Did They Do It?
Lindsay Volkswagen became the market leader in 8 categories in 6 months
New Car Sales CPO Sales Customer Experience Index Fix It Right the First Time Google Rating Edmunds Rating Cars.com Rating Largest Inventory
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Lindsay Volkswagen became the market leader in 8 categories in 6 months
Did They Do It?
DennisMcGinn dialing-in used car turns
DealerPanel the role of service in customer retention, part 2 RobDunn don’t underestimate the importance of parts sales
nine things you can do right now to increase your data security
“Data security starts at your dealership with the policies, processes and procedures that you establish. Here are nine things you can institute to protect your dealership’s data.”
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DavidLewis why your customer is so defensive
SeanV.Bradley how much money do you want to make? really? why?
GlennPasch customer service is not “if only i did...”
Hannah Philpott, Media Director email@example.com
EdLouis the truth about app development
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JeremyAnspach focus on the foundation and win the click
DebbieDrury The ever-changing face of dealership marketing
Brian Ankney, Account Manager firstname.lastname@example.org
“Today’s dealers can have face-to-face conversations with consumers researching vehicles on their dealership’s Website, similar to an actual showroom visit. And dealers can observe the behaviors of online consumers on their Websites to ensure personnel are poised and ready when consumers want to interact online.”
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MarkBradley & RosalindVazquez Dealers accelerate lead follow-up with artificial intelligence
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SusanGivens The FTc’s operation steer clear: How to Protect Your Dealership from the Recent Crack-Down on Automotive Advertising
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JimmyVee & TravisMiller how much is digital dependency costing your dealership?
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The ftc’s operation steer clear:
How to Protect Your Dealership from the Recent Crack-Down on Automotive Advertising
As you may have seen in the news recently, the Federal Trade Commission has cracked down on dealerships that they believe have not been in compliance with Regulation M and Regulation Z. Reg. M and Reg. Z involve proper disclosure of lease terms and credit terms, respectively. Reg. M is part of the Consumer Leasing Act and Reg. Z is part of the Truth in Lending Act. Some dealerships have even had legal action taken against them and will be placed under a 20year probation with the FTC. If dealerships violate the terms of the settlement, the FTC will inflict a fine of $16,000 a day per violation. Reg. M is intended to protect consumers by requiring advertisers to properly disclose lease terms clearly and conspicuously. Under Reg. M, advertisements that state an amount of payment must prominently disclose information such as amounts due at signing and a statement of whether or not a security deposit is required, as well as the specific periods, amounts and due dates of payments involved in the lease terms. Reg. Z is intended to protect consumers by requiring creditors to offer terms that can or will be arranged. In advertisements where payments, down payments, amount of finance charge or term of repayment is mentioned, a clear and conspicuous disclosure is needed. This disclosure must contain down payment details, repayment obligations and the “annual percentage rate,” using that term. A recent article quoted Jessica Rich, director of the FTC’s Bureau of Consumer Protection, as saying, “we’re always on the lookout for deception in the auto marketplace.” The Commission files a complaint against advertisers when it has “reason to believe” that the law has been or is being violated, a very open-ended reason to take action. In fact, the initiative to crack down on misleading advertisers is part of an ongoing effort by the commission called “Operation Steer Clear” that is specifically targeting automotive financing. Dealers often advertise in many different places, and displaying the proper price on each ad can become a management nightmare. This is why many cases that the FTC has brought into the courtroom have taken dealers by surprise. Since the FTC has such unrestricted reason to take action under Reg. M and Reg. Z, this leaves dealers with little room for error. Dealers are ultimately responsible for their advertising and will be reprimanded if they are not compliant with specific FTC laws. This is why it is so important to work with vendors and advertisers that are also complaint — and understand the repercussions if that compliance isn’t met. “We understand that vehicle financing can be complicated,” Honda of Hollywood said in a statement describing their financing process, “and so we work very hard to ensure that all contract terms are carefully and completely explained.” This “Operation Steer Clear” initiative by the FTC is seeking dealers who are not proactive in displaying proper lease and credit disclosures that are required in the media. While most dealers rely on advertising firms and dealership staff to manually create and distribute this information, automated solutions are available. While most general managers and dealer principles are vigilant, they physically cannot have their eyes and ears everywhere. Therefore, they must rely on internal management and vendors to communicate payments and financing properly and legally.
You could be missing your next sale.
“Most dealers mean well, but do not have the oversight and expertise necessary to manage payment advertising disclosures,” said Jerry Thompson, president of www.Offerlogix.com, a company that offers patented lease and loan payment advertising technology for car dealers, OEMs and digital marketers. “Why face the uncertainty of improper disclosures, possible sanctions and legal expenses over something that is relatively simple and inexpensive to manage with the proper tools?” Other companies that work with OfferLogix include Team Velocity Marketing, Tier10 Advertising, Dealer.com and DealerAPP Vantage for mobile devices. It’s important for dealers to be proactive and get ahead of this crackdown so there is no confusion or inaccuracy in the media between the vehicle, the customer and the monthly payment. Susan Givens is the publisher of AutoSuccess. She can be contacted at 877.818.6620, or by e-mail at email@example.com.
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four reasons “a loss” in used vehicles is really a gain I’ve been noticing a dividing line between dealers in recent months as I evaluate their used vehicle inventories and performance. The first group of dealers tends to struggle with over-age inventory. As I dig deeper, I’ll often see they’ve got decent cars, and their asking prices aren’t completely out of line with the market. Yet, the aged cars (and wholesale losses) never seem to go away. The second group of dealers tends to have “clean” inventories from an age perspective. Unlike the first group, these dealers are super strict about selling cars before the 30- or 45-day window they allow for each vehicle as a retail unit. When I meet with this group of dealers, aged inventory is noticeably absent from our discussions. Instead, we spend our time talking about how they can find more cars, hold more gross at the desk and speed up processes that increase inventory turn rates.
end-of-year wholesale write-down) in the past five years. His response: “Dale, the difference is this: In today’s market, if you want to make more money, you have to take a little less. For me, this means I’ll take a loss on a car today to create an opportunity to use my investment to make more money tomorrow. I didn’t used to think this way, and I’ll bet dealers with aged cars still operate the way I used to.” Indeed, dealers with aged-inventory problems typically admit, often with a little prodding, that “avoiding a loss” is a chief reason they continue to hold onto used vehicles. As one dealer put it, “It makes me sick to my stomach when we lose money on a car.”
I understand this operational mindset because it’s the same one I had as a dealer. Unfortunately, times are different today and, in most cases, “avoiding a loss” today translates to aged units and missed opportunities. Interestingly, the differences between the two groups of dealers do not To help these dealers, I offer four reasons why “taking a loss” on used depend on geography or franchise. I’ve seen competing dealers with the vehicles can be a good thing: same franchise in the same market. One struggles with aged inventory, 1. You open the door for a better investment outcome. I’ve modeled the the other doesn’t. financial performance of two different dealers with 100 used vehicles in Why, then, are the differences between these dealers so distinct and inventory. One dealer accepts an occasional loss and holds firm on a 45day age policy, and the other doesn’t. On average, the dealer who accepts dramatic? an occasional loss at retail achieves a better return on investment (ROI) I took this question to a New York dealer who hasn’t had an aged car (or on a per-vehicle basis than the dealer who “avoids a loss” and ends up with aged units. The analysis also affirms the tried-and-true reality that retailing used vehicles when they’re fresh maximizes gross profit. 2. You create more dealership-wide profit opportunities. A big reason the New York dealer believes that “to make more money you have to take a little less” flows from his understanding that every used vehicle represents four opportunities to make money — in parts, service, F&I and the used vehicle department. For him, the combined “total gross” opportunity each car generates in the dealership is more important than avoiding the occasional front-end loss. As he puts it, “The money I make across the dealership more than makes up for the $300 to $500 front-end loss I occasionally take to retail a car that’s run its course in the market. But I’ll be honest, it took me awhile to get off my fixation on front-end gross and see the whole picture.” 3. You eliminate a barrier to improve sales volume. As a dealer, I hated it when I realized my used vehicle inventory had too many of the wrong cars. Because I, like other dealers, had a deep aversion to front-end losses, I often felt like we were stuck until we could either retail or wholesale the unit and move on. Back then, I didn’t fully recognize how this operational mindset made my goal to increase used vehicle sales volume seem so elusive; I was stuck on a treadmill with my capital tied up in aged inventory.
Dale Pollak is the founder of vAuto and a best selling author. He can be contacted at 866.867.9620, or by e-mail at firstname.lastname@example.org.
4. You sleep better. “I don’t lose sleep anymore because my team and I do everything we can — from getting the right cars to pricing and promoting them right — to avoid losses in the first place,” the New York dealer says. “I’m a retailer and we’re all human. We’ll make a mistake and the occasional loss is inevitable. The difference is that I’m now more concerned with ‘turn and earn’ in used cars than ‘avoiding a loss.’”
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New Car Sales CPO Sales Customer Experience (CEI) Fix It Right the First Time Google Rating Edmunds Rating How Lindsay VW achieved Cars.com Rating eight No. 1 titles in 6 months MID-ATLANTIC Largest Inventory(New, Used and CPO)
A Culture that Wins Lindsay VW has defied the odds by growing in sales and profitability while most New Car Sales VW dealers have been losing ground over the last 12 months. Despite a tough year for CPO Sales
Volkswagen sales in the Customer U.S., Lindsay Volkswagen, located in the Washington DC area, Experience (CEI) Fix Itand Right the First increased their overall sales became No.Time 1 in the Mid-Atlantic Region for VW in Google Rating
every major category forEdmunds the first time. They also doubled their national rankings for VW Rating Cars.com Rating
inMID-ATLANTIC CPO sales, finishing fifth in theInventory(New, nation. Largest Used and CPO)
New Car Sales CPO Sales Customer Experience Index Fix It Right the First Time
Google Rating Edmunds Rating Cars.com Rating Largest Inventory
New Car Sales
(New, Used and CPO)
Swimming Against the Tide Lindsay’s success is more impressive because VW dealers have been under a lot of competitive pressure, as sales have decreased by seven percent in 2013 and dealer profitability for VW franchises is a lot lower than other brands they compete with, according to JD Power. This is largely due to VW’s aged product portfolio that is priced at a premium compared to other newer models from Toyota and Honda, which often offer more options for less. For this reason, VW’s loyal customers have not been so loyal and their retention rates have slipped to 47 percent below the industry average and seven to eight points less than Honda and Toyota. 2014 is not a good year to slip in retention because there is a record number of consumers returning to market due to increased lease rates from a few years ago. Automotive News also revealed that many car companies were planning to aggressively conquest customers driving models with lower retention rates, which makes VW a prime target.
