Car Biz Today Magazine Dec 2014

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CAR BIZ TODAY The Official News Source of The Retail Automotive Industry

December 2014

ISSUE 9

Entire contents ©2014 Car Biz Today. All Rights Reserved.

WORK SMARTER,

NOT HARDER JOE VERDE

THE NEXT GENERATION OF LEADERSHIP AT DARCARS

...see PAGE 34

IF IT’S TO BE,

IT’S UP TO ME DAVID LEWIS ...see PAGE 8

MARKETING FOR

FIXED OPS GLENN PASCH ...see PAGE 26

DON’T BLAME

LEASING

John Darvish, left, and his brother Jamie Darvish are poised to take DARCARS to new heights.

SCOTT HALL

...see PAGE 20 ...see PAGE 14

PRSRT STD US POSTAGE PAID Permit No. 1459 Pewaukee, WI

SERVICE SUCCESS

20

15

IN 2015

HAPPY EMPLOYEES LEAD TO HAPPY CUSTOMERS MIKE ESPOSITO

JEFF COWAN If you want to achieve higher profits in your fixed operations in 2015, follow the leaders. Jeff Cowan examines best practices of some of the most successful service departments in the industry and shows what it takes to make your fixed ops one of the leaders.

President and CEO of Auto/Mate

Under the leadership of President and CEO Mike Esposito, Auto/Mate has received high honors in the industry for several years running. The practice of putting his employees first is what lands one of the oldest DMS providers at the top of the customer satisfaction rankings year after year.

CBT NEWS 5 Concourse Parkway Suite 100 Atlanta, GA 30328

...see PAGE 36

...see PAGE 24

Follow CBT Automotive Network and Cars.com on the ROAD TO NADA 2015!

Visit CBTNews.com to see live coverage along the way and be sure to stop by the Cars.com booth #3003N and meet the CBT News anchors.

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JEREMY ANSPACH

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©2014 Best Training Day Ever™ ©2014 Perfect the Path to the Purchase™ ©2014 Automobile Protection Corporation - APCO. EasyCare® is a registered trademark of APCO. ©2014 SOPUS Products.

CAR BIZ TODAY M

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Letter from the editor Dear Readers, This past year has been a truly amazing one, not just for the retail automotive industry, but for us at CBT, as well. Jim Fitzpatrick’s vision for CBT has taken us from an online daily newscast to a multi-channel automotive media group – and this is just the beginning.

We’ve added several shows to our programming lineup, all of which were designed specifically with you, our readers and viewers in mind. We are proud to be the only automotive news source that devotes 100 percent of our content to dealers and their employees. Car Biz Today magazine began in 2014 as a bi-monthly publication, but your enthusiasm for and support of our goal to provide information to help dealers run more successful businesses quickly allowed us to begin publishing monthly.

Our contributing partners have been vastly instrumental in bringing automotive retail trends, training and insight to our readers. This month is no different. The way consumers are buying cars is changing at a breakneck pace, and the way we sell those cars is changing, too. Be sure to check out Mark Rikess’ article on page 12 on how to hire the next generation of sales associates.

Mike Williams of Black Book explores how technology is going to play an even bigger role in managing your store’s inventory in the coming years. See his article on page 10.

Grant Cardone offers sage advice on page 31 about how to maintain that laser-like focus during the busy holiday season. No matter what holiday you celebrate, keeping your eye on the goal will drive those sales and help you end this month and year with a bang.

As we close out 2014 and look to an even more prosperous 2015, we look forward to continuing to serve you.

Let me know how we’re doing by emailing me at cwhite@CBTNews.com.

CAROL WHITE

CAR BIZ TODAY MAGAZINE Email

newsroom@cbtnews.com Phone

678.221.2955 President and Publisher Jim Fitzpatrick Vice President / COO Bridget Everett Managing Editor Carol White Associate Editors Russell Brown Danielle Banks Creative Director Simone Tieber Designer Betsy Alvarez Production Manager Jason Lowsy Creative Director - Digital Jay Roebuck Marketing Associate Roxanne Luhr Subscription Manager Tom Domagalski

Managing Editor

Advertising

A Special Thank You to Our Advertising and Contributing Partners I want to thank all of our special advertisers for making 2014 an exciting year for us at CBT Automotive Network. Your continued support of Car Biz Today magazine has made it possible for us to provide quality content to more than 17,000 franchised car dealerships across North America.

Jim Fitzpatrick

As we enter into our second year of publication, we are thankful for all the great editorial contributors, who also happen to be the biggest names in the retail automotive industry. eir contributions have enabled us to deliver the useful and relevant information that our readers need to run more pro�table dealerships.

Founder and CEO of CBT Automotive Network and Car Biz Today magazine

Director of Sales Jane Howard jhoward@cbtnews.com d 678.221.2964 c 404.452.9551 Sales Assistant Alex Branam abranam@cbtnews.com

Customer Service info@cbtnews.com

Subscriptions To subscribe electronically, log on to cbtnews.com and click the subscribe link on the side bar. Alternately, forward your company name, your name, address, phone number and email address to info@cbtnews. com or CBT News, 5 Concourse Parkway, Atlanta, GA 30328.

Please send address changes to the above email or mailing address.

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CAR BIZ TODAY DECEMBER

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News INDUSTRY

Honda of Chantilly is the only business in the Fairfax, Va., area with a wind turbine.

Pohanka Incorporates Green Technology at Chantilly Store

P

ohanka Automotive Group’s Honda of Chantilly store in Virginia recently completed installation of the latest in its green technology – a 125-foot wind turbine. With a capacity of 20 kilowatts, the Renewagy VP-20 turbine will supply electricity directly to the dealership, as well as to the grid, to allow for less dependence on traditional fossil fuels.

The dealership is focused on reducing its environmental impact and its carbon footprint for the future, according to Geoff Pohanka, president of the auto group. “Energy is finite – at least fossil fuels – and what we need to do is be smarter in how we consume them,” he said.

The American-made turbine, which is the only one in Fairfax, is just one of the dealership’s environmentally conscious efforts. It also incorporates systems for reducing and recycling water usage, LED lighting and indigenous landscaping to name a few.

Canadian Store Buries WWII Willys in Foundation

B

ay King Chrysler in Hamilton, Ontario, has buried a piece of history in its showroom floor. The 1943 Willys MB Jeep, originally built for service in WWII, still has the original serial number and allied markings.

Getting the jeep into the ground was no easy task. A towing company was commissioned to lower it, slowly, onto a bed of rocks in the dealership’s foundation. Triple-paned glass was then placed on top allowing admirers to view the historical treasure from above.

Geoff Pohanka, president of Pohanka Auto Group, throws the switch on Honda of Chantilly’s 125-foot wind turbine.

25 Years With Chevy

G

regory Sweet, left, dealer principal at Greg Sweet Chevrolet Buick in Conneaut, Ohio, recently received the 25-year award from the manufacturer. Pictured with Sweet is Andrew Mangus, Chevrolet district sales manager East Cleveland.

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CAR BIZ TODAY DECEMBER

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If it is to Be, It is up The retail automobile business is one of the best careers to have if you want to stay on top of your game.

BY DAVID LEWIS

N

o matter how your last month’s sales went, the first of each month is a new start with a clean slate and brand new goals to reach. Though that may sound discouraging to someone who likes to have a predictable work experience, to the car salesperson or sales manager, it’s just the way it is. If you don’t keep growing and changing to meet the demands of success, you will fall into a comfort zone of mediocrity that can turn this exciting career opportunity into just another job.

No matter what you think of the car business, there is one reality that is always there calling us into the deeper challenges that are out there to be achieved: If it’s to be, it’s up to me. It is a make-orbreak business where truly “to the victor go the spoils.” If you really want a career with no limits for achievement and advancement, this is the one for you.

Nonetheless, don’t be mistaken and think that you will achieve great benefits just by showing up.

The competitive nature of this business is what makes it both challenging and rewarding. Unless you are up for it, you won’t achieve all that it has to offer. On the other hand, if you want an unlimited future with the potential to make your mark, you have come to the right place.

What else can you do for a living where you can make a six-figure income regardless of your educational achievements? It’s not a college degree that makes the difference in car sales, it’s the degree of commitment you have to your own future that opens all of the doors for you. There is more training material available for becoming successful in this business than you could ever exhaust in one lifetime, and unless the world changes dramatically, people will always need what you sell to keep up with life and experience the American Dream.

It’s not a college degree that makes the difference in car sales, it’s the degree of commitment you have to your own future that opens all of the doors for you.

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CAR BIZ TODAY DECEMBER

M to e SUCCESS TAKES COMMITMENT However, success rarely happens by chance. You make it happen by the efforts you are willing to put forth into the ideas you have. You set a goal and you reach it. You set a higher goal and you reach that. Step by step your commitment to reach the next goal will cause you to put forth new effort and adopt new ideas and skills that will help you accomplish the things you want to achieve. Without continual growth and progress, words like improvement, achievement and success have little or no meaning at all.

In truth, most salespeople don’t realize the potential that every new customer brings to the table. Every time you meet a prospective buyer, you can choose to either sell them a car or create a customer for life. How you view your past and future clients will be the deciding factor of the potential each of them has to offer you. When you consider that the average person will own eight or nine cars in their lifetime and each person has countless friends and family members who are potential customers, you can truly say, “The fields are white to harvest.” If every one of those people will own an average of eight or nine cars in their lifetime, getting to know them and becoming their personal resource for transportation is one of the best ways to invest in your own future.

Car sales legend Joe Girard says success in this business isn’t a quick and easy path to the top.

“The elevator to success is out of order,” Joe says.

“You’ll have to use the stairs … one step at a time.”

Coming from the man who personally sold more than 72 cars a month, selling a record 13,001 Chevrolets in just 15 years, I’d say that makes him an expert on the subject.

Like Joe Girard, your success won’t come from sitting around just reading books on how to achieve your dreams. You have to take the knowledge you pick up in life and turn it into actions that produce results.

That means examining your failures and learning from them as well.

J.K. Rowling, author of the Harry Potter book series says, “It is impossible to live without failing at something, unless you live so cautiously that you might as well not have lived at all, in which case you have failed by default.” Having made over a billion dollars from her books and movies, she is a success from anyone’s perspective. When you consider the fact that she and her children were nearly living in the streets

just before getting her first publishing contract, that makes her success story even more compelling.

BREAK DOWN YOUR GOALS What you do every day and how much you believe in the goals you have set for yourself is what will make the difference between success and failure.

Consistency is the name of the game and setting goals and objectives that can be measured and tweaked when necessary is a big part of how it’s done. When I say goals, I don’t mean pipe dreams.

I mean realistic goals that go from point to point with a structured plan of how to get from one step to the next.

Just setting a life goal for how it will all turn out isn’t enough to get the job done. You have to break your life goals down into manageable steps and commit to working on them every day. Even your time for resting becomes a part of your goal, because it rejuvenates you so you can get back to work with the energy and vision you need to reach the ultimate objectives you have in front of you. You glance at tomorrows’ goals and set your focus on what you must do today to make them become a reality.

Joe Carmack, the highly successful video game developer and founder of Armadillo Aerospace has this to say about success: “Focused hard work is the real key to success. Keep your eyes on the goal and just keep taking the next step towards completing it.

If you aren’t sure which way to do something, do it both ways and see which works better.”

That’s good advice for sure. Don’t be afraid to be unique and original. In my experience, that is what will separate you from the masses and make you an inspiring person whom others will want to deal with. Stretch yourself and never stop learning how to be better at what you do. Take chances when necessary and believe in yourself and your goals. If they are going to come to pass, it will be you that will make it happen. Have a can-do attitude about life and you will soon find out that it’s true: you can do anything you believe you can do. Or as Henry Ford liked to say, “If you think you can or you think you can’t, you’re right.”

Remember: If it is to be, it is up to me. Winning or losing at life is in your hands, and if you don’t recognize that and believe it, you won’t put forth the effort or make the commitment that will cause you to accomplish your dreams in this life. Take charge and be accountable for your own goals and success and you will see others line up behind you and push you forward in the process. Never give up! Your greatest success may be just a few steps in front of you. If you give up, you may never find out how close you were to reaching the goal line.

So set your heart on your dream and point your feet in the direction you want to go and just keep moving forward until you get there. When you are determined not to give up until you see your goals and objectives achieved, you will soon find out that while you were looking for success, success was trying to find you all along.

If you don’t keep growing and changing to meet the demands of success, you will fall into a comfort zone of mediocrity that can turn this exciting career opportunity into just another job.

DAVID LEWIS President of David Lewis & Associates David Lewis is the president of David Lewis & Associates Inc., a national training and consulting company that specializes in the retail automotive industry. He is also the author of four industry-related books, “The Secrets of Inspirational Selling,” “The Leadership Factor,” “Understanding Your Customer” and “The Common Mistakes Automotive Salespeople Make.” Visit his website at www.DavidLewis.com.

DECEMBER

CAR BIZ TODAY

CBTNews.com

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Areas Shaping Virtual Inventory Management

Inventory management used to involve walking the car lot and counting cars. However, today, the practice of inventory management has become much more elaborate. BY MIKE WILLIAMS

I

t has to be, especially because the business of selling cars has become much more elaborate.

Largely driven by the role technology plays in today’s industry, inventory management must cater to rapidly shifting supply and demand as a result of trades from new-car sales, off-lease vehicles and procurement from online and offline sources.

What’s more, vehicle valuations are changing daily and these price adjustments can have a significant impact on profit margin.

The bottom line is technology is playing a large part in reshaping inventory management, offering the potential to streamline efficiencies, enable faster processes and, of course, amplifying profit potential.

