Thank you to all the AutoSuccess Best of the Best NADA 2010 Companies February 2010
Dick Hannah Honda Used Car Net Proﬁt 96.4% increase
Our franchises have always been essential to our new car business. Now, with vAuto, we’ve found a Almost everything my franchises bring to our new car side, vAuto brings to our used operations, including
franchise for our used car businesspulling customers — and it’s made all the difference.
into my front door.
—Martin J. Green Corporate Dealer Manager Dick Hannah Dealerships Vancouver, Washington
—Dwayne Hawkins President Crown Automotive Group St. Petersburg, Florida
Beyond the leading-edge technology. Beyond the exclusive features. Beyond the data-driven insight. For a select set of dealers nationwide, vAuto has become much more. It has become all the power and the privilege of a franchise — refocused on used car operations. License to proprietary software proven to drive proﬁtability. Access to the Velocity Management™ playbook and coaches. Entrance to a community of like-minded, highly successful dealers. Contact with customers predisposed to buying from you. It’s “the franchise”— reinvented for today’s used car market. vAuto is The Franchise 2.0.
Get a live demo today. Visit www.vAuto.com/nextfranchise or call 888-841-3701.
AutoSuccess Magazine is published monthly at 3834 Taylorsville Rd., Building A, Ste. 1B Louisville, KY 40220; 502.588.3155, fax 502.588.3170. Direct all subscription and customer service inquiries to 877.818.6620 or email@example.com. Subscription rate is $69 per year. AutoSuccess welcomes unsolicited editorials and graphics (not responsible for their return). All submitted editorials and graphics are subject to editing for grammar, content and page length. AutoSuccess provides its contributing writers latitude in expressing advice and solutions; views expressed are not necessarily those of AutoSuccess and by no means reflect any guarantees. AutoSuccess accepts no liability in respect of the content of any third party material appearing in this magazine or in respect of the content of any other magazine to which this magazine may be linked from time to time. Always confer with legal counsel before implementing changes in procedures.© All contents copyrighted by AutoSuccess Magazine, a Division of Systems Marketing, Inc. All rights reserved. Reproduction in whole or part is prohibited without express written consent from AutoSuccess. AutoSuccess may occasionally make readers’ names available to other companies whose products and/or services may be of interest; readers may request that names be removed by calling 877.818.6620. Printed in the USA. Postmaster: Send address changes to AutoSuccess Magazine, 3834 Taylorsville Rd., Building A, Ste. 1B Louisville, KY 40220.
GETTING IT RIGHT BEFORE RETIREMENT: ROTH IRA 101 KirkManzo
WHAT IS YOUR MOST VALUABLE ASSET? BudAbraham
IS YOUR DETAIL DEPARTMENT A PROBLEM? SteveBrazill
stephen r covey
RESOLUTIONS, PART 1
sales & training solution 14
FIVE FAVORITE SALES MEETING TOPICS TomHopkins
THE MOOD OF THE SALE
SELLING THE CREATIVE EFFORT
pg p g14
THREE STEPS TO MAXIMIZE CONVERSIONS
IS YOUR WEB SITE READY FOR SUCCESS?
MAKING THE CASE FOR ONLINE NEGOTIATION
TEXTING - YOUR GATEWAY TO SALES
MAXIMIZING LEAD ROI
Susie Horne, Account Manager John Warner, Sales-Improvement Strategist firstname.lastname@example.org email@example.com
2010 SERVICE PLAN FOR GENERAL MANAGERS AND DEALER PRINCIPLES
Gain, Guide and Captivate
Brian Ankney, Account Manager firstname.lastname@example.org
Dave Davis, Editor & Creative Strategist email@example.com
Thomas Williams, VP & Creative Director firstname.lastname@example.org
3834 Taylorsville Rd. Building A, Ste. 1B Louisville Kentucky Ken 40220 | 877.818.6620 / 502.588.3170 | AutoSuccessOnline.com / AutoSuccessPodcast.com | email@example.com
Susan Givens, Publisher firstname.lastname@example.org
feature solution February 2010
RESOLUTIONS part1 choose our response to any circumstance or condition. When we are response-able, our commitment becomes more powerful than our moods or circumstances, and we keep the promises and resolutions we make. For example, if we put “mind over mattress” and arise early in the morning, we will earn our first victory of the day and gain a certain sense of self-mastery. We can then move on to more public victories. And as we deal well with each new challenge, we unleash within ourselves a fresh capacity to soar to new heights.
deeply imbedded bad habit with a good one involves much more than being temporarily “psyched up” over some simplistic success formula, such as “think positively” or “try harder.” It takes deep understanding of self and of the principles and processes of growth and change. These include assessment, commitment, feedback and follow-through.
We may think that we can change deeply imbedded habits and patterns simply by making new resolutions or goals, only to find that old habits die hard and that, in spite of good intentions and social promises, familiar patterns carry over from year to year. We often make two mistakes with regard to New Year’s resolutions:
We will soon break our resolutions if we don’t regularly report our progress to somebody and get objective feedback on our performance. Accountability breeds “response”-ability. Commitment and involvement produce change.
First, we don’t have a clear knowledge of who we are. Hence, our habits become our identity, and to resolve to change a habit is to threaten our security. We fail to see that we are not our habits. We can make and break our habits. We need not be a victim of conditions or conditioning. We can write your own script, choose our course and control our own destiny.
Next month, we’ll look at some concrete steps to take in making successful changes in our lives.
Breaking deeply imbedded habits such as procrastinating, criticizing, overeating or oversleeping involves more than a little wishing and will power. Often our own resolve is not enough. We need reinforcing relationships, people and programs that hold us accountable and responsible.
Second, we don’t have a clear picture of where we want to go. Therefore, our resolves are easily uprooted, and we then get discouraged and give up. Replacing a
Stephen R. Covey, Ph.D., is co-founder of FranklinCovey, and is the author of The 7 Habits of Highly Effective People. He can be contacted at 866.892.6363, or by e-mail at email@example.com.
Remember: Response-ability is the ability to
FACT: Text messaging has risen 700% since 2006. Text “answer” to 89000 to see how many messages were sent in June 2009.
• Inventory on the go!
• Text for info
• Text to win contests
• Text customers responses to inquiries
• Text to join
DealerHD.com Call to setup your demo 0 8
2010 SERVICE PLAN FOR GENERAL MANAGERS AND DEALER PRINCIPLES In Charles Dickens’ novel, A Tale of Two Cities, London and Paris were going through tremendous social turmoil. Even though their challenges were similar, the ways in which they operated were not. Turning to recent times, how would the A Tale of Two Departments read from an automotive dealership’s point of view? Last year’s economically revolutionary story addresses Dickens’ novel’s famous line, “It was the best of times, it was the worst of times....” In an automotive dealership, the tale is not the same from the sales and service perspectives, as the service department accounted for almost all of the profit in 2009 at the average dealership, according to NADA’s end-of-the-year analysis. To get both sides of the dealership out of economic difficulty, dealership leaders must have the vision and the ability to adjust to the market. Dealership vision is greatly influenced by the dealer principle and/or the general manager, so it becomes vital that they learn what it takes to successfully come out of the revolution. The Right Approach Be Consistent — Service is all about retaining customers over the lifetime of their vehicle ownership in order to capture a healthy profit potential. It is also about extending that relationship from the loyalty to the service department into a purchase in the sales department. Most sales approaches are short-term. However, customers are in the service center for repeat visits much more often than in the sales department, so you have more opportunities to impress them with your dealership. Talk Value — Show more value for the investment to compete with the aftermarket brand. Sell the experience of doing business in a nice facility with amenities that customers cannot get from the aftermarket. Talk Price — Are you competitive on the three or four common services that your customers understand, like an oil change? You don’t need to discount everything; just discount enough to cause your market to question the stereotypes. Talk “You” — Service industries are all about reputation because the product, unlike a commodity, really is you. Take the time to talk about your people, your services and your brand. Most service departments sell the quality of their service experience with factory-trained technicians.