Lindsay No. 1 in Eight Categories Despite competitive pressures, Lindsay VW has grown in sales, market share and profitability and is No. 1 in the Mid-Atlantic in almost every measurable category. Like many other VW dealers, Lindsay started the year off slow, but they finished strong and became No. 1 in the Mid-Atlantic in new, used and CPO car sales, Customer Experience Index and “Fix It Right The First Time” scores. Clearly, their strategy has paid off and this article explains how they did it.
Lindsay’s New Strategy “We reorganized our people, processes and marketing to improve our sales, retention and CSI, which improved our overall profitability,” said Jerry Holloway, Lindsay VW’s GM and an accomplished automotive veteran who has experience at multiple dealerships, including Saturn, Lexus and VW. Holloway refined the dealerships processes to create a better customer experience and shifted their marketing strategy from less-efficient mass marketing to target in-market consumers who have a higher probability of buying or servicing a VW. “JD Powers says that over 90 percent of consumers research online and compare up to eight models before buying. It is hard for consumers to experience the value of German engineering on a keyboard,” said Holloway. “We don’t want to be ruled out in a side-by-side comparison where price and options eclipse the quality of our premium product. That is why we bring customers into our showroom before they start to shop, so they can see, hear and feel the difference of the
Annual Growth Rates (2012-2013) In an up market, Volkswagen has lost seven percent of the market share, due in part to their aged product portfolio that is priced at a premium compared to +11% the newer models available through their top competitors.
+7% +3% +3% +3% -7% -7% -7%
Brand Loyalty Rates According to Polk, Volkswagen had a 47 percent retention rate in 2013, which meant that 53 percent left the brand for a competitor. VW’s retention rate is seven points lower than Honda and eight points lower than Toyota. 2014 is a bad year to slip in retention, because there is a record number of consumers returning to market and car companies are conquesting customers who drive models with lower loyalty rates. FORD 61.3% MERCEDES-BENZ TOYOTA FORD HONDA MERCEDES-BENZ CHEVROLET FORD TOYOTA BMW MERCEDES-BENZ HONDA NISSAN TOYOTA CHEVROLET HYUNDAI HONDA BMW SUBARU CHEVROLET NISSAN LEXUS BMW HYUNDAI INDUSTRY AVERAGE NISSAN SUBARU KIA HYUNDAI LEXUS VOLKSWAGEN SUBARU INDUSTRY AVERAGE LINCOLN LEXUS KIA AUDI INDUSTRY AVERAGE VOLKSWAGEN CADILLAC KIA LINCOLN ACURA VOLKSWAGEN AUDI INFINITI LINCOLN CADILLAC LAND ROVER AUDI DODGE ACURA CADILLAC PORSCHE INFINITI ACURA JEEP LAND ROVER INFINITI GMC DODGE LAND ROVER BUICK PORSCHE DODGE VOLVO JEEP PORSCHE MINI GMC JEEP MAZDA BUICK GMC JAGUAR VOLVO BUICK CHRYSLER MINI VOLVO MITSUBISHI MINI MAZDA MAZDA JAGUAR JAGUAR CHRYSLER CHRYSLER MITSUBISHI MITSUBISHI
61.3% 58.6% 51.8% 61.3% 55.5% 51.4% 54.8% 58.6% 51.2% 51.8% 55.5% 51.0% 54.8% 51.4% 50.4% 51.8% 51.2% 50.4% 51.4% 51.0% 48.8% 51.2% 50.4% 48.7% 51.0% 50.4% 47.0% 50.4% 48.8% 46.8% 50.4% 48.7% 44.7% 48.8% 47.0% 42.7% 48.7% 46.8% 41.8% 47.0% 44.7% 40.4% 46.8% 38.5% 42.7% 44.7% 38.0% 41.8% 42.7% 37.5% 40.4% 41.8% 36.5% 38.5% 40.4% 35.1% 38.0% 38.5% 33.1% 37.5% 38.0% 33.0% 36.5% 37.5% 32.9% 35.1% 36.5% 30.5%33.1% 35.1% 29.9% 33.0% 33.1% 29.4% 32.9% 33.0% 30.5%32.9% 30.5% 29.9% 29.9% 29.4% 29.4%
2013 Lindsay VW Sales (Compared to VW National) Before Lindsay Volkswagen changed their strategy, their market share was down like most VW dealers. After implementing their new strategy to retain and resell their customers, they out-performed VW nationally and became the fastest growing CPO dealer in the country.
17%% +17 2013
JAN 2013 2013
JULY PROGRAM PROGRAM START
Lindsay The Lindsay Volkswagen Upgrade Program notifies VW owners when they can upgrade into a better VW for a better payment. Customers are notified via e-mail, mail, phone and when they come in for service. The dealership receives alerts when eligible customers are scheduled to have their vehicles serviced so they can present an upgrade analysis that shows the benefits of getting a newer car for a lower cost of ownership. TeamVelocityMarketing.com, the administrator of the program, provides Lindsay VW with the technology, the tools and the training to implement the program.
German engineering. We understand that some less-expensive competitors have new models that look good online, but none of them drive like a VW. When we bring them into our showroom before they shop, they drive and compare our new 2014 Passat to their old Passat, rather than to the new Camry and Accord,” added Holloway. “And, if they decide to drive the others, now they have the feel of a VW to compare it to.”
Retention Strategy VW has an amazing brand and an enthusiastic base of customers who absolutely love the product. But VW loyalty rates remain below the industry average and their aged product portfolio could drive retention rates south. “Our first goal was to increase our sales by increasing retention, because our customers are our most valuable asset and its easier and cheaper to sell to a VW owner than to someone who doesn’t know the brand” said Holloway. “I like to learn from everyone, so I visited Paragon Honda to find out how they were selling 100+ additional vehicles a month out of their customer base and in their service lane. They were promoting a Vehicle Exchange Program to their customers and we implemented something similar for our VW customers.” Lindsay started a retention program called the “Lindsay VW Upgrade Program” that notifies all their customers when they can get a better car for a better payment before they begin to shop. “We succeed when our customers are driving away in a 2014 VW before they ever see the new Camry or Accord.”
Lindsay VW Upgrade Program
Blackburn, a partner of Team Velocity Marketing.
“I would say it’s been amazing to see how well our customers and employees have reacted to the program,”Holloway said.“Everybodyjustgetsit.Whena customer comes in, the deals are easy because all the terms are pre-calculated and are on the mailer or e-mail print out that they bring in. We sold 35 more vehicles this December over last year, and the Upgrade Program generated 41 sales, which is 24 percent of our sales for the month. Since the customer can get a better car for a better payment, there is little to no negotiation. The average gross profits are higher on upgrades. We also source trade-ins for less than auction and then sell a CPO vehicle for a healthy gross profit for used cars and for service when they recondition the vehicle. Our average internal RO to recondition a CPO is approximately $1,500, which is considerably higher than the $200 per RO average for a “The program is not a hard sell; we simply notify customer pay.” consumers that they are eligible to get a newer vehicle for a lower cost of ownership,” said Lindsay’s new strategy generates profitable Holloway. “We present them with an upgrade revenue for three profit centers: new, used analysis that showcases the benefits of upgrading, and service. “We’ve seen an increase in the including lower repair costs and free maintenance.” number of CPO sales because we have While not every customer buys the first sourced so many high-quality, low-mileage through the program,” month, they continue to get monthly trade-ins statements that let them know all the vehicles Holloway said. Lindsay is the fastest that they can get for a similar or lower monthly growing CPO dealer in the country payment. Each customer also gets their by selling 104 additional units compared to own personal portal where they can view 2012, for a total of 500 CPO sales in 2013, all the vehicles they can upgrade into for which made them the No. 1 CPO dealer in a lower payment and they can sort them based the Mid-Atlantic and the top 20 in the nation on what they are looking for,” added Budd for the first time. “Consumers have options to upgrade their phones, hotels, rental cars and flights, but no one has offered a program for the automotive industry,” said David Boice, owner of Team Velocity Marketing (TeamVelocityMarketing.com), the company that created the program and fulfills the marketing for Lindsay and Paragon Honda. The VW Upgrade program notifies every VW owner that they are eligible to upgrade to a better VW for a better payment. Customers are notified via e-mail, mail, phone and when they come in for service. The dealership also receives alerts when eligible consumers are scheduled to have their vehicle serviced. “The program is our most profitable strategy because we sell a new car and generate a VW trade that we can certify with an internal repair order and quickly retail for a good profit,” said Holloway.
“...All the terms are pre-calculated and on the mailer or e-mail print out that they bring in. We sold 35 more vehicles this December over last year and the Upgrade Program generated 41 sales...” Jerry Holloway General Manager Lindsay Volkswagen
Consumers who are eligible for the Lindsay VW Upgrade Program view an upgrade analysis that showcases all of the benefits of getting a newer car for a lower cost of ownership.
The strategy has worked so well with VW owners, Lindsay is now going after other makes and models. Lindsay’s conquest strategy notifies other brands customers when they are eligible to upgrade into a new VW with attractive offers on the most relevant models. To get the highest return on marketing spend, Lindsay targets customers who drive models that have low retention rates and a higher probability of switching to VW. “Most VW dealers make a mistake when they try to conquest Honda and Toyota owners because their conquest rates are very low, especially now that they have so many new models,” said Sean Wolfington, a partner at Team Velocity Marketing. “You get a better result when you target models with a higher switch rate to VW. For example, the Mazda 3 and the Mini Cooper are proven to have two times the probability of leaving their brands to buy a VW compared to Honda and Toyota.”