As inventory levels continue to rise, it is even more important to increase efficiencies. Earlier this year, Fitch said dealers had a 63-day supply of used vehicles on their lots at the end of 2013, up from 59 a year earlier. This trend is expected to continue as a result of additional trade-in activity from new-car sales. Roughly 60 percent of all sales bring a traded unit, and total vehicle sales are expected to rise above 16 million by the end of 2014.

Dealers must also implement faster processes for handling inventory. As more retail customers leverage technology to expedite their car-shopping experience, dealers must also adapt to this quicker pace of business in an effort to keep customers from going across the street.

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Today’s virtual inventory management is being driven by three primary areas:

1.

Technology is a significant driver of profit within the industry. According to a recent Black Book survey, 64 percent of industry professionals are more profitable using mobile applications.

2.

The type of technology used by industry professionals is diverse. Sixty-nine percent of survey respondents are using smartphones, while 20 percent are using a combination of smartphone and tablet.

3.

Trade valuations have gone the way of technology, as well. A little more than half (53.4 percent) of survey respondents are now using mobile technology for inventory appraisals.

How can dealers maximize profit? Success can often start with properly valuating the inventory coming onto the lot, whether through trade-ins or units purchased at auction. Having access to accurate valuations of each vehicle, including attention to conditioning and transport costs, can make a world of difference.

Remarketers at wholesale are now faced with having to keep an eye out for the right inventory for their lot, as well as leverage auctions for retail buyers. That’s why mobile technology in the form of smartphones and tablets are proving beneficial in the lanes.

Mobile technology allows dealers to see a 360degree view of their complete inventory lineup.

New tools offer dealers a multi-layered look at their inventory so they can make quicker decisions on cars that they want to bring onto the lot, or equip themselves with information that helps them immediately turn a car at auction for the right profit margin.

It is also important for dealers to find the right market value for a vehicle, particularly if a dealer is looking for market value in a specific region of the country. Knowing the right sale price in a different market for a different buyer can further elevate profit potential. Dealers also have access to full vehicle history reports through mobile app technology so they can get a better read on conditions to help make the right sale.

With mobile technology, dealers and remarketers have more insight into their virtual inventory, no matter where they are in the country. As a result, they can focus more on profit potential instead of wondering what’s sitting on their lot.

MIKE WILLIAMS Vice President of Mobile and Direct Sales for Black Book Prior to joining Black Book in 2012, Mike was on the senior management team at the largest auction in the U.S. He has been credited with growing the online wholesale market through innovative products, processes & venues. Partnership projects with most factory & lease leaders in the wholesale industry were a hallmark of his time at Manheim, taking online sales at the PA location from a couple hundred units a year at his arrival, to over 85 thousand at his departure, when he left to pursue new creative endeavors. Visit Black Book at www.blackbookauto.com

• • • • •

Likes to make sales Excellent phone skills Very good grammar/typing skills Loves product knowledge Outstanding organizational skills

The goal of the incoming lead also has changed.

The old-school BDC-driven goal was to set an appointment, pretty much at all costs.

The vast majority of prospects who contact your dealership are calling for information, not to set an appointment. Their goal is to gather somewhat granular information that will aid them in their buying decision.

So the new goal in this digital sales strategy is to get the potential prospect to “want to meet me.”

This is very different than trying to get an appointment. This is about creating trust and confidence by being transparent and knowing a tremendous amount about the product – which can only happen if the salesperson possesses outstanding product knowledge. The more trust and confidence the digital salesperson can establish, the more customers will want to set an appointment.

“The vast majority of prospects who contact your dealership are calling for information, not to set an appointment. ”

RECRUITING

You Need New Horses Today’s informed consumers demand a new kind of salesperson.

BY MARK RIKESS

W

hen asked, “What is your biggest challenge?” the vast majority of dealers will say, “finding qualified sales associates!”

Unfortunately, most dealers don’t have a clear idea on how to find the right sales candidate for today’s marketplace. Compounding the problem is that they employ an old-school compensation plan.

The majority of dealers are still looking for people who are like their “old horses” – high-volume salespeople who’ve been with the store for a number of years and don’t feel comfortable trying to adjust to a new type of customer.

Yesterday’s skill sets created their outstanding success. They were highly persuasive – bordering on confrontational. Dealers rode these “old horses” to outstanding financial success.

But times have changed. There is more to sales now than the valuable skills to confidently approach strangers and make yourself immediately welcomed. Those “hearty handshakes” will always be appreciated, as is the ability to look strangers directly in their eyes.

But today, virtually every new customer is an “Internet customer.” They spend anywhere from 10-15 hours online. That’s right, they make much of their decisions without ever encountering that friendly handshake and persuasive sales pitch.

That means that the era of your sales staff meeting and greeting a “fresh up” is a rare occurrence.

The vast majority of potential customers visit your website before coming to your store. If it is welcoming and information-rich (including vehicle prices), it is likely that they will contact your store 12

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CAR BIZ TODAY DECEMBER

via an online lead or an incoming phone call. If you have seen this trend yourself, then you know you need to hire salespeople with skill sets that work in this new environment.

You need some “new horses.”

SPOILER ALERT: Here’s where I’m going to surprise many of you reading this article. It’s time to eliminate the BDC sales department.

BDCs were established for a very good reason.

The old horses didn’t have the skill sets to handle incoming phone calls – and certainly not Internet leads. They were hired to handle “walk-ins.” So it made perfect sense to establish sales BDCs to complement the old horses’ skill sets and become “appointment setters” for them.

But since almost everyone is now an Internet customer, we need to change our hiring criteria and eliminate the BDC layer of expense. Killing off the BDC or transferring an individual BDC into the new sales arena, is especially important in an era of continuing margin compression where dealers should be doing everything possible to lower transaction expenses.

The hiring profile for the new horses meets the following criteria:

This is a sales model that allows your sales staff to achieve high levels of empowerment. This may fly in the face of old-school sales managers, but it will attract a better-educated, more diverse sales team.

In this model it is also very important to note that you are now running two different sales groups: A smaller staff that meets and greets showroom floor walk-ins and your digital sales force that handles incoming calls and Internet leads. So this new group never works the showroom floor hoping to get a customer, but is a dedicated team that works only by appointment.

OK, so, how do I compensate my new team of digital sales agents? We’re going to assume this is a younger staff comprised mostly of Gen Y. Gen Y is not a cohort that is turned on by a straight-commission job opportunity. For the most part, when you’re looking for younger people to staff your sales force they will want more financial guarantees and a flexible work schedule. If you don’t want to meet those qualifications you’re going to continue to ride your old horses until they retire. Then what will you be left with?

Your compensation for Gen Y should revolve around these principles: • A training salary, typically at least $2,500 for three months • Then a blend of salary and a flat fee per unit sold with volume bonuses • Some compensation for F&I-related sales including securing the financing and a small “spiff” for menu items. We want to incentivize this group to be completely supportive of the F&I department • A flat fee for 5-star reviews from online sites

Hopefully this article is enlightening – not frightening – and inspires you to look at hiring tomorrow’s sales staff in a new light.

MARK RIKESS President of The Rikess Group Mark is a highly regarded expert on progressive retail practices, providing management-consultant services to dealers, suppliers and manufacturers. As a second-generation automotive dealer, he began with an early focus on performance improvement and implementation of results management processes in the dealership-operating environment. Mark founded TRG in 1989, and has consulted more than 150 dealerships.

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LEASING

Falling Used Car Prices?

Don’t Blame Leasing Leasing is back in a big way.

Literally. All those cars and trucks you leased following the recession are now coming back onto your lot. And if you listen to many in the industry, you would think the sky is falling – or at least prices on cars as a result. BY SCOT HALL

T

his is enough to hit the panic button, right?

After all, the latest industry estimates say that lease returns will grow by 400,000 this year totaling 2.1 million in returns, according to Manheim in a recent news report. But wait, there’s even more bad news. Off-lease inventory is expected to climb to 3.5 million in 2017, and possibly even 3.9 million by 2020.

SCARED YET? What’s funny is that this is the same industry leasing program that got us to a projected 16.1 million SAAR by the end of 2014, yet it’s also the big bad wolf that will spell the doom of prices in the industry when 2015 comes around. What do you think we’ll label it in 2017 or even 2020? Funny how we can’t have our cake and eat it, too.

There’s just one problem with this industry narrative of falling used car prices. Leasing might be taking the blame for some other culprit when it comes to falling prices. A closer look at the facts disproves the notion that leasing is the determinant here.

NUMBERS DON’T LIE It is true that close to 2.1 million leases are expected to mature in 2014. Hard to argue this point since some common math calculations point to the number of 36-month leases that were written back in 2011. If you think back to that year, the return of leasing was just beginning to heat up and everyone – foreign and domestic – had jumped back into the game.

However, it is often said that you cannot see the forest through the trees. An estimated 60 percent of all trades are brought back onto the dealer lot in an average sales transaction. This means that between eight and nine million trade-ins will make their way back onto the lot in 2014 based on the projected SAAR of 16.1 million. This is a leading reason why used car inventories are rising.

WHAT DOES THIS MEAN? Trade-Ins Outnumber Returns Leasing will actually account for a very small portion of this inventory. Only 2.1 million leases, or roughly 22 percent of all the vehicles coming back onto dealer lots this year will be lease returns. And while the number of lease returns are expected to 14

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CAR BIZ TODAY DECEMBER

Assuming we still see 60 percent trades in 2017, this means a whopping

10.2 million trades will come back onto dealer lots, of which only 3.5 million will be lease returns. continue to rise to an estimated 3.5 million by 2017, so will the total number of vehicle sales. Some industry projections also say we might reach a SAAR of 17 million by 2017. Assuming we’ll still see 60 percent trades in 2017, this means a whopping 10.2 million trades will come back onto dealer lots, of which only 3.5 million will be lease returns.

The simple truth is that more inventory is driving down prices, but it’s not as a result of the success of leasing. Seventy-eight percent of the inventory coming back onto the lots this year are from nonleased products – hardly a smoking gun against leasing. And even by 2017, roughly 66 percent of the inventory coming back will still be non-leased products.

More Diverse Inventory If that wasn’t enough, let’s think about the type of car that leasing is bringing back onto dealer lots.

Three-year-old vehicles are in high demand – still today. The CPO market is still in recovery mode and much of this off-lease inventory is going directly into feeding the CPO beast.

Leasing has been an extremely effective form of financing that has helped fuel a continuous recovery and growth cycle for the automotive industry.

Prior to the recession, when leasing was running at a similar lease penetration rate of 28 percent, most leases were written for luxury and SUV makes. Today, leasing is again running at about a 27.5 percent penetration rate of overall sales, and it accounts for a much more diverse set of vehicles, including compact cars, full-size domestic cars and even pickup trucks.

Leasing will continue to grow in the years to come, especially as dealers remain focused on offering low-monthly payment options for their customers.

SCOT HALL Executive Vice President of Swapalease.com Since 1995, Scot has served in a number of retail automotive positions, beginning with sales and sales management opportunities with BMW. Today, Scot leads a team of professionals by overseeing sales, operations, customer education and marketing for the leading lease transfer provider in North America. Scot has used his knowledge and expertise in retail F&I departments to develop more flexible lease programs for thousands of consumers for every automotive brand. Visit his website at www.Swapalease.com.

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SALES PERSON RETENTION

Sales Managers Hold the Key to

RETENTION Employee turnover is costing you more than you think. Implementing a solid plan for retention will cut costs and strengthen your dealership’s culture. BY TOM KUKLA

W

e’ve all been there as sales managers: Your sales team of seven is full. Two of your seven sales consultants are a month shy of their first full year and your newest team member just celebrated six months. You are cautiously optimistic and highly confident in your team as you head into the last 10 days of your busiest month. At that moment your cell phone rings – it’s the boss. He just heard from Charlie, your rising star and top producer with 11 months in. Charlie just quit.

You aren’t alone – it’s an industry-wide issue. According to NADA, total dealership employee turnover in 2012 was estimated to be 35 percent. At 62 percent, the position of sales consultant held the greatest rate of turnover. The turnover rate for female sales consultants is even more of an issue at 76 percent, according to the NADA report.

Ted Kraybill, president of DeltaTrends and designer of the Dealership Workforce Study said, “Finding and retaining talent is one of the greatest business challenges that dealers and OEMs face in today’s retail market.”

DEALERSHIP CULTURE The NADA study identified that 40 percent of sales consultants are let go in their first 90 days. Two of the factors responsible for the 90-day revolving door are poor “fit” hiring decisions and commission-based pay plans.

Employee turnover can greatly reduce monthly gross profit so one would argue that employee retention should be one of dealerships’ top concerns.

Kraybill noted, “For decades, customer loyalty research has shown a direct connection between customer retention and employee retention. As dealer margins continue to shrink, employee retention and productivity represent significant profit improvement strategies.”

Turnover is expensive. Some hidden costs of employee turnover are lost knowledge, training costs, interviewing costs and recruiting costs. It cost an average company approximately one-fifth of an employee’s annual salary to replace that employee, not counting lost revenue if your dealership is short staffed.

Lose several employees over the course of a year and the costs mount up. Sometimes turnover cannot and should not be avoided. But when it can, you should avoid it by doing the right things for your employees.

How can dealerships ensure sales personnel stick around a bit longer? They can do a better job of creating career paths for employees who want to 16

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grow and develop. Automakers are currently implementing programs to help dealers engage and retain team members. Investing in sales manager and sales consultant training also has the potential to lead to better employee retention rates.

“Dealerships who invest in new employees

through training programs have higher long-term retention. As dealerships hire more employees who lack sales experience, they need to help them develop the skills needed to be successful,” Kraybill said. Sales managers are a critical link in making sure the skill training “sticks.”

