TD Auto Finance
Your profits may be the only thing better than our service
Get service you can count on. At TD Auto Finance, weâ€™re committed to helping you grow your business. And we go to great lengths to meet your needs. You can submit deals seven days a week, and we offer rates and policies that are among the best in the industry. You also get the expertise of our dedicated Dealer Relationship Managers, who work with you to customize business plans and maximize profitability. Itâ€™s just what you get from a financing partner with over 45 years of experience.
To learn more, call 1-800-200-1513 or visit www.tdafdealer.com
Part of the TD Bank Group, a Aaa-rated bank ranked as one of the safest banks in North America.
TD Auto Finance LLC, is a subsidiary of TD Bank, N.A. TD Bank Group is a trade name for The Toronto-Dominion Bank. Used with permission. For detailed credit ratings for the The Toronto-Dominion Bank and TD Bank, N.A. visit http://www.td.com/investor/credit.jsp. Credit Ratings are not recommendations to purchase, sell, or hold a financial obligation inasmuch as they do not comment on the market price or suitability for a particular investor. Ratings are subject to revision or withdrawal at any time by the rating organization.
“I DELIVER MY DEALERS MORE
REACH & ENGAGEMENT... ...AND THEY SELL MORE CARS
BECAUSE OF IT.” BILL GARLAND VSMM at SOCIALDEALER
REAL RESULTS. REAL ROI.
Our Virtual Social Media Managers (VSMMs) work with you to plan, develop, execute, and track effective Social Media campaigns. Posting to Facebook and Twitter is just the beginning. It ends with more leads walking in your front door. In between, we include a whole lot of strategy and promotion, with a little bit of ass-kicking thrown in to build your audience in Social Media.
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AutoSuccess Magazine is published monthly at 2300 Hurstbourne Village Dr, Suite 1200 Louisville, KY 40299; 502.588.3155, fax 502.588.3170. Direct all subscription and customer service inquiries to 877.818.6620 or firstname.lastname@example.org. Subscription rate is $69 per year. AutoSuccess welcomes unsolicited editorials and graphics (not responsible for their return). All submitted editorials and graphics are subject to editing for grammar, content and page length. AutoSuccess provides its contributing writers latitude in expressing advice and solutions; views expressed are not necessarily those of AutoSuccess and by no means reflect any guarantees. AutoSuccess accepts no liability in respect of the content of any third party material appearing in this magazine or in respect of the content of any other magazine to which this magazine may be linked from time to time. Always confer with legal counsel before implementing changes in procedures.© All contents copyrighted by AutoSuccess Magazine, a Division of Systems Marketing, Inc. All rights reserved. Reproduction in whole or part is prohibited without express written consent from AutoSuccess. AutoSuccess may occasionally make readers’ names available to other companies whose products and/or services may be of interest; readers may request that names be removed by calling 877.818.6620. Printed in the USA. Postmaster: Send address changes to AutoSuccess Magazine, 2300 Hurstbourne Village Dr, Suite 1200 Louisville, KY 40299.
four ways to increase your dealership’s trade-in performance
sales & training solution are you “old school?”
four More ways to elevate your e-mail marketing
Susie Horne, Account Manager John Warner, Sales-Improvement Strategist email@example.com firstname.lastname@example.org
Are you winning the technology arms race?
14 26 34
the closer - first-Party leads
Brian Ankney, Account Manager email@example.com
2300 Hurstbourne Village Dr, Suite 1200 Louisville, KY 40299 | p 877.818.6620 / f 502.588.3170 | AutoSuccessOnline.com/AutoSuccessPodcast.com | firstname.lastname@example.org
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sell on the phone, then on the drive. Who should sell an appointment? ohio superstore reduced recon time by 50 percent, resulting in two additional used car turns
match your marketing to your audience
why tablets matter:
tools and tiers: Are They Working for You or Against You? RussellGrant
Making a Difference in the Automotive Sales Process
overcoming objections: Rules to Help You Close More Business MattBaker
why relationships matter and roi doesn’t
30 32 38 36 40 DavidJohnson
five reasons why you should be tracking in your service department JenniferVerbrugghe
are dealership attention deficit disorders (ADD) undermining long-term success BrianPasch
a new landscape for auto auctions ToddKinzle
train with a funnel, not a hose MarshBuice
22 24 28 JimmyVee & TravisMiller
don’t you really care about your people? fire your internet sales manager MarkTewart
16 18 20 42 SeanV.Bradley
Six Potent ‘Weapons’ for Selling More Vehicles Online
Thomas Williams, VP & Creative Director firstname.lastname@example.org
Susan Givens, Publisher email@example.com
Making a Difference in the Automotive Sales Process Tablet sales continue to soar, and are expected to eclipse laptop sales by 2015. In fact, Forrester Research predicts that by 2016, a third of the U.S. adult population will own a tablet. This is not just a consumer trend, however, but one that has implications for every retail business. Although in-store tablet usage is still in its infancy, retailers are rapidly jumping on the mobile bandwagon to make shopping more fun and involving for their customers. A 2010 McKinsey survey found that the two most important factors that influence a customer’s perception of a sales force are the sales team’s product knowledge and the overall sales experience. Incorporating a tablet into your sales process is one of the most effective ways to improve upon these factors, especially in the dealership environment. A salesperson using a tablet: Makes the shopping experience more personal — Tablets help to foster a consultative sales process, adding value and providing information that is customized to the buyer’s needs, rather than a one-size-fits-all approach. Additionally, looking at information together on the tablet can help to establish a stronger relationship from the outset. Enhances customer engagement — A tablet is interactive, and shoppers love using them. For dealerships, there are many media-rich options for shoppers to engage with, including videos and side-by-side competitive or trim comparisons. When customers participate more actively in the sales process, they are more invested in making the purchase.
Increases customer satisfaction — Tablets give instant access to information, enabling the sales team to answer questions and look up details or inventory quickly, without leaving the customer’s side. This enhanced efficiency and credibility not only makes the sales consultant look more knowledgeable, but it also shows respect for the customer’s time. Bobby Wallace, GM at Dale Jarrett Ford, is excited about the value that tablets add to his sales process. “Customer expectations have changed,” he said. “They now do their research before coming in to the store. Their experience once they get here is what makes the difference between a sale and a lost opportunity. The iPad helps us exceed expectations to create a more engaging, satisfying customer experience that ultimately increases sales.” “The iPad is one of the most important automotive sales tools to have come along in a long time,” said Jim Hughes, co-founder of IntellaCar, the iPad sales application used by Dale Jarrett Ford. “It not only increases the productivity of the sales team, but its unique capabilities help deliver a superior customer experience from beginning to end.”
Susan Givens is the publisher of AutoSuccess. She can be contacted at 877.818.6620, or by e-mail at firstname.lastname@example.org.
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are you winning the
technology arms race?
Six Potent ‘Weapons’ for Selling More Vehicles Online
I recall the 1997 NADA convention where a new idea popped up. It had everyone talking. It had everyone trying to figure out just what this new technology was.Now, hardly a dealership today operates without this new channel for selling and buying inventory.
A single integrated platform for end-to-end lead control: You will capitalize and convert more online leads into sales when your online inventory originates from the same system where leads are received and managed. A single, integrated platform for such end-toend control provides increased visibility into We know this advancement today as online lead the intricacies of consumer behavior. This generation. My, how some similar technologies insight helps sales staff work leads more over the years have turned the car business on effectively and efficiently to increase closing its ear. Most would say we have been much rates and sell more vehicles. better off because of them, though some oldschool salespeople might object compared to Such care-centered follow up is increasingly the glory days of showroom-centric sales. powerful today. Consumers thirst for more personalized interactions. They’ve grown Be that as it may, technology marches on tired of repeated e-mail blasts instead of and dealers have more solutions and services real-life, personalized follow up. to consider than ever before. Many of these pertain specifically to how dealers utilize the The best technology tool to deliver Web to market vehicles, attract quality leads improved customer analysis and follow up and draw them into the dealership. Some is this single-platform concept. It adds this even enable dealers to try to conduct an entire value by tying inventory optimization and transaction online. publishing together with robust Website content management and CRM functions. Considering this trend, now is the time to look at a few potent new ideas that will help Automated windshield inventory tags: you keep pace with your competition in the One new exciting technology allows dealers technology arms race. Here are six such of any size to replace old school, messy “weapons” that can also help reduce costs: grease pens and stacks of pre-printed hang tags (and similar labels and decals that have Single sign-on: Using a single provider for to be hand written) with branded, variable multiple applications like CRM, inventory data printed stickers. Printing stickers right out of the showroom with “was/is” pricing and any management and Websites reduces the number other content means no waiting. Plus you can print stickers that cross-sell F&I products like of log-ons employees must use. Over time, extended warranties and other “soft adds.” a single sign-on app reduces IT maintenance costs. It also provides a single bill to pay for Mobile presence: Consumers are increasingly mobile and when you’re connected in multiple accounting, reducing overhead costs. Plus, it ways to your market shoppers they can interact with you via mobile Websites, social media, delivers a single support and help desk partner, the phone itself, e-mail, etc. — whichever method they prefer and is most convenient to them. simplifying remote assistance for employees Today’s aggregated real-time data exchange technology lets customers browse your online and improving employee satisfaction and listings — via classified shopping sites as well as your Website inventory pages, prequalify ensures that all teams inside the dealership themselves using online finance/lease calculators, negotiate a down payment, and/or even receive the features, functionality and support schedule their first service visits — from anywhere at just about any time of day or night. Not they need. investing marketing and technology dollars in mobile is a risky bet on your part. Real-time, inventory data exchange: This technology reduces or eliminates delays when posting inventory, changing inventory descriptions and/or pricing online. It also enables greater posting consistency among sites, such as cars.com, autotrader.com and craigslist.com where customers view inventory. Perhaps most beneficial, real-time data exchange enables real-time updates of inventory posted on your own Website, which tends to capture leads from the most downfunnel shoppers. With this time advantage, what shoppers see on your Website inventory pages is exactly what they see on any thirdparty site. This is crucial. Inconsistencies across platforms result in lower conversion rates and raise red flags for adept consumers.
Dynamic CRM: We all know systems like CRMs are often underutilized. Sometimes this underutilization is due to user training or motivation issues, but often because the tool packs more functionality than the dealer can use now. Modular CRM systems give dealers options — they can start with a system that helps them “crawl,” upgrade to when they’re ready to “walk” and as they become more experienced and their needs grow, upgrade again to a “run” level system. There is rarely any justifiable reason to buy more technology than can be used now or for the near term. It’s like being to pay for only those cable channels you really use, not the 200+ channels the cable company bundles in. The Great Recession (now in its fifth or sixth year, depending on who is counting) did change the retail game. While the industry’s growth and profits have improved over the last 18 months, it’s clear that leveraging technologies to reduce expenses, increase turn, increase profits and improve customer retention are a necessity for long-term success. Stay abreast of new technologies like those above to keep up with the automotive technology arms race. Christian Thornton is senior executive vice president of marketing and new business development for all AULtec Inc. He can be contacted at 866.516.6238, or by e-mail at email@example.com.
More shows. More sales. Now mobile. The smartphone has changed how consumers shop for everything, including high-end purchases like automobiles. AutoHookâ€™s new mobile capabilities drives car shoppers into the showroom right from their phone. Your sales force can now also validate, redeem and measure the performance of any AutoHook generated lead directly from any iOS or Android enable device with the AutoHook mobile dealer app. The AutoHook technology is incredibly simple to implement and manage, and converts leads generated from all of your marketing channels. Get started today.
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AutoSuccess: How did the idea for a digital dealership come about? Russell Briggs: We sell around 700 vehicles per month. During our high volume months in
the spring and summer we were sending 400 or more vehicles each month to the auction as a byproduct of these sales. We no longer have to do that. In the future, I see us having to go out and buy cars if we don’t get enough inventory from trades. We now have more than 1,600 registered bidders. The Auto Direct platform has been wildly successful. We thought if eBay can do it why can’t we? We are the only dealership we are aware of that is doing this.
Eric Giroux: From the business side, we would get lots of cars on trade that we cannot retail
because we want to keep our retail cars at $10,000 or above. We used to send the rest to the auction, which could lead to wholesale losses. From the customer service side, we would get customers that would come and in and ask, “Do you have any cars for $3,000” In the past our answer was always “no.” Now we are able to mitigate wholesale loss, while also being able to serve a much larger customer base and say “yes” to any customer looking for a vehicle at just about any price.
Derek Jones: Just like any dealership, we have a huge customer database. Customers who
Serving a particular customer base in the world of auto sales sometimes requires a new way of thinking and doing business. When the Kansas-based Briggs Auto Group decided to serve customers looking for lower-cost automobiles (which wasn’t the group’s original target audience), instead of adding another storefront to the nine existing locations, they tried something different: Briggs Auto Direct. In this virtual dealership, people register and can bid on lowercost cars and trucks, or have the option to “buy it now.” To say it’s been a success is to understate the matter. The site has only been online in its current perpetual-sale format since late November 2011,” said Briggs’ Marketing Director Eric Giroux. “We had our first month of 60+ cars after three months, and now average more than 70 cars a month. Obviously, with a large auto group like Briggs, we’re able to leverage our exposure, but it showed that there was a huge section of the market that we weren’t tending to — the low-price market — and as soon as we offered a solution, people just pounced all over it.” AutoSuccess spoke with Giroux, along with Briggs’ Owner Russell Briggs, Used Car Director Derek Jones and DealerFire Owner/Founder Eric Hoopman to ask them how this new outlet got started, what makes it so successful and how they plan to grow it in the future.
have bought $20,000 vehicles from us have kids who need a $3,000 car, or they need an inexpensive commuter car. Our company strives for 100-percent customer satisfaction. Our philosophy is that 99-percent customer satisfaction is less than we expect from ourselves. We do a complete inspection on every vehicle and we report the results to the customer. When our customer buys a $2,000 car from us rather from the independents, they know exactly what they’re getting — it takes the guesswork out of it. We call that a 100-percent disclosure, and it allows us to attract a new type of customer and maintain the level of customer satisfaction we expect.
Eric Hoopman: Over the years, Briggs has brought some really innovative automotive Internet ideas to the table that produce results. Russ Briggs is not afraid to take risks and invest time and resources into exploring all opportunities to improve his Internet sales. DealerFire and our creative team have always hustled hard to bring these ideas to life and I think it’s that back-and-forth push that has made for a great partnership. AS: What advantage does this new dealership offer that a more traditional dealership can’t? RB: This isn’t a new business. There is minimal cost or work. All you need are a couple of
extra techs to complete the vehicle inspections. The cost of reconditioning, detailing and transporting to the auction are now gone, along with the seller and buyer fees. A $4,000 car has to be marked up at least $1,500 by the next dealer just to cover these costs and make a small profit. By eliminating these costs, we are able to price our cars extremely competitively and often $1,000 lower than other dealers. This is truly going to change the way new car dealers manage their business.
AS: Describe the typical Auto Direct customer. RB: Many people who are buying from us are check writers. Many are parents buying a first
car for their child. We are now able to provide their first car and every car to their last. We have nine showrooms and 15 different inventories and, without a doubt, Auto Direct is our highest ROI. We are averaging about half the gross profit of a retail used car deal. We are selling to other dealers and consumers. And, we don’t negotiate. There is the option to use the auction platform or the “buy it now” price. We are not paying any commissions on these cars. We just pay someone to deliver each vehicle.
AS: How does the digital dealership interact with your existing brand? RB: It is human nature to have similar expectations of a $4,000 car and a $20,000 car when
you see both sitting side by side on the lot — so we don’t mix the Auto Direct cars in with the retail units. They are separate and available for customers to see them. I think customers are more comfortable buying cars on our Briggs Auto Direct platform. We state that the cars are exactly as advertised. We guarantee the vehicle condition report is 100-percent accurate. We have only had six issues in total so far on more than 400 sales, and have never needed to give a refund. An oil drip is an oil drip, and an oil seep is an oil seep. We state that cars with a drip need to be fixed. You can still drive a car a with a drip — and people do. We fix anything that is a safety issue and we still send some vehicles to the auction.
AS: Who were the key players in developing this idea, and how was it implemented? DJ: We came up with an idea and got with our Web design partner, DealerFire. We expressed
our ideas and together we built this from the ground up. Through working with their group, we were able to have it built the way we wanted. We did trial runs and made changes. They were
For more information about the Briggs Auto Group, visit www.briggsautodirect.com. For more information about
really patient with us and a few of their people took ownership of the project on their end. They were involved in the process, fixing the mistakes, working on improved processes. They helped us develop the bidding process and diagnose problems from start to finish. We didn’t have to babysit them, and this shows in the end result. We have a full-blown digital dealership. EH: When Briggs came to us and wanted us to build a branded “eBay”-esque platform for them to sell vehicles from, we definitely had two distinct points of view on project scope and complexity. On the automotive side, they looked at it as “we list vehicles and people bid on them,” but from the “techie perspective” ,we saw user accounts, condition reports, auction lots, preview mode, bid history, authentication methods, proxy bids and so on as major development challenges. I would say without a doubt their passion for the project and commitment to being a very active hands-on partner in the build out won us over and gave us the added fuel we needed to tackle a project of this scale head on. AS: What have been some of the results from this new way of doing business? DJ: We no longer have to pay to transport every vehicle to the auction and we are not paying
auction fees. Beyond that, we are getting the benefit of all the extra leads. All of the people that register are added to our database. We like to think of it as a “cradle to grave” approach to automotive sales and service. The person who just graduated from high school or college, the people just turning 16, or anyone looking for an inexpensive vehicle we can now help. We weren’t dealing in this price point of vehicle, and now we are. We are able to introduce them to the Briggs family dealership and, most importantly, our service department. Briggs can be their dealership from their first car to their last car. That’s a big plus. It also produces lots of retail buyers, as well. Many customers end up on a retail unit. We are also sending a bunch of business directly to service. With full disclosure of what’s wrong with the vehicle, it provides a prime opportunity for a service upsell after the sale, and that can help to develop a relationship between the owner and the service department from a young age.
“We had 1,157 phone ups from BriggsAutoDirect.com in March.” EG: Derek hit the nail on the head. This opens up our business to a multitude of new customers
we didn’t have the ability to help before. They had to go to a buy-here, pay-here store before that didn’t have our level of customer service. We now have access to those same customers, and whether they buy the car here or not, we have an opportunity to break down that barrier and open that line of communication, get them into our service department and develop a customer relationship that hopefully is a lasting and profitable one.
AS: Describe the change you’ve seen in gathering leads from this new method of sales. RB: The real magic of the platform is the data. Every person who registers provides all of their
contact information. Once they register, we are able to communicate with them for life for free. We are sending out an opt-in e-mail marketing campaign every two weeks to our registered bidders with an updated inventory of vehicles to be auctioned. No one is opting out. Anyone that has done an aggressive e-mail marketing campaign knows that people opting out becomes an issue. We are not having that problem even sending biweekly e-mails.
AS: What are you adding in the future? RB: DealerFire is adding a new feature for us that will send an e-mail to a service writer every time
an auction is complete or the “buy it now” feature is used. The e-mail will include the car report and the buyer’s information. The service writer will contact the buyer with the vehicle information and ask them if they would like to have any of the disclosed issues fixed in our service department before they come to pick up the car. This will result in many more service up sells.
AS: When you were deciding on a company to help you build this dealership, did you look for anyone outside of your current Web design partner? DJ: We have a great relationship with DealerFire so we went to them and went through with
them to the end. There were other companies, but none of them were specific to the automotive industry. They created a full solution from top to bottom: design, development and support. They are our full-service solutions provider, and a digital dealership can’t be supported without a full service provider like DealerFire. We believe in 100-percent disclosure to our clients and they pride themselves on 100-percent transparency with their clients. We are a perfect fit. EH: We couldn’t be more excited to see all the success Briggs has experienced in this new wholesale 2.0 space. We are excited to be turning on other dealer groups around the country to one of the last great frontiers in profitable, transparent automotive sales.
Eric Hoopman and DealerFire, contact him at 866.924.7027, or by e-mail at firstname.lastname@example.org.
VERIFIED SALES EVENT RESULTS
the closer -
first-party leads UNITS GROSS ST DAYS SOLD PROFIT Week of April 7, 2012
Note: 83rd sale w/ dealer group
$189,822 14th sale here
Sale # 28 w/ this group Week of April 14, 2012
17th sale w/ this dealer
8th sale w/ this dealer; worst result
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We’re probably the only company that will tell you that every event we do isn’t perfect. 81% of our clients are very excited about the results we generate for them. The other 19% aren’t great, but our clients don’t lose money!
GUARANTEED RESULTS STAFFED EVENTS DIRECT MAIL & MARKETING CONTACT MATT BAKER 800-688-1370 email@example.com Accountability. Reputation. Results. Since 1994
• Cost — The cost of acquiring leads through other sources continues to climb, while the closing percentages of third-party leads remain flat or are in decline. First-party leads, by their very nature, are the lowest cost because they’re coming from the dealer’s own site.
The visitor can receive one for visiting the dealership, taking a test drive or even inquiring about service. Many providers offer incentives or gift cards as a part of their overall lead generation service, making it an easy go-to solution when looking for ways to increase walk-ins. • LiveChat — Think of live chat as a virtual meet and greet for all of your Web visitors. This technology gives a dealership the ability to reach out to every person who visits the Website and encourages interaction Just by greeting the visitor, the dealership can increase first-party leads over those dealerships not employing this tactic. • Payment Marketing Payment marketing companies understand what “car guys” have known for years: Most consumers are payment buyers. Vendors in the space are tackling past “price reveal” problems by now allowing dealers to define both finance and lease payments for every new and used unit on their lot.
• Higher close rates —According to industry experts, the average dealer closes about five percent of their third-party leads, but closes their first-party leads at more than 20 percent • Trade Appraisals Tools — Online trades rank as one of the top three pieces — that’s four times the sales with the same of information buyers look for when amount of leads. researching a purchase. An online trade appraisal tool that asks for consumer lead • Control —While many third-party lead information before providing values can providers push leads to numerous dealerships help increase first-party leads significantly. in the same geographic area, first-party leads enable the dealership to remain in control of • Specials Marketing — More than likely the sale from start to finish. your dealership’s specials page is the third most viewed page of your Website • Brand Awareness — Leads from a and is a terrific place to gather first-party dealership’s own marketing activity can help leads. Online customers want specials continue and strengthen a dealership brand, and incentives to help drive them into the versus the third-party provider funneling dealership. Top vendors in this space are leads down from their own branded Website. providing dealers with fully automated specials pages that can drive an average After seeing the benefits of first-party leads, three percent page conversion rate. (This the next obvious question becomes, how does means these pages are generating an a dealership generate more of them? Here are a incremental first-party lead from three out of few ideas based on interviews with dealers who every 100 unique visitors.) are having success with their first-party leads: • Web Overlays — Web overlays continue to be popular with Website visitors and can be huge motivators to entice browsers to come into the dealership. Using this method, browsers on a dealership’s shopping pages receive targeted offers, redeemable only by visiting the dealership in person. There are a variety of ways to customize the overlay:
A typical dealer should be closing between 20 and 25 percent of the first-party leads they generate. Knowing this, it’s important for every dealer principal to review their dealership’s Website and employ each and every conversion element available to them. It is well worth the time and effort, and the result can be significantly increased sales.
Jesse Biter is co-founder of Dealers United. He can be contacted at 866.239.4049, or by e-mail at firstname.lastname@example.org.
All vendors agree that an increase in showroom visits can be accomplished from a mix of lead sources; whether it comes from a dealership’s own Website, an OEM site or a third-party Internet provider. However, the first-party leads — those leads dealers generate from their own activities and Websites — are consistently the lowest-cost leads and provide the highest closing rates over any other source. Dealers should be actively searching out ways to increase these first-party leads for higher conversions and shorter selling cycles. Here are just a few of the benefits first-party leads offer dealerships:
Fire Your Internet
sales manager I know I am going to get a lot of heat on this article, but it has to be said. I have worked with thousands of dealerships over the years and there have been numerous reasons given for mediocrity, and even failure. In the beginning of automotive Internet sales in the late 1990s, it was a novelty and an incremental business, but most dealerships were not able to truly harness it and make it a major profit center. However, over the years and through evolution of the automotive sales industry, and the country as a whole, there has been a lot of change — change in how people are researching, shopping, making decisions and ultimately buying a vehicle. There has even been change inside our industry by dealer principals, GMs and sales consultants. It seems that dealers are getting it. They understand that Internet sales, business development, digital marketing, and social media are all important. What I am seeing now is a scary pattern emerging. A lot of dealerships are not maximizing on opportunities right in front of them because they do not have the right person in place. The Internet sales manager or BDC director that they have in place is the wrong person for the position, and they are hurting the dealership! Here are some problems I’ve seen at dealerships: • A computer geek in the position who is not an automotive professional. There is nothing wrong with being a geek. I have a problem if they have no idea how to sell a car, and don’t have the respect of their team and employees. They can’t motivate and drive the department to success. • An IT professional is the head of an Internet sales department or business development center. Just because they are good at fixing computers or understanding technology does not necessarily make them the best choice to run a million-dollar sales department. “Internet sales” is still sales. • Instead of terminating a sales consultant from the showroom floor, they are given a “second chance” running the Internet sales department. I don’t get this one at all. If someone can not be effective on the showroom floor, why would you have that
person be the head of a department where 92 percent of Americans go before they ever step foot into your dealership? • A sales consultant is promoted from the showroom to running the Internet department. Please understand just because someone can sell a car does not mean they can run a department, let alone an Internet sales or business development department. Just because they can sell cars does not mean they are capable of being a manager or a leader. There are a lot of successful sales consultants who sell 20 or 30 cars per month, but don’t work well with others. They have no concept of interdependence. • There is no Internet sales manager/ BDC director at all. That is just bad, and again, makes no sense whatsoever. When 92 percent of people are going online, there needs to be major attention to this area. • A dealership’s manager also manages the Internet department. I have seen it all, my friends. The dealer principal or general manager takes on the Internet department as an “additional” responsibility instead of having a dedicated manager, or they dump the responsibility of the Internet department onto the GSM or sales manager. This is not a viable solution. Remember Basic Math
The average dealership in the United States delivers fewer than 100 units per month. But the average dealership has: • A GM or GSM • One to two sales managers (new car/used car), or “closers” • An F&I manager • 10 Sales Consultants If you want your Internet or business development department to deliver units, you are going to need the right Internet manager or BDC director. Yes, you might need to fire your current Internet sales manager or BDC director. You might have been thinking about doing it for months now but weren’t sure. Let me make it easier for you.
Think of your current Internet sales manager or BDC director: • Are they a family member or in a relationship with anyone else in the dealership? • Do they have any automotive sales or management experience? • Do they have an aversion to the phone? • Do they have the ability to take a “TO” from their employees, sales consultants, appointment setters, etc? • Do they have the ability or desire to proactively “TO”? • Do they have the respect of their team (or the dealership for that matter)? • Can they, or do they, lead by example? • Do they train their team? Do they know how to train their team? • Do they have “one on ones” with their team? • Do they know how to project and forecast, and not merely guess and hope? • Are they rude and or mean to their team or their customers? • Do they have Standard Operating Procedures (S.O.P.s), or do they just “wing it”? • Can they desk a deal? If you are reading this and you are a dealer or GM, do this calculation before you open the showroom tomorrow: Look at your electronic leads, phone leads and walk-in leads. Say your electronic and phone leads are 70 percent or greater of all leads. Now look at your manager running your Internet or business development department. Are you comfortable with them in charge of 70 percent of your opportunities? If not, make the change today. If you can’t promote that person as your nest general sales manager, you have the wrong person in place. If you would like a free personalized analysis of your Internet Sales Manager, contact me at the e-mail below with “ISM” as the subject line. 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.
Missed opportunity? Go back and save it.
What if you could get a second chance at missed opportunities? DealSaver reviews every incoming call, identifying lost sales opportunities and notifying you in time to save the deal. Your notification will include the caller’s name, telephone number and analyst’s notes. DealSaver is now a mobile app:
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Dealsaver has provided my dealership the ability to maximize every phone-up by ensuring that we never miss an opportunity. With Dealsaver, it’s like having a full time BDC for a fraction of the cost.
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Bill Doraty, Owner Bill Doraty Kia
don’t you really care
about your people? If you are a dealer or a leader of a dealership, what are you doing to recruit, hire, train, motivate, educate and retain good and even great people? If you truly want to see what is most important to you, then all you have to do is review where you spent your time last week, last month and last year. No matter what lip service many of you will give to how much you want good people, you will notice that you spent most of your time on everything but your people. You may have worked on upgrading your facilities, buying inventory, talking endlessly with advertising and marketing companies about the next great magic bullet to drive people in the door but, at the end of the day, how much time did you spend directly with and for your people? Jack Welch, the retired CEO of General Electric and widely regarded as one of the better business leaders in the last hundred years, has said often in interviews that some of the most productive time he spent as a CEO was in training and educating his managers and people. Do you have written, quantified, actualized and reviewed plans for recruiting, hiring, training and retaining your people? Most dealers do not have any formalized plan for the above items and never will. Those dealers/managers
will bitch, moan and groan all day about the problem of getting or keeping “good people” but are doing little to nothing about changing it. Here is the reality: If you have people you don’t want, doing things you don’t want, getting results you don’t want, ask yourself who hired them or developed them. Either you hired the wrong people, or you did not do a good job in developing them. Stop playing the blame game and take personal responsibility for the state of your business and the challenges you face with your people. Your challenges have nothing to do with the economy, location, brand or the nature of generation X,Y, Z or any other alphabet description we give to a generation. Your results all boil down to how good a job you do or don’t do in recruiting, hiring, training, educating, motivating and retaining good people. Here is a quick checklist: • I have a written, actualized and reviewed plan to recruit people to my business using multiple sources everyday in an ongoing fashion so I am recruiting from a position of want not need. Needy people rarely get what they want. • I have a written, actualized and reviewed plan for interviewing potential employees that involves set interview questions, the amount of interviews and who is to do those interviews.
• I have a written, actualized and reviewed plan that includes an “Ideal Employee Profile” for all positions to quantify exactly what I want in an employee before I begin recruiting. • I have all the tools necessary to add some science to the art of hiring using different test, predictive indicators, etc. • I have a plan to educate and train my employees everyday or every week and not just when the factory tells me to train them on product. • I am monitoring and know in detail my turnover situation including total numbers, percentages and why by providing exit interviews and management discussions about how we might have failed in recruiting or training this person. • I am providing consistent coaching sessions with my employees in assisting them to grow and learn while avoiding potential pitfalls. To change anything, you must first take stock of where you are and where you want to be. Where you are today is because of decisions you made in the past and where you will be in the future will be based upon the decisions you make today. The most important decisions you make today will be people-based decisions. For my free special report “Ten Tips for Recruiting Salespeople Successfully” e-mail me at the address below with the word “Recruiting” in the subject line.
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 firstname.lastname@example.org.
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When you strip away your bricks and mortar, Website, CRM systems, inventory and everything else, what really matters? It’s your people. The bottom line is, people make a business successful or unsuccessful.
train with a funnel,
not a hose
A three-year-old child has around 900 words in his vocabulary; over the next 15+ years, a child’s word bank will explode to an average capacity of 20,000 words. As a parent, it would be impossible to teach your toddler everything you have learned in life in seven short days, yet dealerships are guilty of cramming thousands of hours of experiential knowledge into a weeklong boot camp affectionately known as Sales Training. The one word that surmises why your hopeful hire went to lunch and never returned is because he is “overwhelmed.” The grandiose expectations of earning a six-figure income in sales vaporized faster than witnessing Kim Kardashian in a wedding dress when he became overpowered by the amount of material, closes and expectations that lay before him.
The world may have been created in seven days, but it is impossible for your new sales consultant to fully grasp the car business in one short week. Instead of overpowering them by dumping a wealth of information in one fatal sitting, try funneling your information to them. When a child is learning how to read and write, teachers are masters at funneling enough information to expand a child’s knowledge but are careful not to pour too much and overwhelm and inhibit child’s progress. In short, effective teachers train with a funnel and not a hose.
The elementary fundamentals to a child’s ability to read and write begin with learning each letter of the alphabet. To aid in a child’s learning, teachers link each letter of the alphabet with an image. Children then begin to associate a letter with a specific image (ex: “A is for Apple”). As a child progresses, letters are strung into one syllable words. The most important element for a person new to sales is his or her approach to the business. Like your chemistry teacher, the car business is brutally tough — you cannot cram for success. It takes an investment of the right attitude, professional attire and an absolute obsession to your profession to set the proper foundation needed to build your pyramid of success. Sound Off
Mix it Up
As a child’s vocabulary and sentence structure matures, he can then concentrate on developing more complex sentences marked with proper punctuation. As a salesperson refines his skills and becomes more acclimated with customers, he then can begin to pepper the complexity of structuring his sales processes with third-party reviews, factual knowledge of the distinct advantages his product has over his competitors’, as well as share real-world success stories of clients who bought a similar product have had. No sentence is complete without proper punctuation. As the Iron Chef of the blacktop, a maturing salesperson begins to mix the right punctuation with the right circumstances. Periods close the sale by delivering a poignant delivery unworthy of a customer’s challenge; commas are instituted as a means of pausing and allowing the gravity of a thought to sink into a customer’s mind; exclamation points create the hype of excitement needed to stir up a customer’s emotions; semicolons are carefully placed to pause and introduce a new thought or idea — sometimes as a means
to put a customer more at ease. In short, a salesperson’s techniques are infused with his personality and experience. The Bible advises leaders to “train up a child in the way that he should go, and as he grows old, he will not depart from it.” Sadly, great potential is departing from the automotive industry not because of a lack of opportunity, but because of illiteracy. In an effort to fill a sales roster, salespeople are rushed onto the sales floor and left to mimic the bad habits and techniques of others, thereby receiving poor results and stunting their potential for growth. When the seed of a Chinese bamboo tree is planted, nothing can be seen for four years. On the fifth year, the tree’s tiny shoot blossoms into an 80-foot tall tree. The tree didn’t suddenly decide to grow five years later — because of the caring and nurturing it was receiving, it was able to develop the roots and provide a base strong enough to support its future magnificent stature. Your future depends on what you plant and nurture. 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 email@example.com.
Once a child is able to enunciate each letter of the alphabet and begins to construct letters into words, he then is able to construct words into simple sentences. In sales, your simple sentences are your processes. Every dealership has an eight- to 10-step Road to the Sale. A Sales consultant, from novice to veteran, is taught a step-by-step process for outlining everything, from how to approach a customer to closing and following up after the sale. Just as a roadmap can aid a driver in arriving at a specific destination, so, too, does a dealership’s step-by-step program lead a salesperson through a sale on a consistent basis. Maps are designed to be followed consistently in order to shorten the trip and make a sale. Make a wrong turn and the trip (sale) will take longer. The Road to the Sale is similar to inputting the right combination into a lock. When the right sequence of numbers is entered, the lock is opened. Under times of duress, salespeople tend to deviate from their proven processes and are guilty of insanely trying different combinations out of desperation to make a sale. If there are 10,000 possibilities in a four-place combination lock, how many variations of your Road to the Sale do you use? Athletes, chefs, pilots and great salespeople are consistently devoted to proven processes.
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This choice is still facing thousands of dealers who’ve yet to “choose a side.” Time and distance, however, have now created the opportunity to look back and ask, “Are those ‘old school’ techniques really out of date?” In an effort to simplify (but at the risk of generalizing), let’s examine some of the elements of the “old school” approach: • Higher-pressure selling environment • Dealer-controlled selling process • Less price/margin transparency • Emphasis on front-end profit • More reliant on traditional advertising like print, radio, television or direct mail • “Hook”-based marketing messages • Bigger push for a substantial down payment • Sales are made in person on the lot Now let’s take a look at the “more sophisticated” new way of doing things: • Low-pressure selling environment • Customer-controlled buying process • Transparent pricing and profit margin • Emphasis on making money in the long term and willingness to forgo immediate profit • Focus on quick turn, high volume • Less reliance on traditional advertising, and more on digital advertising • Price-based marketing messages • Sales process exists in large part in e-mail, the Web and on the phone So which is better? Of course, there’s no right answer. Ultimately, dealers should choose to do business in a way they feel most comfortable — and find to be most effective. However, we strongly advise against flatly rejecting either “old school” or “new school” techniques, and instead encourage dealers to
become independent thinkers and operators who are willing to take the best and most effective elements of any approach and use it in their business.
The real danger is in the vast assumptions that have been made about the “new economy” and the “new consumer.” There’s a sense in the business that all consumers are informed and all informed consumers will demand the lowest price and reject any form of pressure. These assumptions are simply not true. In reality, consumers still have the same lizard brains they had a decade ago. And as nifty as it would be if the Internet could speed up the pace of evolution, it can’t and it hasn’t. People still have desires, which are fulfilled by owning a nicer, newer car. They still have fears or doubts, which prevent them from entering the buyer’s circle. An effective dealer’s job is to leverage the desires and overcome the doubts. Tactics vs. Intent
Nowadays, generalizations are made about dealers who use certain tactics. For instance, we’ve heard dealers who consider themselves part of this newer generation accuse other dealers who continue to make extremely high front-end profit using “old school” tactics of being somehow unethical. The broad philosophical question: Is making a profit unethical? That’s for you to decide. But for the purposes here, let’s assume we all agree that making a profit is ethical. This is, after all, the car business — not the car foundation. In fact, dealers provide a valuable service to the public by finding, sourcing and arranging for the transportation of vehicles to their location, holding an inventory of those vehicles so that customers can browse multiple options, helping customers find and arrange for financing of their chosen vehicle, etc. For that, service dealers deserve a profit. (As an aside,
nobody questions or criticizes grocery stores or electronics stores for making a profit. Why should making a profit at a car store be any different?) How much profit is the right profit? As much profit as the market will bear, one customer at a time.The question then becomes: Is the use of “old school” tactics wrong? We submit that the tactics used are far less important than the intent of the dealer using them. A dealer whose mission is to help as many people as possible satisfy their emotional desires by helping them own a nicer, newer car is not a bad person. Can we agree on that? Then it should follow that whatever tactics are used to make the sale, as long as the tactics are not dishonest, are good and reasonable. And a dealer should find and execute any and all tactics that help secures sales that they feel comfortable with. “Old School” Plus “New School” Makes the Most “Profitable School” In The Industry
In our view, “old school” tactics are wrongly demonized and cast aside by an increasingly contemporary-minded industry simply because they’re old. Additionally, “new school” tactics are rejected by dealers who refuse to embrace new technology, simply because they’re new. In the final analysis, the most successful and stable dealers are those who provide high value in exchange for high profit and utilize all the tools and techniques available to them to accomplish that. Like the dealer who has a video blog and a radio campaign, or uses a trade hook and an optin form. Old and new are not mutually exclusive and should coexist for best results. If you’d like to get our to do list for both “New School” and “Old School” dealers, send an e-mail to firstname.lastname@example.org with the subject line “To Do List,” and to discover how to find the untapped opportunity in your market, request a free Market Rater Analysis at the address below.
Jimmy Vee and Travis Miller are founders of the Rich Dealers Institute. They can be contacted at 866.867.9618, or by e-mail at email@example.com.
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Around 10 years ago, the car business reached a fork in the road. The industry was challenged by a newly informed and empowered consumer base. From that point forward dealers have been faced with a choice: Hang on to those old school sales and marketing techniques or join the ranks of the next generation dealers who rely on a “more sophisticated” approach — a kinder, gentler car business.
sales & training solution
a new landscape for
auto auctions This week, thousands of vehicles will roll across the blocks of hundreds of auto auctions across the country. Thousands of dealers will fill up their Styrofoam coffee cups in the lobbies of those facilities before spending their day trying to be in the right place at the right time, so that they can go home with a few good buys for their lot. Much of what you would see in those auction lanes this week is just the same as it was five or 10 years ago, but if you don’t realize that the overall landscape of the auto auction is dramatically changing, you’re at risk for being left behind. Whether we’re ready for it or not, the way good vehicles are sourced is different than it was just last year. How you respond to all of this change will likely determine the success of your used car operation. Winners accept and embrace change when it comes, and they learn to use the tools and resources available to them to thrive
in their new environment. A common example of this is the transition from print to digital media. The organizations that dug their heels in and hesitated to employ new technology lost opportunities to make more money. The longer they’d waited to update their thinking, the more ground they had to make up, equating to more lost opportunities. All of the major auto auctions across the country have created opportunities for dealers to view, analyze, and even bid online. When you learn to take advantage of these tools, you’ll find that you have access to a much larger pool of inventory. It stands to reason that the more vehicles you evaluate, the more you will increase the quality of the vehicles you actually buy. However, one of the biggest challenges you’ll face is the time it takes to research the vehicles that are now available from all over the country in order to make an educated bid. When my partners and I owned an independent auto dealership, the research time slowed us down as well. We found ourselves spending way too much time attempting to sift through the sea of inventory available with enough information to make intelligent decisions. We wished there was a way to streamline or eliminate the time-consuming research process in order to really harness the power of the Internet and significantly improve our buying process. Cutting and pasting VINs is cumbersome and takes time and attention — two things that are in short supply in any dealership.
We envisioned a tool that would function as a heads-up display, allowing us to look at any vehicle listed on our favorite online auction sites and immediately have all the information we needed to evaluate that vehicle. We wanted a way to have all of that data be automatically provided even when we were participating in a live online auction via Manheim Simulcast or ADESA LiveBlock. We didn’t want to have to leave the auction website and cut and “I CAN’T EVEN IMAGINE RUNNING paste VINs.
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The idea of an all-encompassing resource for online auto auctions ultimately developed into a new piece of technology: a process improvement tool that automates the research that dealers typically perform for every vehicle they view on the major auctions’ Websites. This technology is now available and gives dealers the ability to truly take advantage of the power of the Internet and effectively source vehicles from a much larger pool of inventory. We’ve spent the last several years working with dealers as they embrace the changes in how they source inventory, and time after time they report a measurable increase in their profit per vehicle as they multiply the number of vehicles they evaluate by using the new tools available in the marketplace. They are able to get more cars from more locations, to focus on the more profitable vehicles, they can run more lanes in the online auctions, and are able to do more with fewer resources. The truth is the auction landscape is changing and will continue to change. As a dealer, you need to determine how you will handle the change. Will you resist the inevitable — and be left behind — or will you use the new tools and resources available to you and thrive?
Todd Kinzle is the president and CEO of Auction Genius. He can be contacted at 866.386.4914, or by e-mail at firstname.lastname@example.org.
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match your marketing
to your audience Ten years ago, a company’s advertising options were strictly limited to billboards, television, radio and magazines — until the evolution of the World Wide Web. These innovations have changed our networking world in ways unimaginable. Just consider all the instances in which you’ve used Google or other search engines; you can find virtually anything you need, whether it be an address, phone number or even a list of restaurants nearest you. When connecting with potential car buyers, you as the dealer want to be sure to reach as many consumers as possible, in the most effective manner. Therefore, it only makes sense that your ad message be relayed where the majority of consumers are searching. Below are a few fascinating statistics from the 2011 Deloitte Automotive Generation Y survey that may surprise you: • 40 percent of vehicles sold in the next 10 years will be Gen Y car buyers • 86 percent of Gen Y car buyers use search engines to shop for vehicles • 67 percent of Gen Y car buyers use social media sites to review brand and model information
Why is this information significant to your dealership? Well, according to these statistics and the current innovations in social media and marketing, it is extremely important that your dealership have presence in the search engines and on social media sites. Generation Y car buyers aren’t scanning through radio stations waiting to hear some enticing news about a local car dealership, nor are they watching TV hoping to see a commercial about specials on certified pre-owned vehicles. Gen Y car buyers already know that they’re interested in purchasing a vehicle and that they can simply go to Google.com, type in what they’re looking for, where they’re looking to get it, and then in seconds receive a plethora of results pertaining to exactly what they desire. The use of technology (smart phones, tablets and computers) as the tools to research the purchase of a vehicle have become predominate over the use of TV, radio and print. It’s key that your dealership make use of a strong online digital presence, as it is the way into the minds of today’s consumers. Having your advertisements on the first page of search engines such as Google, Yahoo and Bing will have an immense impact on the amount of exposure you receive, compared to your competitor’s ads, which may be found on later pages of a search, or not at all. When car buyers are searching keywords in your local market to buy a vehicle or get service, your video advertisements will be the first that they lay eyes on; thus, the first dealership imprinted in their minds, and mostly likely the first dealership they contact. Lastly, having a consistent presence on Websites such as YouTube and Facebook ensures that your dealership has the opportunity to be seen by the vast majority of Gen Y car buyers, as these networking sites are arguably the most popular.
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.
One dealership using video SEO is Rancho Santa Margarita Honda, the fastest growing Honda dealership in Southern California for 2011. Bob Carmendy, partner in the store, says “We are using Video SEO to help increase our online exposure for page one of Google in the market area surrounding Irvine. Irvine has a per capita average income that ranks in the top 10 cities in the Unites States.” The search phrase example shown above is for “2012 HONDA ACCORD IRVINE,” which shows RSM Honda having three videos on the first page Google search results, thereby increasing online market share and effectively reducing competing dealerships online exposure to potential car buyers. Start using video SEO today to gain a competitive advantage in your local market.
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sales & training solution
five reasons why you should be tracking in your service department
I am sure many of you have used, or are currently using, a call tracking service to track your sales advertising and review calls for training purposes. Dealers who use these tracking services in their sales department experience many benefits, including increased advertising efficiency and lost opportunity rescues. But ask these same dealers if they are tracking the calls that come into their service departments, and most will tell you they do not track their service calls. Here are five very viable reasons why you should utilize those same tracking capabilities in your service and parts departments and the benefits of doing so: 1. Use Tracking to Measure Your Targeted Advertising Efforts
Most service departments take a more targeted approach with their advertising by using either independent or factory-sponsored direct mail programs. However, if you place a unique call tracking number on each one of your direct
mail offers, you not only have the ability to measure which ads are more successful, but it also allows you to do more in-depth analysis on the value of each advertising effort including ZIP code analysis, peak calling times, ROI and cost per call. With the type of analysis that tracking provides, your dealership is in a much better position to make smarter ad spend decisions and gain a greater return from each ad dollar spent. 2. Setting Appointments on the First Call
The recording feature offered with most call tracking services is the best way to improve your team’s call handling skills and encourages them to work harder to convert incoming service calls to appointments with a specified date and time. Traditionally, emphasis has been placed upon maximizing that skill at the front end, but it is just as important at the fixed end of the business. Customers are holding onto their vehicles longer and competition for the customer pay side of the business is increasing. The need to convert callers to an appointment is critical in the summer service season. Knowing your scheduled service appointments for the day allows you to manage your capacity and reduces dependency on “walk-ins” versus those with specific appointments. 3. Handling CSI Issues When They Happen
By having immediate access to incoming call recordings, along with the customer’s name and phone number, puts service managers in a better position to immediately respond to CSI issues. It allows service managers to intervene quickly and diffuse the situation, perhaps even turning it around. This will help avoid low CSI Scores and the recorded call allows a customized and immediate coaching opportunity for service advisors and receptionists to learn from their individual mistakes. 4. Rescuing Missed Call Opportunities
The spring/summer service season brings increased call volume and the service department can be overloaded during peak calling times, especially in the morning hours. Service departments on-hold hang-ups can become a problem. As part of a tracking service, dealers are provided with a daily missed call report. This gives them the opportunity to determine which customers were on hold too long and hung up, and which calls never made it to the service department to set an appointment. This information can prove to be an invaluable resource to rescue those lost opportunities.
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5. Tracking Parts Requests
The utilization of call recording on parts requests can also provide a great tool to track the balance of special order parts and current inventory. The opportunity to review transcripts and calls allows the parts manager to determine the most frequently requested parts that are not normally in stock. This way they can adjust inventories and further rescue opportunities that might normally be lost. The use of call tracking technology beyond the front end is ripe with opportunity in the service and parts arena. By providing a more detailed and closer look at your advertising spend in relationship to ROI, fixed operation managers are in a much better position to manage their expenses. Utilizing the call recordings provided by these services can dramatically increase service revenue through the rescuing of lost opportunities if calls are routinely reviewed. Additionally, by using these same recordings to “coach” service advisors and service receptionists to better phone handling performance, you have further expanded the long-term value of the services provided by this technology. If you are already using call tracking technology and services in your variable operations, you should strongly consider extending it into your fixed operations areas as well. If you don’t, you could be leaving serious money on the table. Jennifer Verbrugghe is the vice director of sales for the auto division of CallSource. She can be contacted at 888.821.3770, or by e-mail at firstname.lastname@example.org.
as seen on
sales & training solution
why relationships matter
and roi doesn’t
We live in a society that puts the dollar above the customer. That is, corners are cut and customer service is subservient to getting “paid.” Don’t get me wrong, I like getting paid as much as the next person, but too many times we question the return before we implement any kind of customer service process that influences both repeat business and word-of-mouth. Albert Einstein said it best when he said, “Everything that can be counted doesn’t necessarily count; everything that counts cannot necessarily be counted.” I recently wrote a post on my blog called “Forget About ROI, Start Think About ROE.” In that post, I put forth the idea of thinking in terms of “Return On Experience” — in other words, the return you receive on the experience you give your customers. I had somebody tweet me saying that I was naive and misguided if I thought ROI wasn’t important. He missed the point. I’m not saying that ROI isn’t important, because it is. What I am saying is that being able to track an ROI isn’t important on some of the things that we know we should be doing. That takes me back to what Einstein said, “...everything that counts cannot necessarily be counted.” While there are ways to track a repeat customer and word-of-mouth, it’s not always straight forward. I don’t think anybody would argue that customer service goes a long way to determining if a particular customer is going to become a loyal customer or not. We’ve all been subject to poor customer service and thought to ourselves, “I’m never coming back here again!” The opposite is also true. Again, you may not be able to figure out what the cost-to-income ratio is of good customer service, but we know it’s there. So, when it comes to relationships, they matter and ROI doesn’t. Building A Positive Relationship With Your Customers
Depending on what type of business you’re in, the depth of your customer relationships will vary. I’m not putting forth the idea that you should become buddy-buddy with all of your customers, to the point that you’re hanging out with them on the weekends. What I’m saying is that you should build the type of professional relationship that showcases you as the authority, the go-to restaurant or the honest mechanic. What does that mean? It means that you should give great customer service, that you should enchant your customers to the point that, at least in their minds, you are the best thing since the Internet. From there, once they are enchanted, follow-up to cement yourself as the business of choice. Let me give you a hypothetical scenario using a barber shop. I go in to get my hair cut, walk up to the counter and am told there will be a 45-or-so minute wait. The gentleman behind the counter offers me a coupon saying, “If you’d like to, the coffee shop next door has some of the best coffee in town. Here is a coupon for a free cup. I can give you a buzz on your cell when your barber is ready.” I take the coupon, and in 30 minutes I get a call from my barber letting me know that I’m up next. Once I get back to the barber shop my barber welcomes me by name, and asks me if I want the same “regular” haircut, tapered in the back, as I got last time. I mention that I would, and then he asks me if the shampoo he recommended had cleared up my dry scalp. I tell him that it had and then he strikes up a pleasant conversation about me. He shows a genuine interest in what I do, even mentions that he knows somebody who might be in the market for my services and asks for a business card. I give it to him, but instead of sticking it in his pocket he picks up the phone and two minutes later tells me that his friend will be expecting my call. After he ensures that everything is just how I like it, he tells me how much he appreciates my business and how much he enjoys it when I come in. Twenty minutes after leaving, I get an e-mail from him, with the phone number of his friend along with a few tips on how to combat dry scalp.
How would that make you feel? He didn’t spend any money, but he did go above what I’d expect from the person cutting my hair. Even the conversation was about me (everybody’s favorite conversation is about themselves), and not about the weather (what most barbers talks about). What is the ROI on that? Can it even be tracked? Do you even need to track it? I don’t think so, because once again, relationships matter and ROI doesn’t. So, don’t let the fact that it can’t be counted stop you from implementing a customer enchantment methodology into your everyday business practice. Just know that the return will be huge, even if you can’t prove it. Remember, people talk. Give them something positive to talk about and they will talk about you, influencing others to become your customer. That’s how you create a lifelong customer that creates other lifelong customers. How are you enchanting yours?
David Johnson is the digital marketing strategist for Next Generation Dealer Services. He can be contacted at 866.481.8812, or by e-mail at email@example.com.
AutoSuccess Eye Can Challenge Win a Caribbean Cruise for Two!
My Prescription to Win! How would you like to win a complimentary Caribbean Cruise for two? You can sail anytime this year up to the first three months of 2013. Cruise round trip from Ft Lauderdale to the tropical Bahamas. Aboard ship you’ll enjoy a comfortable cabin, delicious meals, Las Vegas style casino, live shows, a relaxing spa, invigorating gym and lots more. Believe me it is the perfect getaway! Decorate your personal “Eye Can” and enter the “AutoSuccess Eye Can Challenge” ! Just submit a picture of your Eye Can and your story to www.eyecanpower.com/autosuccess for a chance to win! Enter the “AutoSuccess Eye Can Challenge” at www.eyecanpower.com/autosuccess by July 4, 2012 for your chance to win a Caribbean Cruise for two!
Visit www.eyecanpower.com for Eye Can ideas. DJ Harrington, CSP
Certified Speaking Professional National Speakers Association American Seminar Leaders Association International Platform Association
1.800.352.5252 770.301.4122 cell firstname.lastname@example.org • eyecanpower.com
sales & training solution
Are They Working for You or Against You? Dealers have never had more tools at their disposal to drive customers and conquests to the showroom — direct mail, Websites, radio, television, billboards, newspaper, social media, Internet, texts, BDC and e-mails. And while it’s clear that salespeople are often naturally more effective at working one mode of communication than another, that doesn’t necessarily mean managers should develop departments and staff based solely on those strengths. Integration versus Separation
It’s easy to get caught up in the specialization trap — to become convinced that you need special tools with special tiers of sales staff in order to compete in the marketplace; to believe that you must continuously add to your arsenal of tools and then struggle with your team and CRM to integrate them, while still tracking responses so you can determine the ROI for each product. But as dealerships work to create a system that centralizes leads — Internet, third-party, incoming phone calls, walk-ins, etc. — many are simultaneously doing the exact opposite with their sales teams. They’re separating them into tiers based on these very same categories. This might not sound like an issue of concern, but it means that their strategy for tools and staff are at odds, with one based on integration and the other on separation. Unfortunately, this doesn’t make for a cohesive or streamlined approach to doing business or dealing with customers.
Internet to Phone to Walk-in to Walk-out
Automobiles are built on assembly lines, but satisfied customer relationships aren’t. The other day a friend who recently purchased a car shared her experience with me. Like 85 percent of other consumers, she started shopping online. When she submitted questions, the dealership’s Internet department followed up. Later, she called the dealership and was transferred to the salesperson for in-coming phone calls — not the gentleman she had originally made contact with. When she stopped by the showroom, yet another staff member
asked her about taking a test drive. My friend ended up having to explain what she was looking for three different times, which she found annoying and time consuming. More importantly, she felt like no one really wanted to help her. I wasn’t surprised to learn she bought her car from that dealership’s competitor down the street. Sell the Way Customers Buy
While it may seem like a good idea to create separate tiers or departments based on types of leads and the individual strengths of sales staff — Sandy on Internet, Tom on walk-ins, etc. — things aren’t nearly as clear cut as they once were. Take my friend, who started as an Internet lead, became a phone lead and ended up a walkin lead. Customer leads overlap and salespeople need to be cross-trained to handle this new reality. Otherwise, a dealership just ends up adding more tools and more departments — and losing customers along the way. Salespeople are still the most powerful tool a dealer has and no matter how many new tools or technologies are introduced to motivate buyers, the ultimate goal remains the same. Get customers to the showroom. And once they’re there, the sales team has got to be able to sell — in person. They can’t just be good on Facebook; they’ve got to be good face to face, because it doesn’t matter how impressive the technology is. In the end, tools don’t sell cars. People do.
Russell Grant is the vice president of sales for J&L Marketing. He can be contacted at 866.503.8397, or by e-mail at email@example.com.
A Letter and Special Invitation from Mark Tewart You Are Guaranteed To Increase Your Bottom line by $250,000 This Year or I Will Pay You $10,000! Would you like to:
• Increase your gross profit per vehicle? • Increase your repeat sales? • Increase your service business? • Increase your service absorption? • Start selling value instead of price? • Create an unbreakable bond between you and your customers? • Earn an extra $250,000 bottom line this year without having to sell one additional vehicle? Mr. Dealer, I’m sure you have heard it all before, Blah, Blah, Blah. The same old sales pitches time and time again. Increase this or increase that with some sort of magic pill. I don’t have a magic pill, but I do have a real solution to dramatically increase key parts of your dealership and I’m willing to back it up with a $10,000 guarantee. Everything I listed above will absolutely happen. It’s already happened for several dealers and you could be next. As a mater of fact, if you sell an average of 100 vehicles a month or more, the $250,000 can easily be $500,000 or more a year bottom-line profit increase. No magic pills, no fairy dust, no scams, no slam-bam programs, no old school hard-sell programs that alienate your customers. As a matter of fact, this will positively impact CSI more than anything you will ever do. What is this Super-Duper Program I am talking about? It’s a somewhat new program that is delivering amazing results. The reason I say “somewhat new program” is that several dealers have now been on this New Program for about a year and half and have had the results I talked about earlier and several have had increases of over $1,000,000 in just one year! That’s No BS and is verifiable. Our Blue Sky Program is designed to increase the Blue Sky Value of your dealership dramatically by increasing your income now while increasing key components that most dealerships continuously struggle with. Please don’t take my word for it; I will let you talk to the dealers who have experienced these things first hand. What’s the catch? There isn’t one. I am not asking you to buy something, sign a contract or pay me one nickel up front. All I’m asking is a half-hour of your undivided attention. Here’s the deal… Not every dealer will be accepted for this program. I purposely don’t do business with everyone. I have found when you try to do business with everyone, you are just doing it for the money and you can’t be everything to everyone. In the long run, you wind up making less money and doing business with people you don’t like or respect and who may not be able to be successful no matter what you do. I refuse to do that. Life is too short. What I do is a personal interview with dealers, go over the program and then do an on-site analysis to see if it’s a good fit for you and for me. Then if accepted, I let you decide. Although the More Blue Sky Program would benefit every dealership, I am only looking for a few specific dealerships.
I have known Mark Tewart and Tewart Enterprises Inc for over 15 years. In the last seven years as a partner and GM of our dealership we have increased our profit by a strong seven figure amount. Our front end gross profit has increased over $1,200 a vehicle, warranty penetration is up over 30%, F&I profits are up 25% overall and our service department is up significantly as well. Greg Woods, Lake Country Chevrolet Muskogee, Oklahoma
This program works tremendously but takes a great deal of work in the beginning by my staff at your dealership to make sure it’s kicked off properly and everybody is moving in the right direction. I personally spend a lot of time, effort and money to make sure it works. Because of this, I have to be selective. In fact, we project only a few dealers will qualify this year for the program. When we are full, that’s it. What’s the next step? I would like to visit with you on the phone; just call my assistant Jaclyn at 888 2Tewart (888 283-9278) or 513 932-9526 or e-mail her at firstname.lastname@example.org to set an appointment. FREE Gift Bonus: For all the dealers who visit with me about this offer, I will give you my High Performance Selling DVD for FREE ($597 Value) Wait there’s more… As an additional value for you, any dealer who is accepted into the More Blue Sky Program will get my Distance Learning Program for FREE ($597 a month value) You can train your sales people over the Internet 24/7 and be able to track the learning and test them on each module. The More Blue Sky Program is the most innovative program for a dealership’s profits, blue sky and customer retention that I have been around in 30 years in the car business. Let’s talk and see if this program works for you. PS: I don’t take guarantees lightly. I put my money where my mouth is.
Tewart Enterprises Inc. 888 2 Tewart (888 283-9278) / 513 932-9526 email@example.com
four more ways to elevate your e-mail marketing
Successful e-mail marketing campaigns are typically defined as such because of their higher open and response rates, and ultimately revenue generation. Dealerships, busy with everyday tasks, often need a little help — a blueprint leading them to results they’d define as “successful.” In last month’s issue of AutoSuccess, we went over some of these steps; here are more suggestions to craft more effective e-mail campaigns: Quality Over Quantity
It’s far more important to send out content-rich e-mails than it is to send out long or multiple e-mails. When you provide your contacts with quality content, they’re more inclined to read your e-mails and even forward them to friends. Gain the trust of your contacts by emphasizing quality of communication over quantity. One option is providing information they can use immediately. A service department might offer a series of maintenance tips, and when a prospect is in need of an oil change, is likely to think of the insightful service department first. Content Suggestions
How can you personalize your message content? Listen to your readers — the people who take time to contact you are most likely to become customers. Study their e-mails, questions, likes and dislikes. Build or improve products with your customers’ input and they will notice you appreciate them and remain loyal. Social media monitoring is one easy way to listen to and engage your readers. Pay attention to what customers are saying online about your services and your industry. Use these insights to create valuable e-mail content. Test Everything
Test the way your e-mail appears, not only through your own e-mail service provider, but several providers. Test all links in your message to make sure they work. Test your graphics. Pictures are a great way to grab someone’s attention; but remember, pictures don’t always show up in e-mail messages, so test the effectiveness of your e-mail by viewing them in an e-mail client with images turned off and making sure your message remains easy to understand and the call-to-action clear.
So why not test it? Test one change at a time. For example, explore what days your recipients are more likely to open your e-mail. Split up your list and send each set the same e-mail on different days. Does the open rate stand out more on one day than another? A next step could be to determine the time of a particular day people are more willing to open and interact with your e-mail. Again split your list up and send out the same e-mail at different times of the day. A good starting point is the start of the day and middle of the afternoon. Studies have shown these are the best times of day to send e-mails. See if your tests concur. When you have a specific day and time recipients are most responsive, examine your content. What sort of subject line gains the highest response? Do your recipients react more to graphics or text? Consider the placement of your call to action. Is one position more effective than another? Do your recipients appreciate lengthy, informational e-mails or do they prefer a quick read? Test each element one at a time.
Finally, test your e-mail with a spam check tool before sending. Spam check services review e-mail content to see what might get caught in spam filters. And Test Some More with A/B Testing
Your e-mail has passed all the tests of looking good, having working Web links, properly placed images, a call to action and has made it through the spam check, but is not getting the open rates you expected. How come? There are many reasons including time of day, day of week, frequency, message, etc.
Nicole Merrett is vice president of CRM marketing for Sage North America. She can be contacted at 866.867.0016, or by e-mail at firstname.lastname@example.org.
sell on the phone, then on the drive. who should sell an appointment? Word tracks – they’ve been around forever. Who uses them in fixed ops, and on a regular basis? Grant Cardone, Joe Verde and Dave Anderson make a living teaching word tracks to salespeople around the world. In my case, I have a service receptionist. Why? Service consultants need to spend 10 to 15 minutes on the drive performing proper walk-arounds, upselling, reviewing history and verifying customer information. Who, then, answers the phone? When does the call get returned if
customer leaves a message? Here is what you can look forward to on a missed call: • You’ve missed opportunities to sell an appointment. • A customer is calling back to approve an upsell from earlier conversation. Now, you might have lost a sale! • The consultant controls your appointment schedule; if they don’t want a busy day, they just set appointment for another day. • You’ve lost a new customer and/or existing customer — they called another local dealership when their call was not answered. I used word tracks when training my service receptionist to ensure proper phone techniques and that the proper steps were followed when answering a service call. These steps included gathering all customer contact information, pulling up the service history and translating the customer’s concerns into a preliminary repair order and, before the call is finished, communicating the recommended manufacture maintenances due by mileage and time. It’s helpful to have a spiff program for the receptionist on any upsell while setting an appointment, and to have your service maintenance menu located next to your service receptionist’s phone. Before the call ends with your customer, the receptionist tells their customer to allow an extra 10 to 15 minutes for their service consultant to perform a walk-around of their vehicle; this stops the excuse all service consultants use — their customer was in a rush. Walk-arounds build great rapport with their customer and stops policy work on scratches and dents. It’s all about educating your customer and it starts at the time of setting the appointment. Also, if your service consultant is ignoring status calls, it allows you as a manager to be aware of the situation. In my dealership, the situation is like night and day after we started this training. Six months ago, when service consultants were setting their own appointments, our CSI score was in the upper 60s; we have been at 100 percent for the last five months. We put the right people in the right area and continuously train. This process will guarantee to improve your profits, retention and CSI results.
Randolph S. Lofgren is the director of fixed operations for Mike Shaw Buick-GMC in Colorado Springs, Colorado. He can be contacted at 866.427.2961, or by e-mail at email@example.com.
sales & training solution
objections: Rules to Help You Close More Business When sitting in front of a customer, many salespeople have a number of thoughts running through their minds: Am I going to make this sale? How do I get the customer to commit? How can I get them to pay the price I want? What kind of commission am I going to make? How do I avoid another objection? On the other side, is the customer thinking: No, it’s just not for me. I can’t use it right now. Is this big enough for my family? What kind of gas mileage does it get? Can I afford it? Do I trust this salesperson? Do I like him? The objections are endless. It’s all too easy for customers to say “maybe” versus “no”; it’s easier to do nothing than to say “yes.” For the average salesperson, objections are reasons not to buy. Objections can make even the most seasoned salesperson a little anxious, and it’s no wonder; objections can create some dangerous potholes on the road to the sale. So how do you avoid those potholes and make the road to buying easier and pain free? Objections are not the end of the road. They can be requests for more information, a test to see what you’re made of, or even just a lack of understanding on the customer’s part. It could be you’re not talking to a decision maker, or the customer might be carrying fear from making a bad decision in the past. Of course, it could also be a buying signal…. Customers are always thinking of reasons not to buy, as if it’s their job. If a customer doesn’t have objections, you should be worried: A customer without objections isn’t buying. The biggest challenge is to turn salespeople’s fears and concerns into a strategic understanding of what is going on in the customer’s mind. At our company, we have a set of 172 rules we use in various situations to help us handle situations in selling and management. I’m going to share a few rules that pertain to objections. Let’s start with Rule 11: Assumption is the mother of all screw-ups. Don’t assume that you know what your customer wants. For instance, if your customer says they’re not in the market, instead of asking “why,” say something like “Are you aware of our special incentives?” or “What were you hoping I could do for you today?” You can’t just ask your customer’s questions; you’ve got to be asking the right questions. You must also know Rule13: The problem the person brings is never the real problem. Let’s take the last example. The customer
doesn’t want to buy. They’ve told you that they’re happy with their current car. It’s your job to ask them what makes them happy about their car, and what they wish they had in a car. Do they like the low monthly payment, or the way it drives? Again you’ve got to ask questions. Help them help you. Let them help you understand what’s important to them — such as low payments or buying a family-friendly car — to help you understand how to sell them and overcome objections. They’re happy with their current car — great. Help them understand why they might be happier in a newer car with better gas mileage, etc. Ultimately, people buy for their reasons, not yours (Rule 32). The toughest problem I have found to date with salespeople overcoming objections is their own fear. I say to them, don’t be afraid to go for the “no” (Rule 34). Most sales reps assume that you should only talk about why they would buy from you. That’s what everyone does, and they never get to the objection as to why they wouldn’t buy and, as a result, don’t get the sale. After you’ve tried everything and the customer is still a “no,” try one more technique. When it’s over, don’t let the customer leave before asking a couple of survey questions (Rule 47). This is, without a doubt, one of the most valuable steps in the sales process. When you take the time to ask a customer questions, such as “Why didn’t you buy?” and “What would have made you buy?” and so on, they are telling you how to sell them. Perhaps you missed clues that could have helped. If you don’t get the sale, maybe you will learn something that will help you with the next customer. Just because that customer walks out of your dealership today doesn’t mean they’ll never be back. It’s really about understanding your customer and how they buy. All too often I’ve seen too many salespeople hoping the customer doesn’t throw out an objection. “Hope” is not a strategy (Rule 37). We’ve moved far beyond simple “features and benefits” selling and hoping that nice features like in vehicle GPS or satellite radio will make the sale for you. You’ve got to do it yourself. You must arm yourself with strategies to change your selling style. You can’t hope your customers will change or wait for the market to fully return or hope that people with better credit will come into your dealership. You’ve got to take proactive steps to help overcome objections. Overcoming objections is not a one-size-fits-all solution. No one line is going to win a customer. It may be two or it may be 10 objections you need to overcome, but be patient and use these techniques to keep conversations going. Overcoming objections isn’t easy, but it’s not as hard as you think. If you’re interested in getting more opening word tracks on overcoming objections and turning them into reasons to buy, you can contact me at the e-mail address below with the subject line “OBJECTION” to request G&A’s Guide to Overcoming Objections which will include techniques to help customers overcome their own objections. Matt Baker is the vice president of sales for G&A Marketing. He can be contacted at 866.618.8248, or by e-mail at firstname.lastname@example.org.
sales & training solution
ohio superstore reduced recon time by 50 percent, resulting in two additional used car turns In 2010, Fred Martin Superstore (www.fredmartinsuperstore.com) was reconditioning 80 to 100 used cars per week and believed their average turn was only four days. At that time, they were using a spreadsheet, closed RO’s and a white board. In reality, the total time for each car, from the arrival of the transport or trade to frontline ready, was not being accurately tracked and reported. This was discovered after doing a complete analysis where they found their actual average was closer to 15 days. It was a real eye-opener for Ohio’s largest used car dealer. They considered developing an in-house system to better manage reconditioning, but after reaching out to industry contacts, they learned their needs could be solved by workflow software — customizable to their specific processes and performance goals. As a result, they now have every used car tracked from purchased at auction, or from trade, to frontline ready. This has allowed them to review their data hourly, daily and weekly for any bottlenecks, problem vehicles or process improvements. “We have completely changed the way we manage reconditioning,” said General Manager Tom Dunn. “Now, we know where we stand with every car, at every step, and can make faster decisions that increase turns. We make wholesale decisions quickly, and the results are immediate and measurable. Our recon staff loves this system because no one else is tracking and reporting on their work, so they are individually accountable and, therefore, more efficient.” The recon turn time is reported for each step and the actual results are visible to everyone, eliminating speculation and thinking the “best case” is the real average. “With the accuracy of the information, we have been able to install pay plans that incentivize the team to drive down our recon cycle time without sacrificing quality” said Adam Huff, owner and dealer principal. Fred Martin now uses an 18-Step Recon Process, shown here with real-time car counts. (Fig. 1). They can easily insert or modify Steps to address particular needs to take advantage of any new efficiency ideas. For example, Step 17—Keys and Windshields was just inserted for two outside vendors. Through the system, vendors have access to the vehicle information needed to pull all the correct parts before they leave their shop. When they arrive, their cars are all lined up and ready to go. They quickly get the job done right, the first time, eliminating unnecessary delays. This Superstore now has their complete used car lifecycle under control using real-time data to make informed decisions — from stocking and pricing, to reconditioning, sale and replacement. Their new tracking system tells their “true” recon story. And, by taking multiple days out of their recon time, they have added two more used car turns making it a very profitable decision. “I can’t even imagine running any reconditioning operation today without this,” Dunn said.
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0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
ALL 264 PURCHASED/TRADE 14 DO NOT SELL 17 WHOLESALE 24 R O NEEDED 264 NEEDS INSPEC. SHEET 16 TO INSPEC. AREA 1 NEEDS INSPECTION 13 PARTS NEEDED 22 NEEDS DISPATCHED 5 FINAL MECH. SERVICE 21 NEEDS DETAIL 21 NEEDS 27 PHOTOS 5 SUBLET 2 PDR/TOUCH UP 2 NEEDS FINAL INSPECTION NEEDS vAUTO PRICE 1 KEYS + WINDSHIELDS 17 VEHICLE COMPLETE 83
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.
are dealership attention deficit disorders (add) undermining long-term success? One way to get an industry 20 Group chuckling is to ask how many dealers or general managers in the room consider themselves successful entrepreneurs with a functional case of Attention Deficit Disorder (ADD)? In most cases, the room is transformed with smiling faces and raised hands. At times, I swear that the application for NADA Dealer Academy must have a section that asks if the candidate has ADD — anyone who says “no” to the question is denied admission. I say this jokingly because of the way decisions are made at the dealership from the perspective of a vendor and consultant. The automotive retail industry is one of the toughest for vendors. I don’t know of any other industry where vendors attack each other so aggressively and perversely. A dealer can sign up for a service one month, and every month thereafter have competing vendors call and try to persuade the dealer to dump their previous commitment in favor of their “better” solution. You know these claims very well: • “Switch to our Website technology and we will ‘double’ your leads.” • “Switch to our CRM software and you will increase Internet sales by 50 percent.” • “Dump that mail house you are using. Our chat system produces 70 percent more leads, so switch this month a get a month free.” Do any of these pitches sound familiar? Why do these cross sells work so well? It’s the ADD part of dealers that measures their vendors in 30-, 60- or 90-day windows. Depending on the patience of the dealership’s executive team, many vendors are booted to the curb before legitimate changes could be seen. Contracts are terminated without any baseline data ever being set at the beginning on the engagement. Without baseline data or real understanding of strategy, how can dealers know if their decisions are correct? This is especially true with SEO engagements. Google sets the rules, and the rules change every month. Making a dent in SEO strategy is
not a 30-, 60- or 90-day project. Dealers who don’t have patience with SEO vendors are akin to asking the three-year-old child not to put their hand in the cookie jar. You can yell all you like, but the child has to grow up; patience is required. I decided to write about this behavior because dealers say that they do not want contracts for more than a month-to-month commitment. But have they considered the consequences? If you have ever been married, think back to the time when you were discussing marriage with your partner. How would your discussion go if you added, “and I also want a 30-dayout clause! If I’m not happy, I’ll give you my notice and we’ll just walk away friends. I’ll even recommend you to some of my friends if I get a referral call!” Without any commitments, dealers are not compelled to understand the product they are purchasing. They are not obliged to consider how to make this product work in their current processes. If it’s just about an “urge” they have now, what is the true long-term success that the product will have in their organization. How many times does a dealer attend a 20 Group meeting and come back excited and proclaim, “We must sign up for Product X because the No. 1 dealer in my group is using it!” It becomes the flavor of the month. On the vendor side, what exclusivity would a vendor give to a dealer who wants a contract with an unsubstantiated 30-day out? What unique energy would a vendor give someone with such a weak commitment? Normally, vendor startup costs are high at the beginning of an engagement. Does a month-tomonth contract slow the initial investments made by the vendor? The answer is absolutely yes. Every day of a 30-day sales cycle is important. Dealers want partners that will jump right in and give them the best out of the gate. However, dealers like to slash startup fees and contract terms without thinking that in business you do not get a free lunch — do you see the irony?
I know dealers who have been burned by companies requiring two-, three-, four- and even five-year contracts. I’m not excusing the extreme cases of abuse. I do question if dealers really are thinking about vendor commitments in the right way. I would suggest that if dealers took more time to research a vendor and discuss the integration of that product into their infrastructure before signing a contract, most problems would be resolved in advance. Dealers cannot afford to cycle through digital marketing partners recklessly because it has many serious financial consequences. It distracts the dealer from their primary mission and business goals. It discourages their employees and creates real barriers to embracing new products and ideas. Employees can only get put through the ringer so many times before they are jaded. Dealers need to develop a team of trusted advisors and consultants who create consistency and increase the likelihood that they will not make mistakes or derail their growth. Dealers have attorneys on retainer when they need legal advice, and HR/OSHA consultants as well. So, in areas like digital marketing, BDC/Internet lead management and budgeting ROI analysis, why haven’t dealers invested in a trusted advisor? The pendulum has swung way too far in this matter. Dealers need a strategy for their business and vendor partners. Once this is in place, the calls from competitors will be answered with a bold, statement: “Thank you, but my processes and vendor partners are performing very well. I have the measurements and reporting in place to prove my investments are excellent. I have a winning strategy that doesn’t need a distraction right now. Have a nice day.” Brian Pasch, is CEO of PCG Digital Marketing and the founder of the Automotive Internship Program. He can be contacted at 866.849.1560, or by e-mail at firstname.lastname@example.org.
four ways to increase your dealership’s trade-in performance
As new vehicle sales gather steam, dealers have an opportunity to ease some of their used vehicle sourcing pain: keeping more trade-ins for retail. This is easier said than done, of course, but dealers would be remiss to not re-visit their appraisal processes to ensure they aren’t letting opportunities to buy vehicles “right” pass them by. I asked several velocity dealers to quantify the difference between the price they would pay to acquire a vehicle via a trade-in versus an auction. Few actually track this number, but anecdotal accounts suggest dealers pay about $1,500 less for a trade-in than if they acquired the same vehicle at auction. The difference owes to the greater degree of competition at auctions, as well as the purchase and transportation fees dealers incur to acquire vehicles there. To be sure, some of the vehicles today’s
customers want to trade may head straight to a wholesaler. These cars should be acquired with this exit strategy in mind. In these situations, your appraisal amounts balance the need to satisfy the customer and provide some profit for the time and trouble it takes to turn the vehicle. For other vehicles, the following four best practices will ensure you approach every trade-in as an opportunity to maximize profitability for your entire dealership: Use the Appraisal-to-Auction Differential to Your Advantage
As you appraise a unit, do the math to determine what it would cost you to acquire the same unit, assuming it’s needed to meet your inventory objectives, at auction. This differential can provide additional “leg” in the deal that balances the needs of the new vehicle department to sell a car and the used vehicle department’s need to maximize its ROI on the unit. Likewise, this differential may be viewed as an off-set to additional reconditioning that the trade-in vehicle may require. To be sure, this balancing act may soften the potential front-end gross on the vehicle at retail as you price it to the market. However, this is a small price to pay to keep the wheels of velocity management turning and create an opportunity for service and F&I income. Make Appraisals Market-Transparent
Dealers say third-party technology and tools, like AutoTrader.com’s Trade-In Marketplace (TIM), offer an effective way to minimize haggling on an acceptable trade-in value. When dealers take the time to physically appraise the vehicles with customers, and then use these tools to make an initial appraisal value, they find customers are often amenable to the number. Why? The process is more transparent and, in many cases, taps into the same vehicle valuation resources customers use to get a ballpark idea of what their vehicle is worth before they showed up at the dealership. “The key is to do the evaluation with customers every time before you put a number on the trade,” said a dealer who uses TIM. “It’s the best closing tool I’ve ever seen.” Think Beyond the Deal at Hand
A velocity dealer in New York says he actively promotes his dealership as a place that will “pay more for trade-ins than other dealers.” He focuses first, of course, on the vehicles that are “right” for his inventory. Beyond that, though, he takes the long view: “Every trade-in gives me the opportunity to create two customers — the one buying the car and making the trade, and the customer who will buy the car I acquired. I’m also doubling my opportunity for additional gross in service, parts and F&I. All of this factors into our appraisals.”
Dale Pollak is an author and the founder of vAuto. He can be contacted at 866.867.9620, or by e-mail at email@example.com.
Track Your Appraisal Performance A key reason some dealers are consistently able to acquire tradein vehicles for less money than they would pay at an auction owes to their oversight of the dealership’s appraisal processes. These dealers will track two important benchmarks for every individual who appraises a vehicle. First, they’ll assess an appraiser’s look-tobook ratio. By itself, this number has limited meaning — that is, if an appraiser’s putting too much money on cars, the ratio is likely to run over 50 percent. To balance this, dealers will evaluate a second metric: The cost-to-market ratio of the amount an appraiser offered to acquire a vehicle. The ratio measures the “spread” between the vehicle’s trade-in costs and its likely retail selling price. At most stores, this figure should run near 80 percent, which allows a 20 percent “spread” to cover for reconditioning, any pack and the unit’s expected gross profit.
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Keith Kocourek has a new weapon in his competitive arsenal: A used vehicle inventory management system that helps him retail vehicles in less time, and make more money, at his five Wasuau, Wisconsin based dealerships. “Provision is a game-changer for me,” Kocourek says. “Our sales have increased 31 percent on the strength of our improved ability to quickly find the cars we need at the right prices.” Other dealers have also become more competitive and profitable in their used vehicle sales departments with the help of Provision. “With Provision, my cars meet customer demand better than they’ve ever done in the past,” says dealer Sean Del Grande of the Del Grande Dealer Group, San Francisco, California. “Our sales are continuing to climb.” “I’m much more efficient finding and buying the cars I need with Provision,” says dealer Marc Ray of Grogan’s Towne Chrysler, Toledo, Ohio, which has doubled its used vehicle sales. “It helps me buy cars that people are searching for and make fewer mistakes. I can buy cars people want to buy without guessing.”
There are four chief reasons vAuto’s Provision system is winning praise from dealers and helping them sell more used vehicles and make more profits:
It gives dealers a real-time, accurate read of supply and demand dynamics for specific vehicles in their markets. Provision is the only inventory management system on the market that renders and measures real-time consumer clickstream data from AutoTrader.com to help dealers know the exact vehicles that today’s consumers want to buy. This data, blended with Provision’s measurements of the current availability and sales rates of specific vehicles (down to trim level and equipment) in a local market, gives dealers the most holistic view of the opportunities and risks each vehicle represents. As dealer Ray notes, “I need to know the full package on every car—how many people are searching for it, its scarcity in the market, everything,” he says. “Provision gives me the full package to make the right decisions.” It offers a strategic method for managing used vehicles. Traditionally, dealers and used vehicle managers stick close to their franchised brand and familiar makes/models as they decide the types of vehicles to acquire for their inventories. This approach can limit a dealer’s used vehicle retailing potential because it focuses attention to what’s most familiar, and likely does not account for the way today’s buyers research and shop for vehicles. According to industry stats, most buyers begin their search for a used vehicle by identifying the shape/type of vehicle they want, and then narrow their focus, based on availability, to specific makes, models and price points. Provision captures this consumer behavior by helping dealers establish inventory “buckets” based on brand-neutral vehicle segments and types. As dealers identify the quantity of vehicles for each “bucket,” Provision identifies both franchise and non-franchise brands that fit. Dealers can also fine tune their “buckets” by price ranges, ensuring selection and “step-up” cars within each that match consumer demand.
It simplifies decision-making. Provision provides dealers a Report Card for every vehicle they evaluate for potential acquisition—whether it’s at auction or a trade-in. The Report Card details seven characteristics for every car, including consumer demand, consumer interest, availability, a dealer’s past experience and profitability potential. In this way, the Report Card effectively distills the data and metrics (such as market days supply, cost to market and price to market) that are the cornerstones of modern-day used vehicle inventory management. The Report Card offers an easy-to-understand A-F grade for every vehicle, and similarly evaluates and grades each inventory “bucket” and the overall inventory itself. Dealers say Provision’s grading system offers an intuitive, less-complicated method for managing dayto-day decisions to appraise and acquire cars, as well as keeping close tabs on their overall inventory performance and return on investment (ROI).
It makes acquiring vehicles more efficient. Provision assembles buy lists of vehicles dealers need to fill their respective inventory “buckets.” It then links to Manheim, Adesa, GMAC and other national/local auctions, detailing the precise lanes, run times and price points where these vehicles are slated for sale. Dealers can then determine the vehicles to pursue, and access condition reports to determine those that offer the best “fit” for their inventories. In this way, Provision answers three critical questions—what to buy, what to pay and where to find the “right” vehicles—in three simple clicks. “This is a huge efficiency gain for us,” says Trent Waybright, director of used vehicle operations at Kelley Automotive Group in Fort Wayne, Ind. “Before Provision, we were spending eight hours each week to match our buy lists to vehicles at specific auctions. Now the matching is automatic.”
vAuto’s Provision: Setting Your Inventory Strategy
Provision allows dealers to establish their inventory strategy by determining the number of vehicles they should carry in distinct “buckets” of vehicles, segmented by their shape and type (e.g., compact, intermediate, SUV, etc.). Provision delineates these “buckets” with price bands, ensuring dealer inventories match the
prevailing price points for each vehicle segment in their respective markets. In this way, Provision sets the strategic foundation for an effective inventory composition that matches the way buyers look for cars and meets buyer demand and interest in each vehicle segment. To help dealers establish their inventory strategies, vAuto assigns a Performance Manager, or coach, to each Provision dealership. They work with the dealer to assess past sales history by segment, as well as the segment-focused sales volumes in a dealer’s market. Together, the Performance Manager and dealer can then allocate the correct number of vehicles for each “bucket” that accounts for the market and a dealer’s goals for inventory turn, market penetration and sales volumes. Once completed, Provision uses the dealer’s inventory strategy to scan and scour market data to recommend specific vehicles that will sell best in each “bucket.” In addition, Provision tracks dealership sales and market data by “bucket,” alerting dealers when individual “buckets” and vehicles require attention. A fully completed inventory strategy for a Toyota dealer would look like the following: In this example, Provision tells a Toyota dealer the number of vehicles needed to acquire or sell to meet inventory targets for each “bucket.” Provision makes the recommendations to buy in green, and the recommendations to retail or wholesale vehicles in red. Note: This Toyota dealer has chosen not to carry luxury vehicles—due to a strategy that focuses more on lower-cost, faster-selling cars. Similarly, the dealer does not include sports cars in the inventory strategy due to limited buyer interest in the dealership’s market area. Setting Baseline Inventory Parameters: vAuto Performance Managers assist dealers in identifying “who they want to be” as part of their used vehicle inventory management strategy. Provision asks dealers to define the broad parameters of their used inventories: What is your days supply target for your inventory? What are your gross profit goals and acceptable minimums? How old will you go with model years? How large is your online market area (e.g., the geographic distance you target on used vehicle listing sites such as AutoTrader.com and Cars.com)? How much do you “pack” cars? What are your transportation costs? Understanding Pricing Bands: Provision helps dealers define a pricing strategy for each of
their inventory “buckets.” To do this, Provision reviews current pricing and local market data to determine the pricing “sweet spot” for each inventory “bucket.” This functionality helps dealers identify pricing bands that offer the greatest opportunity—and to calibrate the number of vehicles to target in each band for maximum sales and profit potential. Adjusting for seasonality, market changes. Provision recognizes used vehicle supply and demand dynamics change given the time of year and season. What dealer hasn’t “gone long” on used vehicle inventory in anticipation of customers looking for cars as spring blooms and summer looms? Provision lets dealers adjust the inventory days supply of vehicles in each “bucket” to account for these changes in season and consumer buying habits and preferences. As dealers make these adjustments, Provision responds by re-calibrating its recommendations, in green and red, to acquire and sell vehicles. Identifying opportunities for market share, sales volume gains. Provision provides a “Workbench” that allows dealers to become students of their markets. The “Workbench” lets dealers see non-franchise brand vehicles that market supply and demand data indicate as good sellers— an efficient, real-time read of opportunities for dealers to expand their market share and used vehicle sales volumes. Provision’s unique grading system ensures dealers are aware, upfront, of potential risks associated with these opportunity vehicles. A Provisioning Tip: Most velocity management dealers ensure at least 50 percent of their used vehicle inventories consist of non-franchise brand vehicles to maximize their market share and sales opportunities.
vAuto’s Provision: Grading Every Car To Maximize Opportunity, Minimize Risk
Provision is the only used vehicle inventory management system that uses an A-F Report Card on every vehicle to help dealers identify and address the opportunities and risks inherent in every vehicle. This is especially important in an era of increased equipment and options offered by manufacturers
on new vehicles—add-ons that can make or break the appeal of these cars as they become used retail units. “The manufacturers have added things that complicate the used car world,” says Jack Anderson, used vehicle director at West Herr Automotive, a 17-store dealer group in Buffalo, N.Y. “Now, if you’ve got a 2010 F-150 pick-up, it better have synch or the vehicle won’t sell well.” The Provision Report Card is built on a simple premise: If dealers are fully aware of the opportunities and risks each used vehicle represents, they can make better decisions—and fewer mistakes. The Provision Report Card distills a host of market supply and demand data to assign a grade for each of the seven characteristics that determine whether a used vehicle is a top-notch winner, a so-so performer or a vehicle to avoid. These seven characteristics assess both market supply and demand data (including market days supply, consumer demand/interest), and the inventory strategy preferences the dealer has established (e.g., minimum level of profitability, market size, etc.). The following shows how the Provision Report Card grades a specific vehicle:
• DEMAND is the number of people in your area that are searching for this car.
With a grade of A+, this car is in the 99.47 percentile when compared to all the other vehicles in your market.
• INTEREST is the average conversion rate from SRP to VDP for this vehicle in your area.
This car gets a B- with an average SRP to VDP conversion rate of 2.93%.
• VOLUME is the number of units sold in your area recently.
This car gets a C+ for having sold 5 in the past 45 days.
• DAYS SUPPLY measures the current available supply
of similarly configured vehicles and the rate at which such vehicles have been sold over the last 45 days. Vehicles with lower days supply values are in higher demand and, therefore, represent greater turn and gross profit potential than those with higher days supply values.
This car gets a B- with 45 days supply.
• PROFITABILITY is the difference between the average auction price of this car to the average list price of the car after adding in a fixed reconditioning/transportation fee.
This car gets a B because the national average auction price is $15,900 compared to the average list price of $21,843 in your market.
• AVAILABILITY is the number of units available at auctions now.
This car gets a C+ because there are currently 12 available at auctions.
• EXPERIENCE measures the success of your recent sales of this make/model.
This car gets an A because your dealership has sold 21 of this make/model. On average, those vehicles were on your lot for 31 days. The last sale was Yesterday.
vAuto’s Provision: Sourcing Cars in Three Easy Clicks
Provision is the only used vehicle inventory management system on the market that automatically matches a dealer’s recommended used vehicle buy list with specific units at Manheim, Adesa and GMAC auctions nationwide. This functionality is crucial to help used vehicle managers quickly find the vehicles they need and know the maximum price they can pay to achieve their gross profit and sales volume goals on every vehicle. The following points illustrate how Provision guides dealers and used vehicle managers to “buy right” every time—and do so more quickly than the competition. Knowing “What to Buy”: Based on a dealer’s used vehicle inventory management strategy and goals, Provision recommends a “shopping list” for vehicles that will address the vehicles needed to fill each inventory “bucket.” The “shopping list” identifies each vehicle’s Provision-set grade, as well as the VIN, the presence of condition/CarFax reports, vehicle color and mileage. Knowing “What to Pay”: Provision provides bid guidance dealers can use for appraisal or auction vehicles. This guidance assesses each vehicle’s acquisition costs (purchase price, fees, transportation and reconditioning) against prevailing retail market prices. Provision offers this guidance to ensure dealers “buy right” on every vehicle. Likewise, the guidance is useful to balance instances where it’s necessary to “step up” at auction or appraisal—Provision immediately shows the effect of this decision on a vehicle’s profit potential.
Knowing “Where to Find” the “Right” Cars: Provision’s exclusive, direct access to leading auctions allows dealers and used vehicle managers to quickly identify the auctions where they can purchase “shopping list” vehicles the most efficiently and quickly.
Provision allows dealers and used vehicle managers to immediately access online auctions and place proxy bids to efficiently acquire the vehicles they need to fill their inventory strategy and “buckets.”
vAuto’s Provision: A “Game-Changer” for the Automotive Industry vAuto founder Dale Pollak calls Provision the “industry’s first system to bridge the gap between the wholesale and retail marketplace for used vehicles.”
The system is a “game-changer” that will help dealers become better used vehicle retailers and achieve the profitability, sales volumes and return on investment they seek in their used vehicle departments, Pollak says. “This is a business intelligence break-through for the automotive industry, made possible through our alliance with AutoTrader.com and Manheim,” Pollak says. “Provision brings gamechanging insights and tools to help dealers efficiently and effectively know what vehicles to buy, what to pay and where to find them—all with a real-time, market-based, precision approach.”