Another core component of Lindsay VW’s success is the way they stay in contact with their customers by thanking them and asking for referrals and online reviews, which helps to build and protect their positive reputation online. As a result, Lindsay VW has the market’s highest reputation ratings on Google, Edmunds and Cars.com. A recent Group M Study validated the importance of this, as 76 percent of consumers use a combination of Web search and social media as their first step before making a purchase, and 70 percent of online consumers report that they consult reviews before purchasing.
“It is great to be No. 1 in anything that you do, especially in a competitive business like ours,” said Holloway. “Our people are very proud to be working at the No. 1 VW dealership in the region. For the first time in our history, we are the No. 1 VW dealership in new sales, CPO sales and customer satisfaction for our region in 2013. It’s a great feeling for all of us.” Most of the growth occurred during the second half of the year, when Lindsay met all its new car objectives from VW for five of six months and sold a lot more than its CPO objectives every month because of the steady stream of VW trades that their upgrade program generated. “The program works and we will continue to make it better next year,” Holloway said. “We aren’t going to see any major product changes to our core models, so we are going continue to protect our customers while conquesting our competitors. The good news is that we are expecting a lot of VW owners to return to market in 2014. Our goal is to reach them early and often with our upgrade program. We will continue to improve our people and processes to deliver a world-class customer experience. We would love to maintain our regional leadership postion and become the second-largest CPO dealer in the U.S. We look forward to a great year.”
70 percent of online consumers consult reviews before purchasing
Better Customer Experience “We monitor and measure every single ad campaign and call that comes into our dealership, whether it’s for sales or service,” said Holloway. “If the call isn’t handled properly, my management team is alerted within minutes to save the deal before it’s too late. Advertising is expensive and we get more calls than showroom visitors, so we don’t want any opportunities to fall through the cracks.” Lindsay uses a call-monitoring system that tracks their advertising, employees and how their customers are treated so they can improve their people and processes and contact customers who get mishandled. “We receive daily, weekly and monthly reports from Call Revu (CallRevu.com) that help us adjust our ads and make the most of every opportunity.”
the truth about app development
Mobile technology is one of the biggest advantages open to dealerships looking to gain an edge over their competitors. Mobile apps are at the forefront of this trend. The mobile app space is rapidly growing, with more than 50 billion app downloads in 2013. By 2017, app downloads are expected to grow to more than 200 billion. An app for your dealership helps you perform certain functions necessary for brand awareness and excellent customer service, so dealers need to spend the most time selecting the right app development company.
Mobile app development is not a one-time activity. Apps go through many evolutions and cycles based on constant feedback from the users. This entails continuous updates and work on the app. You need to select someone who won’t abandon you once the initial development is done and the app is launched. You need a developer who will stick with you through the lifecycle of your app.
App users can easily change their minds about an app, so making sure they have a good experience with your app is vital. A negative experience will impact your company’s brand, as well as your bottom line. You want to select a mobile partner that will provide you with an innovative design and an efficient mobile environment. How an app looks is just as important as how it works. Look at app developers who can add value to the usability aspect, which will define how users interact with your product. Your customers are expecting more from their apps than they might have in the past; something basic and simple just won’t work if you are looking to maximize your app’s effectiveness and revenue.
Receiving the right support is key once you believe you have chosen the app that best represents your dealership. A support team for a popular mobile point of sale (mPOS) app receives more than 35,000 support calls per month. However, the support team knows very little about the device each customer is on. This is where the app developer you have chosen for your dealership’s app comes into play. They can readily diagnose the app for issues and release the updates needed to fix the bug or problem. Apps are still considered new technology so they are always evolving as new ideas continuously flow in. Your dealership needs an app developer that will always be there to think of new features and fresh designs, as well as innovative ways to polish up the interface, making it easier for users to operate the system and putting you on top of your competitors.
Getting Your App Off the Ground
Besides choosing an app development company that will build an exceptional app, you need to consider how the app will be supported. Your app will be the new face of your dealership, so it’s not a good idea to launch your app without having the right support behind it.
Boost the Visibility of Your Service Center
Key tactics to marketing your app includes sending out a press release, announcements on your social media sites, and providing advertisement on various media platforms. Without spreading the word of your dealership’s app, your customers won’t know it exists, and efforts to incorporate this into your mobile marketing plan will fail.
Launching your app entails much more than just finding the right app developer and support. Marketing your app is just as important as the development, and effectively promoting it is the most important element for a successful launch. Getting it discovered, in fact, could be one of the biggest challenges facing its release. Many expect that their app will be discovered by the virtue of its quality and ingenuity alone, but that is almost never the case. The app market is incredibly competitive, and this means many companies invest in apps to only see them get lost in congested app markets. To ensure your app’s success, you need to adequately market it, whether with your marketing company or with the app developer you’ve chosen.
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An app for your dealership can improve the productivity and success of your business — you just need to be careful how you develop it. It’s important to choose an app developer that caters to the needs of your dealership as well as how they plan on continuously monitor and support the app. After developing the right app for your dealership, it’s absolutely necessary to effectively market your app to ensure its success.
KEY SERVICE CENTER FEATURES • Dedicated Service Center Review Page • Additional premium ad placement • Online service appointment requests • Display service specials and coupons • Priority placement on search results • Highlight service and parts employees • POS materials to build service reviews
Choosing a mobile app provider should be looked at in a similar light as choosing a Website provider. You wouldn’t select just anyone to represent your presence on the Web, so why would you do it with mobile? Getting an app and making it a part of your dealership’s culture will reap you benefits, but without taking careful measures during the development process, you will be wasting your time and money.
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REVIEWS DRIVE BUSINESS
Ed Louis is the CEO and co-founder of DealerApp Vantage. He can be contacted at 866.604.6710, or by e-mail at firstname.lastname@example.org.
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dialing-in used car turns
Fortunately, reconditioning no longer needs to be the weakest link. A workflow management software solution is now available with mobile and text for on-the-go UCMs. It’s in real time, Web-based and easy for all workers to use. Given such transparency and accountability, incentivizing your team will be a fair and rewarding process. Dealers across the country are upgrading to this workflow solution with dramatic results. Work, for their entire team, just got a whole lot easier with much less frustration. With the addition of a workflow system, your recon team will now have a level playing field, alongside acquisition and sales, in order to make the most accurate business decisions. With all three dashboards equally aligned, your
DAYS IN RECON
DAYS IN STOCK
DIAL A - Acquire/Replace
DIAL B - Recondition
DIAL C - Sell
time to market will have a seamless connection. Recon is too fast paced and too key to depend on such a static tool like a manual spreadsheet. As competition accelerates, it is critical to address the control of time to market and the average cost of recon. Typical target recon costs for each category are: • Certified $1,300 • Non Certified $600 • Bargain “as is” or under $200 Market forces will dictate what you can afford to invest in, but it is safe to say that, with the entire industry concentrating on turns, the availability of all three categories above will increase accordingly. In turn, this demand will increase competition reducing the amount you can afford to invest in each car. Having across-the-board software management tools for each of your used car businesses — acquisition, recon and sales — provides the foundation for sound, on-the-spot decision-making. This will ensure the level of control needed to maintain profitability. Finally, measuring and managing recon with a real-time workflow system is one of the easiest and least expensive ways to sell more cars. If you are skeptical about this statement, feel free to contact me to see live demos. Bottom line: It’s all about your bottom line. You can see for yourself. Dennis McGinn is the founder and CEO of Rapid Recon. He can be contacted at 866.268.3582, or by e-mail at email@example.com.
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The automated software tools associated with Dial A and Dial C are data rich and have been responsible for a majority of dealers to forgo their own “gut feel” on which cars to acquire by converting to a sophisticated inventory management solution from either vAuto, AAX or FirstLook. Unfortunately, there remains a systemic problem in many dealerships at Dial B. If you are connecting A to C and still use a manual spreadsheet at Dial B, you are seriously handicapping your overall business and leaving somewhere around two full inventory turns buried in your recon process. This is a huge loss to your bottom line.
“Is Your Dealership Struggling?” There is great news for you and your dealership. The car market is booming, sales are great and profits are better than ever.
Does the above statement describe your dealership? Unfortunately, in a booming market, many dealerships are struggling. Many dealers are struggling with sales, lower market share and less than desirable profits all while facing a changing marketplace with increased expenses and greater competition. If the last statement describes your dealership, it’s time for a change. • Do you have a system to recruit professionals? • Are your leaders/managers well trained on what to do every day that gets results? • Are your salespeople trained and executing properly with the customers you spend so much money to get? • Have you called your own dealership and listened to how your employees handle calls? • Do you have a pre-owned inventory system that allows you to turn your inventory once a month and make great gross profit? • Do your managers know how to work deals in the digital age and still maintain gross profit? • Do you have an effective advertising and marketing position in your marketplace that includes digital and conventional?
YES YOU CAN:
• Sell More Cars Now • Make A Lot More Money • Gain Market Share • Feel Better about Your Business • Build a Team of Champions & Attract Winners • Reach & Close More Customers Conventionally & Digitally • Have Your Team Perform at Record Levels • Create a Culture and Environment of Winning Can you see the above in your mind? Can you hear more satisfied customers raving about you? Can you feel the difference in your business? Can you touch people’s lives? Can you smell the money?
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First, go to www.dealershipsuccess.com and view a preview video. Second, call for a personal conversation about your dealership and your future at 888 2 Tewart (888-283-9278) or e-mail email@example.com with the words “Dealership Success” in the subject line. P.S. If you are an already successful dealer, are you leaving sales, market share and money on the table? Call me and I will give you two ways to increase all three immediately!