Sales Managers Can Engage and Retain

People quit people who devalue them

People quit people who are untrustworthy

So why do people quit anyway? Sources estimate that as many as 65 percent of people leaving companies do so because of their managers. Those people don’t quit companies – they quit managers. So what kind of managers do people quit?

According to best-selling leadership author John Maxwell, there are four types of managers people quit most often.

Everyone wants to feel appreciated. This is especially true in the workplace. Effective managers are intentional about finding value in the people who work for them.

Trust in the leader is essential if team members are going to follow that leader over time. Trust is established when there is consistency in behavior and when words and deeds are congruent. Effective managers are consistent in their behavior and have an open and transparent demeanor.

COACHING TIP: Everyone on your team has different strengths and talents.

n Identify what those talents are in each person who works for you n Write them down so they are top of mind. n Share your team’s individual talent with everyone and explain how this person and their talents strengthen the team. n Show your appreciation in a meaningful way geared to the individual.

COACHING TIP: Managers can build trust with their team by doing the following daily.

n Act with integrity in every interaction with your team, your leadership and your customers. n Articulate your values. n Communicate the shared goals and speak in terms of we versus me. n Treat everyone with respect. n Do the right thing - regardless.

People quit people whoareincompetent

People quit people who are insecure

Incompetent managers are a distraction to the team and a drag on the dealership. Incompetent managers do not lead competent people for long.

Effective managers inspire confidence through their behaviors and attitude.

Insecure leaders may display fear, suspicion, mistrust or jealousy. Effective managers, on the other hand, display confidence in their leaders, products and team members. Effective managers also develop their people and are generous with their coaching time.

COACHING TIP: People follow leaders stronger than themselves. Managers become highly competent by creating a personal development plan.

That plan can include: n Committing that you will become the smartest person in your dealership about every new model and service offered. n Seeking out a mentor or coach. n Reading trade and industry journals weekly. n Attending training courses, seminars and conferences outside the dealership. n Teaching a course on selling, closing deals or connecting with your customers. n Volunteering for projects. n Joining an outside but related organization.

COACHING TIP: Sales consultants want to work for managers who lift them up and help them to develop. n Train your team on the skills you want to see implemented on the floor and on the phone. Model, practice and assess their talents.

Set high expectations for both yourself and your individual team members. Be specific and set milestones that are attainable but offer a little “stretch.” n Hold them and yourself accountable for executing the plan. n Provide feedback consistently. When the results are positive, celebrate and tie to actions. When the results are negative, take the opportunity to coach.

When good people leave any organization, it hurts the bottom line and weakens the culture. When people believe in their leaders, people stick around and that strengthens the culture. And when the leaders believe in their people, it transforms the culture – for the better!

TOM KUKLA Principal and Founder of Tom Kukla Credere Leadership Tom is a highly experienced Leadership coach, speaker and trainer. Prior to founding Credere Leadership, Tom spent 38 years in retail and medical sales, sales management and management and leadership development. He developed a world-class management-training program from the ground up in the highly competitive pharmaceutical industry that served hundreds of sales and marketing colleagues.

As a John Maxwell certified coach, teacher and speaker, Tom offers organizations management and leadership workshops, seminars, training and coaching in order to guide the personal and professional growth of managers of all levels and tenure. You can reach Tom at tom@credereleadership.com.

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• •

They leverage the expertise of their employees to produce valuable, relevant content that attracts ideal customers.

They run smart Facebook ad campaigns that target only those who wish to connect and look forward to your content in their newsfeeds.

2.

FACEBOOK AD PERFORMANCE IS OUTSTANDING There’s no better channel to laser-target your ideal buyers with ads that they’re possibly interested in, at the optimal times during their shopping process, without wasting valuable budget to reach those that’ll never buy from you.

While it’s not easy or simple to do on your own, Facebook ads drive traffic, leads and sales. Facebook ads can deliver new customers while at the same time engaging your current (repeat) customers.

For the cost of acquisition, Facebook is still one of the cheapest ways dealers create new customers. Plus, interaction with existing customers helps build better relationships.

SOCIAL MEDIA

Is Facebook Dead?

5 Reasons To Ignore the Hype and Stake Your Claim BY KATHI KRUSE

3.

W

hew! There’s a lot of conversation lately about the demise of Facebook. A lot of users are unhappy about the continued lack of valuable content in their newsfeeds. Business marketers are troubled over negligible organic reach and how Facebook ads cost more to reach less. What does it all mean for you?

Ignore the hype and look at the facts. Facebook continues to be the social network where most people spend their time. Their revenue charts (pictured) seem more like cell phone reception bars – consistently on the rise.

It looks like another strong quarter for the remainder of 2014 is in the works. Facebook’s numbers for Q3 continue to not disappoint: n $3.2

billion (yes, billion) in total revenue over three months (Q3 2014) 64 percent year over year n 1 billion video views a day in September 2014 n 8,300 employees, up 40 percent from Q3 2013 n 1.5 million total advertisers on Facebook n 64 percent of monthly active users log on every day n 864 million daily active users, up from n Advertising revenue grew

829 million in the Q2 of 2014 n 703

million use Facebook mobile each day (40 percent growth for the year) n 700 million people use Facebook groups every month n Price per Facebook ad increased 247 due to higher quality n 1.12

percent

billion use Facebook mobile each month,

which is up 250 million since last year

n Mobile is 66 percent of ad revenue up from 49 percent during the same time last year

Things are looking insanely good for Facebook for the Q4 and on into 2015.

What plans have you made for leveraging Facebook now that it’s clear that Facebook is not only not dead but thriving and ready to help your store get more traffic, leads and sales?

Here are 5 reasons to leverage the value of Facebook for your business and stake your claim:

1.

FACEBOOK IS THE LARGEST SOCIAL NETWORK In traditional advertising, there’s a premium when businesses want to broadcast their messages on the 18

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CAR BIZ TODAY DECEMBER

most popular channels. Why? Because that’s where the customers are. Facebook has become the most popular network and that makes it ideal for dealership marketers.

The only question is how will you deliver your messages appropriately and authentically so that your customers and ideal prospects will want to buy from you and recommend your store to their friends and family?

Awesome content still drives user experience on Facebook. Our clients do two things to facilitate their content strategy:

Facebook Revenue (in Millions)

Payments and other fees Advertising Q3’12

$1,086

Q4’12

$1,329

Q1’13

$1,245

Q2’13

$1,599

Q3’13

$1,793

Q4’13

$2,344

Q1’14

$2,265

Q2’14

$2,676

Q3’14

$2,957

$176 $1,262

FACEBOOK IS IDEAL FOR DRIVING PROSPECTS TO YOUR WEBSITE Publish your blog posts on Facebook. Promote those posts to let more users see them. Every click brings someone to your website. You accomplish two main marketing goals: • You inform would-be buyers of the products and services they’re researching.

• Search engines notice the clicks from social sites and higher organic traffic. You’re rewarded with higher search rankings.

4.

FACEBOOK IS THE GATEWAY TO SOCIAL CUSTOMER SERVICE Who doesn’t want access to the “boss” when you have a positive or negative experience with a company? When customers know you’re listening, they feel comfortable buying.

• 47 percent of social media users have sought customer service via social channel.

• 71 percent of those who receive positive social care are likely to recommend your brand to others.

• Only 19 percent of those who don’t get any response are likely to recommend that brand.

5.

$256* $1,262 $213 $1,262 $214 $1,262 $218 $1,262 $241 $1,262 $237 $1,262 $234 $1,262 $246 $1,262

*In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 and 48 of our form 10-K filed on February 1, 2013.

YOUR FACEBOOK PAGE SETS UP SALES AS CONSUMERS RESEARCH THEIR NEXT PURCHASE Seventy-eight percent of people say that a company’s social media posts impact their purchase decision. Just as if you were meeting them in your store, your salespeople can connect and answer questions on social media.

Social selling has become the go-to process for reaching today’s connected buyer. Establishing a social selling process inside your operation is key to reaching these connected buyers. How much money are you leaving on the table by not embracing the social selling method?

As we move into 2015, Facebook should be an integral part of your marketing and advertising strategies. It can be confusing and at the same time, daunting. Take a serious look at Facebook now because news stories of Facebook’s demise are greatly exaggerated. Is Facebook dead? Not by a long shot.

KATHI KRUSE President of Kruse Control Inc. Kathi is an automotive social media marketing expert, blogger, speaker, coach and author.

Her passion for the car business spans a 30-year career managing successful dealerships in Southern California. Kathi is the author of “Automotive Social Business – How to Captivate Your Customers, Sell More Cars & Be Generally Remarkable on Social Media.” Her Kruse Control blog is the leading automotive social media blog in the U.S. and Canada. Visit her website at www.krusecontrolinc.com

JOE VERDE

The #1 Training Company In The Car Business “We said NO!”

JVTN – ONLINE TRAINING ®

W

How To Handle Your Customers When They Say, “No!”

Your Best Tool For In-Dealership Sales Training

hat is JVTN®? It’s simply the most powerful virtual automotive sales training in the world!

What would Joe Verde teach our salespeople?

The complete sales process...

How to sell a car today. No salesperson will be left behind, not knowing what to say or do when they get a customer.

Word for word – we’ll show them what to say from the greeting to the delivery!

How to close the sale, overcome objections and bypass price on the lot. We teach your salespeople the words and processes to handle every objection, including price, that comes up during the sale, closing and the negotiation.

How to build your business by phone / internet. Phones ring and leads come in daily, so we teach salespeople the complete processes of taking calls and leads and making outgoing contacts, to turn more lost sales into be-backs and more contacts into appointments that show.

How to follow up, prospect and retain your customers forever.

Again, word for word on everything they need to say and do to build your future business. JVTN® even includes a powerful, easy to use mini-CRM built just for salespeople.

Most salespeople hate to hear the word ‘no’! In fact, there are quite a few books on the shelf at the bookstore about learning how to handle the rejection in sales when your customers tell you ‘no’.

JVTN® – The Easy Way To Grow Sales How would JVTN® benefit your dealership?

That’s easy ... you’ll make more sales & more money!

n More floor traffic at no extra expense

But a book on rejection is a waste of paper. If you’ve done your job, ‘no’ isn’t about you, so it isn’t about rejection. ‘No’ either means ‘I’m not buying’ or ‘not yet’ and it almost never has anything to do with you, so stop crying, forget rejection and just learn to improve your selling skills, instead.

n Put more internet & phone leads on the lot n Sell more units every month n Definitely improve your gross per unit n Lower your turnover in sales JVTN® is the only Automotive Online Sales Training with...

n Role Play Games and Timed Practice Sessions n Dedicated staff of Certified JV Training Coaches to help your team develop their skills n Training & Performance based Certification to turn your training videos into skills n Mini-CRM built just for JVTN® Subscribers – Joe's Virtual Sales Assistant® (VSA® )

When you do hear a ‘no’, what the prospect is really telling you is, “Based on the info you’ve given me to this point, I can’t say ‘yes’. Tell me more, get me a little more excited, give me some more logic, and then ask me again later.”

80% of the sales are made after the 5th time you’ve asked for the order, they’ve said ‘no’, and then you handled each objection and asked for the order again.

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“We started using Joe’s online training 3 months ago. We are focusing on using his word tracks to overcome objections and making sure we don’t skip any steps in the sales process.

To top salespeople, ‘no’ is a nonevent. They understand getting a ‘no’ is one of the key steps along the way to getting that big ‘yes’ we’re all looking for.

Remember, it’s no, no, no, no, no, then yes! Don’t beg, don’t push, just learn to sell and close the right way.

Are You Looking For A Job Or A Profession?

Did your previous career go south? Are you getting out of the service and ready for a new career? Are you already in sales, but not earning as much as you wish you could?

Selling cars offers more potential income and satisfaction than almost any other profession – if you do it right.

Are You Ready To Earn Over $100,000 A Year?

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Do you like cars? How about talking to people about cars?

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Would you rather be outside more than being in an office all day?

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Would you enjoy helping people make big decisions – like buying a car?

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Are you willing to continually learn more, so you can improve in sales?

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Would you like to create your own income level – with no limits?

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Would you like to be able to find a good job in any community, anytime?

2. Are you ready to develop a career in sales?

Selling cars can be one of the most satisfying and most rewarding careers you could ever choose. As a profession, sales offers a truly unlimited income, and automobile sales offers you unlimited opportunity. Why? Because everybody has a vehicle, and all of us will be buying even more of them throughout our lives.

3. Are you ready to join the top 5% of the population who earn over $100,000 a year?

That’s right, you can earn over $100,000 a year selling cars and I’ll show you how in this book. Is it easy? It’s very easy when you have the right training and a workable plan. Follow my directions and you’ll develop the selling skills and the success skills to earn the kind of money you’re looking for.

– Jake Sodikoff, General Manager, Steven Kia, Harrisonburg, VA

If you’re serious about becoming a pro in sales, read this book and get ready to earn over $100,000 selling cars – your very first year.

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Call Us 1-888-712-6647

A Shift in Leadership – A Shift in Thinking DEALER PROFILE

With the changing of the guard at DARCARS, President and CEO John Darvish turns his focus to an employee-centric culture. BY CAROL WHITE

W

hen John Darvish was officially named president and CEO of Silver Spring, Md.-based DARCARS Automotive Group, he knew he had some big shoes to fill. His father, John R. Darvish, founded the company in 1977 with the purchase of a Chrysler-Plymouth dealership. Under his leadership, the company has grown into one of the largest privately owned auto groups in the country. In March, the reins were handed over to two of the founder’s children.

According to John, his father has been grooming each of his children for roles he feels best fit their strengths. Jamie Darvish, the youngest of the three, will serve as chief operating officer, while their sister, Tammy Darvish, has been asked to continue working with the company’s community outreach and philanthropic efforts. Their father, who has Parkinson’s disease, will remain on board as chairman. “He’s my best friend and my lead advisor,” said John.