E-mail Doesn’t Replace Everything — Service has been such a lifeline this year that many new companies are looking to introduce “magic pill” programs such as total e-mail management systems to anyone looking to cut costs. Use e-mail to complement your current marketing but not in order to achieve total communications coverage — because it won’t. If not implemented correctly and strategically, you will actually lose money. Track Your Results — Use programs that allow you to measure the results of the program. It is much easier to do in service than in sales. Know the Rules of Co-op — Co-op rules for service are a bit more complicated than in sales, but if you want money back, you need to know them. If the manufacturer’s program is performing poorly, it makes much more sense to waive the free money in order to work with a solution that brings in more customers. Segmented Marketing — Your loyal customers are different from your current customers, who are different from your lost customers or prospects. Technology allows you to separate these customers and market to them based on their behavior. This can ultimately bring in more customers and a better return-on-investment than had you implemented a less customer-targeted mass communication. Rely on Your Service Manager — Tap into the expertise of your service manager rather than attempting to implement a marketing strategy that, while effective in other areas, isn’t informed by a comprehensive understanding of service departments. Again, sales and service are different, and your marketing approach needs to reflect that. Your service manager can play a key role helping you develop a sound strategy. If you commit to the general philosophy of avoiding running the service department like you would the sales department, you can learn how to create a successful service vision for 2010. Remember, there is a lot of potential for “the best of times” with service growth, but there is also a lot of risk of “the worst of times” if you don’t do it right. Get to know the difference, and your vision will be one that allows you to be a true leader in 2010. Chuck Patton is the founder and CEO of Traffic Builders, Inc. He can be contacted at 866.859.8520, or by e-mail at firstname.lastname@example.org. the #1 sales-improvement magazine for the automotive professional
THREE STEPS TO MAXIMIZE CONVERSIONS Gain, Guide and Captivate Converting visitors to contacts is a process comprised of three steps. They don’t require a lot of money; just a little common sense. Maximize your online business by gaining new visitors and leads, guide them directly to inventories and captivate the visitor by following the details listed below. Step One: Take Advantage of the Basics to Gain New Visitors There are numerous opportunities available. Start the process by first taking advantage of no-cost opportunities, then consider low-cost lead acquisition options. No-cost options: 1. Take care of the basics on existing marketing efforts by promoting your Web address on every business card, mailer, billboard, TV ad, radio ad and marketing campaign you create. 2. Next, to help obtain a top ranking in Google, ensure that the brands and models you represent — combined with your location — are listed multiple times in text, versus images or Flash within the top 50 percent of your home page. 3. Take advantage of YouTube, the second largest search engine. Utilize this asset by creating and loading videos for each of your vehicles on YouTube.com, and then embed them into your Web site. It will gain new traffic and also help improve your Google rankings. 4. List your inventories on third-party sites. One of the most popular and productive sites is Craigslist. Minimally, list your pre-owned vehicles. Low-cost options: Utilize eBay to gain high-quality leads. eBay has proven itself to be a great location to sell high-end specialty cars or wholesale units, but the largest percentage of your inventory is probably mid-range vehicles, and they may not sell as easily. Utilizing eBay auctions to obtain high-quality leads can prove to be one of your most inexpensive methods to gain leads. Start by listing several vehicles with a reserve set at your sales price and a very low starting bid. Example:
Reserve sales price is $10,000 but starting bid is $5,000. This invites multiple bidders. Most will stop bidding before the sales price is met, but you will obtain each bidder’s name, address, phone number and e-mail address. These bidders have committed to a minimum of $5,000, you know the vehicle of interest, and that they are located in your area. It’s safe to say they are in the market. The cost — $37 — divided by the number of bidders equates to the cost per lead. There’s no excuse to be waiting on business when you use this lead-generation method. Use cost-per-click programs with controls. Pay only for visitors within a hundred-mile radius of your address, link visitors directly to inventory pages related to the keywords and set a stop-campaign trigger based on your specified budget. Monitor your results and make performance adjustments to develop a profitable campaign. Step Two: Guide Visitors to Inventories The primary reason a visitor comes to a dealer’s site is to view inventory. Access to any new or pre-owned model in your inventory should be delivered within one click from the home page. For instance, if you’re a Ford dealer, all of the models that Ford offers should be displayed on the home page. That way, if a Mustang is selected, the visitor is instantly viewing all Mustang inventories. This oneclick strategy should continue on the Mustang inventory page by maintaining a list of new model choices, so if the visitor decides to view another model and selects a Focus, a single click delivers all of the Focus inventories. Pre-owned inventories should work in the same manner. All pre-owned brands in your inventory are shown on the home page, and if Nissan is selected, all Nissan inventories are delivered in one click from the home page. Never forget what you are selling — cars! Keep your home page focused on enabling visitors to view more vehicles per session and you will sell more cars. Step Three: Captivate Your Visitor It is paramount that you capture the visitor’s attention once they reach the vehicle’s detail page. New vehicles should display all relevant
information including incentives, color brochures, window stickers and options. The visitor should not have to leave this page to obtain these details. An important factor that most dealers omit is displaying actual photos of their new vehicles in lieu of stock pictures. Few pictures are required for new vehicles but it’s important for the visitor to be able to view the trim features, wheels, dash and seats to help personalize the vehicle for the visitor. Add a posting tool for social sites such as Facebook and Twitter to help visitors share their car with others. It serves as a method to help the buyer commit to the sale. Many people prefer watching a commercial versus reading an article. The goal should be to captivate your visitor by giving them both. Add a walk-around video of each new and pre-owned vehicle. Include custom voice-over scripts with background music to transform your video into a professional commercial. The script should include warranty, financing details, and dealer specials (such as tires for life) as the vehicle is being displayed in the video. Upload your entire inventory to YouTube, then embed the YouTube video on the detail page of each vehicle. Why? 1. 100 percent of your inventory can be found in the second largest search engine in the world. 2. Hundreds of YouTube videos embedded in your site will substantially increased your rankings in the search engines. 3. It captivates your visitors. The voiceover is also a good place to invite visitors to value their trade or contact you. All three steps must be utilized in order to maximize your results. A site with low traffic will fail. If high traffic is achieved but the visitor can’t navigate to inventory quickly, it suffers. If customers cannot be captivated, results will be lacking. If, however, you gain new visitors and leads, guide them to inventories in one click and captivate them with pictures and video, you will successfully convert visitors into contacts. Brad King is the president of Dealermade. He can be contacted at 800.723.2608, or by e-mail at email@example.com.
WOLFINGTON The Name on Your Grandfather's Brougham
A TRUSTED NAME IN THE AUTOMOTIVE BUSINESS SINCE 1876.
The original Brougham, designed by Alexander J. WolямБngton in 1876, was an enclosed four-wheeled carriage that was driven by a coachman and a single horse.
ALEX J. WOLFINGTON BUILDS BROUGHAM CARRIAGES -THE WOLFINGTON CARRIAGE COMPANY
HARRY J. WOLFINGTON TAKES OVER COMPANY. ONE OF THE FIRST TO PROMOTE THE SALE OF TWO BODIES FOR THE SAME CHASSIS. CLOSED BODY FOR THE WINTER, OPEN FOR THE SUMMER
HARRY J. WOLFINGTON CREATED BUS, HEARSE AND AMBULANCE BODIES
HARRY A. WOLFINGTON CREATED THE WOLFINGTON BODY COMPANY. BY 1940,
HARRY J. WOLFINGTON TOOK ON PLYMOUTH DESOTO DEALERSHIP
EUSTACE WOLFINGTON - WOLFINGTON CHEVROLET
HARRY J. WOLFINGTON SR. - HILL VOLKSWAGEN
1978 1980 1999
EUSTACE WOLFINGTON - HALF A CAR
SEAN WOLFINGTON - BZ RESULTS
IT BECAME ONE OF THE LARGEST DISTRIBUTORS FOR SUPERIOR STUDEBAKERS
EUSTACE WOLFINGTON - WOLFINGTON MOTOR COMPANY VINCE WOLFINGTON - CAREY LIMOUSINE INTERNATIONAL HARRY J. WOLFINGTON SR. - HILL LEASING HARRY J. WOLFINGTON JR. - THE WOLFINGTON GROUP
THE WOLFINGTON GROUP IS HONORED AND PROUD TO CONTINUE THE LEGACY OF THE WOLFINGTON NAME. Designing Comprehensive NEW & Used Car Sales Events with Innovative Direct Mail, Live Call Center and CSI-Friendly Staff to ensure a Stress-Free Sales Event.
FOR YOUR FREE NO-OBLIGATION MARKETING PLAN, CALL HARRY WOLFINGTON JR. OR DREW COTA, NATIONAL ACCOUNTS MANAGER AT 866-386-0625
It’s another busy Tuesday afternoon at your dealership. You have six shoppers looking at vehicles, three people discussing finance, one person looking at a brochure and five people talking with sales agents. Don’t you wish your showroom was like this? If you’re like most dealerships, it is like this on your Web site. Imagine this: Someone walks into your showroom and looks around, and no one greets them or even acknowledges them. It’s a highly unlikely scenario and might even get someone fired. But, this is exactly what happens on most dealers’ Web sites every day. It may be happening on your site as you read this! This situation equates to literally thousands of lost lead generation and sales opportunities each month for the average dealership. The sales funnel continues to evolve as consumers push for more instant gratification and information. It’s not “dead” as some have asserted, but it’s certainly been flipped around as online communication has rapidly increased. Making the first contact with shoppers is critical and puts you in the driver’s seat for online sales success. According to a recent MIT report, prospective online shoppers fill out an average of three to five lead forms and the first to contact a lead increases conversion by 238 percent. Further, more than 65 percent of all conversions occur on first call. Speed is obviously important and is a key determinant of successful sales. We live in a different world today and consumers demand instant gratification online, and dealership Web sites with the ability to deliver just the right message, at just the right time have a huge competitive advantage. Live chat is the fastest way to connect with consumers online, giving you a huge advantage. Most dealers are still not leveraging the power of interactive, real-time communication on their Web sites. Combining quality information with stimulating multi-sensory applications such as video and live chat is a great way to engage consumers. As they expect more instant gratification online, any steps dealers can take to make their sites more interactive, more robust and easier to be found online, adds incredible value. Research tells us that multi-sensory experiences help consumers retain information and create preference, and using chat on the dealership Web site is a powerful first step in engaging more Web site visitors into a conversation. ActivTestDrive lets dealers move customers through the unique virtual sales process to turn information 1 2
seekers into buyers, and includes engaging custom videos for every make and model. Test drives sell cars at the dealership and virtual test drives help sell shoppers online. Chris Fousek, eCommerce Director of Cadillac Saab Hummer Village of Norwood described the benefits of interactive online experiences, “Our dealership Web site is the heart of our business and consumers increasingly demand instant gratification. Everyone is busy, and shoppers appreciate fast responses to their questions. A growing number of people just don’t want to pick up the phone and call the dealership anymore, and many don’t want to wait for a response to e-mail. Overall, the service provides us with more sales opportunities that we missed. Live chat lets us offer the same level of service on our Web site that we offer in our showroom.”
