, BDC, Internet department and F&I; and will report to the GM, who will act as the executive manager of the dealership and be responsible for all front and back operations as well as administrative.

If the last recession taught us anything, we should have learned to be wary of adding extra layers of management. You had mentioned that the GSM is also to be the GM in training or next in line. If this is the case, it makes sense. Usually, a GSM-GM hierarchy is needed in the case of largevolume stores. It also depends on whether the dealer is an active dealer-operator. If not, the GM acts as the executive manager of the dealership.

The roles of both must be written and clearly communicated by the dealer.

The ability to cross-train managers is a good thing. In the future, I believe we will have fewer “silo” managers responsible for one thing and more of a cross-trained team approach, in which managers will constantly cross over into the other departments as daily work schedules are addressed 32

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as needed. I don’t believe the change should affect the morale of the store and if done right, it would only improve operations.

The pitfall becomes if the GM develops an “executive” mindset and creates a top-purelydown hierarchical management approach that can create dissention among the rest of the team.

Q

I’M TOLD THAT IF OUR DEALERSHIP USES SLIGHTLY DIFFERENT ADDRESS CONVENTIONS ON OUR WEB PAGES (FOR EXAMPLE, MAYBE 118 SOUTH FRAZIER STREET IN ONE PLACE AND 118 S. FRAZIER ST. IN ANOTHER), THAT THIS CAN ACTUALLY HURT OUR SEARCH ENGINE RESULTS. CAN THIS BE RIGHT? IT SEEMS VERY NONSENSICAL TO ME. – Mark J., Tempe, Ariz.

A

Amy Farley, media and communications manager at Force Marketing: It’s both right and wrong, Mark, which I realize can be a bit confusing.

The truth is, Google and the other search engines are getting better every day at ‘normalizing’ data like that, so that they can connect information that’s only different in slight, common ways. When your address is listed on one site using the word “Street” and on another with the abbreviation “St.,” typically Google will be able to understand that both of those listings refer to your dealership.

The problem is that acceptable terminology and abbreviations change over time. Additionally, other businesses could open with names or addresses that are very similar to yours, and the search engines may not always be able to tell the difference. On top of that, you never know when search engine algorithms might change to favor even more consistent citations than they already do. To be safe, it’s best to keep them the same as much as possible.

The bottom line: If the only difference you’re seeing in your citations is Street vs. St., it may not be necessary to put in the effort to change them. If you see other differences, though, it’s a good idea to use a service like Yext or VendAsta to ensure all your listings are as accurate and consistent as possible. This way, Google and the other search

engines can tell that all the citations refer to your dealership in particular, which in turn boosts your local organic rankings.

Q

WE’VE ALWAYS DONE A YEARLY SALES RETREAT, BUT FOR A LOT OF REASONS, I’M NOT HAPPY ABOUT THE IMPACT OF OUR MEETING. DO YOU SEE MANY GOOD REASONS TO HOLD OFF-SITE SALES RETREATS GIVEN THE CHANGING DEMOGRAPHIC OF MOST AUTO SALES FORCES? – Carl C., Denver.

A

David Lewis, president of David Lewis & Associates: I am a huge fan of off-site sales retreats. There is nothing better than getting out of the dealership environment as a group to both learn new ideas and spend time together. The key to an effective event is the material and agenda.

It is important that the ideas presented are new, fresh and relevant. Reviewing old processes and procedures only reinforces that we are satisfied with the status quo, and nobody wants that. Your agenda should be one that inspires people, makes them think outside of the box and lets them know that you are a team.

A great way to add to the event is to assign different people topics in advance for them to prepare and share with the group. The topics can be sales ideas, new industry concepts or even just the dealership in general. Be sure to give them plenty of time to prepare their thoughts and material. I would recommend a meeting months prior to the event to prepare the agenda and topics you want to assign.

I am also a big fan of discussion groups. At the off-site event, break everyone into smaller groups and give them a topic to discuss and create new ideas for. Two examples of great topics would be the effectiveness of our in-dealership training and how could we improve it, and how do we attract new and talented people to our organization.

