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JIM BENINTENDE:

Will Your Dealership Rise to the Top?

VOLUME 2 • ISSUE 1 FEBRUARY 2018

MAX ZANAN Surviving

SAM

WELCOME TO THE

EXPERIENCE AGE

PACK

A 5-Star Performance in Customer

Experience

Rick Ricart & Eric Miltsch

MARKET PRICING:  or 


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contents table of

volume 2 • issue 1 • february 2018

on the cover

F E AT U R E S

26

Sam Pack shares how focusing on the customer and building strong relationships helped him grow his dealership group to one of the biggest and most successful in the country.

4

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06

Room at the Top: Becoming a Leader in the Customer Experience

16

Why Car Dealerships Need to Embrace Digital Disruption Before It’s Too Late

34

Is Market Pricing Hurting the Industry?

Jim Benintende, COO at AutoAlert / Former Director of Sales Support at Ford Motor Company

Max Zanan, Founder of Total Dealer Compliance

Rick Ricart, Vice President of Sales & Marketing at Ricart Automotive Group Eric Miltsch, Co-Founder of Dealer Teamwork


D E PA R T M E N T S modern sales

Forget Selling–Let’s Talk About Buying

Mat Koenig, CEO of BDA Spanish & Rockstar Auto Conference

modern fixed ops Have You Considered a Service Loyalty Program? Keep Your Customers Close

How’s the Service in Your Service Drive?

With Bryan Armstrong, e-Commerce Director of VW Dealerships in MO & UT

modern operations

Build Better Consumer Relationships with the Right Vendors

modern communication

Reframing Social Media: Reach Your Customers with a New Approach Joey Little, Director of Social Strategies at AutoAlert

Is Your Dealership Ready for The Experience Age? Jim De Luca, VP of Digital Road to a Sale

modern dealerhip insights Consumers Rely on Both Search and Social Channels When Buying Online

Top 10 Auto Conventions and Workshops for 2018 Shifting Gears from Millennials to Generation Z They’re coming, and they’ll have more impact than you might think.

40 10 44 38 14 22

in the box

IN TH BOX E

48

In the Box with Mike Marcotte, President of Marcotte Ford

09 20 33

from the editor:

We hope that 2017 was a successful year for you and yours, and that your 2018 is off to a great start! We have so many exciting things in store for MD’s second year, as we continue to bring you the best insider tips from dealers across the nation. In this issue, our focus is on the customer. The impeccable Sam Pack gives us insight from his long tenure as a customer service award-winning Ford dealer (p. 26). Max Zanan, the author of “Perfect Dealership,” tells us the best ways to sell vehicles in a changing consumer environment, on p. 16. We also have former Ford exec Jim Benintende giving us his unique perspective on the customer experience through his 40-plus years in the industry (p. 6), and Bryan Armstrong of VW Southtowne shares tips for making service customers even happier (p. 44). Is this your year to join us? Drop us a line: media@moderndealership.com. Happy reading!

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ROOM AT THE TOP: BECOMING A LEADER IN THE CUSTOMER EXPERIENCE WHAT I’VE LEARNED ABOUT CUSTOMER SATISFACTION IN MY 40-PLUS YEARS IN THE INDUSTRY

BY JIM BENINTENDE CHIEF OPERATIONS OFFICER AT AUTOALERT FORMER DIRECTOR OF SALES SUPPORT AT FORD MOTOR COMPANY 6

MODERNDEALERSHIP


Forty years ago, the general consensus was that the quality of cars would become relatively equal among major OEMs, and that the franchise that could find the right formula to satisfy customers at the retail level would gain a significant advantage among its competitors.

Fast forward to today, and we see that the consensus was pretty much correct. Quality among major OEMs is similar, yet no brand has emerged as the leader in retail customer satisfaction. Many individual dealers from across the brand spectrum do a fantastic job satisfying customers, so why is there no clear winner?

First, let’s look at what has prevented a leader from emerging: Not Investing More Money: OEMs and dealers, in many cases, do not spend the necessary money to satisfy customers when a vehicle is out of warranty. Lack of Employee Empowerment: OEMs and dealers do not give unfettered empowerment to employees to satisfy customers regardless of the cost. Misplaced Management Focus: Most of the OEM and dealer-management focus is on sales and profit, not on the customer experience. Product Issues: Known product problems cause customer dissatisfaction, which is not always addressed by the OEM or the dealer. This can lead to a lack of trust. Buyer’s Remorse: Many customers find that they are dissatisfied with something in the buying or service process, but they aren’t always asked or don’t speak up.

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So, how can dealers do a great job satisfying customers despite these obstacles? Here are my observations from over the years:

People

Empowerment

Transparency

The best dealers hire the best people to serve customers. They believe that employee satisfaction leads to customer satisfaction, so they take great care of their team.

Great dealers assisted by customer-focused OEMs empower their employees to satisfy customers. They don’t need permission; they just do it.

Customers want a good and fair deal when it comes to the sales and service process. They know that a business needs to make money, but they often have a good idea of what to expect to pay and won’t tolerate unreasonable prices.

Listening Skills

Experience

Convenience

Value

Great dealers hire people who listen and are empathetic to customers’ needs and wants.

It’s not enough to do the right thing—you must exceed customers’ expectations. Great dealers do this every day.

Customers don’t want to wait, and they want sales and service on their terms.

Customers don’t just want value, they demand and expect it. Great dealers deliver.

All of us in this industry are aware that consumers have all the information they need at the click of a button. So transparency, fairness, convenience, and satisfaction are expected. Now that I’m with AutoAlert, I have learned that software tools designed to help dealers obtain high-performing sales and increased profits often result in increased customer satisfaction and customer retention as well. Here are just a few specific examples of how our tool does that: We let dealers know when lease customers are tracking to go over their mileage allowance, providing an opportunity for a helpful conversation that will save them money on penalty charges. I’ve seen many happy 8

MODERNDEALERSHIP

customers get a new car for a lower payment than they currently have, and others come away happy when their interest rate was reduced in a return to a good credit rating. Many customers who have received a large service bill (most of us have been there!) get an opportunity to have it paid and get into a new vehicle. How’s that for service? We also see customers get more money for their trade-ins than they expected. One way that dealers can overcome today’s obstacles, create consistently positive customer experiences, and stand out among the crowd, is by employing software that makes transparency, fairness, and convenience almost automatic. Happy customers are sure to follow.


THE ROLE OF SEARCH AND SOCIAL IN THE CONSUMER SHOPPING EXPERIENCE

90%

72%

87%

of customers say they use search at every stage of the customer lifecycle.

say that their search results are trustworthy.

say that they use social channels for discovery and consideration before a purchase.

FRIENDS PROVIDE BETTER REACH THAN BRANDS ON SOCIAL CHANNELS

Of those who use social channels when shopping, 81% named a friend as a source, while just 58% named a brand.

43% of customers were influenced by a company’s social post when shopping … ... and 30% report they were influenced by paid social.

Those who use both search and social are high-value targets, with 50% saying they spent more than $250 online in the past three months.

90% of consumers say their buying decisions are influenced by online reviews.


HAVE YOU CONSIDERED A SERVICE LOYALTY PROGRAM? Keeping Your Customers Close for a Win-Win As national sales plateau and eventually decline, and the pond that we’re all fishing begins to shrink, your existing customers become that much more important to the overall success of your dealership. Loyalty programs are marketing strategies designed specifically to urge customers to keep shopping at your dealership and use your services. They not only turn consumer attention toward your brand and spotlight what you’re doing, but also keep your current customers engaged with your dealership, ultimately boosting revenue. The tactics and rewards of individual loyalty programs vary, but a good program generally includes a point or tier system that allows customers to earn rewards when they use services, purchase from the dealership, or participate in events. It all adds up to one thing: engagement in your brand. You work hard to build relationships, and it’s important to let people know how valuable they are. A good loyalty program will help you reward your best customers and strengthen new relationships in various ways. 10

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“IT ALL ADDS UP TO ONE THING: ENGAGEMENT FOR YOUR BRAND.”