President and author of the Best Seller “How To Be A Sales Superstar”
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technology, innovation and our ever-changing industry Over the years, three technological events led to significant innovations that have forever changed the automotive industry. • In 1913, Henry Ford perfected the assembly line by installing driven conveyor belts that could produce a Model T in 93 minutes. This technology paved the way for many vehicle innovations, including automatic transmissions, power brakes, seat belts, airbags and engine improvements allowing for better performance when going from a V8 to a Slant-6 to a V4…and now to hybrids and electric engines. • In 1995, technology set the stage once again when it allowed consumers to browse information about automobiles and allowed dealers to sell them online — a change as significant as the first assembly line. The industry has evolved along with the Internet and dealerships and consumers have reaped the benefits. • Today, smartphones and tablets are profoundly impacting our industry. Going online no longer means being chained to your desk or bound to your house. The Internet is everywhere and, as such, the need for dealers to have solid mobile strategies – ones that start with intuitive, easy-tonavigate Websites – has never been more important. Since the beginning of online auto sales nearly 20 years ago, the world has shifted to take full advantage of this new technology. Much has changed, from how we connect (from dialup and T1 lines in the beginning to 3G, 4G and Wi-Fi today) to the tools dealers use to run efficient digital operations, such as sophisticated CRM systems, automated responses, lead scoring, enhanced dealer Website content, SEM, SEO and more. And so here we are, having innovated our way into 2014 at a time when consumer privacy and data security is paramount. A quick scan of recent news headlines involving online hacking
and theft from large retailers and financial institutions makes it easy to understand just how important the issues of security and privacy have become. As a result, innovation is taking the automotive industry on a new path as a result. Today, chat conversations in the automotive industry have become the norm since they enable dialogue without revealing a consumer’s private information. Chat is quickly being enhanced with audio and video technologies that replicate a real-world sales environment without risk of too much personal information being revealed. Today’s dealers can have face-to-face conversations with consumers researching vehicles on their dealership’s Website, similar to an actual showroom visit. And dealers can observe the behaviors of online consumers on their Websites to ensure personnel are poised and ready when consumers want to interact online. Today, with user permission, dealers can actually “co-browse” their dealership’s Website with an online consumer, much like physically walking the lot with that consumer. And an audio- and video-enabled online showroom experience enables dealers to ask the key questions — Who will be driving the car, how will the car be used and what features do they find most important? — and then take consumers on a tour of their “virtual lot.” Data shows that a majority of car buyers do not buy the vehicle for which they submit a lead; this is why co-browsing capabilities have become critically important to a dealership’s success. A recent study showed that younger consumers who visited dealerships expected the Apple experience but didn’t get it. First-time car buyers, and even those who buy a car every few years, can be confused by new vehicle features and options. Co-browsing provides a forum where questions can be answered without the pressure of the dealership sales environment. Another exciting innovation is the ability for consumers to send Website content from their desktop to their smartphones, and to provide links to appropriate sections of a dealership’s mobile Website. And when consumers are ready to communicate with the dealership, you can give them the ability to send a text message to that particular dealership. The text conversation is hosted by, and stored within, an administrative tool whereby the information is sent directly to the dealership’s CRM system. This allows consumers to communicate in their preferred method (and mine) — by text. Today’s technologies prevent consumers from revealing too much — no name, phone, e-mail or street address is necessary — until they are comfortable and ready to move the transaction forward. The end result is the evolution of a showroom experience to a digital platform, one in which consumers feel comfortable and one that enables dealers to communicate just like they would if they were walking the lot — by highlighting various trim levels and alternative models, by explaining the advantages of their brands and their CPO programs, and by guiding customers to the right car…easily, successfully and virtually. If this is how far we’ve come in 20 years, I can’t wait to see what the next 20 brings. Scott Pechstein is the vice president of national sales at Autobytel. He can be contacted at 866.423.9019, or by e-mail at firstname.lastname@example.org.
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using vseo when it counts
For this month’s dealer video marketing profile, I interviewed Danny Benites, general manager of Greg Lair Buick GMC in Amarillo, Texas. Danny’s career started in 1984 as a salesperson, and he has worked in virtually every position in the dealership world. AJ LeBlanc: Can you give us a brief overview of your basic marketing strategy and philosophy? Danny Benites: As a small, rural dealership,
we find ourselves having to compete with much larger stores with much larger budgets. In that respect, we have to take a “bang for the buck” mentality at times. These constraints make it extremely important for us to measure ROI continuously. Our investments have to produce results. Volume hides a lot of mistakes and we simply don’t have room for error.
AJ: What type of marketing efforts do you implement in the store on a consistent monthly basis? DB: We are almost 100 percent digital. Our
efforts are mainly on our Website and its conversion, social media and video search engine optimization.
AJ: Why is it important for a dealership to have Video SEO as part of an overall marketing strategy? DB: I can only speak to video’s importance
to us, being a small market franchise dealer. It is particularly important to a store our size because it levels the playing field. Video SEO enables us to dominate Google’s Page One with high-quality video content while staying within
our budget. We use Video SEO religiously, and I can assure you, if it weren’t giving us tremendous ROI, we wouldn’t be doing it. I’m not very patient. AJ: Can you explain what Video SEO does for your dealership? DB: Too many ways to mention. There is one benefit that
I didn’t think about when I began Video SEO, and that is legitimacy. Online, we become relevant to the consumer — a real contender. The videos we use are incredible — Hollywoodtype of stuff. People associate the quality of these videos to professionalism that they can expect when they get here. Without it, they may assume that we’re just small-town hicks pitching horseshoes behind the service department.
AJ: How has a Video SEO strategy impacted your Website’s visibility on search engines? DB: All of our videos include a link to our Website. These links, as well as having our name and
logo sprayed all over the videos, has increased our Web traffic. Not to mention, when viewing search results, the video thumbnails stand out like a sore thumb on your screen.
AJ: How do you measure the effectiveness of your Video SEO strategy? DB: I really only want to know one thing: the percentage of Page One results when compared
to the most popular search terms. Right now in our market, we are on the first page 95.7 percent of the time, based on the 152 most popular search terms/phrases. That’s pretty stout by anyone’s standards.
AJ: Lastly, when did your dealership implement a Video SEO strategy, and what is the average increase you’ve have seen in sales/market share since implementing this strategy into your overall marketing plan? DB: We started our VSEO strategy just under six months ago. Year to date, we have seen a 33
percent increase in Buick market share and eight percent in GMC. The majority of this increase has been over the last six months. AJ LeBlanc is the co-founder of Car-Mercial.com. He can be contacted at 866.795.9094, or by e-mail at email@example.com.
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sometimes it takes four strikes before you’ll hit a homerun
There is a distinct difference between being pushy and being persistent. Pushy sales consultants are self-righteous, self-centered extortionists of the industry. When a customer resists, pushy salespeople plow ahead with lies, half-truths and intimidation, hoping the customer wears down and succumbs to the relentless pressure. I’ll be the first to admit, the compression between making a client and making a living can be unbearable at times. While we are finding the right vehicle that fits the needs of our customers, we are also battling to keep our sanity of wanting a better life in perspective. Getting up each day to hear as many as eight out of every 10 people tell you “no,” having people hang up on you, scrambling to catch the next Up or incoming phone call, and keeping up with the technological advances of the new vehicles being produced can break even the strongest person down. The line between being pushy and persistent may seem blurred; after all, both are aggressive and are fighting to be successful. Persistent sales consultants, however, have a unique advantage over others. When the doors of resistance are slammed, persistent salespeople look for the cracks because they know there’s more than one road to get to the sale. Instead of me hypothetically telling you another “what you should do when” proverb, I would rather tell you of a recent story in my store: A husband and wife came in with their children and selected a pre-owned vehicle. After agreeing to the numbers, we submitted
the agreement to the bank. Even though their credit was poor, we were able to get them approved, but their payments were going to be $80 higher each month. I told them that, although they’ve had some bumps and bruises in the past, we could help get their credit reestablished — all they had to do was come up with $80 more every 30 days. The husband looked up from the paper and simply said, “No, we can’t do that.” Strike One. I sat back and told him that I understood that it was a sacrifice but, again, this will get their credit back on track and that they would be in a better position the next time. The husband sat there staring at me with a blank look on his face. With a gulp, I advised him to put more money down in order to reduce his payments. “No, I’m not doing that either,” he said. Strike Two. As I flipped through my mental Rolodex of closes, I questioned him: “If things don’t work out, what will you leave in tonight?” I caught him off-guard; he broke eye contact and leaned back in his chair. He went on to say, “I have a company truck that my family cannot ride in. The [2 door] car we drove up in belongs to my mother and, because it’s a five-speed, my wife cannot drive it. We don’t have a car; it’s broken down.” This was a no-brainer, I thought. I explained to him that for a few dollars more per month, he would have his own reliable vehicle — not to mention if he were at work and an emergency arose, his wife would be able to drive their new vehicle, as opposed to being stranded with a car she couldn’t drive. “You don’t understand, I can’t do it; my job is to take care of my family and today, my needs of providing for my family come before the wants of this new car,” he said. Strike Three. “Fair enough,” I told him, “I’ll be right back.” I proceeded to pull up a car with more mileage and was half of the size of the SUV they were originally looking at. With a ta-dah expression I said, “Although this will not suit your wants, it will fulfill your needs.” “No way,” he said. Strike Four. With baby in tote, he paced in front of the dealership. After a long deliberation with his wife, he smiled and said, “We want what we came here for — we’ll take the SUV.” A short time later, he walked into my office. Looking up from my paperwork, it was just the two of us. With tears in his eyes, he said, “I just want to thank you for staying with me. You see, during the recession, I suddenly got laid off and lost everything, including my car. That was a tough time for me, but I worked hard and as things began to get better, my house suddenly burned to the ground. Everything we had left, including our clothes and baby pictures, were gone. Not knowing what to do, we packed up and drove across the country until we got here. I’m a prideful man and won’t blame anybody, but I vowed I would never put my family in that position again. That’s why I kept saying ‘no.’ I’ll admit that I’m hardheaded, but what you said made sense. I can make the payments and this is what’s best for my family.” It’s a customer’s job to offer objections — now do yours by remaining persistent. When a customer says “no,” keep pecking away at the objection by offering other alternatives, new insights and ways of thinking. If you don’t persist, you are cheating not only yourself, but your customers, as well, because you allow them to leave and buy an inferior product from an inferior salesperson who offers inferior service. If you are the best of the industry, be persistent enough to show it. Paralyze resistance with persistence. I’ll see you next time on the blacktop. Marsh Buice is the sales manager of Mark Dodge, Chrysler, Jeep. He can be contacted at 866.535.5006, or by e-mail at firstname.lastname@example.org.