The goals of an off-site retreat should be to have fun and to get everyone thinking and participating on how the dealership can improve. Off-site events are a great way to show your team you care about them and the organization, and that they are an instrumental part of the team’s success.

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LEADERSHIP

Foster A Growth Environment That Keeps Sales Reps

With You For The Long Haul Pursue six attributes for your dealership that make salespeople feel challenged and affirmed.

BY CHRIS ROLLINS

S

taff retention has been a major headache for auto dealerships for years, but nowhere is the pain more acute than with the retail sales force. Just talk for more than a few minutes about your dealership, and odds are that your salesperson retention problems will come up in conversation.

The volume of professional literature, seminars and blog posts on this topic is massive. A lot of good advice is being circulated about how to stop turnover in sales positions. So, why does this continue to be an Achilles heel for most dealerships?

Salesperson turnover will never be reduced to zero; in fact, that would not be conducive to high performance.

However, study after study has shown the high costs of constant turnover, so cutting into the rate will certainly produce bottom-line benefits to your dealership.

There is no quick fix to this problem. However, you will begin to progress as soon as you start developing the kind of culture that emphasizes retaining top talent and achieving cumulative returns on the investment in your teams. As I have learned from my mentor, John

Maxwell, creating a growth environment is one of the most crucial tasks that dealers face as leaders. Once we do that, not only will retention improve but also when salespeople do leave, it won’t constantly be our best talent walking out the door.

However, what does a growth environment look like?

Following are six attributes that I believe characterizes that kind of sales force in the retail automotive industry.

1

KEEPING CARROT AT STICK’S END

What happens once your group has hit No. 1, however you define it? Let that question really sink in for a moment.

There is an old saying, “If you are the

2

KEEP THE FOCUS FORWARD

Give the salespeople a big picture on which to focus. When you share our vision for where you plan to take your dealership, your reps will get a lot more excited than if you announce, “Hey, we really need to sell 15 cars each this month.”

A growth environment is one in which your team can visualize how each piece comes together to create the overall big picture and destination for your dealership.

Dealers and GSMs should talk about their vision constantly until it becomes engrained in every part of their culture.

“IN FORUM AFTER FORUM SALESPEOPLE MAKE IT CLEAR THEY FEEL TREATED LIKE A NUMBER AND UNIMPORTANT TO THE DEALER. THEIR CRITICISMS CAN AND SHOULD STING, BUT THEY ARE NECESSARY MEDICINE.”

MAKE THE ATMOSPHERE AFFIRMING

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I believe this presents one of the biggest areas of opportunity for dealerships nationwide. Many automotive sales reps come to work daily feeling like they constantly battle a negative image, with the buyer population pulling up to the lot already distrusting the salesperson due to stereotypes or past experience.

To make matters worse, in forum after forum salespeople make it clear they feel treated like a number and unimportant to the dealer. Their criticisms can and should sting, but they are necessary medicine. Are the salespeople important? Absolutely! Your challenge as the leader is to ensure they know you appreciate their value to the dealership.

3

What would have kept this productive salesman from quitting?

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best person in the room, you are in the wrong room.”

When competitive people no longer feel competition in their current situation, they will seek it out elsewhere.

Your goal is to create an environment in which your salespeople are constantly challenged in new ways, and thus constantly engaged. Doing this could be as simple as tracking more than just numbers of sales and touting, for example, appointments made or profit per transaction.

When you start tracking multiple metrics, no one sales rep will be No. 1 in every area. Everyone has something to strive to achieve. Plus, you could offer one-onone coaching to your top performer as a reward.

That is the sort of incentive that keeps your people working at high level of energy and with consistent enthusiasm.

One simple yet powerful tactic I have tried for years is to send personal letters home to a spouse or family member, letting her or him know how much we appreciate the employee. Win the heart of the spouse, and you have a huge advocate at home.