Loyalty.

M O D E R N D E A L E R S H I P. C O M

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Let’s start with the obvious. In a major industry like automotive, loyalty goes a long way for both the customer and the dealer. Your customers already know your dealership, and most want to stay loyal because they’ve done business with you and know what to expect. On the dealership’s end, loyalty comes across when you’re able to contact shoppers ahead of time with simple, subtle reminders (maybe it’s time for an oil change or a tire rotation). With tools like AlertMiner, you’ll be prompted when customers’ warranties are about to expire or when their mileage allotments are almost up—keeping them informed is an excellent service. Your pros can let shoppers know they can save money by taking advantage of your dealership’s loyalty program. This gives your customers incentive to come to you and remain loyal.

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Partnership Opportunities. Maintaining a loyalty program allows your dealership to partner with other local businesses to boost income and gain customers. If your dealership understands its customer-purchasing patterns and general needs, it can be beneficial to partner with other businesses or organizations your customers frequent and support. For example, consider working out a punch-card deal at a local car wash for your customers. In return, the car wash can refer its customers to you for oil changes and other services. Partnerships help you grow your network and reach a broader customer base.

Customer Retention. This is tied to loyalty. How long do your customers stay with your dealership currently? By starting a loyalty program, your customer retention rate should increase over time as you gain more participants and offer more incentives. According to Fred Reichheld’s The Loyalty Effect, a five percent improvement in customer retention can lead to a 25-to-100-percent increase in profit for your dealership.

Cost. According to Inc., it costs a business five to 10 times more to acquire new customers than it does to sell to existing ones, and the average spending of a repeat consumer is 67 percent more than a new shopper. It’s relieving to know

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your most predictable source of income is already part of your dealership. Having tools like PandoConnect, with AutoAlert’s targeted opportunities, is a major bonus because they’ll do the work for you by alerting when a current customer is in market again, needs to renew a contract, is eligible for an upgrade, can lower his or her payments, as well as other revenue opportunities. This makes your sales professionals’ job easier and allows them to be more strategic and direct when offering loyalty program perks and reaching out to existing customers. Plus, you still do service on the trade-in car, and now that customer has a new vehicle that will also need service.

Staying in touch ... ... with your current customers and offering a loyalty program that allows them to benefit from coming to you for all of their automotive needs is a huge positive for both your customers and the dealership financially. From a networking and customer retention perspective, loyalty programs help your dealership gain new customers, while retaining existing ones. Additionally, the customers you retain stay loyal and easily become a reliable source of income when they enter the automotive market for products or services.


Built for the Future Never miss a service lead again. Turn your service drive into an extension of your sales floor. Know the right conversation to have Keep your team working together toward the sale Build customer relationships and brand loyalty

Contact us today for a demo. 833.244.5720


REFRAMING SOCIAL MEDIA

REACH YOUR CUSTOMERS with a new approach by Joey Little

Director of Social strategies at Autoalert ike all marketing efforts, when it comes to using social media for business, dealers expect to see direct results from the time, money, and energy invested.

L

The results are there, but keep in mind that social is less about counting how many people come in after you post a sale on Facebook, and more about building relationships through creating consistent value for your customers via what you share. Using social in this way will certainly translate to an improved customer experience, which is vital for staying top-of-mind with your customers. Of course, this doesn’t mean you can’t ever post about sales and promotions, but it should be kept to a minimum—or better yet, personalized to the specific customer. So, how to do it? Here are a few tips for making your social efforts valuable, and memorable, for your customers:

Change your perspective. We tend to approach social media via a contentproduction lens. But does your favorite author think in terms of pushing content? What about your favorite musician, or movie studio? Instead of thinking of social media this way, think of it as a meeting space where people go to be 1) entertained 2) educated (or both). If your dealership consistently offers these two things, you can be sure to grow your relationships.

Keep the numbers in mind for realistic expectations. Your Facebook posts aren’t seen by your entire friends list. Depending on how many friends you have, 35 percent, on average, will see your post go through their feed. Posting entertaining or educational material will raise this percentage—and posting without any visual content will drop it. Less than 15 percent of that 35 percent will actually engage with your post (like, comment, share). You can apply these averages to your numbers to gauge success.

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Today’s competitive environment has customers seeking a sense of kinship with most of the places where they do business, especially the ones where they’re making a big purchase.

Be quick but thorough.

Relationship building starts at your dealership. Make sure your employees feel valued, heard, respected, and needed. From there, come up with a plan for encouraging your team to share, and even create, posts about your business. You’ll get a far greater, more diverse demographic and local reach this way.

Consumers expect answers to their questions and concerns immediately, in most cases, especially on social platforms. Having an employee dedicated to monitoring your social closely is a must so that every interaction can be acknowledged and/or responded to in a timely manner—which for social means within hours. And social can be a great place to respond to questions or issues that keep coming up at your store. Odds are other customers have the same concern–education. It’s all about being reliable and building trust.

Mind your audience. In putting together your social plan, dig deeper into who your audience is. Today’s competitive environment has customers seeking a sense of kinship with most of the places they do business, especially the ones where they’re making a big purchase, like a car. Ask yourself: Who is our audience? What do they want to know? What’s important to them? Put yourself in their shoes. Asking them how you can improve things at the dealership is great for increasing engagement. So is starting and encouraging conversations. You can do this by sharing something personal about your team to elicit a response. For example, “Our GM’s first car was a 1986 Ford Escort L, which surprised us. We thought it would be something more exotic,” as opposed to asking, “What was your first car?” Also, be sure to show them your gratitude—you can send personal “thank you” messages via Facebook and other platforms.

Consumers today are tired of having products and services pushed on them. If you really want to succeed in social media at your dealership, keep the “social” part in mind and think less about the marketing.

MODERN COMMUNICATION

Start where you are.


WHY CAR DEALERSHIPS

NEED TO EMBRACE DIGITAL DISRUPTION

before it’s

too late

bymax zanan Founder of Total Dealer Compliance and author of perfect dealership


Not surprisingly, given the social media and digital age we’re living in today, more than 59 percent of people use the Internet to research their car-purchasing decisions. Of those people, 71 percent look for pricing, 68 percent look at cars for sale, 64 percent compare different makes and models, and 46 percent try to locate a dealer or dealer information. Like every industry today, automotive is at a critical crossroads in regard to adjusting to the new consumer-buying habits. We are living in the age of Amazon and Uber and expect convenience and transparency. Especially when shopping for a car. It’s no secret that the car industry is really struggling to embrace global digitalism. A couple of years ago, The New York Times ran a piece called “The Gap Between Auto Dealers and Social Media.” It’s a problem, and it needs to be fixed.

AN INEVITABLE “VIDEO STORE” FATE

Dealership owners can’t drag their feet any longer. Digitalism is here, and it’s quickly shaping our future before our eyes. The automotive retail industry is under more pressure than ever before. Lower margins, stricter regulations, heavy competition, and online disrupters have many managers with their backs against the wall. A staggering 78 percent of shoppers are using third-party platforms to find their cars—that means they are totally cutting the dealership and salesmen right out of the process. These consumers are dissatisfied with the current auto-dealership process, and they’re looking for alternative avenues at this very moment. Autotrader surveyed 4,000 people and asked them if they like the current selling process taking place in

showrooms across the country; 17 people said they do. That’s less than half a percent. Let these numbers sink in. With the rise of online auto sales, will the average auto dealership even exist in 10 years? The industry is staring down a similar fate as that of travel agencies and video stores. Auto dealerships need to embrace digital disruption, not reject it.