Online connectivity is the key as consumers seek information on Facebook, Craigslist, eBay, newsletters, retail Web sites, microsites and more. The ability to connect and engage shoppers on any relevant online locations differentiates progressive dealerships that actively reach consumers. The nation’s top eCommerce dealers use ActivEngage to actively connect with consumers on these sites. It may be hard to believe, but e-mail is now considered “too slow” for a growing percentage of the population participating in online shopping. In
addition, many people are very reluctant to call dealerships because they may have had an uncomfortable experience with an overly aggressive salesperson on the phone, or been routed through an endless maze of automated phone menus only to have no one respond to their calls. Focusing on generating more leads from the dealership’s own Web site helps keep costs per car sold down and delivers the highest closing ratio. Live chat is proving to be one of the most effective methods to generate more of these valuable leads. Dealers can easily double or triple Web site lead generation by sending carefully crafted proactive chat invitations, based on shoppers’ behavior on the Web site. For example, with ActivEngage business intelligence you can know that a shopper arrived on your site from a Google search for “2007 Dodge Ram Atlanta.” You can watch their click path and co-browse to view the vehicles they are shopping, and send just the right message at just the right time. Further, you can actually see what pages and vehicles shoppers view while on your site, in real-time. Armed with this customer intelligence, you can then send customized chat messages, based on their behavior, rather than generic messages. This raises the level of service available on the Web site to the same level as the physical showroom. It creates a great first impression and can be a huge differentiator for your dealership. Technology also exists that allows you to focus your attention on site visitors who are ready to buy, based on particular characteristics or behavior patterns. This behavioral targeting allows you to see where shoppers are physically located, and parameters can be set based number of visits, pages viewed, order of page views, viewing time, specific pages, number of pages, time spent on site, and more. Proactive custom messages can then be sent, based on customers’ shopping behavior, enabling dealers to track and target the hottest prospects and spend more time with shoppers who are most likely to convert, and less time with casual browsers. Driving lots of traffic to your Web site can be great; it can also be a distraction if visitors are not good prospects. It is much more effective to greet shoppers with a customized message, based on business intelligence such as, “Hello, do you have any questions about the vehicle warranty? If so, I’m here to help.” rather than merely greeting shoppers with a generic message such as, “Hello, may I help you with anything?” Justin Brun, eCommerce Manager at Acton Toyota Scion of Littleton commented, “Live chat is playing a part of our increased online warranty sales and profitability. People generally have a lot of questions about warranties, and now we can answer those questions at the Web site and help guide shoppers through our four-step sales process. We are very pleased with the profit margins that our online warranty sales have brought to the dealership. I am also really pleased with the ActivEngage analytics and tools; they are more robust than any others available.” Successful sales start by building trust and relationships, by engaging in personalized communication. Top dealers know this and are leveraging live chat to begin the sales process online, before consumers pick up the phone, send an e-mail or visit the dealership. With online business intelligence and live chat, you can “know” the person before you engage in subsequent communication, leveraging this business intelligence to guide the sales process. Using business intelligence to guide the conversation on your Web site is just like using common sense when you approach someone in the
showroom or on the dealership lot. You use observation and listening skills to lead your conversation with someone in person. If you see that someone is looking at Toyota Camrys on the lot, you offer assistance that is specific to the Camry when you approach them. On your Web site, you can now see what vehicles and dealership information a visitor is viewing and then approach them with an offer to help that is specific to their shopping behavior. The majority of the communication rules for face-to-face interactions apply online. It really is that simple, and technology now allows the same type of interactions online. Most dealers are also very pleasantly surprised to find that shoppers use chat for more than just vehicle sales information. Consumers schedule service appointments, purchase parts, get F&I details and more. Hewlett Volkswagen Internet Manager Russell Blackstone described his dealership’s experience using ActivEngage’s proactive virtual sales associates: “We’re not only using live chat for vehicle sales, but also parts, service, finance — really all dealership profit centers. People can be really impatient and live chat gives them instant gratification. Not all site visitors use the chat, but many of them do, and the ones who do have the highest conversion rates. It’s like a gold mine.” Technology has now advanced to offer you a way to instantly connect with the shoppers, no matter where they are online, and even co-browse with the shoppers to give them a complete rich-media experience, including video. Dealerships that are leveraging proactive chat correctly are creating a “WOW” factor and experience for shoppers. Chat offers your customers access to instant answers instead of forcing them through the e-mail gauntlet or requiring the shopper to change the medium and call the dealership. Chat allows you to deliver the right information at just the right time, to create a great first impression for you and the dealership. Ted Rubin is a founding partner of ActivEngage. He can be contacted at 866.918.2150, or by e-mail at firstname.lastname@example.org. 1 3
FIVE FAVORITE SALES MEETING TOPICS Not to brag, but I probably have the best job in the automotive retailing business. As part of a staffed events group, I find myself in a different dealership every weekend. From Maine to Hawaii and everywhere in between, I am exposed to the inner workings of dealerships’ sales departments across the country. From my perspective, I get to see it all. I see more than 100 ups a day come through the dealership doors. That’s more than 100 different opportunities for another sale. Drawing from 11 years of experience in this career, here are my five favorite sales meeting topics. Save a Deal Every dealership sales meeting should begin with this component. A “save a deal” meeting is just what it sounds like. Each and every interaction with customers from the previous day is reviewed, a strategy is planned and someone takes action to move the process forward. Mr. and Mrs. Smith were in last night, looked at a vehicle and did not purchase because they had another appointment elsewhere. A sales manager agrees to call them today and thank them for coming in and inquire about moving ahead. Sounds simple, right? This assumes that floor traffic and telephone ups are being effectively tracked and documented and provides an opportunity for managers to mentor salespeople. What a powerful, simple idea. The Pump A sales manager at a top-performing dealership conducted a meeting that I had the pleasure to attend. From under the podium, he produced a red, cast-iron hand pump – the kind you see at a farmhouse for the well. He sat it on the podium and explained how it worked. Pumping the handle produces a vacuum that draws the water up from the well and eventually out the spout. As he pumped the device, he explained that it was the water source for his family when he was young. He said some of the kids hated to be the first to pump each day, because it took so long and so many pumps to finally get the water flowing. This sales manager said the process was very similar to prospecting and following up. You
have to make the calls; you have to stay in touch; you have to take any opportunity to get in front of the consumer. However, many sales people stop pumping before the water comes. They get discouraged, it isn’t working for them, they were too busy, etc. But the only way to get that water is to pump and pump and not stop. And once it flows, less effort is required to keep the flow going, but you have to put the work in initially to reap the rewards. At the Sales Desk Every manager has his own style. Some are coaches, some are bosses and some see an opportunity to train in unlikely places. There was a sales manager known for his forthright nature. It was well known on the sales floor that he did not tolerate a customer being released from the sales department without the manager having an opportunity to say “hello.” We watched as a young salesman greeted a customer on the lot, looked at a front line pre-owned car, talked for a minute or two and then the customer got back into his vehicle and drove away. Everyone watched as this manager paged the salesperson to the podium, most of us thinking “This is going to be ugly.” Instead, the manager asked the salesperson where the customer went. The salesperson replied that the customer said he needed to get back to his work and left. The next words from the manager were teaching at its best. “Where does the customer work?” I don’t know. “Where does he live?” I don’t know. “Is he married?” I don’t know. “Does he have kids?” And then the light bulb came on. The salesperson said to the manager, “I know what you are doing! You are asking me the things I should have asked him instead of telling him what a great car that is.” The sales manager smiled, the salesman smiled, and I am convinced that he went away with one more tool to find success. He had learned that people buy cars from people they like, not salespeople. Selecting the Right Vehicle Have you ever had a customer tell you that they have $500 dollars down and want to spend $300 dollars per month on a car payment? Of course you have; it happens all the time. How many times have we selected the wrong car, taken it for a ride, and had the
customer say they would buy it, only to have the desk pencil the deal at $1,500 down and $450 per month? How much conviction did the salesperson have when he returned to the customer and presented those numbers? The salesperson could inoculate himself against that happening with one phrase. Anytime a customer lays out the details of a deal ($500 down, $300 a month) the salesperson should reply, “If I had something a little nicer, with a few really nice features, but it was going to be a little more, should I not show it to you?” Every customer will respond with “depends” and the salesperson is free to show the same car he would have shown, but now won’t look like Jekyll and Hyde if he needs to remind the customer that he said it was going to be a little more. The Four-Minute Mile Something happened on May 6, 1954 that had never been done before. Conventional wisdom was that the human body just couldn’t run a mile in less than four minutes; it wasn’t built to do it — until May 6, that is, when Roger Bannister broke the record. The funny thing is, two more people did it the next month. High school students do it today. What changed? The athlete’s belief that it could be done. This brings me to George Marks. He was a salesman who kept to himself, never in the coffee clutch or gossiping on the showroom floor. If he was at work, he was either with a customer or on the phone, always busy. I saw George Marks go six for six on a Saturday. Six ups, six delivered. I heard another salesperson call him “lucky” one day. The sales manager immediately interrupted and said it wasn’t luck; Marks made his own luck. “I’ll tell you why George sells so many cars,” he said. “He treats every customer like a buyer.” George knew that every person he spoke to was there to do business, and therefore, he gave every person the opportunity to say “yes.” He believed it, just like the runner knows he can break the four-minute mile. Lee Glynn is the vice president of The Wolfington Group. He can be contacted at 800.905.0641, or by e-mail at email@example.com.