No matter if you are a Green Pea or an Old Dog, we’ve all been guilty of not asking for the sale. Even after we’ve spent hours of getting our customers to like us, maniacally sprinted across the lot with the battery box to jump start a vehicle, moved a half dozen vehicles in search for the “one” or climbed in and out of scorching 180 degree vehicles, when it came down to the “kiss goodnight” of asking our customers for the sale, we’ve all backed down because we didn’t want to seem pushy.
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JimmyVee & TravisMiller
how much is digital dependency costing your dealership? Everyone agrees that the car business has changed a lot in recent years. Just a decade ago, many dealerships still didn’t have a Website. Almost no dealerships were leveraging e-mail marketing. Social media occurred on a bulletin board. Online video didn’t exist, and inventory was still listed in newspapers and trader magazines. But look at us now. Online marketing is everything these days. Since the online gold rush began a few years ago, dealers have been flocking to the Internet to cash in on the opportunity.
The problem is that so many people in the car business are now suffering from “digital dependency.” They feel a compulsive urge to keep up with the Joneses and keep shifting their focus to digital marketing, falsely believing the Internet has sucked up all the car buyers and that digital marketing is the only game in town. But it’s not. Truth is, some people love all this technobabble. Many more people, however, secretly detest it, are confused by it, are bored by it and are downright tired of it. They just can’t escape the addictive pull and the false promises. But consider the source. In the original gold rush, it was the shovel sellers who got rich, not the prospectors. Is it possible that much of the high-tech best practices being pedaled today are no more likely to help you discover gold than the newest pickaxe was 150 years ago?
Statistics say that 99 percent of buyers shop online before buying a car. There are a slew of tech tools to help dealers undercut each other’s Internet prices (and it’s a good thing, because all customers are looking for the lowest price, right?). Customers expect to interact with you on Facebook, and you’ve got to keep updating your Website and investing in new technology just to keep up and stay connected with your customers. Thank goodness for the Internet — right?
To find out whether or not you’re suffering from digital dependency, ask yourself, “Why am I relying so much on digital marketing strategies?” Do they really work for your dealership, or do you feel like you have to? Because they consistently deliver profitable results, or because you hope they one day will? Because you’re selling more cars, with higher grosses, or because….
A strong online presence, with the latest cutting-edge secret weapons and aggressively priced inventory are necessary to stay in business today. Or are they?
With the dealerships we work with, we generally find that about 60 percent of their customers did not visit another dealership or another dealership Website before buying a car from them, which gives them a clear advantage when it comes to pricing their vehicles and increasing profitability. Most of these dealerships don’t aggressively engage in digital marketing, many don’t price their cars online, and some don’t even have their inventory online at all. Imagine that! All because they realize they don’t have to, despite what we’ve all been told.
So sorry to be contrarian, but are dealers really getting the full story? According to our studies, the answer is “no.” What most people in the car business don’t realize is that there is still opportunity (and a lot of it) to sell cars, with high PVR, without giving in to the “digital gods” and constantly chasing your tail, looking for the next high-tech tool that will help you give cars away.
Digital marketing works for some dealerships. The Internet is a valuable media and can be used as an arrow in your quiver as part of your overall strategy. It’s not, however, the only option, and it’s not for everyone. If you’re tired of waiting for digital marketing to deliver results and you’re ready to break free of digital dependency, start considering alternatives and feel confident that alternatives do exist.
For a complimentary Traffic Scale Report, which compares the quality of your traffic to other dealerships in your area and helps determine whether or not there’s potential business you’re missing out on, visit www.TrafficScale.com and use coupon code ASM1402. Jimmy Vee and Travis Miller are founders of The Rich Dealers Institute and the authors of Gravitational Marketing: The Science of Attracting Customers and Invasion of the Profit Snatchers. They can be contacted at 866.867.9618, or by e-mail at email@example.com.
DO YOU WANT TO KNOW HOW OTHER DEALERS HANDLE THE CHALLENGES THAT YOU FACE EVERY DAY? Our Dealer Panel gives voice to dealers, GMs and sales professionals to share their experiences — sales techniques, new technologies and ways to motivate staff — giving our readers the benefit of their experiences.
SEE PAGE 28 FOR MORE...
DEALER PANEL autosuccessonline.com
the dealer panel
Chris Saraceno AndrewDiFeo Brian Benst ock
the role of service in customer Danny Benites Tony Provost retention
A well-run service department is a vital element to maintaining a dealership’s customer retention. For this month’s Dealer Panel, we’ll look at the importance of ongoing servicing and ways sales and service can work together for the dealership’s common good. For this installment of our panel, we spoke with Danny Benites, general manager of Greg Lair Buick-GMC in Canyon, Texas; Chris Saraceno, vice president and partner of Kelly Automotive Group in Pennsylvania and Florida; Tony Provost, president and dealer principal for Nissan of Bourne in Massachusetts; Brian Benstock, vice president and general THE manager of Paragon Honda and Acura in New York City; and Andrew DiFeo, general manager of Hyundai of St. Augustine in Florida.
AutoSuccess: From a customer-retention standpoint, how important is it to your dealership to have sales customers come in for servicing, and how do you help that along? Chris Saraceno: Sales customers are vitally important to fixed
operations. To show our appreciation, we offer different incentives, such as free lifetime state inspections and car washes, six months of free roadside assistance, express service and a first oil change appointment 90 days after purchase for all customers. We also pre-book the customer’s first service at time of delivery. It is mandatory that all sales customers receive a service walk and introduction to the service team and manager before the purchase. The importance of this needs to be continually stressed by all managers — not only how it benefits the dealer, but also how it benefits the individual employee financially. Danny Benites: We fully understand that when a customer returns to
our service department not once, but twice, it becomes highly unlikely that they will buy a vehicle elsewhere. As I mentioned previously, sales customers who become service customers become sales customers again and again. With these things in mind, every customer is introduced to the members of our service and parts staff at the time of delivery. They also will set up the first service appointment, as well as sign them up for our Preferred Owners Club, which allows them to earn rewards towards future service visits as well as vehicle purchases.
Brian Benstock: We agree with Google’s analogy that there’s only three times you talk with a customer: before they’re willing to do business with you, when they do business with you and after they do business with you. You’ve got to talk with them all the time, and we make sure we do. If you talk with a customer once or twice a year, they’re probably not going to be that loyal to you. We use several tools and marketing strategies to deliver relevant sales and service information at the right time for that customer’s current situation. Tony Provost: Customer retention is the lifeline of the dealership,
and having customers come in for servicing is a vital part of that Chris Saraceno Tony Provostsix AndrewDiFeo Brianwash Bens t ock retention. We offer our customers free oil changes, hand and clean their vehicle, and top off all their fluids after they purchase from our dealership. We always send the new and used car specials to all customers through e-mail and let them know they can pass it along to friends and family. By giving the oil changes, we know we are guaranteed to see our customers after the sale, plus we also benefit because the customer has now created a habit by visiting us six times.
Andrew DiFeo: It’s extremely important and one of our major focuses, and it’s going to become an even larger focus in 2014. The sales part of the process is the first step, especially if they’ve never done business with us before. You earn their business in the sale, but it’s the service business that keeps them coming back to you for repeat services and, more importantly, for referrals to their friends, family, co-workers, etc. It’s important that we have a smooth transition from sales to service and retain them; if we give them good experience, they’re more likely to have repeat business and referrals. successful solutions provided by
AS: What are some ways that service and sales teams can work together that you’ve found to be effective? CS: Our team knows that sales and service must be united if we want
to dominate our market. Each of our stores has a quality assurance department that acts as a liaison between the departments, ensuring the customer has a good experience at every point of contact within the dealership. This eliminates any lapse in communication and reinforces the relationship with the customer, supporting our goal of buying and selling vehicles through service and repeat and return customers. DB: We participate in the General Motors “Standards for Excellence” program. We, as a dealership, pay an enrollment fee and win rewards based on our sales performance and overall CSI. The way we distribute our SFE rewards is unique and promotes sales and service cooperation. Every quarter, when we hit our objectives, we split up the money evenly between every employee at our dealership and hand out the cash at a catered luncheon. Believe me, every employee, whether sales or service, knows exactly what our CSI scores are and where they need to be. This common goal has done wonders in closing the “front end” to “back end” disconnect. BB: It’s critical that the teams work together. If the customer needs
a $2,000 repair and they just don’t have the money for that, it’s very advantageous for the service advisor to see the value of that customer’s car as a potential certified pre-owned product and be able to go to a salesperson, explain their situation and their monthly payment and see if they could help. Sales and service working together helps the dealership — we’ve satisfied the customer, maybe sold a new car and potentially the dealer panel acquired a certified pre-owned product that we can repair. It ensures the dealership has a consistent flow.
TP: Every quarter, we have a clinic for all the customers we sold vehicles to in the last 90 days. Sales introduces the customer to our service team before we sell the customer a car, as well as on delivery. We’ve worked to make our service team the focal point in our sales process. AD: The service introduction is part of our road to the sale. Good
salespeople will do the service tour before they sit down and talk numbers; that builds value in the dealership and brand. We want to get the point across to the consumer that we’re not just here for this transaction; we’re going to treat them just as well in the service department. The other thing we do is set the first service appointment (we call it a “reminder”), typically three months in advance. We also give two free oil changes, while the transaction is fresh in their minds. If you have questions or are a dealer who would like to be considered for the panel, please contact us at firstname.lastname@example.org.