WHY CAR DEALERSHIPS

NEED TO EMBRACE

DIGITAL DISRUPTION It’s an intimidating task to rewire an entire network in efforts to embrace digitalism. But the long-standing and ineffective processes can’t go on any longer. With digital seamlessness, each department of the dealership can work in tandem with others to provide the best possible sales process—one that is focused on the customer and maintaining long-term relationships. We’ve seen digital immersion in industries like real estate, where buyers can now experience a virtual tour of a property they want to buy. It’s this kind of technology that auto dealers need immediately. Digital retail is popular today because it’s transparent and incomparably convenient. You can’t beat that. There are resources and tools available to help you navigate these critical times. It may be late in the game, but it’s not too late to adopt and adjust your business practices and survive digital disruption.

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REAL OFFERS REAL CUSTOMERS REAL CONNECTIONS

CALL US TODAY FOR A TEST DRIVE

(833) 244-5720 18

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AutoAlert.com/ONE-TO-ONE


PRESENTS

IN X O TH B E DA 2018 A N AT OOTH B

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10 TOP

Auto Conventions & Expos for 2018 NADA CONVENTION AND EXPO

Join thousands of your best industry buds in Las Vegas this spring to learn about the hottest tools, tactics, and trends for 2018. More than 700,000 square feet of exhibits highlight 500+ product manufacturers and suppliers. March 22-25. For more info: www.show.nada.org/2018.

DRIVINGSALES CONFERENCES The industry’s “top venue to develop and grow high-performing dealership executives,” this one’s a must for dealers, GMs, and high-level decision makers. Two conferences annually. For more info: www.events.drivingsales.com

J.D. POWER AUTOMOTIVE MARKETING ROUNDTABLE Get marketing tips from the pros, both inside and outside the industry. AMR’s 90+ speakers include OEM marketing experts as well as leaders from outside the industry, coming together to inspire, push boundaries, and cultivate connections. No 2018 date yet. For more info: www.jdpower.com/news/events.

DIGITAL DEALER CONFERENCE & EXPO Join a good 90 percent of the top U.S. Dealership Groups in Orlando to share best practices and discuss proven strategies for maximum results, including employee hiring and training, leadership, succession planning, compliance and risk, and more. April 10 to 12. For more info: www.digitaldealer.com/conference. 20

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ROCKSTAR AUTOMOTIVE CONFERENCE One of the newer industry conferences, Rockstar returns for its third year of elevating automotive sales and leadership professionals’ careers through a focus on fun, engaging, leading-edge spaeakers. No dates available. For more info: www.rockstarautoconference.com.

INNOVATIVE DEALER SUMMIT Billed as “the definitive management education forum for dealer principals and senior dealer managers,” IDS sessions address marketing, legal F&I, social media, retail and sales, leadership, fixed ops, and more. No 2018 dates yet. For more info: www.innovativedealersummit.com.

SAE 2018 HYBRID & ELECTRIC VEHICLE TECHNOLOGIES SYMPOSIUM (HVTS) Talk hybrid to me. For the 15th consecutive year, this must-attend event for vehicle design engineers and management will be the hot spot for discussing all things electric and hybrid. Learn the latest advances from prominent representatives of OEM and supplier companies. Plus, San Diego. February 20-22. For more info: www.sae.org/events/hybridev.

SEMA SHOW The premier automotive specialty products trade event in the world, the SEMA Show draws the industry’s brightest minds and hottest products to one place: the Las Vegas Convention Center. October 30 to November 2. Trade-only event (not open to the public). For more info: www.semashow.com.

WOMEN IN AUTOMOTIVE CONFERENCE Cofounded by six female industry leaders interested in empowering and developing women in the auto industry, WIA focuses on assisting the automotive community in recruiting, retaining, and developing female employees and leaders.Held in Orlando, a second conference was added last year in Palm Springs, June 24 to 26. For more info: www.womeninautomotive.com.

CBT AUTOMOTIVE CONFERENCE + EXPO CBT was designed to give auto dealers a fresh perspective on the retail automotive industry by bringing in speakers who have a variety of experience in different industries. No 2018 date yet. For more info: www.cbtconferenceandexpo.com. M O D E R N D E A L E R S H I P. C O M

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Attention, car dealers: Your Information Age marketing strategies are obsolete, as we are now living in the Experience Age! The Information Age was spawned over two decades ago, by the emergence of the World Wide Web and Google’s efforts to organize all information into one easily accessible portal. The Consumers Have Taken Over the Asylum

To illustrate this, in March 2016, Facebook announced that status updates among its 1.6 billion active users (at the time) were down 21 percent, while live streams were soaring.

Within a few years, consumers had all the information they needed to make a buying decision at their fingertips. Oftentimes they knew more about the vehicles they wanted than your sales consultants did. They also got insight into how you treated your customers via online reviews and social media. As a result, they now drive greater distances and visit fewer dealerships than ever.

The redundancy of the status box is only a small part of the transition from information to experience. The real driving force for the changing dynamic of our online interactions is the mobile device, which allows us to share our perspectives in the moment, and inspired the development of social sites like Periscope and Snapchat.

Social Media The centerpiece of the Information Age was social media. It encouraged people and businesses to create profiles by accumulating text, pictures, and videos. Our friends and followers responded to posts with Likes, Comments, Shares, and more recently, Expressions. Many businesses saw that social media was a powerful, cost-effective marketing tool, so they abandoned invasive advertising platforms like newspaper and radio.

The Experience Age The Experience Age is a product of “Internet everywhere,” mobile devices, and live-streaming video. These technologies are changing the way we share information online. We are now represented by who we are in the moment, as opposed to being a product of the content accumulated in our profiles.

By Jim DeLuca VP, Digital Road to a Sale

Game Changers Periscope was the first widely accessible live-streaming platform that allowed people to broadcast in-the-moment experiences. Facebook, Instagram, and YouTube adapted quickly by developing their own live-streaming platforms. Snapchat requires a snap (a picture or a short video). Friends can watch the snap and chat until the snaps disappear. Snapchat is all about the visual experience in the moment. It has led to a generation of people speaking to one another using pictures and videos, which means the focus has shifted from capturing a “Kodak Moment”, to a literal way of communicating in-the-moment experiences. The result is that profiles are no longer the cornerstone of our social media existence. In the Experience Age, you are just you. This means the line between online and offline identities is getting narrower.


Perspective for Attention Social media has always been about: “I’ll give you my perspective, and you give me your attention,” but the key difference in the Experience Age is that the stories we tell begin and end visually.

The #1 Factor That Determines Where People Buy Cars Experience Age businesses will either succeed or fail based on the experiences that they provide for their customers. Those experiences must be shared with images and videos, as the number one determining factor for where people will buy a vehicle is the experience that they are promised when they’re shopping online. The great news for car dealers, who face compressed margins and increased competition, is that people will pay more for an exceptional experience.

Think with Google In a recent issue of Think with Google, Jason Spero, Google’s VP of Global Performance Solutions, wrote: “Today’s customers aren’t comparing you to other businesses in your industry – they’re comparing you to the best digital experiences they’ve ever had.”

Unfortunately, retail automotive is still using a lot of redundant processes, like withholding information, and antiquated technologies, such as auto responders and managed chat, which do not provide great online experiences.

Opportunity Knocks These developments have created tremendous opportunities for those who are brave enough to take advantage of new technologies. But the question is: How will retail automotive adapt to this new reality? Will there be another mass wave of resistance, or will we take advantage of this by embracing live-streaming video, video-lead responses, 360-degree vehicle merchandizing, omnichannel websites, WebRTC, “Talking to the Tech” videos, and Virtual Reality?

Tools to Help You Adapt There are plenty of resources and tools available to help you transition out of the Information Age and into a more customer-centric way of doing business. Turn to professionals with experience in Experience Age marketing, and find partners who are transparent with their data.