AN EARLY START John officially came on board with his father in 1993 when he graduated from Northwood University, but his career in automotive started when he was a youngster. He landed his first “job” in the dealership at the tender age of 6, helping out in the parts department unloading and counting inventory, stocking shelves and cleaning display cases. “I’m not sure how high I could count at that age, but at least they made me feel like I was helping,” he said. “I just wanted to work in the dealership and be part of something.”

By 13, John was selling cars. “The summer before I started selling, I worked in the car wash so I would do some of the PDIs. But I was always drawn to the showroom. I was never a shy person and I was always able to talk to people – and I knew a lot about the cars.”

He remembers his first customers – a couple who wanted to help him sell them a car. “They were very nice. They had to drive me to the gas station to get gas for the test drive because I didn’t have a license. I’m sure they realized it was my father’s dealership.” From sales, John moved into finance, and by age 15 he was writing leases and retail loans. He was perhaps the youngest finance manager in the business.

John’s father came to the United States from Iran in the early ‘60s to attend college and become a doctor. His career path veered from medicine when he fell in love with the car business while working at a used car dealership one summer. “He loves cars and he loves people. It’s a perfect combination,” said John, who shares his father’s love and enthusiasm for the business. “We both 20

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CAR BIZ TODAY DECEMBER

John and Jamie Darvish

understand the importance of people, we’re both humble and we’re both empathetic. We treat people the right way, with respect. We both love cars; we both love the car business; we’re both very passionate about the business.”

EYE ON EXPANSION John’s leadership style, however, differs from that of his father. “I think it’s very natural for the person who starts the business to be a little more autocratic,” he explained. “For me, as second-generation, it’s probably easier for me to be more open to allowing more people on the leadership team have more autonomy. I think the way that my father managed is great for somebody who has three or four dealerships. But when you have 22 dealerships, and are aggressively looking for expansion you have to have a team in place that’s qualified and you can allow them to use their judgment to make decisions.”

DARCARS currently operates 22 dealerships in the D.C. area – with two in Florida – representing 37 franchises. More than half of the auto group’s expansion has come during John’s tenure at the company, and he plans to continue aggressively growing the dealership base. “Jamie and I have put many of the deals together in the past and we’re very familiar with how it works. What we look for is opportunity – a store that might not be performing. I am always looking to purchase something that will appreciate and improve,” he said, adding that all locations and brands are on his radar.

John R. Darvish

“My father’s vision was always to be the best and grow.”

—John Darvish

“My focus has been on serving the employee as much, if not more so, than serving the customer. Because if we really make DARCARS the best place to work, those employees will take care of the customers.”

PHOTOS COURTESY OF DARCARS

While leadership has changed hands, the vision for the company remains the same. “My father’s vision was always to be the best and grow,” said John. The means to that end, however, must change to keep up with today’s marketplace.

It’s a different day and age, and to excel and be the best in today’s retail automotive environment requires a new way of thinking and doing business. John is a firm believer that changes in the industry must start at the dealership.

SHIFTING GEARS “I think everything in business, especially the auto industry, has historically been driven by the consumer – customer satisfaction, what does the customer want? what’s the best process for the customer? – and it hasn’t ever focused on the employee.

“My focus has been on serving the employee as much, if not more so, than serving the customer. Because if we really make DARCARS the best place to work, those employees will take care of the customers.” Part of the employeefocused initiative involved John and Jamie visiting every dealership within the auto group over a two-month period and speaking with their employees. “We asked them, ‘What would it take to make DARCARS the best place to work?

And does the company you work for enhance the quality of your life?’”

The results of those conversations were compiled, categorized and prioritized. “We are swiftly and surely making our way through those lists,” he said.

One aspect of being employee-focused centers around work schedules and employee compensation plans. The lack of consistent income and flexibility are preventing some of the brightest people from considering a career in retail automotive.

“I’m convinced we can change. Why can’t it be a friendly supportive environment? Why can’t there be stability with income. Why can’t there be flexibility with schedule? What is keeping mothers out of the business? I’ve talked to so many women with children and families, and they say there’s no way they can work in a dealership. Why? Schedule. Look how many talented women there

are in the world who aren’t coming into car sales. I’m convinced it doesn’t have to be this way,” he said.

“I think it is important that employees have some weekend time off; have some evenings at home; are available to help with their kids’ homework; be at a soccer game or basketball game.” These changes at the dealership level will drive more women and millennials to the car business, he said.

“My goal is to make DARCARS the best place to work. If I can handle that challenge, the rest of it is going to be very easy. My meetings with the leadership team are not so much about customer process as much as they are about the employees. In my opinion that’s our biggest challenge and our biggest opportunity. If we have engaged and empowered employees we’re miles ahead of our competition.”

DARCARS contributes to many charitable causes in their communities. It recently sponsored Walk Off Parkinson’s in Washington, D.C., to raise awareness and money to support those impacted by Parkinson’s disease.

Employees representing the auto group are, from left, Laura Sanders, Jennifer Wade, Nicole McGrath and Maureen Heim.

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Mike Esposito, president and CEO of Auto/Mate

Putting Employees First Boosts the Bottom Line VENDOR PROFILE

Mike Esposito, president and CEO of Auto/Mate reveals what drives his company to the No. 1 spot in customer satisfaction year after year. BY CAROL WHITE

24

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PHOTOS BY ELEANOR GOLDSMITH

I

f you were to ask 10 dealers what the most important Esposito was poised to take Auto/Mate to the next level. feature of their DMS is, you’d probably get 10 differToday the company has about 150 employees and 1,100 ent answers. But Mike Esposito, president and CEO of dealer clients. “The past few years have been pretty great,” Auto/Mate, will tell you that the most important feahe said. ture of your DMS isn’t a feature at all.

“If I’m a dealer and I’m having a problem, I want to pick up EMPLOYEES FIRST the phone and talk to someone who is going to get my probEsposito’s approach to running Auto/Mate differs from lem solved. That’s the most important thing,” he said, adding that of most of his competitors. “Most companies are fothat all calls to Auto/Mate are answered by people, not an aucused on the stockholder first, then the customer and then tomated phone system. And that voice on the other end of the the employee. They kind of got it backwards,” he said. phone belongs to a person who has worked in a dealership “The employee comes first at Auto/Mate. Because if I have and understands the dealer’s needs. “Auto/Mate is and will happy employees, I will have happy customers. If I have always be the No. 1 DMS provider in customer satisfaction.” happy customers, I will make profits. If I make a profit, I Auto/Mate was first introduced back in 1972 as an F&I syswill have happy shareholders.” His approach seems to be tem by the now-defunct Wang Laboratories. By the mid ‘80s, working as Auto/Mate has the highest customer retention the computer giant’s marketing dominance had begun to dirate in the industry.

Auto/Mate’s original mission minish. Wang sold the rights to the software to its chief develthe last five years running, we have won the Best Place statement drafted on a TGI Fridays to “For oper, Steve Fullum who continued developing and marketing Work award from the Albany Business Review and for the napkin in 1985. the product until he died unexpectedly in 1999. Esposito, who past four years we’ve won the award for Top Workplace from was a sales representative for the Albany-based company, was the Times Union. We’ve won the Driving Sales award the last named vice president of sales and marketing – a position he held until the comcouple of years for customer satisfaction. So it really comes down to our people pany was sold to a private investor in 2005. At that time he was named presi“The Driving Sales award is a result of being the best place to work. If we dent and CEO. weren’t the best place to work we probably wouldn’t be winning best customer With a background in mechanical engineering and six years experience as service from Driving Sales. It reinforces that we’re doing the right things when a general sales manager and general manager of a dealership in Albany, N.Y., our employees give us these types of rankings.”

Sue Barnes and Ally Payette in the lobby where a few of the DMS provider’s awards are on display.

Cupcake day is a favorite at Auto/Mate. Mike Esposito, far right, serves up the treats to, from left, Schuyler Traudt, Sam Beroz, Robert Blundell, Bill Deerfield and Cammy Payne.

“The vision over the next five years is to grow the company at a steady rate, not leaving any of our current dealers behind. We want to make sure we’re supporting them and continuing to be No. 1 in customer satisfaction.”— Mike Esposito

Andrew Kambourelis and Jan Daurio take advantage of the workout facilities at the company’s headquarters.

PHOTOS BY ELEANOR GOLDSMITH

YOU CANNOT TEACH ATTITUDE A happy employee begins with the hiring process, according to Esposito. “I tell my HR director to hire for attitude; we can teach the skills.” Job applicants are put through a rigorous interview process before being hired by Auto/Mate. “I don’t want people who are customer-focused. I want people who are ‘otherfocused,’ meaning that they are focused on other people, whether that person is a customer or a fellow employee. It really goes to the core of the person.

“We are a service business; we want somebody who’s empathetic and puts others before themselves. That’s the essence of teamwork.”

GOOD PROFIT/BAD PROFIT Profit is profit, right? Not necessarily, according to Esposito. The company’s original mission statement was written in 1985 on a TGI Fridays napkin (pictured).

He and his team have gone on to create a set of core values that everybody in the company understands. Chiseled down into the simplest term, it centers on “doing the right thing” – doing the right thing by its employees and doing the right thing by its dealer clients. “ We really believe that dealers haven’t been treated well by DMS suppliers and we’re here to change that.”

Esposito went on to define “bad profit” as something in which your customer doesn’t see value, for example, fees airlines charge for baggage, or fees some establishments charge customers to use their Wi-Fi. While these extra fees might provide a profit for the provider, they don’t necessarily benefit the customer.

Auto/Mate looks to reduce the cost of doing business with them thereby saving their clients some money.

Taxes on research and development are one example. “If you’re in a state that charges sales tax, you pay a tax on the sales support,” he explained. “When you

Human Resources’ Laura Marusak and David Druzynski look for a positive attitude when hiring employees.

pay support on software, part of those support dollars goes toward research and development of the next upgrade or the next version of the software. It’s not all used for support. R&D is non-taxable.”

Only about 60 percent of support dollars are actually used for support while the other 40 percent goes into research and development. “We don’t tax the dealer on that. So we can save the dealer money. We don’t have to do that, but charging them would be unfair to our customers.”

Savings are also translated to the dealers using the “1 Equals 3” hiring philosophy that Esposito adopted from Kip Tindell, chairman and CEO of The Container Store. The thinking is that one great employee equals three good employees. “So if I hire the right people that fit our culture, I get a cost advantage because my one person can do the work of three people at another DMS provider,” said Esposito, which allows Auto/Mate to charge a fraction of what his competitors charge.

YOU LEAVE THE DANCE WITH THE GIRL YOU BROUGHT TO THE DANCE That bit of advice from Esposito’s father holds true even in business. “We’ve gotten this successful because we’ve taken care of our 1,100 dealers.” Auto/ Mate strives for controlled growth, which means it’s not looking to add a 30- or 40-store auto group. Not right now, but maybe in four or five years.

“When you take on a large auto group, what happens is those stores hijack our development, hijack our support groups and hijack our installation groups. And the 1,100 dealers we are currently doing business with would feel the pain.”

Auto/Mate currently enjoys a 15- to 20-percent yearly growth. “So the vision over the next five years is to grow the company at a steady rate, not leaving any of our current dealers behind. We want to make sure we’re supporting them and continuing to be No. 1 in customer satisfaction.”

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MARKETING

Don’t Neglect Marketing for Fixed Ops With an adjustment to your marketing efforts, your service department could generate even more revenue than it already does.

service department

ip dea l ersnhue reve

5560%

marketing budgets 5-15%

BY GLENN PASCH

T

hink about this for a minute. What if you were responsible for the return on investment from two teams you run?

One of them receives a lot of money to market themselves to your customers and potential customers. You give them your love and support, they live in a beautiful store and they return a certain level of revenue for you.

The second group, on the other hand, gets very little money from you to market themselves. You do not give them a lot of your time or love and they live in the back of your beautiful store, hidden from view. Despite all this, they still return more revenue than the first team.

However, with some adjustment to marketing, service and parts could generate even more revenue. The biggest problem I’ve encountered is dealership culture. Sales and service seem at odds. One feels loved, and the other is a jealous sibling.

I think most of the struggle is that dealers do not know how to expand their marketing efforts outside of offline marketing – in the form of mailers with specials, for example – to increase this revenue generator.

Their “digital” marketing efforts may only be a newsletter with a service coupon or an email blast.

However, there is no consistent marketing through the digital world for parts or service.

“It is time to share digital education amongst all departments, and to stop giving the fixed operation departments a reason to feel like the jealous sibling of the sales departments.”

WHICH TEAM WOULD BE NO. 1 IN YOUR EYES? Working with dealerships across the U.S. and internationally, I have noticed that this scenario is common across almost every single one of them with very few exceptions. Service and parts departments are the top revenue driver for most dealerships, but they are given the least marketing resources to grow.

I asked a few of my clients for some real numbers to back up my hypothesis. What I found was interesting:

WHAT SHOULD A DEALER DO IN TERMS OF MARKETING SERVICES ONLINE? First, dealers need to review their current digital marketing efforts and decide where they could expand. Taking into consideration the following questions will help them reveal areas of improvement.

n On average, service and parts generate 55-60 percent of a dealership’s overall revenue.

n Do they have a, “Why Service With Us,” video on their service page or confirmation page?

n On average, dealers give as little as 5 percent to possibly 15 percent of their marketing budgets to the service and parts departments.

To many, this could be seen as a great return on their investments. Market a little and make a lot of money, so why change anything? Yet, on the flip side of that argument, spending 85-95 percent of your marketing budget to get 50 percent revenue on car sales seems not so smart.