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how much money do you want to make? really? why? I ask that question every time I step foot into a car dealership, and I always get the same answers: “As much money as I can,” “$8,000 per month,” or maybe “$200,000 a year.” The sad truth, though, is that almost none of those people ever hit their goals and objectives. There are a lot of “wanna bees,” but few people in the industry actually achieve the goals they set out for themselves. It’s like me saying, “I want to be tall” — if you ever met me, you would know that is hysterical because I am only 5’5”. It doesn’t matter how nice or smart or positive or hard working I am; I’m never going to be tall. Goals need to be realistic and achievable. Goals need to be mapped out with “GPS” precision, or the likelihood of ever hitting them will be minimal at best.
• Holidays or any other gifts you need to buy Look at investments that you want to make: • Your primary house • 401K • IRAs • Stocks/bonds • Real estate (secondary, rentals or commercial) • Business development (marketing/advertising) Figure out how much spending cash you want per month: • Pocket cash • “Party money” • Incidentals
I am going to outline a powerful way to find the Now, add up all of that money. How much did that total up to? Let’s use the number $8,000 (life answer to a better question: “How much money is too short — why settle?). Now you have to remember something called taxes. If you need, want and deserve $8,000 “net,” then you need to calculate exactly how much you need to “gross” in do you want and need to make?” order to meet your goal at the end of the month. For our example, you’d need to generate about $12,000 to be able to “clear” the $8K. First, I want you to:
Now, look at your “incidentals” like: • Food • Gas (for car) • Clothing • Entertainment • Tolls Now, identify any situation expenses • Child support • Alimony • Medical expenses for yourself or family member Next, look at the current month you are projecting for and identify any: • Birthdays or anniversaries
Now we are on to something. Now the number isn’t just a “number” — it is your number. It’s relevant, personal and unique to your unique situation. Since it is your unique number, it should be important — almost sacred, if you will. I am confident that once you find your number — your real number — you will work harder to achieve that goal because it is relevant, realistic and needed. It is broken down in detail. Next, you need to identify what your average commission is. For this, all you need to do is calculate what you earned last month. Add in all bonuses, commissions, spins, spiffs, etc. and simply divide that by how many cars you have sold — that will be your average commission per car (ACPC). Let’s assume you are, for example, at $400 ACPC. That would mean you need to sell 30 units to gross $12,000 and net $8,000. How are you going to do that? I’ve created the mind map above to help you get there. If you have any questions about this article or if you would like to me to help you create your personal mind map for free, please call or e-mail me.
Sean V. Bradley is the founder and CEO of Dealer Synergy, a nationally recognized training and consulting company in the automotive industry. He can be contacted at 866.648.7400, or by e-mail at email@example.com.
Success-Driven Solutions; No Matter the Medium. 30
Identify all of your fixed expenses like: • Rent or mortgage • Car payments • Car insurance • Cell phone • Utilities (electric, water, etc.) • Student loans • Credit card bills
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Customer Service is not “if only i did...” As I look back over the last few months I have been astonished at the breadth of service companies delivering both at a high level and at a low level. The gap is widening, but customers’ patience for poor service is waning. Companies that do not focus on service execution as a top priority will end up wondering why their market shares fell or doors closed. Without naming names, I will focus on things I’ve encountered over the last few months. A High Point — My Cell Service
I recently upgraded my phone as a gift from my family. Everything was fine when I left the store, but when I traveled to Puerto Rico, the service did not work. It had never malfunctioned before, so I called to see how it could be remedied. First off, I got to an operator quickly. Yes, really. Then this operator then proceeded to go through all the steps to remedy the situation. She would politely put me on hold when she was not sure of an answer, apologizing that she did not know everything. When she had to transfer me to another department, she offered to stay on the line until they picked up instead of just pushing me off into the next round of hold music. She filled in the new department so I would not have to repeat everything I told her, which never happens. Very nicely done. The next operator was just as pleasant and made sure everything worked before I hung up. He even challenged me — politely — when I said everything was fine, making me check a few more things just to be sure. What we can take away from this situation is a great business model of commitment to solving a problem, making sure the customer is happy and, ultimately, making sure the problem is resolved. A Low Point — My Insurance Company
I called to find out why a bill for medical procedures was not being taken care of by the insurance company. The bill seemed very high in regards to previous ones for the same service. The call to this company had me routed five different times through menus and, as always, asked me for information which I had to repeat once I spoke to a live person. One would think, in this day of technology, we would not have to repeat ourselves. The operator was pleasant, looked at my account and said that she identified the problem. She offered to contact the doctor to make sure no bills were generated until they fixed the issue. “Great,” I said, thanked her and hung up. The following month, a similar bill was received and when I called back, the new operator stated that she saw the previous report but nothing was done with it. She, in turn, said she would make sure it was fixed, but I voiced my lack of faith seeing what the first operator had done. This new operator assured me she would resolve the issue and promised to call me when she had done so. Guess what happened: No call, and another bill has been generated. What can we take away from this situation? Train your teams to never promise what they cannot deliver and make sure there are accountability measures in place to track how things are executed. Never assume that, just because you have a product customers need, you can treat them like a number. Remember that each customer has a voice now that they previously did not. Never assume they will not voice displeasure. More importantly, why not provide such excellence that they use that voice to shout how great you are?
Glenn Pasch is the CEO of PCG Digital Marketing and a national speaker and trainer. He can be contacted at 866.611.0998, or by e-mail at firstname.lastname@example.org.
Wishing you the best in the future.
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Dealers Accelerate Lead Follow-up With Artificial Intelligence Studies have shown that more than 45 percent of car buyers shop for one to three months before making a decision. Also, more than 80 percent of buyers research online to gather information before they ever speak with a salesperson. These stats indicate that potential buyers need to be nurtured and that they need personalized engagement. In addition, individual sales reps or business development centers (BDCs) are often overwhelmed by the volume of inbound/Internet leads; industry research claims that up to 33 percent of the time, good leads are not contacted by sales reps. Successful sales managers are continually seeking
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methods and processes that will provide their dealership with a competitive edge. For many, this search has proved fruitful. They have discovered the power and ROI of artificial intelligence lead management programs to use for their Internet sales teams. Artificial intelligence (AI) programs are now available that are programmed to do the “heavy lifting” of Internet lead follow-up. These programs are designed to engage your Internet leads in a two-way, interactive, human-like e-mail conversation through which the AI is able to determine the lead’s interest and, more importantly, their intent in the current market. Once that interest and intent is determined, the AI program alerts the sales representative assigned to the lead that the prospective customer is ripe for telephone contact. Now, with a “warm-to-hot” lead placed in the salespeople’s hands, they will do what they do best — sell vehicles. These programs are even able to follow up with the Internet lead to make sure that they were contacted, and that they received all the information they requested. With an AI program, no leads will fall through the cracks. Some may suggest that their auto responder program will suffice to attract the attention of an Internet lead. They are wrong. Today’s customers want — and expect — a personalized touch. They are certainly perceptive enough to recognize a canned, non-personal message from a dealership. Fact is, most of these auto responder messages end up in a spam folder, and are never read. However, as a result of specialized programming, personalized AI messages are received in the prospective customer’s e-mail inbox nearly 100 percent of the time. It is proven that AI programs are able to engage a higher percentage of Internet leads. The higher the engagement percentage, the higher the closing rate. Additionally, sophisticated AI Internet lead follow-up programs are also able to deliver extensive reporting on sales response times, drop rates, sales lead ROI and other valuable information. All of this information is gold to a dealership sales manager. Higher lead engagement rates. Higher closing rates. What could be better?
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Rosalind Vazquez is a marketing manager at AVA. She can be contacted at 800.453.8216, or by e-mail at email@example.com. Mark Bradley is the CEO and board memeber for AVA. He can be contacted at 800.901.3058, or by e-mail at firstname.lastname@example.org.
focus on the foundation and win the click In an industry defined by constant change and informational chaos, there comes a time when it’s necessary to revert back to the basics of good selling. There are a million limbs and branches that have grown from the tree of digital merchandising; however, in this article, I’d like to focus on the importance of the foundation. The roots and dirt that generate profit and new life are often hindered by the here and now, and the latest and greatest. When it comes to selling cars, the only way to ensure your digital strategy is maximized is to have a solid, well-merchandised foundation. Coming back from NADA, it’s easy to feel overwhelmed by the latest solutions and industry trends for the coming year. It is important to be progressive and to follow in the footsteps of the largest and most successful dealer groups. But it is equally important to take a step back and realize the best marketing strategies will become amplified when they are applied to a strong foundation. Years ago, it was a huge advantage for dealers to have several vehicle photos and today it’s the norm. Years ago, it gave you an edge to have custom comments and Internet pricing for all vehicles and again today, it’s the norm. Let’s begin with the quality of your inventory. Make sure the vehicles in your inventory are in demand, priced to sell and are showcased in a way that educates the consumer in the most relevant way possible. A properly merchandised vehicle should be able to digitally display every top value, option and reconditioning highlight that would be relevant to a consumer’s search. It can be detrimental to not offer this information on every VDP, as we know there is a direct correlation between VDP views and vehicle sales. Customers don’t want to wait until they come into your store to have their concerns addressed. Through being transparent and addressing them right away, this offers peace of mind as well as more sales opportunities. As innovators, we must remember that
successful ad campaigns can only be optimized when they are used to promote a product with a solid foundation. Let’s face it, spending countless dollars in order to promote your vehicles and drive more traffic to your Website is really just a waste of time if your Website isn’t effectively representing the value in your cars. Your Website and VDPs are the most crucial elements of your foundation after securing the right inventory. Each and every VDP should be treated as a unique page devoted to a specific vehicle. Cobalt studied more than 1,275 dealers and concluded that the way online shoppers browse vehicle inventory is very similar to how people navigate through online dating sites. Your VDP should be equipped with its most enticing characteristics in hopes of forming a connection between that vehicle and the consumer. Your vehicle’s “dating” profile has one ultimate goal: to set up a date with a potential suitor or, in other words, a test drive. Your VDPs are your one-page opportunity to create a digital experience between the shopper and your vehicle. What about that vehicle’s dating profile will elicit an emotional response that would drive someone to dig deeper? As a rule of thumb, dealers should provide at least 24 photos for every vehicle and realize that video merchandising has arrived. At the end of 2013, video was the No. 1 format for encouraging purchase consideration. People aren’t just watching vehicle videos more often, but they are spending more time watching them. Google found that one in four people watched more than one hour of video while researching their next car, which is up 57 percent since last year. Other than attractive photos and incorporating video into your vehicle propositions, you need to effectively communicate what your vehicle has to offer in the fastest and most efficient way possible. Having an alphabetical laundry list of features and options fails to communicate the reasons why your vehicle is worth meeting in person. Customers want to be able to see everything your vehicle has to offer directly from your details page. This is digital evolution. This is the “I want all the information there is to see right now” generation. It is imperative to put your best foot forward when you have the opportunity to do so, and showcase any reconditioning that has been performed, as well as the key value and option indicators that are most important to the shopper. A good mobile strategy is also part of a strong foundation. More and more consumers are utilizing their smartphones and tablets as their own personal digital window displays. If they can’t easily view the value in your cars off their mobile device, they will move on. Make sure your VDPs have a “Send to Mobile” option, so shoppers can revisit that vehicle’s “profile” at their convenience. Optimize your site for mobile before trying to optimize your mobile marketing strategy. Additionally, since more than 50 percent of automotive shoppers have a trade-in, you should make sure to give customers an option to value their trade by completing a quick and easy form that they can access from any device, directly off your VDPs. At the end of the day, think about your digital strategy and remember that any given marketing solution will be supercharged when your inventory is merchandised well. We cannot stop the industry from evolving, and it is important that we adjust our strategies accordingly. We must accept the fact that a successful campaign cannot prosper without a strong foundation for the roots to grow and life to flourish. Jeremy Anspach is the president and CEO of PureCars. He can be contacted at 877.381.2632, or by e-mail at email@example.com.