Car dealerships were among the last businesses to adapt their sales models to meet the needs of online shoppers for four reasons: 1. 3. At first, dealers didn’t believe that their customers would use the Internet to shop for vehicles online.

2.

The only real advantage they had in the negotiation process was control of the information. Loss of that control led to decades of resistance and the continued use of antiquated sales processes that only worsened the industry’s reputation.

They couldn’t see a measurable ROI on social media, so they made lackluster efforts, like sharing content from their manufacturers, or talking about how great they were. They didn’t seem to understand that the operative word in social media is “social.”

4.

This is my favorite because it’s the most dangerous phrase in business: “We’ve always done it this way.”


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Leading by examplE HOW A FOCUS ON VALUES AND RELATIONSHIPS TOOK THE DALLAS DEALER TO #1 On February 18, Sam Pack will begin his 39th year as a Ford dealer serving Dallas. In 38 years, he and his team have grown to be one of the biggest, most successful auto groups in the nation. Last year, the six dealerships that make up Sam Pack Auto Group, and are home to 891 “Five Star Ford Ambassadors”, sold 27,959 new and used units, generating over a billion dollars in revenue.

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A native Texan, Pack was born and raised in Stephenville, Texas, and now lives with his wife, Carol, in Dallas. They have two sons: Todd resides in Shreveport, La., and attends Holy Angels, a residential school for individuals with special needs. Tony is Vice President of Pack Automotive Group, and lives with his wife, Louisa, and their two daughters, Carly and Macy, in the DFW area.

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Pack attributes his success to a solid focus on the customer from day one, with the “Voice of the Customer” influencing every decision he’s made. While being a leader in customer satisfaction has always been his goal, he recognizes that his people are his greatest asset. One way he and his team have put the customer first is by adopting a strong company mission, vision, and set of core values:

SAM PACK AUTOMOTIVE GROUP

MISSION STATEMENT To provide a

best-in-class Five-Star experience in such a way that our customers know we are their trusted friend in the

SAM PACK AUTOMOTIVE GROUP

VISION STATEMENT

SAM PACK AUTOMOTIVE GROUP

CORE VALUES

To create a culture

Integrity

where our employees

Caring

can love their jobs and our customers love our employees.

automotive business.

Self-Discipline Continuous Improvement Fun

“We respect and honor the customer. We do business their way; that’s the way it should be.” – Sam Pack How It All Began A phone call in September 1979 changed everything for Pack and his family. It was from Lee Jarmon, a longtime Ford dealer and the owner of Lee Jarmon Ford in Carrollton, Texas. Jarmon had decided it was time to retire and wanted Pack to be his successor. Enjoying a long and distinguished career with Ford Motor Credit Company, Pack was surprised, but open to discussing the proposal. After several months of negotiations, on Dec. 12, 1979, the two entered into an agreement for Pack to become Jarmon’s partner and buy him out. 28

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The early ’80s were very difficult years economically for America, and the automotive industry was in the grips of the most challenging times it had seen since the Great Depression. Pack would be taking a risk giving up a stable corporate job, but after much discussion with his wife, family members, and their confidants, he made the decision to become a Ford dealer. “No doubt, this was the biggest business decision of my life,” Pack said. It proved to be a good one. On Feb. 18, 1980, the deal was finalized; Pack became a Ford dealer. Jarmon called the employees together and introduced Pack as his new partner, then said, “If you need me, I’ll be at the golf course.”


“The mark of a professional

is someone who is consistent.” ◆ Five Star Ford, 17-time winner

Triple Crown Dealers must earn the President's Award, Sales Leadership, One Hundred Club and Premier Club in the same year.

◆ Sam Pack’s Five Star Ford, 13-time winner

◆ Five Star Ford, 18-time winner ◆ Sam Pack’s Five Star Ford, 15-time winner The President's Award recognizes Ford Dealers achieving the highest levels of customer satisfaction and sales in their respective Customer Viewpoint Group.

◆ Five Star Ford Lewisville, 8-time winner ◆ Five Star Ford Plano, 3-time winner ◆ Five Star Ford, 17-time winner

The Premier Club recognizes the Top Ford Protect dealerships and the Top Retail Parts Purchasing Volume dealerships.

◆ Sam Pack’s Five Star Ford, 13-time winner ◆ Five Star Ford Lewisville, 1-time winner ◆ Five Star Ford, 15-time winner (Master Level)

Partners In Quality is Ford Credit's most prestigious and recognized dealer award program, pays tribute to Ford floorplan dealers that have achieved the highest level of customer satisfaction and loyalty to Ford Credit.

◆ Sam Pack’s Five Star Ford, 4-time winner ◆ Five Star Ford Lewisville, 1-time winner ◆ Five Star Ford, 20-time winner ◆ Sam Pack’s Five Star Ford, 16-time winner

Ford One Hundred Club Leaders programs recognize the Top 100 performing Ford Dealers in the country based on retail sales volumes for the current calendar year.

“I’ll never forget that,” says Pack, smiling. The total acquisition was completed in 1986 and today is known as Sam Pack’s Five Star Ford of Carrollton, the number-one volume Ford dealership in Dallas.

Growth and Recognition Pack was destined to grow. Today he owns six metropolitan dealerships in the Dallas-Fort Worth market: Sam Pack’s Five Star Ford of Carrollton (1980), Five Star Ford North Richland Hills (1991), Five Star Ford Lewisville (2001), and Five Star Ford Plano (2009). Recently acquired are Five Star Chevrolet (2014) and Five Star Subaru (2016).

◆ Five Star Ford Lewisville, 4-time winner ◆ Five Star Ford Plano, 3-time winner

Last year, the four DFW Five Star Ford dealerships made up 27 percent of the New Retail Market, 87 percent of the Fleet Market, and 51 percent of the DFW Wholesale Parts Business. Fixed Operations remained strong at $120 million. Last year, Five Star Ford North Richland Hills was number one in the state for Retail and Commercial Sales and ranked number seven of the Top 100 Retail Sales. Sam Pack’s Five Star Ford of Carrollton was number one in the Dallas Metro area and ranked 23 of the Top 100 in the nation, and Five Star Ford Lewisville was ranked 97 of the Top 100. The Carrollton, North Richland Hills, and Lewisville dealerships all received the President’s Award. Carrollton and North Richland M O D E R N D E A L E R S H I P. C O M

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“As a talk show host, my credibility is all I have. Mr. Pack’s dealerships never let me down. I have full trust that this dealership group will take amazing care of my listeners, and they do it 100 percent of the time.” Jerry Reynolds President, Car Pro Radio Network Owner, KPIR 1420 AM

Hills were both Triple Crown Award Winners, and Five Star Ford North Richland Hills was recognized as DealerRater’s #1 Dealer in the Nation – for all makes. Five Star Ford Lewisville was named 2016 Dealer of the Year by F&I and Showroom Magazine.

During the 2017 Top Volume Leadership Summit, Pack was one of five dealers inducted into the inaugural class of the “Top Volume Ford Dealers Hall of Fame,” in recognition of a lifetime of outstanding achievement and inspirational leadership.

These are just the awards from last year. One impressive feat that stands out in Pack’s success is that Five Star Ford North Richland Hills is the only dealership in the nation to have won the Triple Crown Award every year since the program’s inception in 2001.

In addition to his business awards, Pack is the recipient of many community service merits, including Metrocrest’s “Citizen of the Year,” Metrocrest’s “Business of the Year,” and Rotary’s “Man of the Year.” The Rotary Foundation of Rotary International named Pack a Paul Harris Fellow. He has also received numerous accolades from the surrounding dealership communities: City of Carrollton’s “Entrepreneur of the Year,” Northwood University’s “Educator of the Year,” Lewisville Area Chamber of Commerce’s “Business of the Year,” N.E. Tarrant County Chamber of Commerce’s “Retailer of the Year,” City of North Richland Hill’s “Outstanding Large Retailer of the Year,” Coppell Chamber of Commerce’s “Corporate Business of the Year,” and was a finalist for Ernst & Young’s “Entrepreneur of the Year.”