THE MOOD OF THE SALE To be successful at selling vehicles, you must be able to quickly understand the emotions churning inside your potential clients. Having empathy for your clients and knowing their situations is critical. You have to become skillful at synchronizing what you say with a wide variety of client emotions. How well you do this makes a powerful impact on your income. It’s sad but true; many people put off making vehicle decisions until they absolutely have to. They wait until their old vehicle is in such a state that it either isn’t going to last much longer or will cost them dearly in repairs. Perhaps they weren’t prepared to make a vehicle investment at this time, but for whatever reason, the need has become urgent. In some cases, your potential clients may have been forced into talking with you by someone else (a spouse, a parent, a coworker) who thinks they need a new vehicle more than the clients themselves do. You may work with people who are suffering pain from major upheavals that have taken place in their lives that have caused them to downsize from a vehicle they love to something more affordable. Whatever the situation is, you will have to adjust your demeanor, your words and how you present yourself and your inventory. I teach selling skills. Yet, if I taught you all the strategies and all the words to say, and failed to teach you the importance of having empathy for your clients, I’d be doing you and them a disservice. To be successful in this business, you must know a lot about how to sell and about your products. But, even more important if you plan to make this business a lifelong career, you must truly care about people. Start right now by asking yourself, “How do I feel about how they feel?” If your attitude is, “I couldn’t care less,” don’t be surprised if they don’t care about doing business with you. You can’t fake concern. If you’re not truly empathetic to your clients’ needs, your
attitude will show through in your body language or in some other discernible way and the clients will pick up on it. They may not even be consciously aware of it, but something will tell them not to do business with you and they’ll raise walls of sales resistance about making a decision today. For example, if I were talking with a wife and husband who are having their first child, I’d be a little more concerned with relating to her than him. Even though he’ll be excited about the future and have vehicle safety concerns, she’ll be more likely (as mothers are) to be concerned about the ease of getting the child in and out of the vehicle, whether or not there’s room for a stroller and the other paraphernalia that needs to be transported with small children, etc. Both may be very concerned with economy because we all know that babies are expensive. Now let’s look at another situation. Perhaps your potential clients were recently in a situation where their vehicle broke down and caused them to miss out on a road trip or job interview. Now, they’re talking with you to see that it doesn’t happen again. They’ve had a dose of reality and need to feel secure. With these folks, focus on the security that a reliable vehicle can provide. One or both of them might be upset or angry about being in this situation. They may feel they’ve lost face with each other by not being on top of their needs. You’ll have to tread lightly with this couple until you get them focused on the solution rather than the problem. When you meet them, you’re part of the industry at which they’re mad, and they’re especially afraid of having the same challenge again. The key to success in any selling situation is to leave your opinions, your personal situation, your history outside the door, unless you have faced a similar situation where you can speak from the heart. Start asking questions as soon as you establish rapport so you can understand why they are talking with you. What are they thinking? What do they think they need versus what your experience tells you they need? Why do
they think that? There’s an underlying reason that they’re ready and willing to talk with you right now. Until you know that reason, you can’t start feeling their feelings and relating to them properly in order to serve their needs. Although some situations are touchy to work with, they’re more likely to give you the opportunity to render great service to someone who really needs it. In any situation where you’re talking with a couple, be especially careful not to take sides or favor one person’s opinion over the other’s, even if they’re right. Keep it constantly in mind that if either person suspects you of making judgments about them, they’re not going to buy a vehicle from you. You’re working with people who make buying decisions emotionally, not logically. You must first work with their emotions, then help them see the logic in following the plan you recommend. You do that by building a performance that relates to their needs. As an automotive professional, you have more than a job; you have an absolute obligation to do everything in your power to feel like your clients feel and respond to their feelings appropriately. World-renowned master sales trainer Tom Hopkins is the chairman of Tom Hopkins International. He can be contacted at 866.347.6148, or by e-mail at firstname.lastname@example.org.
IS YOUR WEB SITE READY FOR SUCCESS? Here we are in 2010, and many dealers are still struggling with their Web sites. Depending upon which statistic you read, 90+ percent of consumers search online and their first impression is what they currently see. So, how do you know if your Web site is out-of-date? It seems every time you turn around, someone is telling you how it is wrong or how they can do it better, but how do you really know? The first step is to take a few minutes and look at the front of your Web site. This is the starting point for your prospects and repeat customers: • Do you have good call to actions? • Are your ads and specials current? One good point to remember is the person looking at your Web site is in control. They are in their enviroment, and will shop at their own pace. They can browse, click and play without any pressure. Keeping this in
mind allows you to build each page with a series of actions to increase your Web site’s conversions to sales. Inventory is your next checkpoint. This is the main reason people are on your Web site and, of course, it is the main reason you are in business. • Do you give that automobile shopper tools they need to make a good decision? • Do you have a vehicle model compare feature? • Does your Web site bring out trusted logos, such as “CarFax,” “CarFax 1-Owner” or “AutoCheck”? • Do you have manufacturer rebates displayed? • Do you give the shopper the ability to compare models? • Does your Web site allow for you to customize the “additional vehicles of interest”?
Inventory is where many Web sites let their dealers down. They do not have the call to actions displayed in convenient places and, more importantly, they do not have the features consumers need to make good decisions. Another key feature of Web sites built on newer Loyalty Driver platforms allow enewsletter content for a large photo display section. connects you to This gives you the social networks. ability to enhance that vehicle with unlimited and large photos.
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The next step is to look at your fixed ops sections: Service & Parts • How does your service page look? • Is it easy to schedule service? • Do you have service specials front and center? • Is it built to increase conversions?
Finance • When you select “Finance,” does it send a message to the consumer letting them know how easy it is for you to help with their next purchase? • Is the credit application easy to fill out? Web sites are more than a place for information, but many Web vendors have not taken the steps to help you be successful. As you review your Web site, ask yourself if your current provider is just a provider or are they a partner? If they are not a partner, then you may need to find a solution that gets you ahead of the technology curve. Last and not least, I have put together a small checklist of features that make a successful Web site. • Are you working off of a template Web site, or is it customized to fit your dealership? • Does your Web site talk with your CRM and DMS system? • Is your Search Engine Optimization automated, and does every page of your Web site have advanced SEO? • Is your inventory updated once a week? Why not every day? • Does your Web site have video? • Does your Web site offer vehicle reviews? • Does your Web site display current incentives and OEM rebates? • Is your Web site built for Google’s new search platform, “Google Caffeine”? • Is your Web site vendor a partner, or just an expense? • And, one of the most critical elements to insure your Web site is ready for 2010, does your Web site have a mobile platform? As a bonus here are two major questions to ask when looking for a Web site vendor: 1. Do they offer all of the features I need to be successful? 2. Did they build the tools themselves or are they third-party products? This is critical because if they are third-party products, you may have issues with your data.
Kendall Billman is the director of interactive marketing for VinSolutions. He can be contacted at 866.892.1447, or by e-mail at email@example.com.