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don’t underestimate the importance of parts sales The beginning of a new year gives you an opportunity to evaluate your bodyshop’s financial performance over the past year. Are you happy with the results you are getting? If not, I encourage you to take a look at your statement. What percentage do parts represent of your total bodyshop sales? If that number is less than 35 percent, your shop is not selling enough parts. In fact, dealership bodyshops often do a poorer job of selling parts on collision repair orders than do their independent counterparts. The irony is that the gross profit dollars available to dealers on parts are often much higher than what is available to independent body shops. If your bodyshop’s parts sales are below the minimum acceptable standard of 35 percent, let’s consider some of the possible reasons. Bodyshop Part Sales and Profit are Allocated to the Parts Department
The bodyshop is responsible for generating the parts sale, but they get little to no credit for the gross profit this sale earns the dealership on the financial statement. Therefore, dealership bodyshop managers will often make the decision to repair borderline parts rather than replace them. Or worse yet, the bodyshop orders parts, then returns them to the parts department, opting instead to convert the sale dollars of the part in to labor sales dollars. Although the bodyshop seems to “win” by getting more labor sales and gross profit added to its bottom line, the dealership as a whole loses. Not only is the gross profit from the sale of the part lost, the parts department is left with an unsold part to inventory, or return (often at a cost). Additionally, this also contributes to the often-strained relationship between the parts department and the bodyshop.
Bodyshop Estimator Pay is Often Based on Labor Sales
Many times bodyshop estimators, who are making the decision to repair or replace borderline parts, are paid a commission on labor hours sold. Therefore, they will almost always choose to repair the part and increase the labor hours on the estimate. This is a counterproductive practice. Low parts sales rob the dealership of valuable parts gross profit dollars and also negatively impact other areas of bodyshop profitability. If your bodyshop estimators are paid largely on labor sales, you may be costing your dealership money. Bodyshop Managers and Estimators Believe that Labor Sales are More Profitable than Parts Sales
Beware of percentages. Labor, indeed, typically carries a higher profit percentage than do parts. However, gross profit percentage tells only a portion of the total profit story. High parts sales positively impact dealership profit in many ways, including: • Gross profit dollars from the part sale itself • More paint labor hours sold • More paint and materials sold due to more paint labor hours sold • Much higher paint and material profit on replaced panel versus a repaired panel • Faster cycle time • Better repair quality • Improved CSI The list goes on and on. There are literally hundreds of positive impacts that higher bodyshop parts sales can have on your bottom line. Unfortunately, your estimators and bodyshop manager may not have considered these factors. Conclusion
Most dealership shops have a parts sale that accounts for roughly 30 percent or less of its total sales. Ideally, I would like to see your bodyshop labor and parts sales to be about equal. This means that parts would account for roughly 40 to 42 percent of your total bodyshop sales. This is a large difference, and this change doesn’t happen overnight. However, with alterations to your bodyshop employees’ perspective on profit, their incentives and perhaps how sales and profit parts are recognized on your financial statement, such improvement is possible. Review your bodyshop’s performance. If it isn’t where you would like it to be, chances are it isn’t selling enough parts. Rob Dunn is the lead instructor and dealership consultant for Masters School of Autobody Management. He can be contacted at 866.386.0042, or by e-mail at email@example.com.
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The ever-changing face of dealership marketing Over the last century, newspapers and dealership location lead the charge to reach consumers. So far in this century, radio, direct mail, third-party leads, Websites, SEO, SEM, social networking and a host of other new marketing media now consume marketing budgets while newspapers struggle to survive. What changed? Technology
Technology made these new ways of marketing possible, but without providing a strong return on investment (ROI), the technology could have been useless. Technology has now given us the ability to track and calculate ROI so businesses can be certain that their marketing strategy is the right prescription for their success. Without proof that these new marketing pieces were providing better ROI, newspaper might still own the throne. Aside from radio and social networking, all of these other marketing sources make it far easier to track ROI. With direct mail, Websites, third-party leads, SEO and SEM, calculating
the number of sales from each source and the attributed profits is far easier to diagnose. This does not mean that these sources perform better — it’s just that their performance is more transparent and easier to calculate.
2. Method – The method is what makes each piece of your marketing unique. Each individual method can also be affected by the frequency and other factors. It is important to not treat each method as a stand-alone tactic, but as piece of a larger marketing strategy. Each piece must work together in harmony to produce the highest ROI. 3. Message – Third-party leads come from outside sites that control the message. With SEO and SEM, the message is small and only seen by those who want to see it. With direct mail, an opportunity exists to deliver a more robust message customized by each dealership to speak to their communities. After successfully selecting the list to use, the message must be crafted to communicate to the core needs of the audience in line with the strategic goals of the dealership.
Once you are able to calculate and monitor the ROI of each piece of your marketing puzzle, you must consider the aspects of each piece that influence how well they work. Every type of marketing is comprised of a message that is delivered to an audience through a particular method. To truly hit the sweet spot, you must be When evaluating each piece of a marketing strategic in all three areas. Perfection in all three campaign, it is important to calculate the ROI. It is isn’t necessary to be successful, but the best sales also important to consider the choice of audience come from a good combination of all three. and the message along with each individual method. For your personal prescription for 1. Audience – With third-party leads, SEO and success with selection of audience, method and SEM, the desired audience can change on the message, please send an e-mail with the subject fly, so experimentation is easy. With Websites, “My Store” to the address below. on the other hand, decisions must be made early on that will affect the audience for a longer Debbie Drury is the founder and president term. With direct mail marketing, successfully of Market Doctors. She can be contacted at analyzing and developing the targeting lists is 866.872.8150, or by e-mail at the key to hitting the right audience. firstname.lastname@example.org.
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are you a leader or an enabler?
You must have a plan in place to recruit continually. Recruit when you want and not when you need. Do not run the same ad in the paper you have used for 50 years that everyone else runs. Use unique ads. Utilize some or all of the following: newspaper inserts; a link on your Website homepage with a video and information form; online resources such as CareerBuilder, Simplyhired.com, Indeed.com, ZipRecruiter.com and Onlinevetjobs.com; job fairs; continual referral programs from There are five measurements of a manager or leader: your employees that rewards them if they refer a person who is hired 1. Do you attract, hire and retain the right people? 2. Do you educate those people continually so they have the opportunity at time of hiring, again after six months and then again after one year of employment; college campus recruiting; and vocational schools. for success? Consider the Enterprise Rental car model and sell a career dream not a 3. Do you give your people extremely clear expectations for everything, job. Utilize the phrase “Management Trainee.” including their complete job functions and their expected and potential results? 4. Do you motivate and inspire your team for better attitude and results? Ask yourself, “Do I have really good-to-great people?” If not, what excuses are you allowing? Stop it — no excuses. 5. Do you hold everyone accountable? Management and leadership are two different things. There is an old saying that “You manage things and you lead people.” Managing and leading are both are essential to the success of a dealership. In both management and leadership, you are assisting your team to grow and develop or you are enabling them to produce less than maximum results.
Let’s break down each essential measurement. 1. Nothing happens without the right people. If you are an enabler, you most likely are allowing less-than-desirable team members to be on your staff. Stop it. Stop making excuses about how you can’t hire good people today. You can hire good people, but you must have a belief system and game plan to do so. You need an “ideal employee profile” for each position. Who are you looking for? If you don’t quantify this, you will hire solely on emotion, and that usually leads to bad results.
2. Every single employee in your dealership deserves and should receive ongoing education. You must have a continual education program based upon job skills, people skills, life skills and marketing skills. Hiring new people and not educating them is a recipe for turnover. Having veteran workers who are not continually educated is a recipe for bad attitudes, self-induced comfort zones and lower performance. Stop it — no excuses. 3. Do you have extremely clear written and communicated job descriptions? Do you coach your people daily? Do you religiously perform one-on-one coaching sessions? Do you perform “reviewpreview” sessions at the beginning of every month? Do you inform and coach clear expectations every single day? Stop it — no excuses. 4. It is true that successful people are intrinsically motivated. However, every single human on earth needs extrinsic motivation, as well. Every single work team has a collective mindset that is fluid and forever shifting. Successful managers and leaders are keenly aware of this and look to keep the attitudes and direction of the team moving in the right direction and correct the direction when it wavers. All people have subconscious elements that can guide them towards negativity from time to time, no matter how positive they are. “A ship that sails with every wind never comes in the harbor.” Every ship needs a captain for direction. Stop it — no excuses. 5. Do you hold each and every person on your team accountable? If you are afraid to lead and manage by holding people accountable, you are neither a leader nor a manager. If you do not manage and lead, you are not only allowing less-than-desirable behavior and results, you are promoting it. Stop it — no excuses.