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n Do they have optimized landing pages for each of the eight-10 basic services they handle? n Do they have specific SEM campaigns or remarketing efforts to highlight service?

n Do they have a great, “Thank You,” page for customers who book service that pops up and offers

other options for them to view while they are still on the site? n Do they work closely with their SEO and SEM provider to drive relevant traffic to these pages in order to convert leads?

Lastly, they need to enroll the leadership of the service department into proper digital marketing educational programs so they can unlock their entrepreneurial efforts to grow their businesses. If dealerships continue to do what they have always done in terms of marketing service, they will never keep their customers from going to the independents. Have you seen Meineke or some of the third parties’ digital strategies? It’s pretty impressive – iconization of the website, clear initiative, well thought out.

Go to nearly any dealership website and you will see that the extent of the effort to market service is a form on a page with nothing else on it, or a list of coupons that have no creativity. Some service pages even contain links that take you off the dealership website. That’s not such a great way to treat your moneymaking machine.

If dealers focused their marketing on this revenue generator, or if service was a priority, what could they accomplish? The key is to educate dealers about this opportunity. They need to unify their messages across all marketing channels and improve the digital marketing knowledge of service managers.

2015 has to be the year that dealerships realize that underfunding the marketing for service and parts is taking away revenue from the bottom line.

It is time to share digital education amongst all departments, and to stop giving the fixed operation departments a reason to feel like the jealous sibling of the sales departments.

GLENN PASCH CEO of PCG Digital Marketing Glenn is a trainer at heart. He is a highly sought-after speaker, writer, coach and operations strategist, as well as a customer service fanatic. He has spoken throughout the U.S. and Canada, educating audiences on a variety of topics including business leadership, change management, digital marketing and the impact of this new technology on culture, business and society. Visit the website www.pcgdigitalmarketing.com

Mapping Out the Year Ahead

5 New Year’s resolutions that will keep your 2015 marketing strategy relevant and effective. BY AMY FARLEY

S

ome people want to go to the gym more often. Others want to save more money toward retirement. Still others want to travel more. ‘Tis the season for New Year’s resolutions.

These goals can be incredibly helpful for your own personal development – but they can be a boon for your business, as well.

As we approach Q1 of 2015, it’s time to make some New Year’s resolutions for your dealership’s marketing strategy that will get your year started off right.

Here are some marketing resolutions to consider this year:

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1.

Streamline your strategy across all channels

If you haven’t already implemented an integrated marketing strategy that delivers a consistent message through all channels, let 2015 be the year that you do.

Even with the rise of digital marketing in the automotive industry, you’re likely still putting a portion of your budget toward direct mail and other traditional advertising – as you should be.

These methods of marketing are still effective ways of reaching consumers. On top of that, within the digital realm, you’re probably reaching out to consumers via email marketing, SEM, SEO and social media. Finally, you’re delivering messages to consumers who visit your showroom via in-store marketing materials and offers. The bottom line is that you are reaching out to shoppers through a broad array of channels.

The only way to make the most of your budget is to develop a strategy and message that is consistent and streamlined across all these channels. Not only will this reinforce your message, but it will allow you to reach different segments of consumers who utilize different research touch points when shopping for cars.

3.

Plan for programmatic advertising

Marketing analysts predict that programmatic advertising will be a trend to watch in 2015.

In fact, it is projected to account for fully 50 percent of digital ad sales by 2018.

So why is investing in programmatic advertising such a good idea? Simply put, it’s the smarter way to buy marketing placements. With a programmatic buying platform, advanced algorithms backed by data handle the buying and bidding, determining where and when an ad is placed. The process is automated, and is accurate in a way that humans can’t be.

These programs are able to target the auto intenders who are the most likely to convert, meaning you can spend your advertising budget most efficiently and maximize your ROI. Dealers who implement programmatic buying strategies in 2015 will be ahead of the curve in a big way.

5.

Push for positive feedback

With more and more consumers turning to the Internet, as well as the mobile devices that we’ve already established that they own to research vehicles, it’s important to pay close attention to online word-of-mouth. Auto shoppers are increasingly likely to read reviews on social media websites like Facebook and Yelp, and 72 percent of consumers reportedly trust online reviews as much as they do personal recommendations from friends or family.

Sometimes it may seem like the only people who are inclined to write reviews of a dealership online are the unsatisfied ones. The truth is, you may have to push a little bit harder to encourage your happy customers to write reviews, but those efforts will pay dividends.

It’s easy for your sales staff to identify the customers who are the most satisfied with your service, or to review your DMS data to seek out repeat customers. Try reaching out to these shoppers while they’re still in your showroom. Encourage your staff to take a photo of each happy customer at the time of delivery to post to your dealership’s social media accounts, and ask the customer if they’d be willing to post it to their own pages as well. After a customer’s purchase or service appointment, you can even reach out with a follow-up email that encourages them to leave feedback about their visit on one of the popular review sites.

The occasional negative review is inevitable. These positive reviews will help you cultivate an online reputation that’s an accurate representation of your quality customer service.

As the New Year approaches, it’s a great time to look back on all the things you did that worked – or didn’t work – in 2014. It’s an even better time to look forward to what you can do to succeed in the coming year. Take some time to think about your resolutions and your goals for 2015, and prepare to have your best year yet.

2.

Allow data to drive your marketing strategy You know that the most effective marketing is targeted and strategic, and that’s something that can only be accomplished using data. Utilizing data in your marketing efforts will lead to campaigns that work and results that are both visible and measurable.

With data-driven marketing strategies, you don’t have to stick to a one-size-fits-all marketing approach.

You’re able to target specific customers or segments of customers with messaging that’s proven to work, through a medium you know will be effective. Savvy automotive marketers can take data and craft campaigns that reach the right customers with the right message at the right moment.

In 2015, take a look at the campaigns you’ve been running successfully, and think how much more effective those campaigns could be if they were backed by data.

4.

Make your marketing mobile-friendly It may seem that every year recently has been declared “the year of mobile.” You may have heard over and over that your website should be mobile-optimized, and that approximately 75 percent of the world has access to a mobile phone. But that just means that if you’ve brushed off that advice in the past, you’re sacrificing showroom traffic, leads and sales.

There’s no excuse to neglect mobile shoppers in 2015, particularly because of studies that show that 45 percent of all mobile searches are goal-oriented, and that half of all consumers who conducted local searches via smartphone visited a store within a day. These mobile shoppers are in-market auto intenders who will visit your dealership – or your competitor’s.

In the coming months, evaluate your current mobile strategy – if you have one in place at all. What can you do to make your website more easily viewed on a mobile device? Are you implementing your SEM strategies with mobile consumers in mind?

Want to get a good idea of how your site performs on mobile? Give your smartphone to a 15-year-old and see how quickly he or she can find a specific vehicle in your inventory. Then you’ll truly know if your website is ready for the next generation of consumers. Make it easy for tomorrow’s mobile shoppers to find your dealership and you’ll reap the rewards.

AMY FARLEY Media and Communications Manager at Force Marketing Amy is a skilled writer and editor with a keen interest in digital trends and topics in the automotive industry. She utilizes her knowledge of what is new in retail automotive marketing to help Force, an automotive digital, direct mail and email marketing firm based in Atlanta, Ga., evolve the dealer-to-customer shopping experience. Visit the website at Forcemktg.com.

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REFERRALS

Increase Sales While Decreasing Ad Dollars By building a culture of referrals and introductions, dealerships can boost sales without spending a dime. BY BILL CATES

W

hat does it cost you in ad dollars and other marketing dollars to bring a customer into your showroom? Do you know? If not, how can you know what’s working and how to adjust? Spray-and-pray marketing is not a strong approach. If you’re like most dealerships, you’re spending a significant amount of money on ad campaigns and other promotions. These all are hard costs – money out the door.

FORGOTTEN GOLD Referrals and introductions are the forgotten gold of your business. Most businesses and salespeople want referrals, but very few have a plan to generate them. If you’re providing a great buying and service experience for your customers, then the gold is right in front of you. And what does it cost for referrals and introductions? How about zero?

Zip! Nada! That’s right. By building a culture of referrals and introductions, you can increase sales and decrease marketing expenses at the same time.

And if you’re a salesperson, you’ll increase your personal production just by changing a few simple, but critical habits.

BORROWED TRUST Referrals work because of the dynamic of borrowed trust. When a prospect walks into your showroom, having been referred by a friend, he/she comes in at a higher level of trust. I think you’d agree that a large part of making the sale is about establishing trust. Trust is not an easy thing to build quickly, but there are things we can do to speed up the process.

When we work from referrals and introductions, we’re starting at a higher level of trust. We borrow the trust in one relationship just long enough to earn our own.

Prospects who come to you through referrals and introductions: n Are predisposed to do business with you. n Are predisposed to follow your recommendations. n Often make faster decisions. n Expect the deal you offer to be fair. n Are more likely to give you referrals.

(Referrals beget referrals.)

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BE REFERABLE There are two main components of your referral culture. You have to be referable and you have to be proactive. Both the dealership and the salesperson have to be referable. To build a culture of referrals, every single employee in the dealership has to know their role in order to make this happen. If they are not directly serving a customer, then they are serving someone who is serving a customer. One barometer of your referability is that you’re getting referrals without asking for them. Every business and every salesperson should be getting unsolicited referrals. If not, there’s something missing from either your initial process or how you’re staying in touch with your customers over time.

First, you want to become referable quickly. Provide such a smooth and stress-free buying experience that the customer is pleasantly surprised. You see, you’re no longer just trying to make the sale.

You’re trying to make the sale in a manner that also creates referrals. The referrals are part of the “profit” of the sale.

Second, you want to remain referable over time.

Both the dealership and the salespeople should follow a plan that ensures the customer will be “touched” from time to time. I’ve purchased five Lexus’s over the last 15 years – all from the same salesperson at the same dealership. Why? Because he’s staying in touch with me. I get a birthday and holiday card from him. He seeks me out when I bring my vehicles in for service. He’s always asking about my daughter, what new book I’m writing, or to what interesting place I’ve traveled lately. Studies have proven that “engaged customers provide referrals.” I’ve given Sal about 20 referrals over these 15 years. My value to Sal is not just in the repeat business, but in the referrals I provide.

BE PROACTIVE While being super referable will definitely create unsolicited referrals, you’ll generate 20 to 30 times more by asking for them. At the heart of asking for referrals is the “value discussion.” I’ve seen more salespeople get referrals – often without even asking – just by checking in with the customer – to make sure they’re happy with their buying experience. But this isn’t a “setup.” You don’t want to say, “Do I have a happy customer?” (Yes) “Great, who do you know?” That feels like a setup. The salesperson or general manager should make this a conversation about the experience. “What might we improve?” “What worked – how did we earn your business?”

You also want to try to turn the referrals you get into introductions – get connected with the new prospect. Your customers can introduce you to the prospect via email, and then you follow up from there. Sometimes, they’ll even walk their friend or family member into the dealership. In my book, the referral means nothing until you’ve actually connected with the prospect. Go for the connection.

Do you see referrals as “icing on the cake” – nice to get, but you’re not really focused on them? Or do you see referrals as “the cake”? Grow your sales based on how your prospects would prefer to meet you – through a recommendation from someone they already trust.

Stop wishing and hoping for referrals. Have a plan. Build the habits and culture and you’ll steadily increase sales and decrease ad dollars at the same time.

BILL CATES President and Founder of Referral Coach International Bill works with dealerships that want to grow their sales by attracting more customers through word of mouth, referrals and introductions. He’s a highly sought-after speaker and trainer. His books, Get More Referrals Now and Beyond Referrals, are a must-read for anyone in the automotive industry. His referral system has been featured in Success magazine, Entrepreneur magazine and the Wall Street Journal. Visit his website at ReferralCoach.com/automotive or email him at BillCates@ReferralCoach.com

HOW TO

Stay Productive Through The Holidays Successfully navigating the increased distractions of the season will help you finish the year strong.

BY GRANT CARDONE

I

n life, especially as we head into the holiday season, there are constant demands that will consume our time and can take our eye off the main thing and the bigger prize. Navigating these distractions is a challenge for everyone, even the most productive people.

Allow yourself to get too far off course and you will find it impossible to provide for yourself and your family in the way they deserve.

Life serves up enough distractions, now let’s add the holiday season to the mix. Even if you don’t participate in these great traditions, your customers do. To continue your commitment to high production levels, it is mandatory to keep your distractions to the bare minimum.

This is the time of the year when I make a complete list of all the activities that might possibly distract me. Then I look at the ones I’m willing to compromise on and be distracted by and the activities that I know have no value at all. Keep in mind that November and December only offer 33

Successful people are willing to trade the distractions of today for greater freedom tomorrow. weekday opportunities to work and the rest of the time is Thanksgiving, Christmas, New Year and weekends. Your last two months of the year are annihilated with distractions and that doesn’t even include parties, school, kids, ballgames and other unplanned activities that always come up.

Here are five ways to keep your head in the game and remain focused.

1.

Make a list of all possible distractions. Create two columns on a sheet of paper. In one, list the things that won’t ever contribute to your production. In the other column list your “must-do” distractions – the ones not even you can negotiate your way out of! Then avoid those activities in column one.

2.

Remove all whitespace on your calendar.

The days in November and December that are free from holiday distractions must be filled with calls, people to see and tasks to complete. Have a strict policy during those times for no distractions and commit to new levels of action. When people complain that they “haven’t seen you in ages,” you know you’re on the right track. The more things you get done, the less distracted you’ll be.

3.

Create time, don’t manage it. Divide each hour into four 15-minute blocks of time and see how much you can complete in each 15-minute block. Work fast and furiously to see how much you can accomplish. When you start to approach time this way, you start to move from one thing to the next with little room for distraction.

4.

Share your commitment and get support. The more people know about your commitment and dedication, the better. You might even want those closest to you to agree contractually to support you. Let your friends, family and colleagues know your goals are to double sales this month and that you need their help and support.