MAKING THE CASE FOR ONLINE NEGOTIATION Negotiation is in our DNA. Little children learn to negotiate before they can even talk. When a baby starts crying because he or she is hungry, they are actually engaging in negotiation. They are willing to stop their crying in exchange for the parent feeding them. When we are all grown up, our needs are more sophisticated, but we still negotiate as our primary means of getting what we want. Nowhere is that more apparent than in automotive retailing. You have a product — in this case vehicles — that one party wants to sell and the other party wants to purchase. The seller wants to obtain the most amount of profit from the sale of the product and the buyer wants to obtain the product at the lowest possible price. Each party tries to position themselves and employ tactics to achieve their goals (some people still employ the crying tactic). This positioning and tactical activity is the process of negotiation. Today, most negotiation happens in person or over the telephone. Online negotiation provides a platform for the same negotiations to take place using the Internet. You are merely using the Internet as the communication channel for the two parties to negotiate. The flow of activity is almost the same as it happens on the showroom floor. The buyer selects a vehicle they are interested in on your existing Web site. They provide information about their trade, along with their finances, if they are seeking financing from the dealership. The dealership takes this information and puts together a proposal that includes price, payment options, estimated trade values and financing terms. The dealer then posts that proposal online where the consumer can view it. The buyer can accept the terms of the proposal or submit a counter offer. The dealer can then counter offer back to the buyer and so on until an agreement is reached or one party decides that a deal is not feasible. If agreement is reached, the appointment is made to test drive the vehicle (if they have not already done so), confirm trade condition/value, sign paperwork,
and make a friendly little visit to the F&I department. Online Negotiation Will Drive Up Conversion Ratio One of the most evident results online nregotiation will bring to your dealership is increasing the conversion ratio on your Web site. I define “conversion ratio” as the number of visitors who traverse your Web site and provide you with contact information. The typical conversion ratio on a dealer Web site is around three percent, and varies by brand. We've seen online negotiation increase that ratio of visitors to leads by 60 percent to 90 percent. In some cases much more, if the dealer is advertising online negotiation in traditional media. The bump in conversion ratio happens almost immediately and can easily double within 90 days. It's amazing how quickly consumers grasp the concept. It's clear that the consumer is more than ready to engage in this process, and why wouldn't they? It saves them time and reduces much of the stress involved with making a high-dollar purchase. Are Online Negotiation Leads High Quality? What is great about online negotiation leads is that the buyers are farther along in the buying process. They are at the point where they have decided on the specific vehicle and are ready negotiate the specific terms to acquire that vehicle. It's no wonder that the closing ratio on these types of leads are as high as 40 percent. Won’t Customers ‘Shop’ Me if I Negotiate Online? Newsflash: They already are. This may come as a surprise, but online negotiation actually makes it harder for them to do this. By using online negotiation, you make it much more difficult for a buyer to compare your deal to the deals of your competitors. If you are negotiating online, you are providing much more than just a price on a vehicle. You are providing the “shopper”
a negotiated price, which represents an accomplishment and value to the buyer. This is because they feel that the price they have negotiated is a good price, since they have worked to obtain the lower-negotiated price. In addition, they have received various payment options to meet their budget, trade values which most consumers realize is an important part of what their payments will be, and financing options all online. What You Know in Advance You can Prepare For Since you know in advance that your competitors cannot or will not provide this same information, the fact that the buyer will attempt to shop your deal becomes less worrisome. When the consumer calls or e-mails the competing dealership, they will be told “Sure we will beat their price, but you have to come on down to get it. ” The reality, though, is the consumer doesn't want to come on down anymore; not without the information they need first. Give them the information, negotiate a fair deal and you will seem them coming into your showroom to pick up their new vehicles in droves. Customers are ready to negotiate car deals online. You will have many more high-quality leads coming from your Web site. They are serious buyers farther down the sales funnel than most leads. By meeting the buyer where they want to do business, you will limit the customers ability to shop your overall deal around with your competitors. The customers are ready to negotiation online. Are you? If you would like to receive a free preview electronic copy of my upcoming book On-line Negotiation is Now a Reality, contact me with the information below.
Jock Schowalter is the president and founder of DealerPeak.com and WideStorm. He can be contacted at 866.869.1108, or e-mail at firstname.lastname@example.org.
Have you ever felt like you were making little mistakes that are costing you tons of money at your dealership? Do you feel like there are hidden profits in your dealership that are just waiting to be uncovered? If you are like most dealers, the honest answer is, YES, Absolutely! It’s a shame for YOU not to make more money, when these dealers do it so easily… Our association with Tewart Enterprises has been nothing short of extraordinary. Our sales volume increased over 30% in the first sixty days of implementation. More importantly, our sales gross increased an average of over 68% over the first five months of implementation. The bottom line result was an increase of over $350,000 net to the Dealership Operation. I have used many sales systems over the years and none of them have ever provided the success that we are experiencing with the Tewart System.
Walter Alfaro, GM Perry Ford
Our grosses went up 30% on the front end, and we added almost 50% in the back end. The best part of that is that our sales also increased over 25% and continue to increase. Gary Minneman Jr, GM Sunshine Toyota Working with Tewart Enterprises is different from other consultants and trainers. We are getting results with very satisfied customers. In addition, Tewart Enterprises Inc is helping us to make our entire business more
$1 more on advertising • Increase your gross profits anywhere from $300 to $800 a vehicle • Make an extra $100,000 or more in your service profits in 90 days or less • Double and even triple your sales and service customer retention • Double your appointments and sales conversion from Internet leads, Web site leads, third party leads My name is Mark Tewart and I am the • Increase your F&I Product penPresident of Tewart Enterprises Inc. etrations by 25% immediately For almost two decades I have been • Discover the one secret that will helping dealers find hidden profits and make your dealership an additional correcting little million dollars mistakes that were or more over the costing those deal- There are a few things next five years — ers hundreds of We have several that every dealer thousands of dolclients who have lars. These almostalready experishould be doing to magical solutions enced this and it make money, turn little miswill make the hair takes into instant stand up on your especially in this cash machines of neck when you economy. bottom-line profit. hear this. sound. With years of successful experience, this team is innovative and up-to-date presenting fresh ideas to keep up with our ever-changing business. I would recommend Tewart Enterprises Inc. to anyone who wants to improve their business. – Doug Mathers Russwood Auto Center, Lincoln, NE
Because I have not met you and do not know anything about your dealership, I can’t say how much money is being left unrealized at your dealership. However, I can say FOR CERTAIN that the number of dollars is substantial and would shock you, if you knew. There are a few things that every dealer should be doing to make money, especially in this economy. The Great News is that I have identified those little mistakes and have big solutions for them. NO BS, just real measurable results that start happening immediately and I guarantee those results. • Sell more vehicles without spending
Call 888 2 Tewart (888 283-9278) or e-mail email@example.com to schedule a private and confidential interview. ***We will share candid and specific information that will prove to you without a doubt what I am saying is true. You will see real dealer examples that support these results. Because of time constraints, there will only be a limited amount of dealers accepted into this program. P.S.: To receive the FREE Special Report “New Generation of Selling” email us at firstname.lastname@example.org with New Generation in the subject line
GOODBYE 2009 Over this past year, we saw things that were previously unimaginable: OEM bankruptcies, franchise terminations and many more dealers who just went out of business because they couldn’t survive the economic challenges. Automotive financing, both retail and wholesale, all but dried up while the wholesale used car marketplace drove up values without a corresponding rise in retail prices. We all should be happy to say “goodbye” to 2009. Although we already see some improvements this year, I think it’s fair to say that there are many new realities in the retail automobile business that will outlast the current economic cycle. One of these new realities is a much more efficient retail automotive market. I’ve been speaking and writing about the new, more efficient market for quite some time, but now the effects of this new market are being felt by all dealers in almost every aspect of their business as manifested by the reduced profitability of most operations. Although dealers have made massive cuts in their expense structures, there are only so many steps that can be taken within the traditional dealership environment. I believe it is necessary for the industry to revisit fundamental assumptions about how vehicles are sold. Specifically, I think that the traditional structure of new, used, F&I and, lately, Internet departments are too expensive and dysfunctional. There is too much complexity in the number and nature of tasks that need to be accomplished with the present organizational structure and individual responsibilities. Take a look at the following list of tasks that need to be performed in order to be successful in new and used vehicle sales: Check storefront, lot maintenance, Web site management, certification responsibility, respond to Internet leads, window sticker management, appraisals, log Internet leads, hiring, online pricing, manage inbound calls, validate URLs, training, TOs, SEM, SEO, PPC, Web site navigation, scheduling, desk
management, vendor relationships, online advertising, wholesale acquisition, classified promotions, daily work plans, cost per lead, wholesale disposition, manage photos, CRM management, compensation, F&I, counting ups, working deals, counting calls, reconditioning, manage descriptions, lot pricing, publish prices. Although this list is not exhaustive, everyone would agree that there is no departmental manager that could possibly possess all of the knowledge and skills necessary to perform or supervise even these tasks. The result is that many critical tasks are not performed at all or on a timely basis, and many others are performed in a substandard manner. These dysfunctions and inefficiencies translate into profit leaks that dealerships simply cannot afford. This reality calls for a re-examination of the variable operations organization. I have written extensively about this. One of three new departments that I propose to the industry is what I call the New Sales Department. Unlike sales departments of the past, I don’t think that we can afford the luxury of maintaining separate new and used car sales and management staffs. Today’s used car is not the used car of the past. It is likely a highly reconditioned vehicle with factory warranty. It is not so different, nor is there enough variable gross profit in either new or used car sales to justify the expense of two separate sales and management staffs. The types of people who are needed to staff my proposed new sales department are very different from those of the past. This is because today, documentation is the new negotiation. Once dealers recognize that vehicles need to be priced fairly relative to the competition, then the competition becomes the selling dealer’s most powerful closing tool. New technology allows salespeople at the press of a button to produce an interactive presentation for shoppers to show how their vehicle compares in price, equipment, mileage and condition
technology allows salespeople at the press of a button to produce an interactive presentation for shoppers to show how their vehicle compares in price, equipment, mileage and condition to identically equipped competing vehicles.” to identically equipped competing vehicles. Although there may be other similar vehicles for less, the system instantly identifies the attributes causing seemingly similar vehicles to be different. Such differences include, but are not limited to, higher mileage, odd colors, less equipment, poor condition or prior accident history. The experience of viewing a live presentation is both engaging and credible and allows both dealers and shoppers to adjust their asking or offer price based on the reality of the live market and the live experience. A single new and used sales department coupled with this new technology allows dealerships to hire individuals as product and market specialists rather than traditional negotiating sales persons. This change translates into more sales, for more gross and a much higher degree of satisfaction on the part of both buyers and dealership personnel while improving operational efficiency. Dale Pollak is an author and the founder of vAuto. He can be contacted at 866.867.9620, or by e-mail at email@example.com.