STRAY OUTSIDE OF THE COMFORT ZONE

There is an old saying that growth takes place out of your comfort zone.

The danger of performing the same sales functions day in and day out lie in people unintentionally getting caught in the comfort zone trap.

Keep training, challenging and encouraging your team on a consistent basis to make yesterday’s top performance the new standard. When you do, your team will remain in a constant state of challenge, while you keep raising the bar of performance.

4

Let your salespeople know they are not just numbers, and you value their opinions.

CHRIS ROLLINS President of Rollins Performance Group

FAILURE IS NOT YOUR ENEMY

How many times has a rep walked in from the lot after missing out on an apparent sales opportunity and uttered the classic line, “Oh, they were just looking”? I bet you have heard that excuse at least once already today!

Salespeople aren’t going to close with every customer, but when you foster an environment where they feel secure about opening up and really digging into why the last prospect walked, you begin to develop strategies that will win more of those opportunities in the long run.

Flipping that lost sale to a source of learning from a source of frustration marks an environment where reps are encouraged as they are challenged. It has been said for too long that “Experience is the mother of all learning.”

That is simply not true; evaluated experience is.

Help your sales team embrace learning from failure rather than fearing it. To get things going, try at the next sales meeting opening by inviting the team to brainstorm responses to the customer objections they face every day.

Chris has more than 17 years of sales and operational leadership experience and has been personally trained and mentored by such leaders as John Maxwell, Jeffrey Gitomer and Les Brown.

He is focused on developing leaders and sales teams to achieve exceptional top- and bottom-line growth by building sustained momentum. Visit his website at www.rollinsperformancegroup.com.

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GROWTH SHOULD BE MODELED, EXPECTED

When was the last time you participated in a sales training class with your team?

When did you last read a great book on sales and then share a few key takeaways with your salespeople? If you truly want to create a growth environment, then it starts with you as the leader.

When you model for your team what growth should look like, your reps know you truly are in the battle with them. At that point, you have earned the right as leader to insist on what is expected from everyone who chooses to be part of your team.

When you create an environment built around principles such as these in your dealership, it becomes about more than simply selling cars. Yes, that is the function your reps perform every day, but you also want them to realize a sense of purpose.

Take a few minutes to perform a personal inventory of the six key areas discussed above. If you are feeling really brave, take an anonymous survey of your team to ask how they feel the dealership is performing in these areas. That will give you a great starting point to address the aspects of a growth culture that will have the greatest impact on your salesperson retention.

Record the specific ways you are tackling each area and then compare your dealership’s sales rep turnover and retention rate in six months vs. today.

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TO SEE MORE FROM CHRIS ROLLINS GO TO CBTNEWS.COM

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F&I An effective collections policy manual will address relevant laws, but more importantly reflect the business realities of your F&I department.

EMPLOYEE HANDBOOK, DEPARTMENT POLICY MANUALS DESERVE YOUR Dealership’s Real Effort And Attention Don’t make the mistake of just copying from the Internet; follow these steps to craft an effective guide. BY STEVE LEVINE

I

n one of my toughest cases defending a car dealership, my client was asked during the lawsuit to produce its policies and procedures manual. The dealer proudly presented me with a manual several inches thick. “Policy Manual of XYZ Finance” appeared on the front. So far, so good, right? Well, you really can’t judge a book by its cover.

As I read further, I noticed that the front cover was the last time “XYZ Finance” appeared. Instead, the rest of the content referred to “ABC Finance,”

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the manual’s apparent author. When I confronted my client with this regrettable fact, he admitted that he pilfered the manual when leaving an old job and meekly asked, “That’s not a problem, is it?”

After spending lots of money of attorney fees and a less-than-favorable settlement, he learned the hard way that it surely was a problem.

Car dealers are constantly lectured about the importance of strong written policies and procedures for every department. Having and adhering to such a manual demonstrates an intent

to do business the right way and allows the dealer to argue that any failure in following these policies was an unintentional mistake, not deliberate disregard for the law.