“We are proud of these accomplishments because they speak volumes about our people, our very special people,” Pack says. “They are professionals – the best in the industry – and they are responsible for our incredible accomplishments.” Pack also co-owns six dealerships in Tulsa, Okla., with longtime friend Don Thornton. The franchises represented are Lexus, Audi, Cadillac, Jaguar, Land Rover, and Volkswagen. He also co-owns Tiger Honda in Gonzales, La., (May 2016) with partner Jose Pozos. Pack has served the industry in an executive and leadership position at local, state, and national levels for 38 years. Texas Automobile Dealers Association recognized him as an industry “Legend” in 2005. He was the second person in the 93-year history of the association to receive this award.  Pack is also a 2003 recipient of Ford Motor Company’s “Salute to Dealers” Award, presented by Edsel Ford II. It honors dealers for their outstanding contribution of time, services, and resources to improve the lives of individuals and their communities. 

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He currently serves on several industry and community boards and committees and spends a lot of time in Detroit meeting with leaders in the industry. “Sam realized that the dealership’s relationship with the community, and the dealership’s relationship with its employees were important building blocks for a road map of success,” says Trey Russell, General Sales Manager at Sam Pack’s Five Star Ford. “His emphasis has always been to give back to our communities.” Pack is widely known for his charitable contributions, especially those involving children. He established a charitable arm


at the Auto Group with an aim to support those in need. In the last three years, the program provided millions in financial support to 277 charities, service organizations, and community events. In addition to his generosity, and his dealership success, Pack is also well known for his eclectic antique car collection. His purchase of a 1939 Ford convertible 15 years ago sparked a passion that soon grew to almost 500 vintage automobiles. Although he downsized the collection a few years ago to a more manageable size, Pack still has an impressive 358 “antique, restorable, vintage, classic, racing, one-off, and celebrity-associated cars and trucks” in the Pack Automotive Museum – one of the largest of such collections in the nation. The collection can be viewed online for free at www.packautomotivemuseum.com.

A Customer-Experience Approach Rooted in Culture It’s imperative for Pack and his team that every customer comes away with a memorable, truly exceptional experience. Having confident, empowered employees is one way Pack ensures that, which is why he provides daily in-house training across all departments. “When customer concerns arise, we take an aggressive customer-first approach and focus our energy on how to quickly satisfy the customer by doing what is right,” Pack says. “Problems will occur, but the true measurement of a company is how problems are resolved. Our team members are empowered to make immediate decisions to address the problem.” Kerry Cardwell, general manager of Five Star Ford of Lewisville, says customer-centric training keeps him focused on the dealership’s goals. Part of that training involves a focus on service after the sale, as well as keeping associates

involved in the entire sales process in order to build strong relationships with customers. “We maintain a quest to be the best of the best,” Cardwell says. “In today’s market, you cannot rely on customer satisfaction. You must be in the ‘customer delight’ business.” Cardwell and his team have a manager complete the delivery process on every car sold, do a walk-around, and thank the customer because “it doesn’t take a fancy or elaborate process to show someone you care.” Responding to every customer concern, no matter how seemingly small, with a sense of urgency, is also important. In addition to the comprehensive training, employees are backed by a positive company culture. Pack has long believed that happy employees lead to happy customers. His son Tony, Vice President of Pack Automotive Group, agrees: “Our customers have great experiences because we focus first on making sure our employees love their jobs. When employees love their jobs, customers love their experience.” Team member of 30-plus years Brian Huth says it’s the dealership’s culture that inspires employees to offer the outstanding, awardwinning service that separates Sam Pack Auto Group from the competition. “When a culture is left to chance, it can never create employees who truly love their jobs and customers who love our employees,” Huth says. “Culture is just as measurable as performance. The measurables are employee satisfaction, low employee turnover, customer satisfaction, owner loyalty, and profitability. We are proud to say we are a leader in all of these areas.” Joshua Fichter, General Manager of Five Star Ford North Richland Hills, says that each of the company’s core values help guide his team: “When our customers see our core value of Caring at work, for example, they know that we are working with them to find a solution.”

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Relationships First. And Last. And in Between. It’s clear how important the customer relationship is to the Sam Pack Auto Group team. But when talking to Pack, it’s also evident that to him, building and growing relationships includes everyone – family, employees, community – and of course, the customer. “It’s important that employees are considered and treated as partners,” Pack says. “Every employee is important, and working together as a team for the good of the customer is our greatest asset.” The team is more like a family than a business. In an industry where a turnover rate of 80 percent year-to-year is standard, the group’s average salesperson tenure of 9.1 years speaks volumes. Most new employees come through referrals, and two-thirds of the group’s general managers were promoted from within.

a place that drags you down?” says Marcus Porter, service director at Five Star Subaru. “As a manager, it’s important for me to keep an upbeat attitude and create an environment where my employees can have fun while at work.” Pack knows that technology, and the internet, have led to evolving customer needs and desires. He sees big changes coming for the industry, but he’s confident that the adoption of new technology and increased partnering with third-party vendors, combined with a focus on values and relationships, will keep dealerships viable and strong. Pack named AutoAlert as a vendor that gives his team a clear strategic advantage.

Pictured from left to right: Elena Ford, Edsel Ford, Sam Pack, and Joy Falotico.

“Take care of your employees and customers, and they will take care of you,” he says. “Be an inspired leader in your personal and professional life. Live by the golden rule – always do what is right.”

Success Going Forward There’s no magic bullet for the kind of success seen at Sam Pack Auto Group. The strong focus on relationships and values creates a culture where people want to see themselves and others succeed. Including “fun” in the group’s core values certainly doesn’t hurt. “Who wants to wake up early and drive to

“Technology has changed our business model and the world we live in today. AutoAlert has proven to be a powerful data-mining tool for us, making us more efficient and effective in our advertising and marketing. It’s a tool our management loves and our sales associates use daily to enhance our business by focusing on owner loyalty and trade-cycle management.” 32

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– Sam Pack


Shifting Gears From Millennials to Generation Z Just when you thought you had millennials pinned...

Studies show that Generation Z will soon be making a huge impact on the economy. By 2020, those born after 1995 are expected to account for 40 percent of all consumers, according to published reports.

40%

It’s good news. Despite an assumption that future generations will strictly take public transportation and engage in ride sharing, this group is excited about cars, and they’re buying them faster and younger than millennials did. In the case of Generation Z, studies have found that 92 percent plan on owning a

vehicle, and 97 percent have, or plan to get, a driver’s license.

of all consumers by 2020

97% 92%

Gen Z is willing to give up quite a bit for a year, that some might not expect, to get into the driver’s seat, with 72 percent saying they would give up social media, 63 percent forgoing new clothes, and 33 percent even parting with their cell phones.

72%

would drop social media

63%

would go without new clothes

Meanwhile, only 26 percent want to buy a car online, while 68 percent say that face-to-face interactions are important, so for most, dealerships are still relevant.

33%

would give up their cell phones Price point is 77 percent more important to Gen Z than it is to millennials, with millennials more focused on environmentally friendly considerations.

Learn more about Generation Z’s spending and car-buying habits in our issue dedicated to Generation Next. All back issues are available for free online at ModernDealership.com. SOURCE: AUTOTRADER REPORT M O D E R N D E A L E R S H I P. C O M 33


IS

MARKET PRICING HURTING THE INDUSTRY?

M

arket pricing has been a hot topic in the industry

lately, with some saying it’s done nothing but create problems for dealers and impede business, while others claim it’s natural, and that companies need to adapt.