GETTING IT RIGHT BEFORE RETIREMENT: ROTH IRA 101 Did you know that many people spend more time planning their vacation than planning for retirement? Although there are many ways to save for your retirement, if you are like most people, you aren’t taking full advantage of them. For example, do you understand the basics of a Roth IRA? If not, here’s a little Roth IRA 101. Right now, you may be wondering why you should invest in a Roth IRA if you currently have a retirement plan with your dealership. The Roth IRA has many benefits that other retirement plans don’t have, and chief among them is the fact that any investment earnings may accumulate tax-free. In other words, your Roth IRA has the opportunity to grow without incurring any taxes, and can be distributed to you tax free, if certain conditions are met. While there are advantages to owning a Roth IRA, there are also some rules to think about before you decide this is the account for you. First, not everyone can take advantage of a Roth IRA. You or your spouse must have earned income or compensation — this includes wages, tips or salary. However, be aware that earned income or compensation does not include rental, interest, dividend, pension annuity or deferred compensation income. Second, your modified adjusted gross income cannot exceed certain limits. For single people, your modified adjusted
gross income must be less than $114,000 and $166,000 for married couples filing jointly. Contributions you make to the account are not tax deductible, but may be withdrawn any time without tax or penalty. Before taking withdrawals from your Roth IRA, you need to determine if you are receiving a “qualified distribution.” Any withdrawal that is not a “qualified distribution” can result in income taxes and IRS penalties. For example, any earnings on your principal will be subject to income taxes should you decide to withdraw them prior to the five-year holding period or before age 59 ½ (contact your state department for state taxation rules). In addition, these earnings are also generally subject to a 10 percent IRS penalty.
applies: You have reached age 59 ½, you have become disabled, the funds are used for a first-time home purchase (subject to a $10,000 lifetime limit) or the funds are distributed to a beneficiary after your death. After thinking over the rules, if you are eligible for a Roth IRA you may be wondering how much you can contribute. For 2010, you may make regular contributions that do not exceed $5,000. If you are 50 or older, you can also make “catch-up” contributions of up to $1,000 per year for a total contribution of $6,000. A couple of other important items worth noting: Contributions to your employer’s retirement plan do not exclude you from making contributions to a Roth IRA, and owning a traditional IRA does not prevent you from setting up a Roth IRA, either (although contributing to a traditional IRA for the same year will limit the amount you can contribute to a Roth IRA). Whether or not you decide a Roth IRA is the right retirement account for you, it’s always smart to plan ahead and save money for the future. Never underestimate the importance of saving for retirement and using a variety of investment vehicles to achieve your goals.
Tax and penalty free withdrawal of your Roth IRA earnings for “qualified distributions” can be made once a five-year holding period is satisfied and one of the following
John Freund is the senior vice president of investments for Moors & Cabot. He can be contacted at 866.599.9162, or by e-mail at firstname.lastname@example.org.
SELLING THE CREATIVE EFFORT As I stand out on the service drive of dealerships today, I witness a phenomenon that is present in almost every store. I call this activity “marking your territory.” Let me explain: Imagine a customer driving into your dealership and your service advisor actually goes out to the vehicle to greet the customer. What is the first thing the service advisor does? Approach the customer with a friendly greeting or throw a tag on the dashboard and start writing down numbers? Next, does the service advisor pull open the door and check the mileage or does the service advisor inquire as to the reason for the visit today? Does the advisor pull open the hood and start selling the business or does the advisor actually seek to understand the needs of the customer? A super majority of the advisors that I have witnessed have already marked their territory by doing these staunch hard-selling activities with the customer. The customer has not even told their story yet, or even had a chance to unload their concern to the service advisor, and he’s already selling them a major maintenance. Would you, as the consumer, accept this treatment? Think about your recent holiday shopping. When you went to purchase your new television or computer, did the sales person try to sell you a television? Do you prefer to be sold the big-screen monster when you really just needed an under-the-counter
model? Did the Genius at the Apple Store try to educate you on the product? I challenge you to take a walk out to the drive and listen how your advisors perform the first step in any write-up process. I encourage you to stop trying to sell the business and start building a relationship with your customer. Dealerships need to retain every customer who pulls up to our gates, drives through our drive, and allows us the opportunity to practice our trade with them. We need to take one giant step backward and remember that the customer has choices in business. I suggest that we slow our advisors down to the same speed as the customer and teach them how to listen. Most advisors listen with their mouths running and not their ears. We can’t just stop here. We have to sell the fact that we are listening. Ask the customer for a description of the problem. Identify with them. Educate them on the process at the dealership. Alert them to any charges for the fix. Inform them about the time it will take to make an accurate finding. Finally, thank them for choosing the dealership for the repair needs. Make sure the customer is satisfied before the service advisor ever begins the sales pitch. Once the customer has had the opportunity to tell their story and has acknowledged their satisfaction with this transaction, then the dealership show begins. Now is the time for the dealership to pitch its wares. Now is
the time to educate the customer about the dealership walk-around process. Now is the time to ask the customer about an under-hood inspection. Now is the time to educate our customers about the many wonderful options the dealership offers. This is the time to celebrate with the customer the wise decision they made to select your dealership as the vendor of choice. We call this “Selling the Creative Effort,” which is a process where the service advisors focus on the actionable customer service points of the transaction. Aggressively selling the relationship is the key to the success in sales. By showing up at our location, our customers have decided on us as the vendor of choice for their repair needs. The power of not selling the business is in building a long-term, sustainable relationship between the dealership and the client. Building this client type relationship, and retaining the customers, will only happen by providing a tireless effort to meet or exceed the customer’s expectations in a consistent professional fashion. Your customer will appreciate the effort and stand side-by-side with you through the ownership lifecycle.
Steven Shaw is a partner and performance coach for M5 Management Services, Inc. He can be contacted at 866.201.3043, or by e-mail at email@example.com.
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TEXTING - YOUR GATEWAY TO SALES As a member of the mobile revolution, it’s difficult to think back and imagine the “dark times.” Times when people actually had to keep plans because they couldn’t change at a moment’s notice, having to walk to a payphone if your car broke down instead of calling AAA from the driver’s seat and, possibly the most difficult to fathom, not being available to people 24 hours a day, just in case they need you. Going mobile has made us completely available, although some resist the mobile movement; it’s difficult to deny it has severe advantages both personally and professionally. We have the ability to reach anyone at anytime and we’ve become so accustomed to the instant connection that it almost feels like a snub when someone doesn’t answer. How dare they not answer while they’re on the treadmill or out with their family? “I need a quote and I need it NOW!” You get my drift; you might even be the one making the calls. Taking it further, as if having the ability to call anytime, anywhere wasn’t enough; mobile providers have given us the gift of a messaging service, Short Message Service (SMS) — which is most commonly known as “texting.” Texting, in its most basic form, is the act of sending a text message from one mobile phone to another. The texting capabilities have grown since its initial development, to include multimedia messaging service (MMS), allowing pictures, videos, music, etc. to be shared. Messages can also be sent from an e-mail account to a mobile, or from a mobile to an e-mail account. To say texting has grown a lot in the last few years is a gross understatement; we’re looking at exponential growth. According to Nielsen, the use of texting has risen 700 percent from 2006 to 2009, with more texts being sent than mobile calls made in 2008. With texting accepted as a standard form of
communication among us — it’s definitely time to look at the avenues it can be useful to you and your dealership. Site providers pushed mobile hard last year at the National Automobile Dealers Association Conference (NADA) — it was the future of car shopping and buying. Don’t get me wrong — it is. The development of mobile sites has tapped further into consumers’ vehicle shopping and buying behaviors. I hope it goes without saying, but if you don’t have a mobile version or mobile compatible version of your Web site yet, get on the phone with your provider, right now. The evolution of texting has taken mobile even further, tapping into consumers’ communication cycle. It allows businesses to disperse information to their customers the way they prefer to be contacted, making you available to them at their convenience. The possibilities for dealerships to take advantage of the growth of texting as a marketing tool are innumerable. How Do You Get Started With Texting? You’ll need to find a texting service that can provide all of the services you’re looking for. Don’t worry; they’re out there. Once you find a provider you’ll be ready to begin. Build Your List Texting parallels e-mail marketing in the regulations that need to be followed for best practices. Since this is true, you’re probably more familiar with what you need to do to get started than you might think. To get everything rolling, you’ll need consumers’ permission to begin contacting them via text, just like an opt-in. Similarly, you’ll also need to leave them an opt-out option if they are no longer interested in being contacted. Building your list via text is as easy as running a promotion and incorporating it into your traditional media campaigns. You can set up a promotion such as “Text IMPALA to 89000 and enter to win a 2010 Chevy Impala,” and advertise it in your print ads, TV, radio spots and even billboards. The responses you get from your promotion become your list.