It’s easy enough for lawyers, compliance experts and consultants to preach – but it’s a lot harder for dealers to actually accomplish. After all, they are in the business of selling cars, not writing policy manuals. However, I’ve read and drafted lots of them, and here are my suggestions on how to get started.

START WITH READING MANUALS At the outset, it is important to set goals for the document and its intended audience. An employee handbook, for instance, covers the employer’s

“20 to 30 pages typically cover sufficient detail while still being manageable for your F&I people. That’s just a guideline, though, because the “right” length truly depends on the complexities in how your dealership is run.” policies on topics such as vacation, sick time, benefits available, standards of conduct, and other general topics relevant to all employees. This is very different than a departmental manual, which provides employees with detailed information about the rules and expectations of that department.

Ideally, the dealership would hire an expert to create an effective policy manual. Some lawyers and compliance firms specialize in this practice, and you can find them by attending an industry trade show or browsing trade publications. These experts will ask the right questions, learn how your dealership operates, and craft a manual that fits your business while also addressing the important legal and compliance issues.

Having this done professionally is not cheap, though. For a simple policy manual for a single small store, it may run you $2,500 or more. Multi-location dealerships needing a more detailed manual may shell out more than $5,000. Not every dealer is in a position to make such an investment.

Therefore, I bet many of the folks reading this article have done what my client did. They either copied another dealership’s policy manual or became Internet lawyers and searched Google until they found something “close enough.” In truth, there is plenty of good content online. The trick is to use it as a starting point – not just slap your business’ name on it and think you are finished.

Read through a few manuals to see how they are organized and what topics they cover. Then, ask yourself how well they fit your dealership and adjust wherever necessary. Once a solid draft is complete, share it with managers or other leaders in the dealership and learn whether they agree it comes close to the realities of your business.

Finally, bounce your draft manual off a consultant, lawyer or other professional before printing it and giving it to your staff. It’s much cheaper to have a lawyer proofread and make suggestions in certain areas than to have him or her start from scratch.

You’ll still gain an attorney’s perspective and guidance on ensuring the manual doesn’t fly in the face of relevant laws.

HOW LONG SHOULD IT BE? There is a good debate going among compliance experts about whether more is better or less is TO SEE MORE FROM STEVE LEVINE GO TO CBTNEWS.COM

You don’t want to testify about following a manual that’s too long to remember.

more, when it comes to policy manuals. I tend to lean toward the “less is more” approach.

While there is no magic number for dealership manuals and handbooks, 20 to 30 pages typically cover sufficient detail while still being manageable.

That’s just a guideline, though, because the “right” length truly depends on the complexities in how your dealership is run. Your manual should be thorough enough to cover all relevant business processes, but not so long that an employee can’t possibly grasp all the content.

I’ve seen more than one witness tripped up during a deposition or trial examination because the manual simply had provided too much content to recall. Remember, the manual should contain “best practice” guidelines, not intricate instructions covering every last duty an employee may have.

Those are job descriptions, which is a topic for another day.

WHAT TO INCLUDE You must strike a balance between practicality and the law. For example, it’s insufficient to simply have the manual proclaim, “We will follow federal law XYZ.” That’s a worthy aspiration, but it gives the reader no specific direction. Your manual must provide instructions on how to apply the law to day-to-day business operations.

Instead, I prefer an approach more like: “We strive to follow the federal law XYZ in our work environment. To do this, we have our employees adhere to the following rules regarding communicating with customers ...”

I’ve seen lots of unfortunate examples when

employers tried to handle everything in one document, which is confusing. The smart course of action is to have an overall employee handbook and then more specialized departmental manuals, which can vary greatly in length based on the size of the department and areas of responsibility.

Your employees are a key resource in this exercise. Ask them for guidance on how their department is run. Create flow charts that follow your various processes. Only then should you attempt to document each of the stops along the path. I’ve seen many dealerships make the mistake of overvaluing the contribution of outside consultants and undervaluing their internal subject matter experts, with unfortunate results.