5.

Get obsessed!

The only way to knock out any distraction is to get completely obsessed.

Become as consumed by your production as most people get over eating a fried bird on Thanksgiving and as obsessed as your kids get over Santa delivering gifts. Your energy and posture at work must take on an intense, obsessed-like nature.

This approach will cause everyday distractions to seemingly disappear. This is when you don’t even hear the TV or other noise going on around you.

Life is already filled with enough distractions and those consumed by distractions trade experiences for freedom. Successful people are willing to sacrifice the experience in order to build a future and do everything possible with the time they have.

When you become completely committed to providing security for your family, the distractions that seem so appealing to the average person will no longer trap you. Successful people are willing to trade the distractions of today for greater freedom tomorrow. Use this holiday to build your hustle muscle and make choices that will result in the life you want, not just a life filled with endless distractions that control the everyday person. Sell strong in December and end the year great.

GRANT CARDONE Entrepreneur and New York Times best-selling author Grant, a national speaker and motivator, is a respected, highly-regarded master salesperson whose passion is to teach people how to sell themselves, their products and services regardless of economic climate. His books, audio packages and seminars provide people of all professional backgrounds with the practical tools necessary to achieve high levels of success. Follow him on Twitter @grantcardone.

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looking to replace or add a vehicle?” The answer to this question helps provide keen insight to help overcome the natural procrastination associated with making a purchasing decision on a new vehicle.

As indicated by a recent AutoTrader study, few people are in the market for a new vehicle solely due to an internal desire, “I want a new car.” The motivation to enter the market is fundamentally a need-based decision, often the cause of some external issue. The new job requires a different type of car. A longer commute reveals the need for better gas mileage. Cost and frequency of repairs on the current vehicle justify replacement. Their car was stolen or damaged due to accident. A new family member means the need for more space. You get the picture.

“What would be your second choice?” Sure your customer may start out saying that they are dead set on a particular vehicle, yet isn’t it amazing how many will ultimately drive home in a different car than originally intended? It is always good to keep your options open.

“Questions are the most effective means of connecting with people.”

The Value of Questions

BY KIRK MANZO

“The art and science of asking questions is the source of all knowledge.”

-Thomas Berger

T

he ability to ask great questions helps to separate us from being viewed as just a commodity. There are countless options available to today’s consumer. As a result, creating distinction for the dealership and ourselves is a real challenge when selling to two separate groups of potential buyers – first, consumers looking for a new vehicle; and second, job candidates looking for a place to earn a paycheck.

In general many of us struggle to ask good questions. Here are some examples submitted to Sunday’s Parade magazine columnist Marilyn vos Savant: “I noticed you have the same first name as Marilyn Monroe. Are you related?”

“Do you think daylight saving time could be contributing to global warming? The longer we have sunlight, the more it heats up the atmosphere.”

“When I dream, why don’t I need my glasses to see?”

“I just observed a flock of geese flying in a ‘V’ formation. Is that the only letter they know?”

Now don’t you feel better about the quality of your questions?

Whether you are trying to sell a car or a candidate on joining your team, both require that you successfully make a connection. Questions are the most effective means of connecting with people.

After all, what are they really buying when they say, “Yes, I’ll take the car,” or “Yes, I’ll accept the job”? You! When helping identify a replacement vehicle, one question we should always ask is, “Why are you 32

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Bob Biehl in his book Asking Profound Questions writes: There is gigantic difference between the person who has no questions to help process situations and the person who has profound questions available. Here are a few of the differences:

WITHOUT PROFOUND QUESTIONS

WITH PROFOUND QUESTIONS

Shallow answers Lack of confidence

Profound answers

Poor decision making

Life confidence

Live in mental fog

Wise decision making

Work on low priorities Immature processing

Crystal clear focus in life Focused on high priorities Mature processing

“Other than that, would there be any other reason why you would not move forward with the purchase?” Accepting the reality that we need to be transparent with both our sales process and pricing does not mean we don’t apply any pressure to make a buying decision.

Let’s just not pull out our plaid sport coat or the overused cliché of “If I could, would ya…?” Remember decision anxiety (paralysis) still exists even if you operate a one-price or market-based pricing philosophy. Consumers often need help to get to the finish line. Great questions can keep the conversation moving forward.

When looking to add members to your team, here are some practical suggestions to help close that sale as well. We must accept the fact that supply and demand are unfortunately working against us.

Add to this that most parents’ dream of their kids becoming a doctor and not a car salesman. Heck even young children often talk of becoming firemen or teachers versus someday running a dealership let alone starting out as an automotive salesperson.

That said, what questions must we ask to turn this around? First when people leave the dealership do we know why? Do you currently conduct exit interviews with team members to identify the reason for their departure?

As leaders we must ask ourselves daily the same question that former UCLA basketball coach John Wooden asked, “How can I make my team better?”

The most effective way to find new people who are willing and motivated to join your dealership is to make certain that the team members that currently work with you tell others to apply. Happy employees make for happy customers.

By developing a large inventory of quality questions we can streamline both the sales process as well the recruiting process. So tell me about a time when you…

KIRK MANZO President of The Manzo Group As a nationally-recognized speaker and professional trainer, Kirk has conducted hundreds of in-dealership programs nationwide and was a featured speaker at the 2008 NADA Annual Convention in San Francisco. As a certified member of the John Maxwell Team, Kirk facilitates mastermind groups, in-dealership workshops and coaching services based on Maxwell’s strategies on leadership and communications. Visit his website at Manzogroup.com.

JUMP-START THE

NEW YEAR

AND PLAN FOR SUCCESS IN

2015 YOUR DEALERSHIP’S 2015 CHECKLIST:

aStreamlined Multi-Channel Strategies aData-Driven Campaigns aProgrammatic Advertising aMobile-Optimized Marketing Start off the new year strong with a marketing partner

Visit our video channel for automotive marketing tips,

that will align your ad messaging and effectively

campaign strategies, client testimonials, and more!

reach auto shoppers in your market.

Youtube.com/ForceFeedTV

ForceMarketing.com

866-297-9514

– r e t r a m S k r Wo

HOW TO

Spend more time learning the ‘good stuff’ and avoid these common mistakes that are losing you sales every month. BY JOE VERDE

M

ost salespeople spend their careers trying to figure out how to make more money and become more successful.

The problem is while they’re learning a new technique or putting in those extra hours, they’re making mistakes that cost them more on the loss side than they’re picking up on the gain side. These aren’t the only mistakes, or even the biggest ones salespeople make. They’re just some of the most common mistakes most of you probably make that cost you a few deals every month.

Why not work smarter instead of just working harder? Why not learn more good stuff and do less bad stuff at the same time, so you can end up with a double treat on payday? Go over these five mistakes with your salespeople in your upcoming sales meetings.

5

Big Mistakes That Will Cost You Sales and Income 34

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1

Not enough product knowledge and/or telling them everything you know

Most salespeople don’t have enough product knowledge to give a value-building presentation that matters to the specific customer they’re talking to. Even with salespeople who have good product knowledge, they still don’t know how to turn all that information into a targeted, value-building presentation tailored to each customer.

Even those salespeople who do have enough product knowledge and try to target that information, sometimes haven’t developed the other skills that make a product presentation more effective.

Unless you know how to investigate effectively to find and then push each person’s hot buttons, all you can do is tell everyone everything you know about your product.

People don’t want to know everything you know about your product.

Everybody has those hot buttons and those are features, advantages and benefits they care about – not everything you know about the vehicle. Overloading them with product info they don’t care about will cost you sales and income. So instead of telling them everything you know, just assume every customer only cares about three things and make it your goal to discover those three hot buttons in your investigation.

Start with whom it’s for, how they’ll use it and why they’re getting it. Really dig in and your presentations on those three key benefits will be awesome.

In your investigation, if your customer stresses that their primary buying motive is safety, every time you cover a safety feature, advantage and benefit, you move closer to the sale. Every time you cover something they don’t care about, you move further from a sale.

So how much product knowledge do you need?

To give a good presentation, you need to know enough to cover at least three features, advantages and benefits at every point of your six-point walk around. That means if your customer only cares about safety, you need to know at least 18 safety features, their advantages and benefits.

As a quick reference, you need five times more product knowledge than you’ll use with the average customer.

2

Not finding a customer’s wants and needs and just focusing on price

Typical: “Hi – how are you folks today? How can I help you?” We’re fine thanks; we want to look at the new Tahoe. “Sure, we’ve got super low prices on every one, plus a rebate of $3,000, and if you buy today, we’ll even give you $1,500 more on your trade-in than it’s worth and free movie tickets to Transformers #27. What kind of payment are you folks looking for?”

PROBLEM NO. 1 – They didn’t say they wanted a Tahoe, they asked to look at one. Statistically, salespeople try to sell the wrong vehicle 30 percent of the time because they don’t investigate.

I can’t tell you how many times I’ve asked, “Who’s the [Tahoe] for Betty, you or Bob?” only to hear something like, “Oh, it’s not for us, our son just bought one and we wanted to see what they look like – we want a [car].”

PROBLEM NO. 2 – Stop assuming that price is what gets people excited. It isn’t. They get excited about those hot buttons they care most about.

PROBLEM NO. 3 – Realize that if you’re relying on price to try to get people excited, then it’s probably because you lack the selling skills or discipline to follow the correct selling process.

TWO FACTS ON PRICE VS. VALUE: First, focus on price and you will sell 20 percent tops. Second, follow my selling process and you will sell 50 percent or more.

r e d r a H T O N –

4 5 Assuming you’ll get better with age

If experience equaled success, every 10-year veteran should be selling 30 to 40 units a month by now.

But we all know that most of them aren’t. Why? Because they stop growing in sales as soon as they stop developing more skills.

Whether you’ve been selling for three months, three years or 30 years, if you stopped learning more after 90 days, you’ll find yourself stuck at that sales level, too. If you want to improve your sales, you have to improve your skills. When you develop more skills, you improve your sales and income. It takes practice to develop skills.

3

Not wearing your happy face

A Chinese proverb says, “Man who cannot smile, should not open shop!” I stop for a donut at a place by our office now and then. The lady behind the counter never smiles, never says thank you and never seems to have a good day. The only reason I stop there is because it’s the only donut shop on my way to work.

Guess what? You aren’t working at the only place in town to buy a car. So leave your problems at the curb and stop trying to make people prove they’re there to buy before you’re nice to them. Just be nice, be excited to see them and do your job. If you will – you’ll sell more.

Keep it simple – eliminate the mistakes and you’ll increase your paycheck.

Mishandling their trade

Everybody thinks their trade-in is worth a lot more than it is. You do, I do and so do your customers.

The problem is people have this thing with cars, especially their cars. Sure, you’re trying to get them to be realistic, so the six-car guy taught you to low ball them or start pointing out all the things wrong with it. When they ask, “What’s my trade worth?” if you answer with a six-car guy “sales-prevention response” such as, “Not much, you should try to sell it yourself,” it’s costing you sales.

If you want to learn how to sell more, you’re going to have to learn how to slowly, gently and quietly help them devalue their trade themselves with your silent walk around. As part of your information gathering on both vehicles, walk around their trade with them before the write-up.

When you spot the tear in the seat, don’t say, “Wow, big tear!” Just touch it, shake your head and say hmmm, then write down, “Tear in front seat.”

When you get to the mangled fender, don’t say anything, just lightly run your hand over the dent, and jot down “fender.” When you get to their bald tires, take your informal tread depth gauge (your pen), and measure the tread that isn’t there, hold it up to look, say hmmm – then jot down “tires.”

You never have to say a word and when you get finished with the walk-around, the value in their mind just dropped a few grand. Remember – the biggest bumps you get in sales are the ones you never hear.

JOE VERDE President of Joe Verde Sales & Management Training Inc. Joe has been in the car business since 1973. He has been the “eight-car guy” and the 38-car sales professional, a manager and dealer principal. His company was founded in 1985, and under his leadership, was rated the number-one training company again this year. Joe is a frequent speaker at NADA conventions and is in constant demand to speak around the world to automotive groups.

Visit his website at www.joeverde.com

DECEMBER

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35

OUTLOOK

Service Success for 2015 Taking cues from the most successful fixed operations will ensure your service department shines in the coming year.

BY JEFF COWAN

A

s the tide rolls out on 2014 and we look ahead to the new incoming tide of 2015, it is time we sit down and start to plan for what I believe will be a record year for service department sales.

Since the recession began back in 2008, I have witnessed many service departments experiencing their best years, year after year. Although the number of service departments having their best years has not increased much with each passing year, those who are having record years understand that it is not happening because of luck. It is happening because they are identifying their roadblocks, developing plans to navigate around those roadblocks, setting minimum acceptable standards and executing.

Having worked with literally hundreds of these successful service departments, I will share with you their secrets of how and why they are so successful.

CREATE A SALES CULTURE They have processes that have created a sales culture throughout their entire service department; processes that guarantee no matter who a customer speaks with in the service department, they will be talked to and handled in the exact same way. The managers in these successful stores understand that just like in selling, you have to take control of a customer and they understand that you must do the same with your staff. Take control of them, train them, require the memorization of word tracks and processes and then make sure your staff executes.

They fully realize that if they are not in control of their staff and their customers, their staff and customers will control them.

TAKE ADVANTAGE OF THE LATEST TOOLS They have all the latest tools needed, including multipoint inspection processes, which are utilized to their fullest by both their technicians and their service advisors. They have tablets to make the check-in process cleaner and quicker. They have up to date displays that are inviting and easy to work from. They have processes in place to maximize the technologies of email, texting, telephones and video to communicate to their customers in the most efficient ways possible – ways that today’s customer welcomes with open arms.