You Have a List, Now What? Start Texting — Once you have a list and a provider, the opportunities to reach out to customers and potential customers are plentiful. Text Vehicle Information — You can assign each vehicle in your inventory an ID or keyword and add it to your traditional advertising. If a customer wants more details, they can text and get the vehicle information back instantly via text. Don’t stop at traditional media either; put the ID/keyword right on the window sticker in the lot. It’s a perfect way to get information out after hours or give the “no pressure” sales pitch. Respond to Inquiries — Setting up a question ID/keyword will allow customers to text “Dealer Question” to your number and a representative will be able to respond to their question instantly. Texting provides the same open communication between customer and dealership, but offers more convenience for both parties. Giveaways — You can run giveaway promotions, like the example above. In many cases, the giveaway promotions can be programmed to select the winner without bias based on a pre-determined formula. The giveaways can be as big as a vehicle or as small as an oil change. Keeping a good variety will keep your customers engaged and eager to participate. Service Specials — If your service department is slow Tuesdays from noon to 3 p.m., there’s a quick way to liven it up. Send a text to your customers with a special offer: “Free tire rotation with oil change” or “1/2 off oil changes for the next hour.” Texting one-time service specials can spike your slow times, keep your departments productive and, in many cases, act as the reminder that many customers need. Once you get started with texting, you’ll start to see the benefits: great returns, ease of use, convenience and cost-effectiveness. It provides your dealership the perfect bridge between your marketing mix of traditional and interactive media. If you have questions on texting or other interactive media products, please feel free to contact me and discuss.
Erin O’Connor is the director of marketing for Dealer HD. She can be contacted at 866.918.1790, or by e-mail at firstname.lastname@example.org. www.autosuccessonline.com
WHAT IS YOUR MOST VALUABLE ASSET? What is your organization’s most valuable asset? Is it the brand you sell? Perhaps could it be the location and condition of your facility? In the end all those elements are important, but without the right team in place, you will struggle to achieve and sustain momentum. People and process separate the highestperforming groups from those that struggle. A clearly defined process can help compensate for limitations in natural abilities and inexperience. Assembling a high-performing team requires your organization to establish and maintain a system for recruiting, selecting and retaining the best talent. Just as you work to maintain adherence to the “road to the sale” in your dealership, you must place the same level of importance to attracting and retaining high performers. There are many accepted benchmarks in our industry that dealers and managers apply as reference points. There are standards that dictate acceptable levels for closing percentage. 4-3-2-1, for example produces a 25 percent closing rate for overall sales opportunities. By comparison, few dealerships hold this same expectation for closing Internet leads. The more accepted norm is often 10 to 15 percent. Fifty percent penetration on vehicle service contracts and/ or $1,000 PVR in the backend continue to be the standard most F&I managers are expected to achieve. So what standard do we hold our managers to as it relates to staffing? If recruiting, selecting and retaining are part of every manager’s job description (and if they are not, they need to be), then what standards or benchmarks have you established and communicated? Last week at your dealership a discussion probably took place regarding the number of opportunities (ups) you worked with and
the resulting sales that occurred. There were conversations regarding the number of RO’s in service, the status of bank contracts still in transit (CIT). But ask yourself this: Did you even ask the management team how many interviews were conducted last week? Bear in mind, while you may be at full staff (no current openings listed), is your team comprised of all “A” players? There are fundamentally two types of players on any team: campers and climbers. In a performance-based business, if the opportunity to hire a climber exists, then why not put a system in place to pursue them? Like anything else you intend to improve, establishing and communicating a standard will be your first step. Start slowly. Have each manager conduct one interview each week with a potential candidate. Even if your yield is only one in 10 applicants, that new player has the potential to be your next top performer. In a market where many stores are operating with as few as 10 sales people, one person can make a big difference. Finding potential candidates for hire is like finding new sales prospects; it requires a consistent effort. Here are a couple of suggestions. First, start with the people you already have. When you examine the cost of finding a viable applicant, you will find that paying out a $500-$1,000 bonus to your current employees is a cost-effective strategy. Obviously you don’t pay unless the new hire works out. Ninety to 180 days of active employment is the standard. Secondly, work with your printer or design team to create a business card that is a “recruiting card.” All managers would then be expected to carry these with them at all times. When you are out in the community, the idea here is to look for someone providing great service and or someone with a great attitude; basically, someone that hustles. Approach them one on one and ask them to come in for a conversation about
getting into the business. Offer to buy them lunch or a cup of coffee. The recruiting card should include a contact number and e-mail, but more importantly it will need to contain information explaining that this is regarding a career opportunity. Applying the “rule of 3’s” will help provide structure and uniformity to the selection process. This approach begins with establishing the standard that all applicants will be interviewed three times prior to the offer of employment. The interviews are to be conducted by three different managers. The last element is the most important. The interviews are to take place on three separate visits to the dealership. Anyone can show up on-time, looking good, sounding good, and yes, smelling good once. Can they accomplish this three times? If yes, then you have a viable candidate. With regards to retention, research what others have done to achieve success. Forbes magazine publishes their list of the Top 100 companies to work for in America. The list changes from year to year. An outside firm creates this list for Forbes by surveying the employees and compiling the results. The Gallop organization has conducted similar surveys. The book Strength Finders 2.0 by Tom Rath is based on some of those surveys. While compensation was certainly one criterion for these surveys, there were many other issues and variables that were measured. Identifying the key to increasing staff retention may begin with conducting a survey of your own. Insight into your current team could prove to increase the value of your most important asset, your people. Kirk Manzo is the president of The Manzo Group. He can be contacted at 800.858.6903, or by e-mail at email@example.com.
MAXIMIZING LEAD ROI It doesn’t take long to figure out that effective online lead generation is closely tied to sales. However, assessing just what constitutes an effective lead — and effective lead generation expenditure — requires a periodic, deeper assessment of the numbers behind your leads. It is likely that more leads equals more sales, but at what cost? What percentage of your leads does your sales team pursue? Do they only pick the low-hanging fruit? What percentage of your leads goes wholly untouched? Why? At what cost? If your sales force favors leads from certain sources and less so from others, it may be time to institute better lead follow-up processes, but it also may be time to reevaluate your lead generation activities and expenditure. For instance, could you be spending a few more dollars on marketing and generate many more sales? Could you spend less than what you spend now, yet close many deals faster? Could you spend the same you do now but get higher profit margins on many sales? What would you pay to achieve those end results? How would you arrive at that figure? Understanding the three key performance indicators of lead quality will help you assess your online sales and marketing strategy: specifically, percentage of leads that convert to sales, average margin per unit, and vehicle days on the lot (other factors could be applied here, as well, but these are the most essential to work with for these purposes). You probably spend good money on leads with aggregators and pay-per-lead programs, but I hope you don’t blindly do so. I hope you know more than the cost-per-lead from each of these sites. You do, right? Cost-per-lead is only an accurate indicator if all of your leads, from all sources, share identical profitability and conversion rates. Without knowing the sources of your paid leads, I can tell you the best and worst probably vary wildly in those metrics. And, some may share similar scores on margin per unit and vehicle days but have very different conversions rates.
Regardless, I imagine you would cheerfully pay higher per lead from a source that boosts all three. But what if a clear leader doesn’t produce enough leads for you? How do you assess the remainder of the pool? Leads from one source may have higher profit margins, while those from another source may have 3 higher conversion rates and fewer days on the 2 www.autosuccessonline.com
lot. How do you identify those other top lead sources?
particularly if your competition is posting 10 or 12.
Higher conversion rate means easier sales for your salespeople. Fewer days on the lot mean less overhead, and your inventory can be refreshed more often to attract new customers. Higher profits mean more money for the same effort. All have great merit.
Quality of Photos: Never post photos with glare, that are off-center, that show distracting, extraneous objects in the background, that are not in sharp focus, dark/ muddy spots, no detail, etc. Professionallooking photos go a long way
Profitability is dictated by supply and demand. Go for leads that produce highest conversion rates (even if their profit margins are typically middle of the road) because they automatically deliver higher margin potential. When more people are buying from you, you’re in a better position to call the pricing shot. The more customers in front of your salespeople, the higher the probability of more deals closing whose margins hits the sweet spot.
Well-written vehicle descriptions: Would you just read the window stickers to your customers? Computer-generated — or worse, no — vehicle descriptions are painfully dull and do not entice the customer into taking action. Even if just the top five or so differentiating features of each car are written to generate emotion and appear at the top of the page, that will put viewers behind the wheel of that car and entice them into taking action.
But Wait! Garbage In, Garbage Out… I would then add an “accountability” section and challenge the dealer to analyze the quality of their ads with every source — quality/ quantity of photos, handwritten emotional description vs. computer generated (or no) description, video, call to action, etc. — before analyzing its results. Before you can truly analyze lead quality, however, you need to assess the quality of your vehicle display pages. Regardless of where they reside, do they do what they’re supposed to do, which is engage Internet browsers and bring enthusiastic, ready buyers into your showroom? Posting your inventory on a premium site will still yield far fewer — and lower quality — results if your vehicle display pages are subpar and uninteresting in comparison to your competition. Likewise, posting high-quality, consumerfriendly, and interactive pages on any number of lesser-known and free sites, when your competition doesn’t, automatically gives you a tremendous advantage. Your cars will always look stand out. Put the two together — posting compelling, content-rich vehicle display pages across all kinds of Web sites — and your lead generation ROI just jumped significantly. What factors determine a quality vehicle display page? Number of Photos: 30 or more reflects earnestness and transparency on your part,
Video: Through video, every car — and your dealership — comes alive. With voiceover options, you can convey excitement, sincerity, sensitivity, trustworthiness and a myriad of other character traits your audience wants to see in you. Wrapping vehicle videos in a dealer intro increases the likelihood that viewers will remember who you are. It’s also a great way to make the call to action. Plus, when they share it with their friends on Facebook, your dealership name is getting some great, free exposure. Call to action: Vehicle display pages that don’t list incentives, offer browsers the opportunity to start the trade-in process or apply for financing right there in their jammies at 10 p.m., are missing the boat on having customers walk into the showroom already knee-deep in the deal. The more ways you allow the customer to say “OK! Let’s do it!” before you’ve even shaken their hand, the greater the quality of that lead. If every car on the lot isn’t an active online gateway into your showroom, it isn’t working for you. In that case, you’ll have to spend far greater amounts of money generating leads and attracting shoppers. The good news is, with a grasp of lead quality and ROI, the Internet marketing team can beef up vehicle display pages and create a shift in lead performance by realigning the marketing spend to profit potential. Tim James is the director of sales with HomeNet, Inc. He can be contacted at 866.924.6573, or by e-mail at firstname.lastname@example.org.