TRAINING AND TESTING Your policies and procedures manual should work in concert with training and testing efforts. It isn’t enough to publish the material or put it on a shelf.

A wise dealer will implement the manual through training and make sure short tests are administered for employees to demonstrate their grasp of the information.

These tests should be given at least once a year and then filed in each employee’s personnel folder.

They don’t have to be elaborate; 10 or 15 questions can be enough to reveal if an employee has put in the effort to review the manual.

A dealership wants to make a powerful statement to employees that these policies are part of your company culture. In turn, you’ll send the same message to lawyers or regulators who could knock on your door in the future.

STEVE LEVINE Chief Legal and Compliance Officer of Sigma Payment Solutions Steve has more than 25 years of experience as a lawyer in the consumer finance and automotive industries. Sigma Payment Solutions offers a full suite of advanced payment technology products to car dealers, lenders and other businesses, as well as various consumer-friendly payment channels.

Visit the website at www.sigmapayments.com.

SEPTEMBER 2015

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ON THE SET WITH

AUTOMOTIVE NETWORK David Kain, president of Kain Automotive, with Corinne Lillis of CBT.

John Fitzpatrick, president and CEO of Force Marketing.

Thom Brodeur, chief operating officer of Digital Air Strike.

Jeremy Anspach, CEO and co-founder of PureCars.

Mark Tewart, president of Tewart Enterprises Inc.

Frank Lopes, vice president at Forrest & Blake Marketing/ Advertising, with Corinne Lillis of CBT.

Katti Ehoff Fields, VP of dealer products at Edmunds.com, with Corinne Lillis of CBT.

Roger Penske, chairman of Penske Automotive, is inducted into the Automotive Hall of Fame in Detroit in a ceremony that CBT covered. Also shown are (far left) NADA Chairman Bill Fox, NADA President Peter Welch, NADA Vice Chairman Forrest McConnell and (far right) David Penske, chairman of Penske Buick GMC.

Trevor Banks of Zimbrick Inc., with Joe Gumm of CBT. Jeff Risner, CEO and co-founder of The Appraisal Lane.

Laura Madison, national director of sales at Alan Ram’s Proactive Training Solutions.

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Jim Fitzpatrick (left) of CBT interviews Roger Penske, chairman of Penske Automotive, at his induction into the Automotive Hall of Fame.

Ken Potter, VP of sales at The Appraisal Lane.

News ASSOCIATION

Fiat discusses deal with federal government to police recall vehicle sales.

Volkswagen was ranked at the bottom of 32 auto franchises given a report card, with an overall mark of 62 on a scale of 1 to 100. Next nearest to the basement were Infiniti (65.6), Mini (66.4) and Smart (68.1).

Lexus topped the charts at a 91.7 score, followed by Toyota with 90.1 and Suburu’s 90. Those three brands were the only ones rated by their franchise dealers at 90 or above.

VEHICLE TRADE GROUP WORRIES ABOUT MORE LIBERAL OVERTIME RULES

The Recreational Vehicle Dealers Association wants its members to weigh in on proposed federal rule changes that could significantly increase the number of their employees who qualify for overtime pay.

Pending revisions to Labor Department regulations would make employers pay all eligible employees overtime at time-and-a-half for working hours over 40 per week, if they earn $50,440 or less per year. That would represent more than a doubling of the existing $23,660 threshold.

The RVDA also is gauging member dealership reaction to the Labor Department’s consideration of whether to modify the current duties test for overtime. The agency has publicly wondered whether an employee should have to work on his or her primary duty for a minimum amount of time, in order to qualify the employer for exemption from the overtime rules. The RVDA worries this could have the effect of making many salaried dealership employees who perform numerous tasks overtime-eligible.

The association plans to draft and submit comments to the Labor Department before the Sept. 4 deadline.

NAFA LANDS BIG LENDER FOR ITS COMPLIANCE PROGRAM

ASSNS. REACT AGAINST PROPOSED BAN ON USED VEHICLES UNDER RECALL

Dealer trade associations are wary of a plan they are hearing about to prohibit the retail sale of used cars that are under an open manufacturer recall program.