THE “YES” SIDE

BY RICK RICART

VICE PRESIDENT OF SALES & MARKETING AT RICART AUTOMOTIVE GROUP

Here, two of our automotive insiders take a side and argue its point. Rick Ricart, Vice President of Sales and Marketing at Ricart Automotive Group, will argue “yes,” market pricing is detrimental, while Eric Miltsch, Co-Founder of Dealer Teamwork, takes the “no” side.

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THE “NO” SIDE

BY ERIC MILTSCH

CO-FOUNDER OF DEALER TEAMWORK


THE “YES” SIDE BY RICK RICART The choices dealers make to remain profitable while market pricing takes hold has created a domino effect that could be viewed as a race to the bottom. Once the Internet came along and became the primary shopping and research tool, consumer behavior shifted, and the way car shopping was conducted drastically changed. When we lower our prices to match those that consumers have determined to be right, we also lower our chances of being successful in the long run. If I were the only one adopting market pricing, I’d have a pretty fair chance of being successful. But once I lower my prices, my competition will too – or risk losing their customers to me. So maybe we’ll all just increase the number of cars sold to make up for the loss caused by lower prices. This may have seemed feasible over the past decade, when car sales were on the rise, and hit record numbers, but forecasters see that number decreasing in the coming years. We are all aware that last year’s numbers were saved due to an increase of car sales following the active hurricane season. Yet another domino gets lined up and knocked down when we all start lowering the trade-in offer, too, in an effort to make up some of the profit loss. Now our brand – already devalued due to lower new-car prices – depreciates further in the consumer’s mind, and they begin

to lose confidence in the cars they once loved. This, in turn, hurts new car sales. Every space where a car sits is an asset. We need to turn vehicles. But when the market reaches saturation, confidence in the brand is lost, and competition is stifled, it becomes harder and harder to do this. Of course, all is not lost. We just need to shift the way we do business. Gross will decline if your entire business model isn’t changed, and your focus isn’t transferred from front end to

WHEN WE LOWER OUR PRICES TO MATCH THOSE THAT CONSUMERS HAVE DETERMINED TO BE RIGHT, WE ALSO LOWER OUR CHANCES OF BEING SUCCESSFUL IN THE LONG RUN. velocity, cash flow, internal service, and F&I. That takes time. The smaller the inventory, the shorter the profit recovery time – the larger the inventory, the longer it takes to cycle through to the new model. Embracing the new world of digital marketing is also vital. Online merchandising, pricing, pictures, comments, VDP layouts, conversion button/tools, PPC, SEM, third-party listings, etc., all become new priorities with competitive pricing.

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THE “NO” SIDE BY ERIC MILTSCH “MARKET PRICING IS AN ABSOLUTE MUSTHAVE ELEMENT OF OUR OPERATIONS. THIS IS HOW MODERN DEALERS ARE ADAPTING TO TODAY’S MARKET AND GIVE CAR BUYERS THE SHOPPING EXPERIENCE THEY EXPECT. WE CAN MOVE MORE VEHICLES, MAKE A FAIR PROFIT, AND MAKE SURE CUSTOMERS ARE VERY HAPPY!” –JOHN IANNONE, CEO OF AUTO OUTLETS USA Market pricing isn’t hurting automotive – dealerships and their employees who are unwilling to adapt to the evolving industry and make changes to their daily behavior are the culprits. Let’s consider the bigger picture and forces at work here. It’s important to understand why market pricing in the automotive-retail industry exists in the first place.

• Standard e-commerce activities created the opportunity for cost savings.

• Wholesale and retail markets passed along a new layer of pricing to their customers.

Next, the Internet changed customer behavior, and the retail segment of the automotive industry ignored these changes. For years, many stood by their claim that it was a fad, and wouldn’t last, or you were labeled crazy to believe in such nonsense. E-commerce was responsible for lowering prices, as a result of increased competition. Online shoppers quickly became accustomed

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to searching online for, and finding, better bargains. Suddenly consumers were empowered, and began researching different product characteristics. They could make price comparisons, communicate with sellers more quickly, and get recommendations from peers via social platforms. The result? Both traditional and online suppliers continued to keep prices low. While that ultimately contributed to lower profit margins, there were several areas for retail organizations to offset these lower margins (via marketing automation, POS systems, lower marketing costs, and additional methods). The long-term effects of the general e-commerce ecosystem have been at work ever since car dealers began taking advantage of the Internet’s ability to significantly amplify their inventory’s exposure. Initially, many dealers resisted including prices, with the belief that this would drive phone calls. Big shocker—it didn’t! And still doesn’t today. Shoppers realized they could find pricing data online on other automotive sites. In fact, this paved the way for even more significant changes in shopping patterns. Florian Zettlemeyer was a pioneer of this concept when he stated, “Consumers who dislike the face-to-face bargaining process might benefit more from obtaining


information from the Internet than consumers who do not mind bargaining” (2006, “Journal of Marketing Research”). Pricing vehicles online became the expected behavior of car dealers, regardless of what the outliers believed. When Zettlemeyer conducted his initial studies, mobile online traffic wasn’t even a consideration. Within two years of the ’06 study, dealers would suddenly begin to see up to three percent of their traffic come from mobile devices, which would eventually act as a consumer-behavior and expectation accelerant. Fast forward, and we find ourselves in the midst of another transformation within the marketpricing movement. The inclusion of transactional data is positioned to move online shopping experiences even further.

MARKET PRICING IS A NATURAL RESPONSE TO THE MASSIVE SHIFT IN CONSUMER BEHAVIOR AND EXPECTATIONS. Market pricing wasn’t created to hurt the industry. It wasn’t designed as a race to the bottom. Dealers not understanding other market forces at work were quick to label it as such. Instead, market pricing was a tactic born out of the necessity to participate in the rapidly changing shopping environment. The shopping experience simply demanded it. Shoppers are not necessarily seeking the lowest price; they are merely searching for a price. Now car buyers are seeking answers to their specific search queries. They expect their phones to deliver the answer to the question “Ford Explorer Lease Deal.” The dealers who seize this opportunity, and provide relevant results, are rewarded with higher-quality traffic, lower marketing costs, and improved performance. This change provides dealers with the opportunity to offset

possible margin compression in extremely competitive environments. Additionally, the opportunities for success extend beyond the new car market. Used cars, certified vehicles, and fixed operations, present opportunities for dealers to leverage market pricing, demonstrate additional value, and provide shoppers with the relevant transactional information they’re seeking online. The majority of the industry treats standard metrics as gospel. According to a 2016 study, over 60 percent of the top 100 Automotive News dealer groups have adopted several key guide posts to maximize their operational excellence. They include: • Market Days Supply • Cost to Market • Price to Market • Average Days in Inventory • Annual Inventory Turns • Average Inventory Cost The challenges facing the retail segment should not be blamed on market pricing. Other examples of changes dealers say hurt the industry are those that come from those that have accepted market challenges, altered their business models, and pivoted to one-price experiences. “One-price dealers make up an estimated 10 percent of the market now, and that number will continue to grow each year. Every change the retail market experiences begins with removing the friction out of the buying process. In general, easier, faster, and simpler always wins,” said Alan Krutsch, Vice President of Sales and Marketing at Ryan Adams Group. Dealers embracing market pricing create new cultures around the experience, implement new marketing solutions to deliver relevant content effectively, and build new processes to maintain their competitive edge. Industry changes will continue to accelerate. Stop fighting them, and get up to speed, so you aren’t left behind.