As the manager and leader of your dealership, if you will manage all the processes, numbers and functions while you lead people utilizing these five elements of success, it is impossible to fail. If you do not utilize the five elements, your chances of failure and/or underperformance are destined. Stop enabling yourself and others to low production, results and failure. Stop it — no excuses. You choose to win or you choose to lose, but the choice is always yours.
Mark Tewart is the president of Tewart Enterprises, and the author of the best seller, How To Be A Sales Superstar. He can be contacted at 866.429.6844, or by e-mail at email@example.com.
For a free special report titled “Moving From Enabling to Leading” e-mail me at the address below with the phrase “Enabling To Winning” in the subject line.
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nine things you can do right now to increase your data security What do you need to look for in a vendor before granting them access to your DMS? Data security starts at your dealership with the policies, processes and procedures that you establish. Here are nine things you can institute to protect your dealership’s data. 1. Conduct Background Checks — Any employee you bring on will have access to, or will be in the vicinity of, customer data. When hiring new staff, conduct background checks, including drug, criminal and credit checks. Contact their references, as well. 2. Establish a Confidentiality Agreement — Establish and enforce an agreement that states confidential and proprietary information belongs to the dealership — and have all employees sign it. 3. Limit Access to Data — Determine who
will be granted access and/or administrator duties to which resources, including CRM, DMS, Intranet, social media, Website and e-mail. Document user names and passwords.
4. Institute Password Best Practices —
Passwords should be unique to each individual, at least eight alphanumeric characters in length and account access should be blocked after the fourth invalid password attempt. Password changes should be scheduled and not permitted to be the same as the previous four passwords. Passwords should not be displayed near workstations, shared with other staff or transmitted via insecure technologies (e-mail, IM or fax).
5. Invest in Data Protection Software — Invest
in protective software, including anti-virus, anti-spam, firewall, data encryption and virtual private networking (VPN). Institute protective data measures, as well: Servers should be at a separate location or in cages, backups should be performed, and data retention and destruction policies should be established. 6. Disable Access upon Termination — When an employee is terminated, make sure to collect
and/or disable their key, security code, remote access to any systems, Intranet access, e-mail access and phone extension and voicemail. 7. Require a Non-Disclosure Agreement — Require all vendors that you share data with to sign a non-disclosure agreement. 8. Partner with an SSAE Certified Vendor — Our industry has not yet established a standard for data security policies, processes and procedures. The financial industry, however, has: SSAE-16 Certification, developed by the American Institute of CPAs. By partnering with a vendor that has achieved SSAE-16, you know they can protect and secure your data and guard its integrity and confidentiality. 9. Require Documentation — If a vendor is not SSAE-16 Certified, request and require that they provide documentation of restricted access to buildings, data, computers, resources and systems; scanning technology at entrances (cards, fingerprints or retinal scan); government-issued ID required of visitors; password policies and best practices; firewall, anti-virus, anti-spam and data encryption software; equipment monitoring; data retention and destruction policies; backups; and a disaster continuity and recovery plan.
Jamil Zabaneh is the vice president of national accounts for J&L Marketing. He can be contacted at 866.883.6669, or by e-mail at firstname.lastname@example.org.
dealership data security in 2014 As we enter into a new year, one big topic from the past year continues to be an issue for dealers — the issue of how dealerships handle the collection, storage and distribution of the consumer data they collect in the course of doing business. It has been well established that the concerns by many state and federal agencies surrounding this issue are going to increase and not subside as time goes on. At the center of these concerns is the dealer’s role and responsibility to the safeguarding of the data. Within the industry today, the norm is for dealerships to send their data to vendors in the course of providing important services for the dealership. The “send” part is what needs to be carefully considered. Many dealerships have several companies access their DMS to extract the necessary elements for their programs to function properly. While the majority of the time this process has not been a problem — and has been the standard for many years — it appears this method is starting to cause concern. The low frequency of issues or problems arising from this process may give dealers a false sense of security. The reality is that it only takes a single mistake to cause huge problems for the dealer’s prospects and customers. There are ways that the dealership can minimize their risk without sacrificing participation in solutions that help their business: • A dealership must ensure that any entity using its data, through an entity contractually bound by the dealer, enforces those provisions on its sub-contractors. • A dealership must have a written contract directly from the entity requesting access to the data, including the manufacturer. • Dealers must make sure they understand what elements of the data are being used, ensuring that only the data attributes that are truly needed are being extracted. Dealers should be able to look at their data as an asset; often, however, it becomes an exposure. The data that is collected is done so by a relationship between the dealer and consumer. It may be housed in a DMS system or a platform, but the dealer is responsible for and owns the data he collects by contract with the consumer. I continue to hear more and more on this subject we would like to know what others are doing to protect themselves. Please contact me at the address below; I would love to hear what you’ve done.
Steve Cottrell is the founder of DealerVault. He can be contacted at 866.769.1778, or by e-mail at email@example.com.
sales & training solution
why your customer is so defensive
This year will mark the beginning of my 35th year in the car business. It has been an amazing journey, and watching the changes that have taken place has truly been an enlightening experience. The technological advances of modern automobiles are nothing short of astounding. Then, there is the introduction of the many new and dynamic financing options available to customers today which allows vehicle ownership to be customized to fit anyone’s specific wants and needs. And beyond all of that are the incredible changes the Internet has brought to the business for dealerships and customers alike. Yet, in spite of all the forward progress made in our industry, many still have not grasped the absolute necessity of developing new methods for how we sell our products. In a time when customers have access to nearly unlimited information about our vehicles, pricing and trade values, most car salespeople are still being taught to sell cars the same way it has been done for more than 50 years. With this evolution, customer knowledge has changed dramatically, yet the public opinion of our process has not. Customers today are still defensive and fear being taken advantage of when going to a car dealership. So, what is it that really makes customers so defensive? Why do customers view us so negatively to the extent that normal people will often lie to a salesperson if they think it will get them a better deal? Having spent more than three decades asking these questions, I can tell you unequivocally it is the customers’ perception of our sales process. The way we approach and view our customers causes us to act in such a way that it often drives them into a defensive posture of resistance. Salespeople often have a “win/lose” approach, where the only thing that matters is selling a car. When this happens, serving the customer’s wants and needs takes a back seat. If you make the sale, you win and the customer loses. If you don’t, they win and you move to the next prospect. For the average customer, a car dealership is a high-pressure environment where they expect to be manipulated and controlled from the moment they arrive. Even though most modern customers spend hours online preparing for the experience, they often feel overwhelmed when dealing with trained sales
professionals. When a salesperson or manager uses pressure words and statements to drive the process, it confirms their fears and hits the switch on their defensive mechanisms. Consider the effects of “trial closes” on a customer during the process. Though many today still utilize these extensively, they are clearly some of the worst problems with our process. Instead of trying to focus on what the customer wants to buy and helping them accomplish their objective, we try to sell them what we think would be best. This is done through a relentless process of trial closes and pressure words, all designed to get the customer to make a decision before they have even settled whether the car they are looking at is what they really want. Trial closes often take place after every turn of the page in a sales presentation. The old-school mentality was based on the acronym ABC (“Always Be Closing”). Customers don’t want to be closed like that on a consistent basis. They want to be “wowed” by an exciting product, and then — if they like it and if it fits their wants and needs — they have no problem being asked to make a purchase. People have a right to make their own buying decisions. Today’s informed customers demand the respect and professional treatment they deserve. It’s not enough just to recognize that; it must be acted upon if any real change is to take place. Dealerships must be willing to invest in the training required to bring their salespeople up to higher standards of ethics and excellence. Until that happens, we will continue to see the same negative practices that have plagued our industry and our reputation in the public’s scrutiny of us. If you want to win the favor and business of your customers today, you must be different from the competition. There is no better way to do that than to distinguish yourself and your dealership through excellent service and customer satisfaction. Having the lowest price is not what does that — caring for your customers and working hard to earn their business is what makes the difference. Instead of applying pressure and control, we need to ease the fear and anxiety that goes along with buying big-ticket items in a stressed economy. When customers see that we are genuinely trying to help them solve their transportation needs, price will take a back seat. Industry research has clearly shown year after year that customers’ buying decisions are driven by the product, the salesperson and the dealership, and in that order. Price is certainly important, but it always comes behind those three in the order of the buyer’s priorities. Buying a new car can and should be an exciting and fun experience for the customer. Creating a stressful environment through pressure and negative sales practices severely lessens the chance of that happening. It also reduces the likelihood for repeat business. Once salespeople and sales managers fully grasp this thought, which I call “Inspirational Selling,” the sales process becomes more enjoyable for both parties. The customer finds the process less intimidating, the salesperson finds the process more relaxing and the sales manager realizes a much better outcome with increased sales. So what is the secret to this problem? It is obvious: Drop the old methods of pressure and control and utilize methods the customer finds to be unique and inspiring. I like to call it the approach of “catching the customer pleasantly off guard.” By doing the unexpected, we can throw the customer’s game plan off track, which will now give the salesperson a better opportunity to inspire them with their product and their personality. We can only lose when we view and treat our customers in an adversarial way. By treating them in a way that we would want to be treated, we make the buying experience something to enjoy rather than to dread. When we can do that, we will see our customers’ attitudes change and our business will grow naturally and exponentially. David Lewis is the president of David Lewis & Associates, Inc. and the author of three industry-related books, The Secrets of Inspirational Selling, The LEADERSHIP Factor and Understanding Your Customer. He can be contacted at 866.834.6074, or by e-mail at firstname.lastname@example.org.
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