REWARD THE CUSTOMER They have some type of rewards system that remunerates their best customers for repeat business.

Think airline mileage programs. They know that these types of programs are what truly accelerate customer retention, and they never rely on cheap prices and coupons. That said, they will use coupons, but with an advertised “value price” and not necessarily the cheapest price.

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CAR BIZ TODAY DECEMBER

FOLLOW UP They have processes to guarantee that every declined service and every missed check-in time is followed up within 24 to 48 hours, maximizing every opportunity and showing their customers how serious their shop is when it comes to maintenance, repair and providing great service.

TRAIN AND RETRAIN They approach training from the standpoint that training is not something you did. It is something you do – forever. They have a basic training course that every service employee must attend when first hired, where they earn a certificate. This is followed by weekly 15-minute sales meetings, capped with a monthly hour-long sales meeting where strengths and weaknesses are examined and corrected as needed. They typically have a recertification meeting once a year, because they believe all training certificates should come with an expiration date.

They also look outside their own business for training, to make sure that they do not become stagnant and that their message does not grow tired.

SET EMPLOYEE GOALS They schedule annual meetings with each employee to discuss goals, each individual’s role, and what they are being held accountable for. They have a brief quarterly meeting to make sure that their goals are on track, and stay on track. Their mantra tends to be, “It is not about any single employee; it is about every single employee”.

It is happening because they are identifying their roadblocks, developing plans to navigate around those roadblocks, setting minimum acceptable standards and executing.

In addition to all of these major items there are minor things they do as well, to ensure their success. They take this seriously and execute it with great enthusiasm, because they clearly understand that if the customer is not “wowed” every single time, there may not be a next time. They get that they are there for the customer and if there is no customer, there is no job security.

As many of you know I am out in the field on a consistent basis, and have been for more than 29 years. I may not know everything, but I see a lot. I receive telephone calls all the time from dealers and managers asking exactly what these dealerships do to have these record years. That question arises in nearly every meeting I am in. When I spell out what I have spelled out here, a few heed the advice and steer their ships toward newer and greater horizons. However, many more write it off as too much work, or unrealistic, and remain on the same ship in the same rough waters, never seeming to realize that it is they who need to simply plot a new course and guide their ship to discover these newer, bigger horizons that await all who are willing to navigate the waters.

JEFF COWAN President of Jeff Cowan’s Pro Talk Inc. Jeff, in his 28th year of training, is recognized as the creator of the modern-day walk around and selling processes for service departments. Currently partnered with NADA, EasyCare, NCM, MPi and other vendors and manufacturers, Jeff is the nation’s authority when it comes to training service advisors and service support staff. Visit his website at automotiveservicetraining.com and sign up for free, weekly training.

HOW TO

K

Record Service Calls to Boost Profits Recording service calls will help identify both weak and strong areas in your fixed ops sales efforts. BY MIKE HAEG

nowing how to get the most from the important calls your call tracking provider gives you will make your staff better, and your bottom line bigger.

To start, phone training is especially successful when staff members can actually hear themselves.

As a service manager or director, you should have weekly meetings, where you sit down with your entire staff and listen to three phone calls out loud.

Don’t identify the staff members that handled each phone call, and let the staff determine if the call was successful or not. From there, break down each call into three categories: Questions or objections the prospect had, holes in staff member knowledge and whether there was a legitimate service opportunity. You should never look at phone training as a chance to simply point out mistakes. Building a phone culture means helping your staff improve by recognizing the good and the bad.

vice was price. Although a staff member may know to suggest payment plans or insurance coverage, there should be a standard for this, especially if it is a common problem. Make a guide with example phone scripts and suggestions to send to your staff.

HOLES IN STAFF KNOWLEDGE Service prospects expect the service technicians and staff to have answers to all of their questions about complicated or routine repairs. If it seems like a staff member or receptionist didn’t know the answer to their question, or if they had to speak with a manager directly to get the answer, that’s a red flag. If one member of your staff doesn’t know the answer to common questions, the majority of the staff probably doesn’t know the answer either.

COMMON OBJECTIONS/QUESTIONS Let’s say in two out of three of those calls, the most common issue prospects had with your ser-

GRANT CARDONE

JOE VERDE

MARK TEWART

Plan a presentation about (for example) “Overhauling a transmission” if that’s something they struggle to answer questions about.

ASKING FOR THE APPOINTMENT If a call ends with the prospect saying, “I’ll give you a call back,” that’s also a red flag. Your employee just missed out on a huge opportunity for business. According to the NADA, each repair order sale is worth $250. In 2013, the average service department had 14,002 repair orders. If service departments stopped missing out on appointment opportunities that number would be closer to 19,000 repair orders. Even if the prospect doesn’t seem ready to book, suggest saying, “I would love to book you for next week anyway, just so we can really find the root of the problem with the vehicle.”

Other crucial things to look at include hold times, whether calls are being answered and overall attitude on the phone. Making simple suggestions like “smile on the phone” and “don’t put your prospect on hold for more than two minutes” will automatically improve the functionality of your phones.

Invest the time and resources into making the phone a priority and you’ll create a big bump to the bottom line.

MIKE HAEG Director of Business Development for Century Interactive As director of business development, Mike is dedicated to helping dealerships “Own the Phone.”

He is passionate about fusing technology, people and process to improve the bottom line. Outside the office, don’t be surprised to see Mike at a local live music venue, jotting down his crazy ideas or knee deep in a good book. Visit the website at centuryinteractive.com

JEFF COWAN

Tune in every Saturday morning Saturday Morning Sales Meeting airs every Saturday featuring the biggest names in automotive sales training. There is no better way to start your Saturday Sales Meeting! Gather your sales team and tune in each Saturday for a great start to your weekend and have the best Saturday ever!

BILL CATES

DAVID LEWIS

MARK HUNTER

JACK DALY

DAVID KAIN

CORY MOSLEY

BRYAN FLANAGAN

RICHARD KEENEY

S

ALES

R A T S R E SUP

FAMILY: I am currently enjoying a long-term

relationship with a wonderful woman. She and I share our enthusiasm for our careers.

HOW MANY YEARS IN THE AUTO BUSINESS? I have

been in this industry for a total of 22 years. I received my salesman’s license at the age of 18.

HOW MANY UNITS DO YOU AVERAGE A MONTH? In

the average month there are 65-70 units sold and delivered out of my office. Usually about equal number of new units to pre-owned units. September 2014 is a month I will not forget, I delivered a record-breaking 83 units that month and it felt great!

WHAT MADE YOU WANT TO BE A SALESPERSON IN THE AUTO INDUSTRY? My father owned a car lot

when I was a youngster, and I spent quite a bit of time there. I had a talent for talking to people and learned everything there is to know about cars; so sales was a natural fit for me.

WHAT DO YOU LIKE MOST ABOUT YOUR JOB? I

NAME: KYLE BUSS DEALERSHIP: COUNTRYSIDE CHEVROLET BUICK GMC LOCATION: BEAVER DAM, WISC.

really enjoy the selling process, taking a customer through all the steps of the buying process. With increased sales numbers, I enjoy increasing my goals year after year.

WHAT MOTIVATES YOU? Money motivates me of

course and when plans come together to reach personal goals I have set for myself.

HOW DO YOU FIND NEW CUSTOMERS? The bulk of

my business comes from previous customer referrals. I satisfy my customers and provide great care after the sale. In turn, I gain numerous referrals.

Word-of-mouth is the best advertising there is. I do advertise locally in several publications and billboards.

WHAT’S THE GREATEST CHALLENGE IN YOUR POSITION AND HOW DO YOU OVERCOME IT? Delivering

multiple units in one day has its challenges. I rely on a structured sale and delivery process to stay organized and give the customer reliable service every visit.

TO WHAT DO YOU ATTRIBUTE YOUR SALES SUCCESS? My self-motivation to be a top performer

is certainly a factor in my success. I also stay focused when I am at work and concentrate serving customers. I have learned and implemented many sales techniques from Grant Cardone’s coaching over the years.

WHAT ADVICE WOULD YOU GIVE SOMEONE NEW TO AUTOMOTIVE SALES? The newer salesperson

needs to really put in the hours to catch all the customers they can. Go to work from open to close and learn all you can. I would also say a good trainer is important, but you must also learn and believe in yourself.

( continued on page 32)

Brian Pasch is now on CBT Automotive Network!

TUNE IN EVERY WEDNESDAY

Brian Pasch, CEO of PCG Consulting, author of “Mastering Automotive Digital Marketing,” and one of the foremost authorities in automotive marketing, examines the latest topics and best practices that are changing the way auto retailers do business today. Brian interviews some of the industry’s brightest minds in the retail automotive business.

S

ALES

STAR SUPER

( continued on from page 30) WHAT ARE YOUR INTERESTS/ HOBBIES OUTSIDE OF THE DEALERSHIP? I enjoy my toys.

I have many including ATVs, snowmobiles, motorcycle, Jet Skis and boats. I guess you could say I enjoy all motorsports and watersports.

NOMINATED BY JOAN GEORGE, INTERNET SALES We have a Superstar that exemplifies the term Customer Service! Kyle Buss is a selling, serving machine! His customers love him! Year over year, Countryside can count on Kyle to deliver over 600 vehicles.

He is a top-ranked salesperson with GM in the Mark of Excellence program for the last six years and sets the standard for CSI. He is also our buyer, appraiser and Internet sales manager. Every aspect of the dealership is enhanced by his expertise.

His winning attitude and love of people give him the edge, others only dream of.

Charities and sports teams benefit from Kyle Buss on a regular basis. He contributes to local organizations and participates in several charity functions a year. Kyle actually cares about the customers he serves.

Do you have a salesperson or service advisor who pushes the envelope each month and lands at the top of the leader board?

Does one of your professionals make considerable contributions to your community while maintaining a lead position in your dealership? We want to know! Send your nominations to the editor at cwhite@cbtnews.com and let us know why he or she is your store’s Superstar.

FIXED OPS

Time to Tune Up Your Service Department Customer retention goes way beyond the sale – It’s all about how well you deliver on your customers’ service expectations.

Thank you from your Service Department

BY MICHAEL ROPPO

H

arvey Mackay is one of my favorite business leaders who at one time said, “There’s a place in the world for any business that takes care of its customers well way beyond after the sale!”

This mindset can seriously have a great impact for dealers looking to tune up their service game. The dealership and service industry as a whole must get a better understanding of the importance of outstanding customer service long after the deal is made. It has been said “sales sells the first car and service sells all the rest.” Truly outstanding service in every area of the dealership sells all the cars all of the time. It’s a proven fact.

Some of us may have had some variation of this experience: You walk into a dealership and the salespeople start to surround you. They greet you with a warm smile and pretend to offer up what seems to be an outstanding customer service experience, all the while asking questions about you and your lifestyle. You end up liking the sales staff and the interest they show you, so you decide to do business with the dealership. Then all of a sudden you sign, they take your hard-earned cash and hand over the keys, you take delivery of the vehicle and then come in for service for the first time and realize that the customer service that originally won you over diminishes drastically and you feel like they just took advantage of you.

Automotive dealerships may arguably have a less-than-stellar reputation when it comes to customer service. This is sort of baffling when you consider that our industry, not to mention our own livelihood, depends on how well we serve our customers.

If you look at businesses as a whole, the automotive dealership industry has plenty of room for improvement. And in my humble opinion, enhancing customer service deserves and needs to be the focal point of our industry. As an entrepreneur, you have a wonderful opportunity to influence the change required and make things happen when it comes to serving customers well.

So what can you do to not only satisfy your customers, but also provide an outstanding customer service experience designed to keep them coming back to your dealership?

Here are some tough questions aimed at helping you improve the process of delivering a truly outstanding customer service experience during and long after the sale. As a customer yourself, you know the difference between strong and less-than-desirable customer service in a dealership environment.

As a service provider, you need to take time now for your customer service “tune-up.” Start by asking yourself some simple questions like:

n DOES YOUR STAFF BUY into your mission

of treating customers as guests you’d invite to your own home? n DOES YOUR DEALERSHIP seriously value

customer loyalty and do you have best practices to influence and measure the process? n ARE YOU WILLING to do whatever it takes

worse than it was just one year ago?

to achieve that level of customer loyalty you desire or are you just settling for customer satisfaction?

n ARE YOUR SERVICE ADVISORS industry

n DO YOU FOLLOW UP with customers to

n IS YOUR SERVICE BETTER, the same or

professionals or are they just order takers? n DO YOU TAKE your regular customers for

granted? n DO YOU CONSISTENTLY keep things in

your service department and dealership looking new? n DO YOU TRULY APPRECIATE working with

your customers and solving their vehicle concerns? n DO YOUR SERVICE AND SALES STAFFS

understand the value of customer service at your dealership? n DO YOUR SERVICE AND SALES TEAMS

understand your customers’ expectations?

monitor their level of satisfaction? n DO YOU HAVE A SPECIFIC PROTOCOL in

place for responding promptly to customer complaints? n DO YOU NEED HELP?

If you answered no to any of these questions, you are missing a huge opportunity to improve customer loyalty, retention and additional opportunity to attract new customers who aren’t getting good customer service at their current dealership facilities. Outstanding service and sales departments are designed to sell, but how many really deliver a truly outstanding customer service experience every day, every time, without fail and no exceptions?

n DO YOU CALL all your customers by their

name? n DO YOU REGULARLY ASK your customers

what they want (after all, they’re the source of all your business)?

…enhancing customer service deserves and needs to be the focal point of our industry.

MICHAEL ROPPO Director of Fixed Operations and Training /QPS of Automotive Domain Results Michael has more than 30 years experience in training and consulting for Automotive Domain Results and its parent company, The Mironov Group. He helps dealers attain maximum profitability, customer satisfaction and retention, by improving the quality of their management teams and the personnel who come in contact with their customers. Visit his website at AutomotiveDomainResults.com.