Build Better Consumer Relationships

With the Right Vendors

The most important thing that a dealership can do is connect with the customer and build lasting relationships. It’s vital to keep that in mind when partnering with a vendor. These partnerships will reflect on your business, and influence your ability to sell cars. So, how do dealerships pick vendors that help them connect meaningfully with their consumers and ensure a strong ROI? The two issues are intrinsic. If you’re not finding the right partner, the customer will sense the disconnect, and it will impact the bottom line. Everyone knows how hard it is to choose a company to help you outsource solutions for your dealership, based solely on online reviews, and the degree of trust that should be put toward those online reviews, testimonials, and ratings, which aren’t always reliable. There is a lot to sift through, and much of this can be inconsistent. A few ground rules are helpful to make sure you find the most meaningful partnership that can help give favorable short-term sales results and establish long-term customer relationships, which can lead to a recurring ROI. This means that you might want to stay away from a` la carte programs. Stick to something that can help build business through longevity, and subsequently make vehicle buyers feel valued.

Don’t Base Your Decision on Price Alone You get what you pay for. As a dealership in search of a vendor, imagine how you want to be perceived by customers. It’s likely that if you pay less money for a particular vendor, then it will impact the consumer experience. That might work temporarily to move vehicles, but if you want sustainable relationships with your customers, and to increase ROI consistently over time, it might be more beneficial to find a vendor you can partner with into the future.

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That’s not to say you can’t find reasonably priced vendors that have great products, but be sure to put the product first, and the price second. Choosing to pay a vendor less to save a few bucks can now be the make-or-break decision for your ROI. Look for intangibles they might provide that can fortify the customer experience. We all want to save money, but spending more can sometimes increase your revenue because the customer will identify the quality they are paying for.

Networking Is a Valuable Resource Don’t be afraid to talk to other people in the industry, even if they are potential competitors. They have gone through the same experience. Those other dealerships can be valuable resources on the reputation of a vendor’s product or service and help you make the right choice. Getting information from someone who essentially does what you do, and the experiences they have, is a much better testimonial than hearing it from someone trying to sell you a product. This involves networking, and one of the best ways to do this is at in-person trade shows, or by joining industry related online social groups. If you are looking for a specific product or service solution, ask others who they use and why. What products improve the customer experience and engagement with consumers? Do they feel like the vendor is a partner, or a company that they just pay every month? Has the ROI been what they expected? You can also achieve some of this due diligence by seeing what others report about the vendor online. Word of mouth and personal accounts are the most accurate. If a peer takes the time to speak with you about a vendor, they will be frank about their experience and the cost-reward benefits of the services offered.

Training and Follow Up Are Important Priorities The amount of training you and your team need for a product or service is going to depend on what is being provided. The best way to measure whether or not the training is valuable, despite the amount of time spent on it, is how seamlessly you and your team learn about the product or service and apply it, and how effectively it will be related to the customer. Some vendor solutions you’re paying for might take more time to learn than others, which is fine, but no amount of training is going to make up for the ease of translating the new solutions into a positive customer experience if it’s not a good product.

Make Sure You Like Who You’re Working With Finally, and this might seem obvious, but don’t take for granted how much you get along with your main contact person and how that is going to impact your overall vendor relationship. We might deal with a lot of individuals in our daily life that we don’t get along with. Sometimes you’re going to have to do business with someone you might not like and don’t have a choice in the matter. But you are in control of picking a vendor. Make sure you like interacting with them, or your attitude of frustration will be obvious to your shoppers. Remember that the people buying cars are who you need to care about first, so try to choose a potential vendor that can enhance the customer experience.

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FORGET SELLING - LET’S TALK ABOUT

BY MAT KOENIG

CEO of BDA Spanish & Rockstar Auto Conference


How Do You Like to Shop for Things?

Think of what your experience is as a customer, not just as a salesperson. This month in Modern Dealership magazine, the focus is on the consumer experience, and one thing we don’t talk about enough is the fact that you – whatever title you have in a dealership – are a consumer. In our industry, we are used to having consumers and the media complain about experiences when purchasing vehicles. Meanwhile, it doesn’t seem like other business industries have to answer for their practices as much as we do in car sales.

Take off your dealership hat, and go shopping for a new television. It could be a 65-inch, 3D, superamazing model. It’s the TV of your dreams. You might walk into a major electronics retailer, and head back to the television department. Upon arriving, despite knowing exactly where you’re headed, there are several employees greeting you, and asking if you need help finding anything. Upon arriving to the correct section, the salesperson usually asks: “Do you have any questions?” You ask the price, and the salesperson gives it to you without hesitation. You talk about accessories, how to best mount the television on the wall, and the kit that you’ll need to get the job done. They answer your questions and ask if you would like to make a purchase.

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A Seamless Transaction We all know that retail outlets are not charities. They exist to make money. For example, analysts expect Best Buy’s revenue to rise about 4.6 percent, to $41.2 billion, during its current fiscal year. So why aren’t salespeople more aggressive to get the deal, taking gross where they can get it, and bringing in the boss for a T.O.?

a purchase, the employee doesn’t mind, because their income isn’t dependent on it. They are always going to give the same experience. They don’t get a closer to take a T.O., and try to negotiate the price. The employees serve you, and have the confidence that if you want a TV, you’ll return, and there is a good chance you might.

Make Sure the Consumer Leaves Better Off

It’s because Best Buy, or similar outlets, realized that people will come back if you make them feel good about being there.

I’ve been part of many heated debates, in plenty of forums, when discussing the future of automotive-sales professionals.

A consumer can likely make a less expensive purchase on Amazon, but Best Buy continues to have strong financial results because people want the experience of interacting with what they are going to purchase.

As a result, there are some tips I would like to share with you when planning for the rest of 2018 and beyond.

No matter the outcome, or whether or not a transaction takes place, the sales associate gives you their full attention. Your questions are likely answered, and you are hopefully given accurate information. If you don’t make

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There are several great commission-sales professionals that will serve people well, and they are all over the country. They will provide strong service, knowing that it will equate to consistent revenue.


But this industry has challenges when it comes to consumer experience, because, as Damian Boudreaux, the President and Founder of the Auto Training Academy, once told me: “Nothing about what we are doing is natural.” We have the best of intentions with our sales processes, and there are several sales-training professionals out there to assist dealership employees. However, a consumer is always going to buy what they are intent on purchasing, and hopefully you provided the best possible experience, or at worst, did not scare them off. Automotive sales is the only profession, other than baseball, in which we celebrate a 70-to-80-percent failure rate. We are excited when one out of four people decide to make a purchase. But that kind of logic is not a key for success. People generally only stop at two dealerships, so at a minimum, a salesperson has a 50-percent shot.

“Nothing about what we are doing is natural.”

The Good News The industry is always changing, based on what consumers want. You can change with it. Don’t wait for competing dealers to prove it first. Anywhere shoppers go, the cars are going to be similar. The prices might be about the same, as well as the experience. Welcome people to your store, listen with the intent to understand, and do everything in your power to deliver the best experience they’ve ever had at a car dealership. Make the decision that no matter what, people are going to leave in a better situation than when they arrived. Whether that means you’re helping them buy a car, or you’re giving them the right information so that they can make a good decision when they decide to buy, it’s important that they leave smiling. A salesperson can only control themselves. That means being conscious of the experience you offer to those walking through your doors. If you make sure everyone leaves happy, and are doing everything within your power to help them, you will sell more product, and make more money. You’ll also feel better about going to work every single day.

There are obviously variables like credit, trade balance, and other factors to take into consideration, but more deals are lost due to a perceived poor experience than any other factor. That doesn’t mean you intentionally treated the customer poorly, or did anything unethical. It means that you didn’t let them do it the way that they wanted. So the customer went to a different venue. M O D E R N D E A L E R S H I P. C O M

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HOW’S THE SERVICE IN YOUR SERVICE DRIVE? TIPS FOR TAKING THE CUSTOMER EXPERIENCE TO ANOTHER LEVEL

WITH BRYAN ARMSTRONG e-Commerce Director at VW Dealerships in Missouri and Utah

Better-tasting coffee. More comfortable chairs. Bigger TVs. You’ll find them in service-drive waiting rooms for one reason: to make the experience better for customers. Nobody (or pretty close to nobody) wants to take their car in for service. However, there is a lot that dealerships do in

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between the time the customer arrives, and leaves with his car to make the experience if not enjoyable, then at least positive. Beyond fixing what needs to be fixed at a reasonable price – and offering local coffee and chairs with lumbar support – there are new, data-driven ways

your team can make the service experience even better. According to Bryan Armstrong, e-commerce director of VW dealerships in Missouri and Utah, everybody wins when the focus is entirely on what’s in it for the customer, not what’s in it for the dealership.


IT COMES DOWN TO DATA. But when the customer is engaged in a conversation that applies specifically to her and her car, providing more options than usual, shifts the experience. Armstrong says tools like AutoAlert’s Service Lead Management provide all of the information needed for such a dialogue.

often want a new car after losing faith in their current one. Having an advanced data-mining tool keeps him on track with those customers. “Knowing when customers are in a position to easily swap, while providing a lower acquisition cost to the dealership and higher customer retention, has changed the game for us,” says Armstrong. “Plus, we’re seeing a greater customer satisfaction index and customer experience index.” Customers are happy because they’re being approached with a benefit – a real, ready offer. Rebates and incentives that fit particular customers might allow them to take advantage of lower payments on a newer car, while forgoing a huge service bill.

It comes down to data. Knowing things like what the customer can afford, what her car “position” is (where she is in her contract, whether her warranty is up, etc.), and what her recent shopping behavior has been, gives you an approach that can make a big difference. And having software with proven algorithms for determining what customers want, when they want it, makes the process easy.

Armstrong says his team will even refund customers’ RO bills if they choose to take advantage of the offer after they’ve paid for service and left. Every offer is left on the passenger’s seat.

For example, Armstrong notes that at any given time, 17 percent of the population is in the market for a new car, but which 17 percent? One indicator is recall notices, he says – even months after a national recall, customers

“If we got the car as a trade-in, we were going to have to service it anyway,” he says. “This is a very empowering, positive experience for the customer. It puts them in the driver’s seat … pardon the pun!”

CUSTOMERS ARE HAPPY BECAUSE THEY’RE BEING APPROACHED WITH A BENEFIT.

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“The traditional customer looks forward to going to the service department about as much as going to the dentist without Novocain – there’s a very negative bent to it,” Armstrong says. “It’s basically ‘This is probably broken; how much will it cost to fix it?’”


The customer is happy, and the sales and service teams are happy. Armstrong says this is another benefit to the customercentric, data-backed approach: the team at the dealership really comes together through a unified effort. Another unique feature of the service drive at Armstrong’s dealership is the walk-around videos provided to every customer. The service team makes a short video of what’s specifically wrong with the customer’s car, then sends the video via text or email, along with an upgrade proposal, when appropriate. They get an “open” or “read” report on each message, providing further useful data.

THE TEAM AT THE DEALERSHIP REALLY COMES TOGETHER THROUGH A UNIFIED EFFORT. “Overall, it’s not an angle of attack, but an angle of approach. The most contentious part of being at a dealership for customers is when they feel like they’re being sold, rather than being helped,” Armstrong says. And although good coffee never hurts, what customers really want when they choose your service team is to be given options – something historically unavailable, and certainly appreciated.

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MODERNDEALERSHIP


WE BELIEVE WHEN YOU FIX COMMUNICATION THROUGHOUT YOUR DEALERSHIP, YOU WIN.

WIN WIN WIN FOR YOUR

CUSTOMERS

Communication attached to the customer offers clear, consistent messaging all in one place.

FOR YOUR

EMPLOYEES

Let your staff know where they are supposed to be. No more intercom announcements.

FOR YOUR

DEALERSHIP

Less confusion and less wasted time.

CALL US TODAY FOR A TEST DRIVE

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IN TH BOX Mike E Marcotte with

President, Marcotte Ford

Running a dealership at age 33 is pretty uncommon. For Mike Marcotte, it’s perfectly natural, considering that he started in the business at 14 and worked in all but two positions (“I never worked in tech or parts, but I still want to learn!”) before being named president. Read on to see how Mike is continuing the legacy started by his grandfather at Marcotte Ford more than 50 years ago.

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How long have you been in the business?

My whole life. My father had me working in a different department every year in high school: the wash bay, rental, service advisor, F&I, sales, sales manager, so I learned every aspect of the business and can really put myself in the shoes of the person I’m talking to. When my grandfather started, there were 30 employees, and we’re up to 142 employees. There’s lots of family here, so luckily we get along. Our employees feel that, and they’re all part of the team, part of the family.

That’s pretty cool! What was the hardest department?

Service advisor is hard, because 50 people walk in each day, and you’ll think about the one person who wasn’t happy when you leave. F&I I enjoyed a lot. You’re working with the customer after they’ve made their purchase, so they’re excited, ecstatic. You’re telling them what they need to protect their purchase.

Does your dad still come in?

Yeah, he’s here every day—seven days a week. He loves it, and still has a passion for it, which bleeds into everybody else. You can see this is what he loves to do. And there’s no reason not to be here. If business isn’t good you want to be here; if business is OK you want to make it better; if business is doing great you want to be here [smiles].

What was your first car?

In high school, I had a 2000 Eddie Bauer Explorer. Black, with a tan trim. Bucket seats in the back. I was lucky!

What have you learned so far about running a dealership?

You learn a lot as you go. At 25, you think you know everything. At 33, you realize you don’t know what you don’t know. Every day, I’m learning new things, so we can run smoother. And we have an unbelievable staff. We really do. We’re lucky we don’t have a lot of turnover, so it’s the same people just helping them get better and better. And then the customer comes in and sees the same faces—the same atmosphere, the same service advisor, the same sales advisor, their go-to person.

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What’s the best part of your job?

Working with people. Mike [my brother-in-law] and myself work to make sure everyone’s happy. The happier the employees are, the happier the customers are. They can feel it.

You used to serve food to all your service and sales customers.

It’s coming back! We have Lug Nuts Café in the showroom: “Eat and bolt.” My dad started it, and he’s always going over how much bigger we can make it. It’s like, “Can we still fit a car in the showroom?” It’s a “wow” factor. Someone comes in for an oil change, and they’re offered breakfast for free. They’re eating breakfast, and their oil change is done.

What changes have you made at the dealership lately?

We moved across the street [last summer], and we’re waiting to remodel. So we’ll be back across the street [this summer]. We’ll make this location our commercial sales. And we’ll pick up more bay space.

How did your grandfather get into the business?

He bought it with a partner in New Hampshire, and he ended up buying him out and moved to Holyoke. Then, the highway was constructed, so they moved down to the lower road of Main Street. Then we added a service addition to that place, and we’ve been growing ever since. We had to buy land just to park a car, and now we’re adding a building across the street.

Is Marcotte Ford involved with the community?

Community is huge for us. My father ingrained that into us—we’re all here to help out the community. We’re in a lucky spot, without a doubt, so it’s good that we can help out. Right in Holyoke, we have the Holyoke Boys and Girls Club; I’m on the board, and my father’s also on the board. We also do Kate’s Kitchen … we get the family involved and the whole staff involved. We go down monthly and cook for them and help serve. You forget how good you have it, and then you see [people hungry], and it reminds us, and it’s great to be able to help out. Kate’s Kitchen serves one meal a day. They’re always open, and nobody will be turned away. So you have kids and parents going there. Kids walk there by themselves, which is sad, but they know to go there. So we’ll go and provide the meal. We did a cookout in August. Normally they do about 80 to 100 people, and we did 200 hamburgers and hot dogs that day. And we had 14 employees there, helping out, and they brought their kids, so they’re seeing what it takes to help out their community, too.


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Modern Dealership - February 2018  
Modern Dealership - February 2018