NADA says Sen. Richard Blumenthal, D-Conn., had authored a proposed amendment to a transportation bill that would prevent sales of used cars under recall. However, the latest substitute for that bill did not include such a Blumenthal amendment.

Meanwhile, NADA is urging dealers to keep an eye out and lobby their congressional representatives against a ban.

NADA, the American International Automobile Dealers Association and the National Association of Minority Automobile Dealers all oppose a ban, saying it would not guarantee that any recall vehicles actually gets fixed but it would drive down the value of used cars.

Meanwhile, a 36-page consent agreement between Fiat Chrysler and the federal government would forfeit dealer incentives from the manufacturer if those dealers sell any cars with open, unrepaired recalls, “regardless of whether new or used.” Currently, it is illegal in the U.S. to sell new cars with open recalls, but there isn’t any such legal prohibition for used cars.

The agreement between Fiat Chrysler and the National Highway Traffic Safety Administration pertains to alleged violations of federal auto safety laws involving government-ordered recalls. It orders the U.S. unit of Fiat Chrysler to develop and implement a process to “deter” dealers from selling vehicles lacking recall repairs.

Westlake Financial Services signed up 600 staff to participate in the National Automotive Finance Association’s Compliance Certificate Program, an online curriculum focused on federal and state consumer credit laws and regulations. Several other major lenders are participating, NAFA said, and all five certificate modules now are available to companies.

TOYOTA’S LENTZ TO GIVE KEYNOTE SPEECH FOR AIADA

Toyota North America CEO Jim Lentz will be the keynote speaker at the American International Automobile Dealers Association’s annual meeting on April 3, 2016 in Las Vegas.

Also at that meeting, Greg Kamisky of California will take over as AIADA 2016 chairman for Bradley Hoffman of Connecticut, and the association will present its David F. Mungenast Lifetime Achievement Award.

ASSOCIATION MATTERS IN BRIEF

The National Independent Automobile Dealers Association became one of the industry partners in the “Used Car Week” conferences produced by Cherokee Media Group.

The National Auto Auction Association and National Automotive Finance Association already were industry partners for the series of used vehicle-specific conferences held each November … Rob Thompson, the owner of Mid-State Auto Auction in New York Mills, Minn., was named to a two-year term on the board of Franklin, Tenn.-based ServNet Auctions, the National Auto Auction Association announced.

LATEST NADA SURVEY EYES DEALER ATTITUDES TOWARD THEIR BRANDS

Dealers selling Volkswagen, Infiniti, Mini and Smart models are worried about the value of their businesses, their relationship with manufacturers and the quality of their brands’ field personnel. Meanwhile, life couldn’t be much better as a Lexus, Toyota

or Suburu dealership.

That is the picture painted by the most recent “Dealer Attitude Survey” from the National Automobile Dealers Association. Results of the twice-yearly NADA survey are not supposed to be publicly released, but a copy was leaked to and reported by Automotive News.

The index is compiled based on responses to questions about past, present and future franchise values; how much an auto manufacturer takes dealer input into consideration, and fairness of the manufacturer’s policies about supporting dealer efforts on customer satisfaction; and how dealers rate their brands field staff. The latest survey gathered responses from about 10,600 dealerships and was conducted from Jan. 5 through Feb. 12, according to the Automotive News story.

just a generic stock shot for news. Let us know if there’s anything different you’d like to use SEPTEMBER 2015

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- Jeff D’Ambrosio, Owner Jeff D’Ambrosio Automotive Group

Jeff D’Ambrosio, Owner Jeff D’Ambrosio Automotive Group

VISIT THE LINK BELOW TO SEE HOW JEFF D’AMBROSIO AUTOMOTIVE GROUP

IMPROVED WEB TRAFFIC BY 150% IN 12 MONTHS. www.ForceMarketing.com/WebTraffic

Force Marketing | Atlanta • New York | 800-610-8905

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