IS YOUR DETAIL DEPARTMENT A PROBLEM? Do you have problems with your detail department? You will know simply by looking at the entire dealership and then looking at the detail department. Is it a striking contrast to the other departments that are clean, organized, well-run and staffed with well-groomed, efficient personnel? If you are like many dealers, you are aware of the problems in the detail department but you don’t do anything to change them. For a number of reasons you have learned to live with the problems rather than finding solutions. Hopefully, if you read this article you will find some answers as to why you have problems with your in-house detail department and what you can do to solve them. Most dealers have a faulty paradigm about detailing. Most see the detailing department as the “Cinderella” of the dealership. It exists and is needed, but it is largely ignored and disrespected by most everyone in the dealership. Why else would it look like it does in an otherwise organized and pristinelooking dealership? If a dealer truly wants to eliminate the problems, they must be committed to the importance of the detail department as a part of the entire dealership operation. This means insuring that the proper management time is devoted to this department, that it has the latest and best equipment technology, that it is supervised by a competent manager and, finally, staffed by well-trained, competent employees. Ask any business owner the most important aspect of their business and they will tell you people. A dealership is no different. It is top salespeople who sell the cars, well-trained technicians who service them and it is highly skilled managers who supervise these departments. Unfortunately, the detail department in most dealerships has none of these. If there is a person who is given responsibility to oversee the detail department, it is usually someone who does not want the job — the used car manager or the service manager who does not see it as a part of their responsibility and does not want the responsibility for a pigpen, manned by unmanageable detailers.
In my 30+ years in the detail business — several as the owner of two detail centers — I can say without reservation that “experienced” detailers are not the type of personnel anyone would hire anywhere in their business. In fact, I have pointedly asked dealers themselves “Would you hire this type of person for a position anywhere else in the dealership?” The unequivocal answer is “no.” So why do they continue to hire them for the detail department? Most would say, “experience.” The problem here is that their experience is only good if you let them do what they want. In other words, each detailer in your dealership is in charge of what they do and how they do it. So, who is really in control of the detail department? Many dealers kid themselves into thinking they are in control, but closer observation shows the detailers are really in control. This type of situation was what caused Mike Gold of Gold’s Chevrolet-GMC in Newport, Oregon to say to me, “I’ve been a slave to my detail department for years.” What you see in most dealership detail departments is truly primitive technology, which results in disorganization, inefficiency and poor-quality work. It stands to reason that if the dealer doesn’t really care about the detail department, they certainly aren’t going to invest any money in modern technology and equipment. Even if they do care, what can they do if they are not aware of the new technology that is available to improve things? The biggest culprit in any detail department is the manual handling and use of chemicals in plastic squeeze and spray bottles. Take a look: chemical bottles lying around here and there, unmarked and often uncapped? This is an OSHA violation that could cost you thousands of dollars in fines; it results in chemical waste and theft, as well as chemical misuse, which can result in an expensive mistake on a high-end vehicle. How are carpets and upholstery cleaned? Typically with a bucket of shampoo and a nylon scrub brush. Result? Inadequate cleaning, wet carpets and upholstery, smells and mold. Vacuuming is done with a $50 shop vacuum.
I ask, “Is this high-tech equipment to be used on a $25,000+ vehicle?” Yes, dealers are purchasing extractors (carpet and upholstery steam cleaners.) However, if you have only one unit for a shop with three or more bays, you have inefficiency and distraction because you will always have detailers “waiting for the extractor.” You need to have sufficient equipment to keep everyone working. In addition, these extractors are only one part of carpet and upholstery cleaning. You need pneumatic friction shampooers and vapor steamers to be able to clean any interiors. Then, there is the paint. Few detailers today know the difference between single stage and clear coat-base coat paint finishes. They do not know how to identify paint finish problems, and do not know the proper tools, pads or chemicals to use to correct the problem without swirls. The typical paint finishing tools are archaic. The 10-pound electric buffer and wool cutting pad were great for lacquer type paint finishes of the 40’s and 50’s, but are not for today’s clear coat finishes. This discussion could go on, but suffice it to say, there are not many people in dealerships today that are aware of the new, advanced technology and methods available to upgrade a detailing operation to keep the shop organized, efficient and turning out quality work in a reasonable period. This article might have raised more questions than it answered, and it may be harsh in tone, but that was intentional. As an advocate for the professional detailing industry, I have a passion to see this industry grow and prosper. And, because dealers are so critical to the growth of the industry, I challenge you to look seriously at the “problem child” in your dealership and realize that you can solve the problems and create a “professional appearance department” in your dealership; however, you have to see and care. Bud Abraham is founder and president of Detail Plus Systems. He can be contacted at 866.205.8499, or by e-mail at email@example.com.
FUTURE SHOCKS It is not necessary to change. Survival is not mandatory. – W. Edwards Deming Last month, we transitioned to a new year — the last in a tumultuous decade that began in January 2001. We opened the decade with more than 22,000 franchised dealerships in the United States; today we are on track to close in the neighborhood of 18,000. General Motors was the largest manufacturer of vehicles on the planet; today it’s Toyota, with Volkswagen in hot pursuit. The U.S. was the world’s largest new vehicle market in 2001; today it’s The People’s Republic of China. Plymouth, Oldsmobile, Pontiac and Saturn were high profile brands; today they are notations in the history books. If you are a survivor of the first decade of the 21st century, congratulations. But the second decade opens in less than a year and most of the forces that drove change in recent years continue unabated. Are you prepared? It is not the strongest of the species which survive, nor the most intelligent, but the one most responsive to change. – Charles Darwin Brute strength guaranteed success to neither manufacturers nor dealers, and plenty of bright players are no longer in the game. Looking forward, a particular combination of franchise and location that has been successful for the past 50 years may no longer be viable by 2015. Business practices and
methods that worked in the past may become progressively less effective. Dealerships and individuals who manage change best will accrue competitive advantage over those who do not because the ability to deliver the right products (including services) to the right customers in the right location with the right processes at the right price is never a constant, but a constantly evolving matrix of conditions. The ability to cope with change will be the ability to survive; the ability to manage change will be the ability to prosper. There is nothing so useless as doing efficiently that which should not be done at all. – Peter Drucker The managing of process has become one of the major themes of management science in the late years of the 20th century and early into the 21st. It has proved to be a valuable point of focus and produced significant benefits. Determining the best way to do something, then enforcing the process to ensure that it is consistently performed by our people is well and fine, but too often it fails to address the question of whether that thing really needed to be done in the first place. Or, whether the process that added value to what we did yesterday continues to produce value today — and will continue to do so tomorrow. This is what Drucker often called the difference between doing things right and doing the right things. He believed the survival and prosperity of an enterprise depended on the ability of its managers to focus on doing the right things.
It is only the last turn of the bolt that tightens it — the rest is just movement. – Shigeo Shingo Customers expect to pay for the things we do that create value for them. On the other hand, they resist paying for activities that produce no visible value. Within your processes, you will have activities that produce value customers are willing to pay for (having a particular model in stock) and some that do not (time spent looking for keys misplaced by the last salesperson who showed the car). Some activities that produce no direct value for customers (such as locking the dealership at night) might be considered necessary, but most non-value adding activities are simply waste. When you learn to see the waste in your operation — and are ruthless in its elimination — you reduce your costs and, just as importantly, reduce the time/effort required for customers to spend money with you. We can hope that unit volumes improve in 2010 over last year, but many of the forces that have reshaped the industry will continue even as sales rebound. Some dealerships and individuals will ride those forces to prosperity, many will fight them to a draw and survive, and others will be overwhelmed by a future for which they are unprepared. Which describes you? Steve Brazill is the chair of automotive marketing for Northwood University, Texas Campus. He can be contacted at 866.861.1515, or by e-mail at firstname.lastname@example.org.
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Protective is seeking a Divisional Vice President – Sales within our Asset Protection Division responsible for the Northeast Region of the U.S. Excellent opportunity within an industry-leading company providing ﬁnancial security through our suite of F&I products. Candidate must be able to manage dual distribution sales network; manage, mentor, coach recruit & train a direct employee sales force; capable of delivering annual revenue & proﬁtability improvements; recruit and manage an independent agent distribution network; develop client accounts; create new client relationships; administer regional affairs. Candidate must possess 5-7 years sales mgmt. exp. in an auto environment; bachelor’s degree preferred & strong focus on customer service. Have excellent listening, oral & verbal communication; negotiation/conﬂict resolution; problem solving, presentation, organization & planning skills. We offer a comp. salary with unlimited income potential; 401k w/matching co. contribution; cash based pension; medical/dental/vision. For more information call 866.478.9241 or visit www.protective.com/jobs.asp