WEST COAST
THE NIADA C MPLIANCE
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DALLAS, TEXAS Permit No. 2079
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PAGE 14
DEALER
THE OFFICIAL MAGAZINE OF INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION OF CALIFORNIA | OCTOBER /NOVEMBER 2019
ASSOCIATION NEWS |
By Brenna Stansberry
PRESIDENT’S MESSAGE
Invest in a Better Future
Index
06..........................Executive Director’s Message 07..............Subprime Recourse Deal Precautions 08...............................NIADA Government Report 10............................ Customer-Friendly Websites 12..................................TCPA and Text Messaging 14............................. NIADA Compliance Program 18.The Difference Between Success and Failure
Advertisers Index
ACV Auctions...................................... Back Cover Alliance................................................................ 9 Lobel Financial.................................................... 3 Manheim ............................................................. 11 NextGear Capital..............................................6-7 vAuto.................................................................IFC Warrantech...................................................... IBC
What’s New
S AV E T H E D AT E F O R 2 0 2 0 WA A C : M AY 1
Save the Date for the 2020 World Auto Auctioneers Championship! It will be held at Manheim Dallas Auto Auction on Friday, May 1. The event will be streamed live on NIADA.tv. To learn more, visit autochampionship.com.
Office
For information on how to become a member please contact larry@IADAC.ORG or 916-893-3306.
NIADA Headquarters NATIONAL INDEPENDENT AUTOMOBILE
DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838
For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com. West Coast Dealer is published bimonthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the authors and do not necessarily represent the views of West Coast Dealer or NIADA. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2019 by NIADA Services, Inc.
I’ve met a lot of great dealers during my terms as IADAC president. Some are very organized and plan ahead while others run at breakneck speeds bouncing from task to task. I have observed that those who plan ahead have fewer surprises and problems than those who never seem to have time for planning. For all dealers, I’d like to invite you to join me at the 51st annual IADAC convention in Sacramento on Monday, October 7. I know you’ll ask, “What is this event about?” This event is about showing your interest in the future of the auto industry in California. This event is about you meeting with the new DMV director, Steve
Gordon, and deputy chief Kathleen Webb. This event is about learning to lower your liability, become more compliant and more profitable. For those reasons I ask you to make time in your busy schedule to attend. And it’s only $50, including lunch! Find out why dealers who attend 20 groups and events like this are generally very successful. Technology has caused significant change in our businesses and we need to know how to stay ahead of our competition. This event is about staying ahead of your competition and showing you care about our future. Please take a few hours out of just one day to invest in a better future.
IADAC PAST PRESIDENTS GUS CAMACHO, 2015-2017 ROCCO DELAPA, 2013-2015 ROD DAVIS, 2010-2013 DAVID AAHL, 2009-2010 TERRY DEGMETICH, 2007-2009 LUIS ESTRADA, 2006-2007,
2001-2002, 1989-1990 ROGER HANKE, 2004-2006 PEANUT RENFROW, 2003-2004, 1996-1997 FRANK GROMAK, 2002-2003 MIKE MACAULAY, 2000-2001 BOB HENRY, 1998-2000 RAY FOREST, 1997-1998 REX RODEN, 1995-1996 DOUG ROBERTS, 1994-1995 ED DOHNT, 1993-1994
OPIE HENDRICKS, 1992-1993 MANNY PADILLA, 1991-1992 GREG HODGES, 1990-1991 JERRY COWGILL, 1988-1989 DON HEAD, 1987-1988 JOHN BRAUN, 1986-1987 RAY GLOVER, 1984-1986 PAT MATLACH, 1983-1984 LARRY BRASHER, 1982-1983 TOM FIELD, 1981-1982 JIM MCCABE, 1980-1981 ROY WILHITE, 1979-1980 LEONARD BOYD, 1978-1979 JORDAN SUGARMAN, 1977-1978 BOB DUTTON, 1976-1977 TOM KENT, 1975-1976 JIM MITCHELL, 1974-1975
VIC SNYDER, 1973-1974 FRANK HAMMER, 1972-1973 MANUEL ROGERS, 1971-1972 JOHN HIATT, 1970-1971 DOUG ALMAN, 1969-1970 BOB SCORDINO, 1968-1969 LUCKY SKYRME, 1966-1968 LEONARD CRAVENS, 1964-1966, 1960-1961
WALT HOWEY, 1962-1964 TRAVIS GODBOLD, 1961-1962 WENDALL ANDERSON, 1959-1960 DICK RAFFERTY, 1957-1959
HONORARY PRESIDENTS
FRANK MURRAY RICK GOMEZ
EXECUTIVE COMMITTEE
STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITORS Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT Jeffrey McQuirk • jeffrey@niada.com PRINTING Nieman Printing
4 WEST COAST DEALER OCTOBER/NOVEMBER 2019 WWW.IADAC.ORG
CHAIRMAN OF THE BOARD Gus Camacho
VICE PRESIDENT Guy Strohmeier
Camacho Auto Sales, Inc. Lancaster, CA
Auto Center 87 Soda Bay Rd Lakeport, CA
TREASURER Beto Beas
PRESIDENT Brenna Stansberry
VICE PRESIDENT Brittany Hibdon
Park Marina Motors Redding, CA
Hibdon Auto Center Orland, CA
SECRETARY Tony Harb
SR. VICE PRESIDENT Bruce LaVergne
VICE PRESIDENT Mehdi Chitgari
MAGAZINE CHAIRMAN Mike Macaulay
Pacific Auto
Classic Chariots, Inc. Vista, CA
Beas Auto Sales Stockton, CA
JustBetterCars.com
Car Systems carsystems40@yahoo.com
MANAGEMENT MATTERS | By Danny Delich
RETURN TO SELLER
Why In-House Service Contract Work Keeps Them Returning My career has taken me to many dealerships. A large part of my job is problem solving to help dealers sell more contracts and make more profit! Not everyone does things the same way, so I like to stand back and watch the (mostly) controlled chaos that defines the dealership of today. Sometimes the issues are subtle and take some consideration. Other times the problems are glaring and easily addressed. This is one of the latter. Over the past few months I’ve noticed a disturbing trend regarding the sale of service contracts at dealerships. Salespeople – at stores with in-house service centers – are selling VSCs and telling customers to take their vehicle anywhere they want when they need covered repairs! Salespeople note: you want your customers to return to your dealership for service! