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DealerPanel hiring: Making the Right Choice, part 2

RebeccaKon your live chat results are only as good as your dealership’s follow-up strategy

Finding a Solution for Lapsed Insurance

MarkTewart dealers, why are you committing suicide?

Hannah Philpott, Media Director hannah@autosuccessonline.com

marketing solution

IsraelAlpert digital marketing of vehicles: The Problems, the Solution and the Advantages

LenShort getting close to vehicle shoppers — and moving beyond the big search engines

Brian Ankney, Account Manager super6@autosuccessonline.com

sales & training solution

Dave Davis, Editor & Creative Strategist ddavis@autosuccessonline.com

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 info@autosuccessonline.com. Subscription rate is $69 per year. AutoSuccess welcomes unsolicited editorials and graphics (not responsible for their return). All submitted editorials and graphics are subject to editing for grammar, content and page length. AutoSuccess provides its contributing writers latitude in expressing advice and solutions; views expressed are not necessarily those of AutoSuccess and by no means reflect any guarantees. AutoSuccess accepts no liability in respect of the content of any third party material appearing in this magazine or in respect of the content of any other magazine to which this magazine may be linked from time to time. Always confer with legal counsel before implementing changes in procedures.© All contents copyrighted by AutoSuccess Magazine, a Division of Systems Marketing, Inc. All rights reserved. Reproduction in whole or part is prohibited without express written consent from AutoSuccess. AutoSuccess may occasionally make readers’ names available to other companies whose products and/or services may be of interest; readers may request that names be removed by calling 877.818.6620. Printed in the USA. Postmaster: Send address changes to AutoSuccess Magazine, 2300 Hurstbourne Village Dr, Suite 1200 Louisville, KY 40299.

Thomas Williams, Creative Director design@autosuccessonline.com

leadership solution

Susan Givens, Publisher sgivens1@autosuccessonline.com

the cost of not ranking at the top of the google search

LarryBarditch

buy-here-pay-here in a franchise world:

TimByrd

Recon Metrics, Accountability and red flags DennisMcGinn

Susie Horne, Account Manager John Warner, Sales-Improvement Strategist shorne@autosuccessonline.com jwarner@autosuccessonline.com

EdLouis can a mobile app add value to your business?

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SusanGivens what to do when the phone rings

08 22 32

JimmyVee & TravisMiller how you can stop competing on price in three steps

18 28

DavidLewis is it okay if i walk around alone?

10

JohnDobrick when a little late — came a little early

29 30

DalePollak three ways to win amid a declining wholesale used vehicle market

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SusanGivens

marketing solution

what to do when the phone rings

Despite technological advancements in the automotive industry, a dealership still receives a majority of potential opportunities for business through the phone. Unfortunately, many teams are not trained in handling phone calls — or are simply not picking up the phone at all. A recent study on two million phone calls to dealerships found that nearly a quarter of calls go unanswered. The research also found that more than 35 percent of calls for sales and service resulted in an appointment, but the number nearly doubles by excluding unanswered calls. Simply answering calls can have a dramatic effect on your bottom line.

online marketing campaigns to maximize your lead capture rate. Additionally, using different phone numbers on different platforms — such as Websites, email newsletters, search engine marketing and traditional media — allows dealers to track how each avenue of their direct marketing campaigns is performing. When the phone starts ringing, a monitoring service can let you know if your sales or service team mishandles a call. The service should notify key managers electronically and be mobileaccessible to allow dealers to respond and save the deal from anywhere. Equally as important is ensuring your team receives automotive-specific training and is continuously being coached. Regular phone-call reviews also make sure you are making the most of every phone opportunity. An effective BDC not only maximizes sales and retention, but helps increase inbound and outbound call efficiency. With up to 50 percent of operational costs spent on follow up, it’s not difficult to find a third-party company to handle this for you, that will save you time and money. The service could also help in setting appointments and forwarding leads to your team.

It’s not always feasible to handle every single phone call that comes into your dealership. However, there are many tools and services that can help your dealership do this.

“Getting the phone to ring at your dealership is an important goal for any marketing campaign,” said Chip King, a 30-year veteran of auto retailing, and now a managing partner at CallRevu. “But if you’re not handling these phone calls properly, or not handling them at all, your campaigns become less effective. A lost opportunity on the phone is a lost opportunity at making money.”

In order to do this properly, it is important to take a four-step approach that includes tracking and monitoring every phone call, training your staff properly and improving your BDC. A call tracking application can help combine your

The coming year looks to be one of the best for auto sales in a decade. Continuing with your dealership’s strengths is good, but improving upon your weaknesses will take you to another level. Susan Givens is the publisher of AutoSuccess. She can be contacted at 877.818.6620, or by email at sgivens1@autosuccessonline.com.

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DavidLewis

sales & training solution

is it ok if I walk around alone? Going to an automobile dealership to shop for a new car can be a stressful experience. Often, customers are in a defensive posture when they first arrive and, when approached by a salesperson, will throw out an obstacle in order to avoid being pressured or controlled. One of the most common statements used for doing this is, “Is it okay if I walk around alone?”

them pleasantly off guard by responding in a way they would not expect and inspire them with your difference from other salespeople? It begins with letting them know you respect their right to shop — you encourage it. If you deny a shopper the opportunity to browse, they will shut down and not cooperate with your process. Here is an example of a dialogue where the salesperson has been asked, “Is it okay if I walk around alone?”

I often refer to this type of customer as “The Scarecrow,” because they are apprehensive about dealing with a salesperson and will resist any effort to help them for fear of losing control of the decision-making process. This defensive posture usually brings a response from the salesperson that goes something like this:

Salesperson: “Actually, that takes all of the pressure off of me as a salesperson. Why don’t we consider today’s visit to be purely an information-gathering event. We can look at all the different cars and if some catch your eye, just let me know and I can get the keys so you can sit inside of them. Before you leave, I can provide you with the pricing information to take home to compare against the other vehicles you will be considering. Are you more interested in looking at a new or pre-owned car?”

“Since I know everything that we have on the lot, why don’t I walk around with you? Then, if you see something you like, I can get the key and open it up for you so you can have a closer look.”

By using this dialogue, I acknowledge their right to shop around and have eliminated the normal sales pressure to buy a car today by using the term “information gathering.” I have removed all the pressure of buying today, and even told them I would give them prices to take home and consider.

Others who don’t feel like bothering with this type of customer may just hand them their business card and tell them to come in and get them if they see something they like. The first response will, of course, affirm their fears and make them even more defensive, often to the point of quickly wandering around the lot then leaving before the salesperson gets a chance to make a presentation. The second response of “here’s my card” puts the customer in an awkward position and usually doesn’t motivate them enough to find the salesperson. This approach has been taught — or at least tolerated — for many years in car dealerships, and it is how customers have learned to respond in order to avoid being pestered or pressured by a salesperson. Today’s informed customer has tremendous access to information concerning our process and they know what to expect when they come to a dealership. Why not adapt a better approach that will lessen their fears and will give the salespeople an opportunity to have a chance to show what they have to offer? When customers come to your dealership, they are most likely looking to purchase a car and probably know what you sell. Why not catch

10

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Salesperson: “Of course you can. So, may I assume you do not need to purchase a car today?” Customer: “No, not today. I’m just starting my shopping process.”

Customer: “New.”

These non-threatening comments express a genuine concern to help the customer get to the vehicles they were interested in as quickly as possible. This eases their defensive posture and presents me as unique from what they would normally expect a car salesperson to be like. My statement, “Before you leave, I can provide you with the pricing information to take home to compare against the other vehicles you will be considering,” gives them a non-threatening reason to continue a dialogue, since I’ve given them no reason to be defensive. By using this approach, you catch the customer pleasantly off guard and give yourself an opportunity to move forward with your sales process. They see that you are not going to pressure them; instead you are there to help them with their shopping process. The chance of this happening to them anywhere else is slim, and it sets you apart as someone they can work with in a non-threatening environment. This is extremely valuable to today’s informed customers. Does this mean you don’t want to sell them a car today? Of course not. You certainly would like to; you have actually given yourself the best chance by giving the customer good reasons to buy from you if they find a car they like. By using this no-pressure approach and avoiding strategies such as trial closes, you distinguish yourself from the typical car salesperson. If they do decide to continue shopping at other dealerships, there is a high likelihood that the impression you have made will bring them back to you when they are ready to make their purchase. Research has shown that the top three shopping priorities of most buyers are the vehicle, the salesperson and the dealership — in that order. The initial goal of this sales process is to help the customer become comfortable dealing with the salesperson. When the threat of losing control is removed, it eases their defensiveness and opens the door for a good working relationship. The approach here not only offers you the best chance of making a successful sale, but it serves the larger goal of creating a customer for life, both for yourself and your dealership. David Lewis is the president of David Lewis & Associates, Inc. and the author of three industry-related books, The Secrets of Inspirational Selling, The LEADERSHIP Factor and Understanding Your Customer. He can be contacted at 866.834.6074, or by email at dlewis@autosuccessonline.com.


1 Sales Trainer & #2 Nissan Sales Consultant,

#

The stigma is understandable, however. In the past, training was not something that could be taken lightly. Drawbacks to Traditional Training:

Discuss How To Maximize The Two Most Important Tools In The Dealership • Intensive — a lot of information packed into There is a great deal of moving parts in the modern dealership. Each person plays a vital role in the dealership’s day-to-day operations, from the showroom sales floor to the service center to the F&I department to the Internet department; all must work cohesively for the same common goal: dealer profits. Considering your long list of responsibilities, how can you, the general manager or dealer, guarantee that your team and all its moving parts are following through on protocol and the processes you are expecting? How can you make sure you are being efficient and tapping into all the resources available to you? Training, training and more training. By training your team on effective processes, how to attract and cultivate good quality people, how to spend your ad dollars wisely and strategically utilize your customer relationship management (CRM) system, you will minimize the need for micromanagement and maximize profits. A CRM is one of the most essential tools for all dealerships in today’s rapidly changing technology-based culture. And rightfully so, because it behaves as a data incubator for sales opportunities, allowing dealerships to store customer information in an organized, up-to-date fashion, it has easy tools for interaction and follow-up and provides accountability of the staff, for an increased rate of productivity. CRMs go far beyond data storage. The tool uses the data strategically to improve the sales process and increase profits across all components and profit centers of your dealership, including showroom control, lead management, data mining and equity mining, special finance, F&I, fixed ops, inventory and much more. When utilized properly, a dealership’s CRM has the ability to contain a gold mine of information about customers. CRMs have gotten much more powerful in recent years; they don’t just track your customers’ information, calls and emails anymore. New technologies have given them the ability to identify when a customer is in an equity position, has a warranty about to expire or has a lease that is about to come to term. In addition to being able to send alerts and set priorities, modern CRMs can create and automatically send email templates to stay in touch and ensure proper follow-up. However, with these changes, they’ve also become more complicated. The modern CRM system requires a more complex user interface, advanced tools and ever-changing updates and applications. As a result of these new resources, it’s more crucial than ever to provide your team with ongoing CRM training. You don’t want to just keep up with dealerships that you envy; you want to be the dealership that other dealers envy. Unfortunately, training is an often-overlooked step and ends up stopping the dealership from effectively leveraging leads that they’ve already gathered and spent the advertising dollars to generate. The reality is that most dealerships struggle with maximizing their CRM. Even when a dealership has the most incredible CRM technology with a proper set up and training, it still falls apart. Why is this the case time and time again? The simplest explanation is that the rate of turnover at most dealerships is extremely high. There often isn’t enough time to properly train new salespeople on how to use the CRM, and so they are not taught the intricacies of how to truly engage and utilize the power of a CRM. In addition to not being able to truly maximize all resources and technologies, an untrained or poorly trained salesperson, manager or BDC agent can wreak havoc in the CRM by not using the proper statuses, archiving prospects improperly, inactivating leads, letting action plans expire, not marking units sold or putting notes into the CRM. Since the CRM is so important and has so many applications for all profit centers, this is serious. In fact, these are the leading reason why most CRMs in this country are a complete mess. It is not the CRM company; it’s often because of user degradation. There has been a stigma in the automotive industry about training that has led to the practice being consistently neglected, which has created an epidemic of untrained sales consultants, coordinators and even managers. NADA estimates that the average dealership spends approximately $64,000 per month in advertising. With an average of 10 sales consultants at each dealership, that’s essentially an investment of $6,400 per consultant, monthly. The average salesperson only earns an average compensation of $4,000 a month. This means that the average dealership invests vastly more money in advertising per month per person than an average salesperson earns. Even with staggering numbers like this, dealerships still fail to invest in training their staff appropriately. They spend all that money to get people into the dealership, yet they spend almost nothing to ensure that the freshly generated traffic is handled correctly by a thoroughly trained sales team with sufficient training to solidify the sale.

a short amount of time • Invasive — if everyone’s in class, who’s selling cars? • Expensive — quality trainers don’t come cheap

Luckily, just as CRMs have advanced over time, modern training has benefitted from emerging technology, as well. The newest and most powerful way to train in all areas of your dealership is through virtual training. Virtual training provides the classic areas of training, such as showroom sales, Internet sales/BDC, phone sales, F&I, fixed ops, management and, of course, technology products, including CRM. With the limitless capabilities, it’s easier now more than ever to train your team and reap the benefits of increased profits. Benefits of Virtual Training: • Interaction — This isn’t YouTube. Highlevel production videos truly interact with the trainee to enhance and customize the training and learning experience. • Retention — Correlated testing means that there is a qualitative way to ensure retention. After each video, the viewer must correctly answer questions in various formats before moving onto the next concept. • Accountability — Dealers and managers can track their entire staff. Get notified daily, weekly or monthly via text or email on accountability details, such as who has logged in, what videos were watched, what tests were taken, who passed and who failed. • Certification — Just like an OEM certification, virtual training offers curriculum paths for many aspects of the dealership. Follow the modules, pass the tests and get certified in areas such as automotive sales professional, Internet sales/BDC director, sales management, BDC rep/Internet sales coordinator, special finance director and more. Virtual training breaks down the barriers of time and location because it’s available whenever your team is able to take a few minutes off the floor, regardless of whether your staff is at the store or at home. The trainee can use their cell phone, tablet or desktop computer to access the lessons. If dealerships had access to a truly comprehensive, ongoing training program that covered all profit centers of the dealership and a full regimen regarding one of the most powerful tools a dealership possesses, their CRM, they would be able to sell more cars, more often and more profitably. If they had these strategies in place, dealers would be able to reduce their advertising costs, reduce their attrition in HR and simultaneously increase sales, volume and gross. Dealers need to focus on making sure their team is educated on each and every aspect and possibility of what the CRM can potentially do and on the strategy of how to use their CRM effectively. The only way


to guarantee the true success of your CRM is through ongoing, consistent training. We recently sat down with two of the industry’s top experts, Tammie LeBleu, National Dealer Development of AutoLoop and Sean V. Bradley, CEO of Dealer Synergy, to explore a surprising number of new resources available to dealerships when dealing with the two most critical subjects within a dealership — CRMs and virtual training. AutoSuccess: Tammie, let’s start with you. You’re one of the most successful salespeople in the country — earning more than $1.5 million over the last five years. You were the No. 2 Nissan salesperson in the country in 2011. Your personal bests include six sales in one day, 47.5 for one month, and 400.5 units in a year. How does a person hit those kinds of numbers? TL: (Laughing) You sell a lot of cars! Seriously, a lot of it is just what you would expect: hard work, drive and preparation. AS: Do you think being female in a traditionally male-dominated industry was a plus? TL: No, not at all. In fact, I found it to be the opposite. I had to overcome a lot of, I don’t want to say “bias,” but maybe, expectations. People have this picture of who a salesperson is supposed to be and I do not fit that image at all. AS: Did your dealership location factor into your success? TL: I’m sure it did, but it didn’t help me much in my situation. I was in Bossier City, Louisiana, which has a population of 62,000. It’s not a high-traffic market. AS: So, are you saying that with just hard work and determination, anyone can sell this many cars? TL: Hard work is going to play a role in being successful, no matter what. But the other factor I feel that’s necessary is that you really have to have a willingness to use every resource available to you. And for me, that meant learning how to leverage the information in the dealership’s CRM. A good CRM is like an ATM, a money-making machine for a dealership. But you have to be willing to learn it and use it, and you have to be consistent. For me, it’s been like a road map. It gives me direction and tracks what I need to do every day to be successful. I know when to call customers and which customers I need to call. It’s all digital, updates automatically, and I don’t have to write anything down. AS: Was there a steep learning curve? TL: Well, the software does a lot, so yes, there’s a lot there to learn. But you don’t have to know everything to start enjoying the benefits. Start using one feature, get familiar with it and then start adding to your knowledge base. There are training programs online, even “On Demand” training. AS: Well that leads us right to Sean V. Bradley. First, Sean, you have been featured in, and have been writing for, AutoSuccess for seven

years now and most of our readers are already familiar with you and your company. But we welcome new subscribers frequently, so for those who are not as familiar, can you describe for us what Dealer Synergy does? SB: Absolutely! We build custom, highly profitable departments for automotive dealerships across the nation, Canada and overseas. We are partnered with state associations and manufactures to provide training tactics for not only Internet sales and business development centers, but also for showroom sales training. With 92 to 99 percent of Americans going online before they step foot in a dealership, almost every customer is an Internet customer. Therefore, we don’t just believe in Internet “departments,” but rather Internet “dealerships.” We have taken our profound experience and success with Internet sales departments and developed programs that utilize the same Internet tactics, principals and philosophies for the showroom sales floor and have witnessed extreme success. AS: So you offer Internet sales, business development and showroom sales training. Do you offer CRM training too? SB: Absolutely. The CRM company usually shows you how to use their technology; we show you how to set it up to make money. Specifically, we will assist dealers create their automated action plans, sales processes, set up email templates (video and text), scripts and statuses. We teach the proper follow-up process with the dealership’s CRM for the showroom and Internet/BDC teams. We focus on how to manage the relationship from showroom, phone and the Internet fluidly through the shopping and buying cycle, all the way through to service, referral generation and re-sale. AS: And you actually go to the dealership? SB: Yes, we conduct onsite training. Our program varies from an array of options, from two to five days of intense onsite training, depending on the specific needs and goals of the dealership. In fact, up until recently, almost all of our training has been on-site. But that doesn’t work for everyone in terms of scheduling and cost and all the other aspects of on-site training. We’ve taken our curriculum and created virtual, interactive training modules available on-demand, 24/7, called “Bradley On Demand.” Our training covers an immense amount of topics, such as Internet sales, showroom sales, BDC, CRM, F&I, special finance, time management, leadership, motivation and much more. We saw a great need for this type of service in our industry and we wanted to fill that need. It is a more viable solution for dealers because it’s more cost effective. Your sales team can focus on whatever area they most need training in at their own availability and at their own pace. Plus, you don’t have to worry about things like, “Oh, John was sick on the day the trainer was here; he missed the whole thing.” AS: That sounds great. How do you guarantee that the training sticks? SB: The three R’s — repetition, reinforcement and retention — are key. I don’t care if you are the best trainer and motivator on the planet. Eventually, that feeling of inspiration will dissipate. With the availability of this tool to re-motivate and reinforce the information, whenever needed, this concern is eliminated. Again, I don’t care how amazing the trainer is, it is a scientific fact that immediately after hearing a speech or a lecture, only 50 percent of what the trainer says is retained. Then, 48 hours later, only 25 percent of that 50 percent is permanently retained. With virtual training, the same information is delivered exactly the same way each time and can be repeated over and over again for maximum retention. AS: Tammie, you’ve been using virtual training to train your teams, correct? TL: Yes, I watched all of Sean’s videos when I was a consultant, and


once I was in the management role I had my team watch the videos, as well. It’s the obligation of the dealership to train the salespeople. I felt it was my duty to supply them with the education, the “know how,” to give them a fair opportunity to succeed. More times than not, we hire these people, give them no direction and then are surprised when they fail. Whose fault is that? Not the salesperson’s. Poor training is a direct reflection on the dealership. SB: I agree completely. How can you expect your team to excel if you don’t provide them with the tools to succeed? We need to evolve what we do in the dealership. TL: Yeah, I had to evolve on my own. I wish there had been training back when I started. I credit most of my success to the utilization of my CRM, but even the CRM itself has evolved in the last five years. At first, it was more about what information I could get out of the CRM. But as it went on and I realized how much data really was in there, that’s when I started asking, what information do I need? When do I need it? Then I used the CRM to set parameters for alerts or reports or whatever. AS: That probably didn’t happen overnight. TL: Oh no. I felt like I was married to my CRM for a while there (laughs). It was that type of commitment coupled with a great tool that got me to be the No. 2 Nissan sales consultant in the nation and sell more than 400 units in one year. AS: Tammie, that is a surreal amount of units sold from such a rural town. Explain to us how you used your CRM to sell that many cars. TL: When I said was I married my CRM, I wasn’t kidding. I used every feature that it had. For every prospect that I had, I entered their birthday, their anniversary and other special holidays that were relevant to them. I then set up reminders and notifications. The CRM alerted me when those dates arrived so I would be able to call, email or send out a personal letter to these people. It truly built a relationship with the prospects and clients. That is what the “R” in CRM is: relationship. I took that literally. Additionally, I had an automated action plan for every situation, including: • Fresh Up process • Be-Back process • Dead deal process (Bought elsewhere, changed mind, upside down, credit, etc.) • Prior-customer process/orphaned owner • Phone-Up process • Internet lead process • Referral generation process • B2B process • Service conversion process • Equity miner/data mining process (prospect manifest) I used my CRM methodically. I thought of it as a team of personal assistants for me. There are eight ways that a sales professional can sell an automobile: walk in, be back, Internet, phone, service, prior customer, referral and prospecting. I truly leveraged my CRM to enable me to maximize all eight ways every single day. AS: Getting that fluent with the CRM, to be able to use it to that extent, must take a lot of training. Does virtual training help to fill that role to give a clear ongoing path mastering the tool? SB: Absolutely. Like we’ve said, the technology keeps evolving, so training needs to be done on an on-going basis. You can’t just learn one thing and be done; next week, a new version is coming out with more features that will make your life easier — but you still have to learn them. TL: Exactly. This is one of the major benefits of this type of education, which is why I have used on-demand training. It helps me stay current as things change and progress. AS: Now, we’ve talked about how training is evolving and how technology is evolving, but what about the industry as a whole? Is this

type of high-level CRM data-mining the wave of the future? SB: Yes, today it is. But because it keeps evolving, you have to stay on top of it. What looks like science fiction today is old hat by tomorrow. TL: I agree, and I don’t think we’ve done a good job of staying with the trends as an industry. With my speaking engagements, I get to see different dealerships all across the country and I am amazed at how many aren’t tapped into the power of CRMs. They either don’t have a CRM, they have one that it is not being used, or it’s being used incorrectly. So many dealerships don’t even know what they’re missing out on. We’re still pouring too much money into advertising and events and we have no real way of tracking whether it’s even doing any good. Yet, we have a whole database of potential prospects at our fingertips and we neglect it. AS: It’s a blanket approach. TL: It sounds more like a “throw it against the wall and see what sticks” approach. You think, “Well, sales went up during that promotion.” Okay, but there is nothing to say that the promotion itself had anything to do with it. We don’t know for certain if the message is really getting out, or hitting the right people, or who those people even are. On the other hand, all that information is already there, sitting in your CRM. All you have to do is ask for it. SB: (Laughing) She sounds like an evangelist. TL: This is definitely something I believe in wholeheartedly. Which is why I’ve shifted my career focus. I feel like I have a responsibility to the industry to make them aware of the gold mine at their fingertips. AS: Yes. You’ve actually joined AutoLoop as their new National Dealer Development. TL: Yes: I’m going to be out there saying, “Hey, this has worked for me, and I think it will work for other dealerships.” I think this is what our industry needs. And when I say that, I’m talking about all CRM marketing, and data-mining as a whole: personally, it made sense for me to go with AutoLoop, since they were the CRM company my dealership had used in my sales career. I know the product works, because it worked for me. It’s important to me that I stand for a product I believe in. But overall, I’m talking about a complete shift in the way we think about selling cars: We have the information, we need to use it and I am going to make it my mission to spread that message. Exclusive offers for AutoSuccess readers: Test drive Sean V. Bradley’s training courses for free by visiting www.bradleyondemand. com/autosuccess. You can also email Sean at sbradley@autosuccessonline.com. If you’d like to have Tammie LeBleu — “The Million Dollar Car Girl” — personally conduct a no-obligation assessment of your current CRM program, email her at tlebleu@autosuccessonline.com.


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TimByrd

sales & training solution

buy-here-pay-here in a franchise world: Finding a Solution for Lapsed Insurance Automobile sales have traditionally been broken down into three areas defined by the economic circumstances of the buyer: primary, secondary/sub-prime and “buy here pay here” (BHPH). Many franchise dealers who had chosen to stick with the primary credit buyer find themselves expanding with a special finance manager in F&I. This allowed for a greater number of sales which had been traditionally lost. Many savvy dealers looked at this and realized that, in many cases, the finance companies were making more profit on the car than they were. The dealership provided the location, signs, floor plan, etc. and received less profit. The idea of “I can do this myself ” has crossed many dealers’ minds. Hence, “Buy Here Pay Here” and “Lease Here Pay Here” offices have been springing up in franchise stores across the country. Those who have ventured into the BHPH business have discovered a different animal than what they are used to. Although lucrative, they are finding there are problems and challenges unique to the BHPH business. One of the greatest challenges is in the area of lapsed insurance. It’s estimated that 50 percent of the BHPH books of business are uninsured. Most BHPH operations have a full-time employee who makes collection calls for lapsed insurance, tracking down customers to get them to renew their coverage. To put this in perspective, you are paying someone to call your customers and demand they pay an insurance agent to cover your asset; if they don’t, you’re going to repossess their vehicle, because the alternative of unprotected collateral is more than you can swallow.

Some dealers find themselves with customers who are paying them well, but have lapsed insurance. So, they look the other way in hopes that nothing will happen. This is called “assuming the risk,” as well as other things. What is the solution? There are two main products available in the marketplace: collateral protection insurance or CPI, and debt cancellation coverage or DCC (also called loss damage waiver or LDW for leases and rentals). Neither product covers liability. CPI is primarily used as a force-placed insurance product. The customer buys full coverage insurance and lets it lapse. The lender then turns to a CPI provider to protect its interests against loss and passes the cost on to the consumer. This is an insurance product and, in some states, you must have a property and casualty insurance license to sell it. Force placing a BHPH customer can be challenging at best. DCC is a waiver, like GAP is a waiver in most states. It is an insured product, but not an insurance product. DCC cancels their loan balance (minus a deductible) if their car is totaled or stolen. It does not require an insurance license. DCC is usually sold to the customer at time of sale. In most states, it would be a recurring payment collected alongside the customer’s car payment. CPI can be purchased from a provider or reinsured. DCC is only available as a reinsurance product. Owning a reinsurance company gives a dealer the great advantage of turning a huge problem into a profit center. One reinsurance company can be used for many different products, such as warranties and service contracts. One of many advantages of offering collateral protection, such as DCC, is that at the point of sale, the customer is onboard and the premium collected is transferred to the dealer’s dealer-owned reinsurance company trust account. Each dealer’s reinsurance company is stand alone. Only a dealer/lender’s premium goes into the trust and only the dealer/lender’s customer’s claims come out of the trust. Therefore, just like an insurance company, any premium collected that is not used to pay claims becomes underwriting profit for the stockholders (owners) of the reinsurance company. DCC also benefits the customer. It is an agreement in which, for a fee (typically less than collision insurance coverage), the lender is agreeing to forgive all the customer’s debt should their vehicle be deemed a total loss. Insurance companies rarely pay off the debt completely and can take several weeks to come to a decision. The customer can often end up with no car and still owing on their last car. When most primary consumers have an issue with their vehicle, it is an inconvenience; however, with the BHPH customer, it can be a crisis. Being without a vehicle for an extended period of time waiting on an insurance company may force a customer to go to the next BHPH dealer down the street and buy from them, resulting in a lost customer. Owning a reinsurance company and offering DCC would allow a dealer/lender to act quickly to get the customer into another car and continue making their payments, which is the lifeblood of BHPH. There are alternatives to fighting insurance companies and customers. Savvy entrepreneurs realize that, with their own finance company, they could eliminate problems and make more profit. With a reinsurance company, they can also eliminate problems and make more profit. Tim Byrd is an author and founder and president of DealerRE. He can be contacted at 866.347.6022, or by email at tbyrd@autosuccessonline.com.

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JimmyVee & TravisMiller

sales & training solution

how you can stop competing on price in three easy steps We’re always amazed by how many dealers spend so much time and money hunting down, fishing for and pulling in priceshopping customers. Many dealers try so hard to educate themselves in the business, and spend countless hours picking out just the right cars at the auctions, but they still continue to compete on price. The “best dealership” and the “best service” and the “lowest price” do not belong in the same sentence, marketing piece or dealership. However, sadly, price-oriented marketing has become the standard in the automotive industry. Most dealers see it as a necessary evil that can’t be avoided. Price seems to be the last remaining competitive edge a dealership can employ. That’s why many great dealerships end up pricing themselves out of profitability. They don’t understand that consumers will pay more than the lowest price if you give them other reasons for choosing you. One great way to put more money in your pocket is to take Dr. Nido Quibein’s advice: “In life, you must become a ‘value interpreter,’ because in the absence of a value interpreter, everything is reduced to price.” We talk a lot about creating a buying preference. Creating a buying preference is a sure-fire way to help you stretch your ad dollars and make everything you do more profitable. There are many ways to create a buying preference. You can establish yourself as an expert or give value first. Both of these strategies give an added value to what you are selling, which should result in a buying preference for your customers. However, sometimes when you add value in these ways, the act can go unnoticed by your customers. Let’s say you are in the market for a new washing machine. Nowadays, it seems there are hundreds of choices and even more places

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to buy one. However, if you don’t know what you’re trying to accomplish — what make or model will solve your problem — chances are you will just choose the cheapest machine; you won’t see the point in paying more. But if a salesperson were to step in and explain how a specific machine would better meet your individual needs and why buying it from them would help you better accomplish your goals, you would probably be willing to spend the extra cash. This scenario is the same in every business and industry, and is especially true in the automotive industry. If you can interpret the value of a purchase for your customers, they will be willing to spend more. The moral here is not that you should buy a lot of cars with a variety of features, but rather that you should demonstrate that you are the expert in helping customers choose the best car for their situation. That’s the added value. Therefore, becoming a value interpreter is a three-step process. 1. First, you must discover what problems your customers are facing that are keeping them from buying. In the example of the washing machine, this is where you would try to uncover which features your consumer was looking for. In the car business, you have to find out what problems are keeping them stuck in a car they hate — do they owe too much money? Are they short on a down payment? 2. Then, you must show them how your dealership can solve these problems. For some

consumers, this step might be as easy as helping them find a car that is big enough for their growing family or having options on your lot that fit their budget. For others, you might have to dig a little deeper to determine what your dealership does to help them solve their problems. Do you have a special process? Do you host a seminar at your dealership?

3. Finally, be sure to highlight the additional value that your dealership provides. If your

dealership offers an extended service package or makes a customer service guarantee, you must explain these valuable additions to your customers. They need to understand the positive impact that buying a car from you, instead of another dealership, offers. You must interpret the added value a consumer receives by purchasing a car at your dealership. These are benefits unique to your dealership, after all.

How much you can charge for something is all based on your ability to sell it, which means the more you learn about marketing your uniqueness and the more you can interpret the value of what your dealership does differently than every other dealer in your area, the more you will be able to charge for your vehicles. For a complimentary Traffic Scale Report, which compares the quality of your traffic to other dealerships in your area and helps determine whether or not there’s potential business you’re missing out on, visit www.TrafficScale.com and use coupon code ASM1411.

Jimmy Vee and Travis Miller are founders of The Rich Dealers Institute and the authors of Gravitational Marketing: The Science of Attracting Customers and Invasion of the Profit Snatchers. They can be contacted at 866.867.9618, or by email at jt@autosuccessonline.com.


DalePollak

leadership solution

three ways to win amid A declining wholesale used vehicle market Some dealers have taken historically high wholesale used vehicle values for granted. These dealers have eased up on their efforts to quickly retail every used vehicle, knowing that they’ll probably do OK if they decide it’s time to wholesale a unit. At some stores, dealers have realized a profit as they wholesale aged units.

Dealers who appraise vehicles based on current retail conditions for a specific car rarely fall into this trap. Using technology and tools, they assess the current retail conditions as they size up an auction vehicle or a trade-in. In this scenario, wholesale valuations may play a role, but it’s the spread between the cost to acquire a vehicle (e.g., the Cost to Market) and its likely retail selling point (e.g., the Price to Market) that matter most. When dealers use these retail-focused metrics, they instantly know if a vehicle fits their inventory needs and profit objectives, as well as steps they’ll need to take (e.g., cost-conscious reconditioning) to manage units that are likely to pose a retail profit challenge.

But this luxury has pretty much disappeared as wholesale used vehicle values continue to decline, thanks to rising supplies and seasonally Real-time retail pricing — Dealers who focus on a retail-first used vehicle strategy are vigilant about each car’s price position relative to same/similar competing units. Here, the ups and downs based value drops that arrive this time of year. of the wholesale market merit little consideration; instead, the dealers balance each vehicle’s retail price position (as measured by Price to Market data) with the unit’s profit and turn objectives. So now what? The answer to this question is a return to “retail-first” fundamentals dealers should follow regardless of the ebb/flow of wholesale market values. Indeed, dealers who focus on the decisions and steps required to retail every vehicle for maximum profitability believe wholesale values are simply the cost of entry to retail a car, not an aspect of their exit strategy.

At these dealerships, it’s common for dealers to check and adjust their retail pricing at least once a week. By doing so, dealers are able to mitigate profitability and return on investment (ROI) risks that flow from incoming supplies of competing cars and diminished buyer demand.

Here are three fundamentals I recommend to help dealers maintain a “retail-first” focus as the wholesale market becomes more volatile:

Interestingly, some dealers are even more aggressive, setting a goal to maintain 75 percent of their inventory under 30 days of age. This decision did not follow any worries about volatility in the wholesale market, or even significant shifts in the retail landscape. Rather, the dealers raised the bar for themselves. They recognized a higher level of process efficiency and sales throughput would elevate profitability and sales in used vehicles and other dealership departments.

Retail-focused appraisals — As wholesale values decline, it’s tempting for dealers to believe they’re stealing a car, particularly given the historically high wholesale valuations we’ve recently seen. But this view typically obscures an important retail reality: In most instances, wholesale value declines result from increases in vehicle supplies. In turn, these cars inevitably end up as retail units, which can cause retail asking/transaction prices to diminish.

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Tighter retail turn timelines — I’ve long advocated that dealers maintain at least 50 percent of their used vehicle inventories under 30 days of age. The reason: This standard ensures dealers retail a greater share of their used vehicle inventory in less time to maximize profitability. In a volatile market, this turn-focused standard becomes even more important.

Each of these fundamentals poses its own set of challenges, particularly for dealers who have become too dependent on the ability to wholesale used vehicles for a profit. But, again, let’s be honest: A wholesale profit on a retail vehicle is really putting “lipstick on a pig.” After all, the vehicle failed as a retail unit, and this failure cost the dealership far more than the wholesale profit it might have earned. Dale Pollak is the founder of vAuto and a best selling author. He can be contacted at 866.867.9620, or by email at dpollak@autosuccessonline.com.


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DEALER PANEL THE

IsraelAlpert

marketing solution

digital marketing of vehicles: The Problems, the Solution and the Advantages

THE PANEL WILL SEE YOU NOW!

Our Dealer Panel gives voice to dealers, GMs and sales professionals to share their experiences — sales techniques, new technologies and ways to motivate staff — giving our readers the benefit of their experiences.

SEE PAGE 24 FOR MORE...

Digital marketing relies on capturing attention. For a dealer, the easiest way to capture the potential buyers’ attention is to cut the price below the competition. However, the smart way is to stand above the competition by showcasing the inventory in the most appealing way possible — by posting high-quality pictures and media. Capturing, processing and displaying such content, however, can present some real challenges. Challenges

Dealers are spending thousands of dollars per month for third-party data collectors or for hiring photographers. As a result, many dealers cannot afford to spend the time and money involved in taking pictures of their entire inventory. They opt, instead, to use stock images. Studies have shown, however, that consumers are oblivious to stock images. Website postings of actual images of the vehicle receive 400 percent more attention than stock photos. Dealers are taking 40 to 50 pictures of each vehicle because “the consumer wants to see the inside details.” Yet most consumers don’t click on so many pictures. Did you ever try to view 50 pictures on your smartphone or tablet? It takes hours, or even days, for the pictures to be posted to the dealer’s Website. The photos come through the Website provider, who then posts it to the hosted Website. The quality of the pictures may actually deteriorate due to this process of moving and copying them. Then, once the pictures are uploaded and posted, one must go through the same sort of arduous process in order to change or even to remove or edit one bad picture. It’s a time-consuming and frustrating process. Solutions

Today, there are systems capable of capturing pictures with instant publication to the dealer’s Website and online content management system, and even a practical method of capturing and displaying a 360-degree virtual tour of both the vehicle’s interior and exterior. These modern systems can take advantage of the cloud and smart cameras, smartphones or tablets. Just select the vehicle, aim and shoot. The system uploads the content and displays the pictures on the dealer’s Website almost instantly. Post-production efforts (such as adding banners, background and watermarks) are eliminated as well, since the cloud-based system applies them to the pictures automatically. There is even the capability to set a special camera inside a vehicle to take a 360-degree panoramic view of the vehicle’s interior and automatically create an interactive virtual tour that is displayed on any Website and mobile device. This tour is unique because it allows the buyer to control their point of view, zoom in, out and all around — a true 360-degree experience from the driver’s point of view. Additionally, these modern systems also include video clips with human voice narration available in English or Spanish. Advantages to the Dealer

Advancing to this cutting-edge technology empowers the savvy dealer to: • Save money by bringing the picture-taking process in house: Dealers can save thousands of dollars every month. A fully automated system enables the dealership to process 10 vehicles in less than two hours. • Stand above the competition: Studies show that a 360-degree virtual tour captures the buyer’s attention and increases interaction by more than 200 percent. On mobile devices, the interactivity is critical and it is far more effective than flipping through dozens of pictures. • Escape from “stock photos”: Since the process is much faster and more efficient than the traditional way, dealers can now take a virtual tour of every new vehicle using the same amount of man-power that can process just the pre-owned inventory. Providing actual pictures for every vehicle as opposed to “stock photos” increases the buyer’s attention and responsiveness. Dealers who adopt the new, sophisticated, cloud-based, fully automated systems enjoy a less expensive, more efficient and highly effective method to take advantage of digital marketing and differentiate themselves from the competition. The time is now to present your vehicles in a new light. Israel Alpert is the CEO of Sister Technologies. He can be contacted at 866.855.5925, or by email at ialpert@autosuccessonline.com.

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the dealer panel

part 2

Hiring:

Making the Right Choice

Chris Saraceno AndrewDiFeo Brian Benst ock Danny Benites Joe Clement i One of the most critical decisions leaders make is choosing new staff members. A good fit can take the organization to new places; a bad fit can cause difficulties throughout the company. Last month, we asked what sets a candidate apart from the pack in our panel’s eyes when hiring. This month, we’ll look at getting the employee off to a good start. For this installment of our panel, we spoke with Danny Benites, general manager of Greg Lair Buick-GMC in Canyon, Texas; Chris Saraceno, vice president and partner of Kelly Automotive Group in Pennsylvania and Florida; Joe Clementi, general manager and sales trainer at THE Sacramento Kia in California; Brian Benstock, vice president and general manager of Paragon Honda and Acura in New York City; and Andrew DiFeo, general manager of Hyundai of St. Augustine in Florida.

DEALER PANEL

AutoSuccess: Describe the process a new employee goes through when joining your organization. Andrew DiFeo: We have a two-week orientation, and one of the most

important activities is that they are introduced to everybody in the dealership — especially management in all the departments — so if they ever have an issue that needs to be resolved in a different department, they know who to go to. We also have new hires, especially ones who have never worked in the car industry before, shadow one of our more senior personnel for two weeks to learn our processes. Chris Saraceno: We work with an automotive recruiting firm to attract talented candidates in our market. The firm shares what we’re like to work with, our expectations, and the specific behaviors, actions and attitude needed to excel in the automotive industry. New team members are introduced to the team during a tour of the dealership. They attend a one-day Kelly orientation workshop (taught by myself or Greg Kelly). Depending on the position, they will be assigned passwords within 24 hours for the OEM’s online training, as well as DLA and CRM online training. We then schedule them for appropriate training workshops. We have a culture of training, mentoring and coaching on a consistent basis. Joe Clementi: After an extensive interview process, we introduce them to all of our team members. We want them to understand how dependent each associate is on the other. We introduce them to our core values and our mission statement. We provide them with a job description and the expectations that come with the position. Once the HR tests are completed we move onto process understanding. We provide the associate our process map books as they relate to the position they were hired for so they know what is expected. We team them up with an existing employee so they can see the process as it’s being performed. After five days, we review their performance so that we can see if what has been instructed is being followed. Brian Benstock: We have a training program that lasts two and a half weeks, where they go though our policies and procedures, and then they do someSaraceno shadowing and Provos basic training for each department. an area Chris Tony t AndrewDiFeo BrianIt’sBens t ock we could always do better in, but we have a thorough process to ensure that by the time they interact with a customer, they’ve been well trained. Danny Benites: Outside of the basic orientation, I

want our new team member to learn three things immediately: what we provide, how we provide it and why we provide it. If employees know why we do things the way we do, they are likely to buy into our culture and become a long-term team member.

THE

DEALER PANEL

AS: What steps do you take when an employee isn’t performing as well as they could within your dealership? AD: For our employees, especially in sales, service and F&I, we give

them clear-cut monthly goals. They know what’s expected of them. We try on a weekly, and sometimes daily, basis to review that employee’s performance against those goals. We find that a bad month just doesn’t happen. It’s a few bad days strung together to a bad week that leads to a bad month. We try to correct the process early on; it’s easier to get them back on track. We put a 90-day plan out with goals and make sure they knowsuccessful what’s expected of them and work solutions provided by out how to meet those goals. If they can’t, they might not be a fit for that department, or it might be better for both the company and employee to move on.

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CS: We set clear expectations from the first interview, and follow up in writing with what is needed to excel in your career at Kelly on daily, weekly or monthly basis. We do one-on-ones early and often. Several times a week, our managers will sit down with the team members and ask them what’s going on, what their plan is for the day and what support they need from them. If they’re not performing, it’s typically discussed early on. If it’s a performer who’s having a bad day, week or month, we mentor them. If they’re having personal issues, especially if they have been a top performer, we continue to coach, mentor and support them; they’ve earned and deserve extra time and attention. A poor performer with a poor attitude is removed quickly from the team. JC: Creating consistency from your sales staff requires constant management and coaching. Counseling performance is the step where a sales manager has a formal review of prior production requirements, and the dealership’s standards. Having the proper documentation and reviewing the coaching stage of the deficiency is imperative. The goal is to alter the behavior to accomplish a common goal. A proper analysis of the associates’ job production should be compared to prior production, job requirements, expectations and the associates’ potential. Clear communication is essential and should never be performed out of anger or frustration. The associate should always feel the counseling stage is a performance-improvement step and the walk-away for the associate is to understand that performance is a job requirement.

the dealer panel

BB: You have to ensure you’re giving employees the tools they need to

succeed. We do a 30-, 60- and 90-day evaluation to ensure the employee is being able to grow. If an employee is new to the car business, we’re not going to set unrealistic expectations. If it’s an experienced employee, though, and came in discussing their abilities and results, we’re going to want to see them perform at those metrics or above. If it’s just not the right fit, we would hopefully discover that early on.

DB: The first thing we look at is a mirror. If we are hiring thoughtfully,

we have to take some responsibility in their lack of performance. If we have done what we are supposed to do and it appears to be a bad fit, we will always consider moving them around before moving them out. Sometimes we have the right people in the wrong places. It’s up to us, as leaders, to put the pieces of the puzzle together. Next month, we’ll take look at our panel’s personal experiences, and their recommendations when it comes to hiring. If you have questions or are a dealer who would like to be considered for the panel, please contact us at thepanel@autosuccessonline.com.

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DennisMcGinn

leadership solution

recon metrics, accountability and red flags

Metrics based on verifiable facts, and not opinions, is the only way to ensure you have airtight accountability in recon. If you include the third dimension of managing the ups and downs of business cycles, then these same metrics are vital to both short and long-term profitability.

After working with hundreds of dealers, I can say with certainty that, when compared to seeing the actual or measured “real” numbers, anything under a 7.5 day average (without metrics) is not reality.

To produce solid metrics, your staff must be able to close out each job on the spot, in real-time, from a mobile phone, a tablet or a desktop computer with a single click. This is the first big step that eliminates excuses. The second step is to make these metrics visible so everyone can see the impact of a weak link or a bottleneck.

The “incremental expense” assumption is my favorite topic because I occasionally see GMs who are convinced they are “on top of recon.” However, I have yet to encounter one who can show me verifiable metrics based on workflow technology. To be more specific, once a properly designed, real-time workflow system is in place for 45 days, their verifiable average recon time is inevitably in the range of 7.5 days to as high as 18 days. It comes as quite a shock to some dealers that their “real” numbers are so high and have been hidden all this time by using a spreadsheet.

The third step is to have a time-to-market target that includes specific department-level metrics. For example, if your overall timeto-market (TTM) target is four days, then “Inspection,” “Service,” “Detail” and “Photos” must be consistently under two days. “Parts,” “Body” and “Sublet,” as needed, account for the other two days. What red flags point to the need for fact-based metrics? • You are under the impression you don’t have a recon problem because you are running two to four days. • You are still using a spreadsheet or shared Google doc. • You think that a recon workflow solution is an incremental expense. This two- to four-day assumption normally exists when GMs are lacking verifiable metrics or proof. By delegating the recon responsibility and without metrics, they typically hear only the “good news” and the difficult cars are omitted.

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Spreadsheets are not reliable since they depend on sampling only a few departments, such as service and detail. The sampling process has a strong tendency to ignore problem cars, which in turn, hides the real averages. The problem here is that all cars count, not just the best-case vehicles.

As a general rule, any store without workflow has two inventory turns buried in recon. This by itself makes it at least cost neutral, but this is actually not the big win. The big ROI is what happens when you have used car sales and fixed operations/service on the same page and making timely decisions that work for both. Finally, “a system is only as good as the people who use it.” While this is patently true, how do you get your people on board? You give them the most reliable and transparent tools available for them to be individually accountable. You give them the opportunity to close out a job from anywhere, with real-time capability and mobile apps, making the results visible to everyone. Your good people want to be accountable. They are eager to prove they are doing a good job and have control over what is being reported to management. This, in turn, establishes the proof and validates your metrics. You probably will not like what the numbers tell you initially, but the reality is, you will have the facts and can proactively make changes in a positive way to bring those numbers down fast. Recon will be a more efficient workplace when the numbers are trusted and individual work is valued. Red flags will automatically show up and get immediate attention, eliminating any real drag on recon time. The entire recon dynamics and business model of that department will come alive. It is a win/win for both the worker and for your bottom line.

Dennis McGinn is the founder and CEO of Rapid Recon. He can be contacted at 866.268.3582, or by email at dmcginn@autosuccessonline.com.


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MarkTewart

sales & training solution

dealers, why are you committing suicide? Dealers are committing suicide in their business every day all over the country. The suicide of their sales, profits and business comes in the form of excuses that are allowed and perpetuated — to the point that those excuses take a life all of their own. The excuses are now a created reality. You may have read about the example of an elephant chained to a pole with only a small radius to move; then, when the chain is removed, the elephant continues to move only within the same small radius. The limited area has become learned behavior and the mental acceptance has become more reality than the physical reality. Many dealers operate every day within their own self-imposed limitations, and that’s why they are committing suicide to their sales, profits and business. Have you heard the following common excuses? • “You can’t get good people in this area.” • “My veterans don’t sell a lot, but they are loyal and they are honest.” • “You can’t make good gross profit today in the age of the Internet.” • “I don’t want to expect too much from my managers — they might leave.” • “My customers are different in this area.” • “I tried that once and it didn’t work.” • “I cannot afford that.” I could list thousands of the common excuses that are used every day. The truth is that every single one is nothing more than excuse, and you have limited yourself and accepted these excuses to create a reality — just like the elephant. You have even grown to find great comfort in the excuses. You have now become a professional victim who gave up your power and now wear your hopelessness like a badge of honor. Great dealers never accept excuses because they know, if you do it once, it grows like cancer. Great dealers know that excuses create a learned behavior that tolerates bad behavior, bad results and creates a culture

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and environment of malaise and eventual suicide. Great dealers instantly recognize the victim mentality and constantly teach abundance and possibility to the point that their team also takes on a champion mentality of no excuses. Great dealers guard their businesses like a warrior against allowing the mental sabotage from creeping in. “Speed of the boss, speed of the crew, how you think and act, your team shall too!” • Do you tolerate low to no productivity? • Do you tolerate low to bad results? • Do you tolerate your excuses for playing small and playing “not to lose” instead of playing to win? Think like a great dealer. What do great dealers do? • • • • • • • • • • • • • • •

Great dealers are always looking to do better. Great dealers always act as their own harshest critic. Great dealers always take personal responsibility. Great dealers have “teachable spirits.” Great dealers are naturally curious and looking for an edge to get better everywhere they can. Great dealers are bold and make quick decisions. Great dealers embrace and promote constant change and growth. Great dealers have much higher expectations. Great dealers create an expectancy of winning and, therefore, attract winners. Great dealers are very clear on what they expect and hold their team accountable. Great dealers create a culture of great attitudes and live under the mantra of “Coach, Counsel and Cut.” Great dealers constantly train and educate their team while never allowing team members who fight learning to get their way. Great dealers make the hard decisions daily and do not avoid them, hoping they will just go away. Great dealers are all about action — and not excuses. Great dealers are understanding of the ups and downs that people go through, but do not allow the downs to become the standard.

Here are my questions for you: • Are you a great dealer? • Would others consider you a great dealer? • Are you creating greatness or tolerating slow suicide? Being great or committing suicide is a choice. What choice are you making? For a free Special Report titled “What Great Dealers Do and Don’t Do” email me at the address below.

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 email at mtewart@autosuccessonline.com.


JohnDobrick

leadership solution

when a little late — came a little early Vince Lombardi once famously professed: “We didn’t lose the game; we just ran out of time.” How do you think that line would work in our business? “Boss, we didn’t miss our objective; we just ran out of time.” I recently had the pleasure of working with one of the largest auto groups in the U.S. and we tackled two major senior management objectives: 1. Help the management team identify and

“work through” time management issues.

2. Help the organization create the foundation

of a management process that would enhance and compliment their alreadysuccessful selling process.

A little background information: This is one of the best-run organization in the country. With that stated, one of the biggest challenges each manager faced was sticking to a sizeable daily and weekly to-do list. Candidly, this list was viewed by the management team as anywhere from a “waste of time” to a “necessary evil.” The one thing virtually every manager could agree upon was they just wanted the time “to do what they were paid to do — sell cars.” Ultimately, the objective was accomplished by developing a process that took less time and has yielded better results. Not only did we end up “saving time” — the management team was able to cover the daily to-do list in 50 to 65 non-consecutive minutes per day — and the five “foundation” steps complimented the sales process already in place. The Rule of Five

In preparation for this undertaking, I recalled an article by John Maxwell, who is considered by many to be the authority on the subjects of leadership and time management. In the article, Maxwell used a time management analogy. His subjects? A large tree and an axe. The premise of Maxwell’s tree and axe analogy is this: Imagine a tremendous decaying tree in your backyard — a tree that must come down. The only tool you are allowed to use is an axe and you are permitted to take five swings per day. Eventually, your five daily swings will bring the tree down.

So, why not use the quick-fix chainsaw instead? It would certainly save time. This quick-fix approach is understandably prevalent in many dealerships today. A valiant effort is put forth in spurts. This sporadic approach falls short because it lacks consistency and, in the end, the lack of consistency leaves one ill-prepared and vulnerable to any and all distractions. The Tree and Axe

The beauty and the reward of the consistent “axe approach” is this: • It is only five swings — but it is five swings each and every day. • It is five swings, no matter what obstacle gets in my way. • Those five swings will occur no matter who is here or who is off today. • Those five swings take discipline, but a disciplined approach will soon enough become a habit. • When your five daily swings are the habit of your entire dealership — wow. • You will take your organization from being a good organization to being recognized as a great organization. Let’s identify the five things that your dealership’s management team should be doing every day. A Manager’s Rule of Five 1. Prepare every day. 2. Train every day. 3. Prioritize every day. 4. Reinforce every day. 5. Measure every day. The Foundation Huddle Guidelines

Consider the word “meeting.” It has been my experience that, in certain instances, the word “meeting” carries negative connotations. Here’s why: • Typical meetings are not very well planned and often lack structure. • Meetings often do not have a definitive end time. Example: “Our Monday morning meeting begins at 8:00 a.m.” Ambiguous end times promote daydreaming and a general lack of focus amongst the attendees. Now, consider the word “huddle.” A huddle is a short gathering, designed to put a play in-motion. The Egg-Timer Approach

A useful tool for establishing the specific length of your foundation huddle is the egg timer. For example: Everyone understands that we are huddling-up for 10 minutes (until the sand runs through the timer). When all the sand is through the glass, the huddle is over, and all participants fully understand this. The Four Rules of the Foundation Huddle

In order to expedite an effective huddle, follow these four rules for successful huddles. Your huddles should be “broken-up” throughout your day. The dealer or GM should run at least one of these huddles daily. 1. Stay disciplined. Tomorrow it will become a habit. 2. Set a specific start time and end time, using the egg timer. 3. No interruptions — this is 10 to 12 minutes of zero distractions. Decide in advance on who will handle the potential interruption? (Receptionist? F&I?) 4. Have concise expectations upon “break.” Everyone should have a clear understanding of what he or she is accountable for today — and what individual they are responsible for getting back to with the information. Inspect what you expect. For a free copy of “The Manager’s Rule of Five,” contact me at the address below. John Dobrick is the vice president of sales and marketing for The McDavid Group. He can be contacted at 800.901.2860, or by email at jdobrick@autosuccessonline.com.

the #1 sales-improvement magazine for the automotive professional

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RebeccaKon

sales & training solution

your live chat results are only as good as your dealership’s follow-up strategy Today, 75 percent of shoppers prefer to use live chat to get their questions answered quickly and anonymously, according to a study by Moxie Software Inc. They love the personalized, real-time customer service. However, what shoppers don’t love is when, after having the best sales conversation of their life on a dealership’s Website, they experience follow-up communication that is less than satisfactory — or possibly no response at all. In fact, Pied Piper’s 2014 Internet Lead Effectiveness Study showed that, out of the 14,500 Internet leads submitted to dealerships, 7 percent received no follow-up. That means that 1,015 online shoppers received no response at all. These missed Internet leads — from Website forms and live chat leads — are a huge missed opportunity for dealerships. So let’s be frank: If your dealership’s staff doesn’t have a proper chat follow-up process in place, you aren’t going to see the ROI from live chat (or any lead provider, for that matter). No matter how outstanding the chat conversations are, you won’t make any money if your staff doesn’t properly follow up. So, how do you implement an effective followup process for live chat? First, you need a plan: • Who will be following up on the leads? • Will you use round-robin or other approach for fair lead distribution among your staff? • How quickly should your team be following up on chat leads? • How many employees do you need to follow up on all chat leads in a timely manner?

• Does your staff understand how to use your CRM to access the chat leads? • Where will the chat transcripts be stored for your team to review? Next, you need to train your team on the new follow-up process you have created. Below is a sample step-by-step process your team can follow in order to successfully convert chats into sales: Step 1: Read the chat transcript thoroughly to ensure you understand all of the shopper’s needs

and requests. This will help you accomplish Step 2 and make you more knowledgeable about how to approach the sale.

Step 2: Gather the details the shopper was looking for and include them in your response: vehicle availability, price, vehicle specs, leasing special details, service package information, etc. You must answer the shopper’s questions in your follow-up. By doing so, you will begin to build a relationship with the shopper and earn their trust. Step 3: Make sure to attach any photos or coupons requested during chat in emails. Step 4: Reply quickly, but make sure to spell check before you send any emails. Be a professional. Step 5: In phone calls, if the shopper picks up, provide them with the information they requested in the chat. You’ll also want to prompt them for any additional information that might be important in order to fully understand their needs.

(If the shopper doesn’t pick up the phone, leave a message with the details and a call back number). Step 6: Ask the shopper to come by for a test drive, to set up a service appointment, or ask them if they would like to order the part for their vehicle repair.

You want to lead them to a next course of action in the buying process. If they are ready and you have done your job correctly, they’ll fulfill the action and come to your store to complete the sale. Be sure to train your staff on these best practices so you can have an effective and timely follow-up strategy. If done properly, your live chat service should pay for itself — plus some. Rebecca Kon is a communications specialist at ActivEngage, Inc. She can be contacted at 866.485.7071, or by email at rkon@autosuccessonline.com.

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LenShort

marketing solution

getting close to vehicle shoppers — and moving beyond the big search engines How and where consumers shop online has changed dramatically in just 10 years. Back then, it was all about “Big Search” — and big companies like Google and Yahoo. But a 2012 report from Magnetic, a digital technology company, states that Google controls only 43 percent — less than half — ­ of the market. Even more surprising, the report also notes there were a staggering 375 million automotive searches during that same time period on non-search engines.

their own. During the initial discovery phase (top of the funnel), vehicle shoppers use a general search engine like Google to look for brands, sizes and features. Once they narrow in on a brand, then they go to nonsearch engine Websites (such as Consumer Reports) to research more detailed information for evaluation.

And what are these consumers looking for? Vehicle detail pages (VDPs). That’s right: those hard-to-findbut-super-desirable, ready-to-buy shoppers are likely to be hunting down real inventory on non-search engines. The challenge for your dealership is to find and connect with those purchase-ready shoppers as efficiently as possible — and before someone else does. Understanding and Leveraging the Online Shopping “Funnel”

Shopping for a vehicle is a “high involvement” process for consumers — one that involves many decisions and steps, including discovery, research and shopping. Think of it as a funnel, and in a way it’s nothing new. Before the Internet, that entire funnel process took place at dealerships.

Are You Getting The Most Out Of Your SEM Campaigns?

But today, consumers are doing most of this process online — and on

Here’s where it gets interesting: A critical first part of consumers’ purchase decision is made at this point — mid-funnel — because it’s here that they decide what make/model/color vehicle they’re going to buy. Yup, it’s worth repeating: Consumers are likely to figure out which car they’ll buy without having visited a single dealership. The bottom of the funnel — shopping — is where consumers figure out which specific vehicle they want and where to buy their vehicle. Lowfunnel shoppers are hunting for actual, specific VDPs. That’s where you need to be, too: “greeting” consumers online with the VDPs of your dealership’s inventory of vehicles. So how do you get there? Getting Your Vehicles — and Your Dealership — Closer to Shoppers

You need an online strategy to optimize the shopping funnel so that you connect with those ready-to-buy shoppers. Get your inventory on leading third-party research sites where, according to a Google/Shopper Science study, 71 percent of online shoppers are hunting down cars (Remember: Shoppers can’t easily find specific vehicles on the general search engines). The best way to do this is by leveraging deeplinking technology. Deeplinking seamlessly connects low-funnel shoppers to the VDPs on your dealership’s Website. Dealers who embrace deeplinking are achieving an outstanding average shopper-to-sale ratio of 23 to 1, and a 25 percent increase in sales. The results make sense: Deeplinking provides consumers with a better shopping experience than any search engine, and it links more buyers directly to your dealership’s Website. So what about the rest of the funnel? Earning traffic is still very important, and every dealer wants to attract new customers, so that’s where Google and ad word spending make good sense. But if you want to rack up sales and close deals, you have to funnel buyers down to specific inventory. Your inventory. It’s that simple. ADWORDS

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Len Short is a founder of LotLinx. He can be contacted at 800.901.3053, or by email at lshort@autosuccessonline.com.


LarryBarditch

marketing solution

the cost of not ranking at the top of the google search While I used Google in the headline, because it’s the 800-pound gorilla in the search engine arena, you could substitute Yahoo, Bing or any other search engine. It’s difficult for dealers to gauge ROI on many of their digital marketing services, especially their search engine marketing (SEM) and pay per click (PPC) campaigns. Let’s analyze the missed ROI from not ranking at the top of searches. Although generating leads is the No. 1 objective for digital marketers, the initial goal for PPC is to control impression share and drive more Website traffic. PPC marketing has almost equaled organic ranking as the main component that drives traffic — and you should be dominating both to succeed. So let’s break this down, factually. There are almost five billion searches performed each day on Google alone, and 95 percent of all clicks happen on the first page of the results — but being listed on Page One is just not good enough these days. Approximately 65 percent of all clicks come from the top three search results, also considered as “top of the fold.”

There are several factors that determine your ability to actually rank in the top three results. I will cover those in my next article, but for now, let’s look at the cost of a failed PPC/SEM strategy. To determine your missed ROI, I’ve used one of my previous campaigns that consisted of 50 keywords of a popular domestic brand in a popular city. That campaign generated 500,000 Google searches in a month. Depending on a variety of factors, the average click-thru-rate (CTR) from Page One results could be between 2 percent to 35 percent. Let’s use a conservative CTR of 5 percent. That math equates to 25,000 possible lost visitors. If we use the Google Analytics Website data to determine the actual conversion rate of those visitors at 5 percent, we would come to a conversion amount of 1,250 leads. The average dealer’s Website conversion rate for leads to appointments should be 15 percent. Using those calculations, we should expect 187 qualified opportunities. Using the 50 percent show and 50 percent show-to-purchase averages, we would expect 93 shows and 46 sales. You can plug in your own profit per vehicle amount, but if you average $1,000 on a new/used ratio, the amount would total $46,000 — an average of $2,000 per vehicle would be $92,000. Using my formula, the cost of not ranking at the top of the Google search results would conservatively equal $46,000 in lost revenue per month, or $552,000 annually. So, if your digital marketing agency is not getting you in the top positions, you’re not only wasting the current PPC/ SEM monthly spend, but it is costing your dealership thousands of dollars. Social media is increasingly important, and SEO is always a key factor, but failure to have an amazing PPC/SEM strategy could be costing you Website traffic, leads and sales. Larry Barditch is the vice president of digital strategy and innovation for MSA Advertising. He can be contacted at 866.590.1624, or by email at lbarditch@autosuccessonline.com.

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EdLouis

marketing solution

can a mobile app add value to your business? Inevitability, all dealerships want to improve customer experience through more quality interactions that drive satisfaction, loyalty, increased revenue and even improve the way they service their customers. What better way to improve the experience than with a consumer facing dealer branded mobile app? Here are five ways a mobile app can add value to your business: Dealer Branding

• Apps add value to your existing marketing strategy for brand awareness. Dealers spend thousands of dollars every month to market their business so they can sell and service more cars. A mobile app is an inexpensive way to help achieve that goal. • Your store is visible in the app stores. With links or QR codes, it is extremely easy to direct your customers to the app stores to download your app. • A good-quality app will allow you stand apart from your competition. The Trend — Apps are Extremely Popular

• • • •

Most major industries are using apps. Manufacturers use apps. Your competitors are using apps. Your customers are using apps.

Convenience — Apps help Increase Customer Satisfaction and Engagement

Why Adaptive Knocks Out Responsive for E-commerce

• They provide a toolkit with useful features, including roadside assistance, schedule service, etc. • They are easy to use, providing directions to dealership, hours, appointments, contact information, etc. • They are relevant, with “My garage” data, up-to-date record keeping, etc. • They are accessible; most people have their smartphone with them at all times. Push Notification System — Powerful Messaging System

• This technology drives relevant content to your customers and community, such as coupons, specials, events and videos. • Push notifications have close to 100 percent read rate. • Push Notifications can be geo-targeted, as well as by demographic, vehicle make/model, situation, etc. • Push notifications are an effective communication channel, from one to one commination to communication to the entire network. Flexibility — Apps Reflect All Areas of Your Business, Including:

• • • • •

Mobile Website Social media Videos Reputation management Manufacturer events, news and information

According to Flurry Analytics (an app analytics provider), “native app usage on smartphones is continuing to grow at the expense of the mobile Web.” Therefore, a mobile app for any business definitely adds value. But just as with anything else in life, you will get out of it only what you put into it. Once you make your app part of your business culture and incorporate simple marketing processes, the rest, as they say, is history. Dealers, follow what other industries are doing and use a mobile app to add value to your business.

Download the whitepaper: nakedlime.com/resources/whitepapers

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Ed Louis is the CEO and co-founder of DealerApp Vantage. He can be contacted at 866.604.6710, or by email at elouis@autosuccessonline.com.


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the future of third party leads Why performance-based sites may spell the end for the cost-per-lead revenue model

Performance-based websites, which charge per transaction instead of per lead, are winning the confidence of consumers and retailers by giving both parties more of what they want. This is creating a marketing revolution that has automotive retailers moving their marketing budgets away from cost-per-lead advertising models and investing more in costper-transaction models that minimize risk while providing higher ROI. the value associated with cost-per-lead revenue models has declined rapidly for automotive dealerships in recent years. Because lead providers often sell the same lead to 10 or more dealerships, margins and closing ratios have decreased, while the effort associated with closing each lead has increased. to make matters worse, many consumers are refraining from submitting leads altogether. according to a recent study by autotrader.com, less than 25 percent of consumers now contact a dealership prior to walking in. this is especially significant given the fact that, according to JD Power & Associates, consumers only visit 1.4 dealerships prior to making a purchase. This has left both sides looking for a better way to get what they want from the car buying process. Consumers are demanding increasing levels of transparency and are seeking out ways to avoid the traditional negotiation practices associated with buying a vehicle. dealerships are demanding leads with higher closing rates that allow them to generate a reasonable profit on the vehicles they sell. To meet the needs of both these groups, a new generation of membership-based sites, like TrueCar.com and autoamigo.com, are rapidly gaining popularity because they are giving both sides more of what they want.

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ä Continued FroM tHe CoVer Benefits to the consumer unlike traditional advertising sites, consumers choose to become members to receive the benefits of sites like TrueCar. com (nasdaQ: true) and privately held autoamigo.com offer. However, in exchange for their contact information, these sites give consumers a guaranteed price, increased transparency across all three major components of a car deal (price, finance / lease, and trade value) and introductions to certified dealerships that have agreed in writing to honor the perspective company’s terms and processes in the customer’s car buying experience.. “The customer is put at ease and is more confident because they trust autoamigo and univision and it makes it a lot easier for us to sell a lot more cars to a lot more people,” said alfonso Gutiero, Business Manager at sterling McCall nissan. “Who knew car buying could be so hassle free? We literally just walked into the dealership, gave them the certificate and got the car we wanted for the price we were quoted,” said anya islamova, trueCar customer. as the business model for performance-based automotive sites continues to evolve, consumers are being offered greater and greater levels of service. A perfect example of this is the way certified AutoAmigo retailers continue the “AutoAmigo Experience” all the way through the buying process. Prior to their arrival, customers are personally guided through the entire autoamigo process that will take place at the dealership by the autoamigo call center and an appointment is scheduled at the participating dealership. the member is then encouraged to download a patent-pending mobile app. this app assists the customer through the buying process by guiding them to the dealership, notifying their certified AutoAmigo representative when they arrive on the lot and allowing them to get real-time, guaranteed pricing by scanning any new or used vehicle on the dealership’s lot. Customers are greeted in a dedicated autoamigo section of the showroom where high quality point-of-sale materials reaffirm the company’s core messaging and lets them know in advance what they can expect during their visit. The transparency that’s given to consumers who use autoamigo and trueCar’s products yields higher close rates. Consumers enter the dealership knowing they will receive a fair and reasonable price upfront with no negotiations required. “When that customer reaches us through autoamigo we are confident it is a deal because they trust AutoAmigo and univision and they know they are going to get a great deal,” said Chris Roberts, President of Kendall Toyota, “We have already sold over 80 cars that we probably would have never seen. it complements our tV and radio on univision and adds incremental sales.” the consumer demand for this kind of process is high. trueCar’s success in the marketplace has proven that. the service is growing in popularity, helping users purchase

400,000 cars last year, a third of the 1.1 million vehicles it’s helped sell since launching nine years ago. a key differentiator between the two companies is that autoamigo provides additional training on the Hispanic Consumer, one of the fastest growing consumer groups in america. Combined, trueCar and autoamigo have approximately 7,400 certified dealerships nationwide and this number is growing every month. “trueCar and autoamigo are a win-win scenario in the fact that we sell more vehicles and the customers are happy and they refer their family and friends,” said Boris Martinez, AutoAmigo Program Manager at sterling McCall nissan.

benefits to automotive retailers dealerships are the big winners with these new performancebased models because they have zero marketing dollars at risk, they receive all of the added services that sites like trueCar and autoamigo provide for their customers for free and they only pay for a lead if a customer buys a vehicle. Best of all, the fees paid to these programs are approximately half of what a dealership typically pays on a cost-per-sale basis. according to nada, the average dealer spent over $600 per vehicle sold in 2013. TrueCar charges $300 for every new car sold and $400 for every delivered used car. AutoAmigo charges $350 across the board.

“Customers love it, and we are closing leads at over 40%.” - Jenny Gonzales Internet Director Kendall Toyota

the only downside with these performance-based sites is that not all dealerships will qualify to become certified retailers. In order to join the dealer network for a performance-based site like trueCar or autoamigo, dealers must meet certain criteria. this includes the ability to maintain a minimum number of high-demand vehicles, a commitment to participate in required training and a commitment to abide by the terms and conditions of the particular program. that being said, if a dealership makes the cut, they usually receive an extremely high level of support. This is a necessary part of the business model because these third-party sites only get paid when a car is sold. in the case of autoamigo, a call center follows up with every lead to help increase appointment rates and show rates, as well as to survey each customer that visits a certified dealership so that those who do not purchase on their initial visit eventually purchase from their program in the future.


autosuccess Average Dealer Spend Per Car Sold in 2013

$600 $400 (used) $300 (new)

NADA

according to a recent study by iHs automotive (Formerly r.L. POLK), customers are responding very well to this approach. average closing rates for autoamigo leads nationally are up to three times that of traditional leads with top performers claiming upwards of 40 percent. Program loyalty is also high. 62 percent of all memberswho bought a car from any source bought from the referred autoamigo dealer. “With autoamigo customers the appointment coordinators call you as soon as they schedule an appointment. it’s much better than a lead that you hope comes in. these customers come in and close,” said Jenny Gonzales, Internet Director at Kendall Toyota, “We follow the process, the customer loves it. We are closing our AutoAmigo leads at over 40 percent.”

about autoamigo autoamigo is a privately-owned Hispanic-focused car-buying company that focuses on eliminating language barriers and delivering a guaranteed low vehicle price to customers. autoamigo, in partnership with univision, gives Hispanic car shoppers a predictable and enjoyable way to buy dependable, high quality vehicles from america’s best dealerships for a guaranteed price. there are no membership fees to join this program and it is available to anyone in the united states. For more information, please visit www.autoamigodealers.com.

TrueCAR

$350

AutoAmigo

pricing information, and a network of trusted TrueCar Certified dealers who provide guaranteed savings certificates and seamlessly complete the car purchase. the reality is buying a car is painful and buyers fear they are going to overpay. TrueCar recently celebrated their IPO and has helped with over 1.2 million automobile transactions since its inception. trueCar’s mission is to prove that truth and transparency is a more profitable way of doing business -- starting with automotive. We enable users to obtain market-based pricing data on new and used cars, and to connect with our network of trueCar Certified dealers. in addition to this product offering, trueCar customizes and operates a platform for affinity group marketing partners like the USAA, Consumer Reports, financial institutions, and other large enterprises such as Boeing and Verizon. For more information, please visit www.trueCar.com.

To learn more about this report, email: successstories@autosuccessonline.com See video.

about truecar Founded in 2005, trueCar is the negotiation-free car buying platform. trueCar empowers car buyers by giving them transparent insight into what others actually paid, upfront

SPECIAL REPORT


SPECIAL REPORT

the future of third party leads Why performance-based sites may spell the end for the cost-per-lead revenue model Performance-Based Lead vs. Traditional Marketing

$616

vs.

PER NEW VEHICLE

Costs l l

Less people Lower Commissions

$350 PAY PER PERFORMANCE

Retention & Referrals

Revenue l l l l

Volume incentives Financing used Vehicles service

l l l

Higher satisfaction Higher Loyalty Higher referral rates

at a Glance •

Performance-based websites, which charge per transaction instead of per lead, are winning the confidence of consumers and retailers by giving both parties more of what they want.

The value associated with cost-per-lead revenue models has declined rapidly for automotive dealerships in recent years because margins and closing ratios have decreased, while the effort associated with closing each lead has increased.

Consumers are volunteering higher levels of information up front in exchange for increased transparency and introductions to certified dealerships that have agreed in writing to honor the perspective company’s “consumer’s bill of rights”.

Dealerships are the big winners with these new performance-based models because they have zero marketing dollars at risk, they receive added services for free and they only pay for a lead if a customer buys a vehicle.

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AutoSuccess November 2014  

The #1 Sales-Improvement Magazine for the Automotive Professional

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