DECEMBER

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THE OFFICIAL NEWS SOURCE OF THE RETAIL AUTOMOTIVE INDUSTRY

INTRODUCING OUR ALL NEW FALL LINEUP

We are introducing a full lineup of programs that address each area of dealership operations including F&I Today, Auto Marketing Now with Brian Pasch, Service Drive with Jeff Cowan, View From the Top, Saturday Morning Sales Meeting and On Location.

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CAR BIZ TODAY MAGAZINE

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Car Biz Today magazine is dedicated to delivering positive, meaningful information to dealers that will help them run a more successful business. We have partnered with some of the biggest names in retail automotive training to bring insightful and relevant information that covers all operational areas of the dealership including Management, Sales, Fixed Ops, F&I, Marketing and more.

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25

Adapt &

Thrive A sober look at the state of the auto sales industry and what must be done to adapt and survive in an era of new regulations

BY REBECCA CHERNEK

T

here’s an old saying that strikes to the core of the biggest problem occurring in the auto sales industry: If it ain’t broke, don’t fix it. The saying was intended to offer sound advice to those who would waste their energy seeking out new ways to reinvent the wheel. The only trouble is, too many professionals are using it as an excuse to ignore the very real fact that today’s auto sales industry needs a bit of fixing if it’s going to adapt to fast changes.

As if to drive this point home even further, a new era of transparent sales has arrived. The reasons for it are numerous, driven by increased regulatory scrutiny and the desire to stave off bad media coverage and boost in-the-dumps customer satisfaction rates. Yet still, some dealers take the viewpoint that with market conditions booming, there’s no incentive to make change.

IT’S NOT BROKEN, SO WHY FIX IT? Truth be told, the hard numbers give dealers even less of a reason to change gears. According to the Federal Reserve Bank of New York, loans issued to consumers with credit scores below 660 have doubled. By all accounts, the industry is booming. But if you stare at dollar figures for too long, you tend 42

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CAR BIZ TODAY DECEMBER

to ignore important things. Like the signs of storm clouds brewing on the horizon signaling the start of a major storm.

THE FUDGED NUMBERS CRISIS If you’ve been in the business for any length of time, you’ve probably met a sales manager or finance manager who thought fudging a customer’s income was just the way business should be done. The addition of a couple of extra zeroes, or the clever transposing of numbers, is common among some managers who push deals into F&I without proper verification of creditworthiness.

Some sales managers push these transactions into F&I, placing all of their faith in the F&I manager’s ability to perform an immaculate hat trick that will somehow bring the deals to fruition. In most cases, these efforts wind up being a colossal waste of time for both the customer and the dealership when the bank denies credit and the buyer is brought back to square one. In some cases, deals that have been approved have led to the ruination of finances, negative nationwide exposure and, in some cases, even jail time for some of these managers.

A quick Google search will reveal all you need to know about it. Stories of dealerships caught perpetrating deceptive practices are coming under

investigation. Recently, The New York Times reported that several employees of a dealership in Alabama had been charged and indicted on fraud and conspiracy charges for falsifying information on customer loan applications. In one particularly distressing case, a 71-year-old woman has reportedly been forced into bankruptcy due to her inability to assume car payments on a co-signed auto loan that defaulted to her. Probing further, investigators discovered that the dealership had grossly over exaggerated her income.

When all signs pointed to the dealership as the responsible party for falsifying the information, the dealership immediately went into damage control mode, announcing internal investigations and installing safeguards to prevent the same thing from happening again. Unfortunately, these actions were too late to save that dealer’s reputation.

TRUST, BUT VERIFY Possibly the most severe consequence of this kind of loss of public faith is the confidence that’s also lost among lenders themselves. Put simply, auto dealers caught with their hands in the cookie jar can expect a hailstorm of negative consequences.

Banks will drop them like hot potatoes. Those who don’t will impose severe scrutiny on all future

Insisting on a culture driven by integrity and adherence to rules and regulations is the first major step toward surviving the new era of auto sales. and regulators is the very hinge on which success or abject failure rests. Those who think it’s too late to turn back now – that changing their daily activities would simply be too difficult, or cause undue hardship at the dealership level – should take stock of the potential consequences of inaction.

Most importantly, they should look to the behemoths of the industry to learn how positive change can impact exponential profit. The largest auto retailer in the country, AutoNation, is a shining example of how contemporary practices trump traditional methodologies. Operating on the principle of upfront sales practices, and using menu sales as their primary tool of choice, AutoNation showed a 6 percent increase in PVR in the first quarter of 2014 – an average boost of $85, which brought them to a record $1,407. To put that into wider perspective, in a single year AutoNation’s gross profits jumped $14 million.

transactions. Even employees will head for greener pastures when bank-imposed scrutiny brings the regular flow of business to a near grinding halt.

Last, but certainly not least, are the very real monetary consequences that come as a result of increased charge-backs and legal fees.

Of course, there are stubborn sales managers who will insist on testing their luck. After all, only the sloppy get caught. But this kind of reasoning will only go so far in the new age of centralized databases that are gradually beginning to tighten the proverbial noose. According to Trust But Verify, a white paper published by Equifax, new systems are in place that should effectively put a halt to misrepresentation of information.

The Work Number is a database containing the employment and income information of some 59 million consumers. Available 24 hours a day, the database contains information from more than 4,000 employers across the nation and is coming into use by a growing number of dealers and lenders who understand the critical consequences that could be faced through the improper reporting of income and employment status.

THE FED IS CRACKING DOWN With this kind of technology looming over the

day-to-day activities of auto dealers, it’s more important than ever to adopt transparent sales tactics that enforce integrity in loan applications.

Adding to this is the recent announcement by the Consumer Financial Protection Bureau that it intends to increase its own scrutiny of big banks. In addition, the CFPB has proposed new federal oversight of nonbank auto finance companies.

The impact of this would be game changing for dealerships – in particular, those purveyors of oldschool methodologies that rely on deception and falsification of information to thrive. With federal regulators turning their eyes to the auto industry in an effort to prevent a subprime bubble, the stakes have grown even higher.

FOLLOWING THE AUTONATION LEAD Reputation is everything. In the automotive industry, a dealership’s standing in the eyes of the public

HOW IT’S DONE Insisting on a culture driven by integrity and adherence to rules and regulations is the first major step toward surviving the new era of auto sales. An understanding of the importance of compliance should be conveyed to every dealership employee, including salespersons and F&I staff.

Beyond that, it is essential to involve the F&I department as early in the transaction as possible to both shorten the length of time it takes for a customer to purchase a car and to provide perfectly clear, transparent processes that keep all involved parties on the same page. With the understanding that two heads are better than one, some dealers even go so far as to put F&I managers at the desk with the sales manager – a great idea whose time has come for more widespread adoption.

Instilling a culture of creativity in problem solving – treating each transaction individually and looking closely at the reasons and circumstances behind a subprime credit score – is not an overnight process. But it is something that can and should be learned. Without a willingness to concede that things are changing, the ability to move forward is hindered.

REBECCA CHERNEK Founder of Chernek Consulting LLC. Rebecca has nearly three decades of experience in retail automobile, which began at her family’s dealership in Maryland. She has worked in many areas of dealerships including sales, F&I and general management. As a consultant, trainer and nationally recognized expert in F&I training and sales procedures, Rebecca has worked with hundreds of automotive car dealers, RV and marine dealerships throughout the United States and Canada offering customized, in-dealership training and workshops.

Visit her website at ccilearningcenter.com.

DECEMBER

CAR BIZ TODAY

CBTNews.com

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CBT News Covers Kain Automotive Workshop

T

he CBT News crew traveled to Lexington, Ky., to cover the 10th Annual Kain Automotive Digital Success Client and Friends Workshop. Attendees learned cutting-edge techniques and strategies to differentiate their dealership from the competition and ways to make their BDCs run more efficiently.

Industry leaders were on hand to share best practices, and present ideas and case studies on how their clients are able to grow their businesses. CBT anchors Russell Brown and Danielle Banks interviewed many of the presenters at the workshop. To see those interviews, visit CBTNews.com.

David Kain, President of Kain Automotive

Mike Berg, Manager, SaleMove from Autobytel

Dean Evans, CEO, LotLinx

Kain Workshop

Sarah Petlick, Internet Manager at Gates Toyota

Chip King , Owner & Managing Partner, Call Revu and Shaun Kniffin, Director of Marketing, Germain Motor Co. Elaine Richards, VP of Channel Development, Cars.com

Jason Wiley, Director of Sales, Haystak Digital Marketing

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David Pyle, Sr. VP of Dealer Sales, AutoTrader.com

Todd Levy, Sr. Account Executive, Twitter

AUTOMOTIVE NETWORK’S

2015

ROAD TO NADA CBT BUS TOUR sponsored by

Follow CBT Automotive Network and Cars.com on the road to NADA 2015!

News anchors Bridget Everett, Russell Brown and Danielle Banks will stop along the route to interview dealers and their personnel as we travel from San Diego on January 19 to NADA in San Francisco. Visit CBTNews.com to see live coverage along the way and be sure to stop by the Cars.com booth #3003N and meet our team.

ASK THE ?

PROS

A

t CBT News, we are fortunate to partner with the best trainers in the industry.

Whether it’s information on sales, service,

F&I, marketing, management or fixed ops, our contributors are the go-to professionals for reliable, relevant advice for dealership personnel. You have access to the foremost authorities in the retail automotive industry. Need a new closing technique? Wondering what’s the best way to increase sales in the service lane? Send us your questions at AskThePros@cbtnews.com. We’ll forward your inquiries to our ensemble of experts.

Q

How important is it to have a blog on our dealership website? James R., Orlando, Fla.

A

Brian Pasch, CEO of PCG Digital Marketing: A dealership blog is an opportunity to share original content with local consumers. Google wants to see fresh content added to a dealership website, and without a blog, very little text is actually added to a dealership website. The blog provides a convenient way to write, share and syndicate dealer-centric messages, in-store activity and dealership contributions in their community. Blog content, when written properly, is an important part of a social engagement strategy.

A blog, if started, should have a content calendar in place so that new content is published on a regular basis. If dealers cannot be consistent in adding new content, hire the services of a local writer or competent industry vendor partner.

Q

Of all the social media sites, how can I tell which one will give me the biggest ROI? Steve W., Wichita, Kan.

A

Kathi Kruse, President of Kruse Control Inc.: The simple answer would be: which ever one your customers are on. However, it's not that simple.

Social Media sites are channels, just like radio or TV channels. You choose to run marketing campaigns on the channels where your ideal customers spend time. But that's only a small part in your overall quest for ROI. The only true way to establish ROI is with a marketing plan. We're talking about clear objectives, goals, a budget and a timeframe. Examples could include:

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• Increase likes, followers and/or engagement by X within the next six months.

• Generate X traffic to your site and convert Y into customers by leveraging a budget of Y for social advertising.

Goals and objectives provide a starting point from which to measure. During the lifecycle of your campaigns, you track and analyze your results.

When it's time, you tie your results back to your goals. That's true ROI.

Q

Lots of customers tell me they have already driven the car at another dealership. What is the best way to get my prospect into a demo drive in MY car? Traci F., Huntsville, Ala.

A

Joe Verde, President of Joe Verde Sales & Management Training Inc.: Most people forget that buying is emotional and negotiation is logical, and as soon as you start talking price, you switch from the “fun of owning” to the “less than fun logic” of paying for it.

Speed Kills Sales. Whether it’s a be-back who’s ready to “sit down and see what it takes” or someone who drove it down the street – no demo means no emotion – and that means you’re basically sitting down with a calculator instead of with someone who just drove it and is so excited they can’t wait to start showing it off.

Here are two very effective responses, just always “assume the demo” – never ask if they want to drive it.

Customer: We already drove it at ABC. Salesperson: Great that’ll save us time – from what you’ve said though about how you’ll use it, I need to show you some things they probably didn’t cover – so go ahead and buckle up and we’ll take it for a quick spin.

Be-Back: We’re ready to see what you can do.

Salesperson: Great, it’s going to be a few minutes before my manager can look at your trade though, so let’s take it out real quick and we’ll do some practice with that back up camera so you’re ready to hook up your boat and head to the river.

At the end of the demo, start your closing process at step five with the summary questions, do your action closes, get all of the info on both vehicles, do your silent walk around of their trade, and stay

away from price. Just focus on the fun and benefits and you’ll do fine.

Remember this, too: You never compete with the dealership down the street. You only compete with the untrained salesperson there that took every shortcut they could.

Q

Should my salespeople have their own social sites to build their business or should I only have them for my dealership?

Daniel G., Greenville, S.C.

A

Joe Webb, Founder of DealerKnows Consulting: In 2014 and beyond, salespeople need to be proactive about acquiring clients. They can't simply rely on the marketing dollars of the dealership.

For that reason, they should definitely use social sites as a means to brand themselves. With that said, most professionals will realize they'd want to create a separate account from their personal account where they can focus on posts regarding being an automotive advocate more than just sharing the traditional "daily lives" pictures/posts.

With that said, dealers can utilize no- or low-cost solutions to help their employees proactively market themselves. While it may take a little effort, each sales professional should have their own distinct page on the dealer website where they can share personal reviews, video introductions, a personal bio, pictures and contact information. That way, each employee can proactively alert people to their own dealer website page rather than simply a secondary Facebook account. It would allow more tracking for the dealer to see which employees are taking active roles in their own client acquisitions as well.

The dealership's primary Facebook page should still remain as the de facto social location where social marketing initiatives are executed.

Most professionals will realize they’d want to create a separate account from their personal account where they can focus on posts regarding being an automotive advocate more than just sharing the traditional “daily lives” pictures/posts.

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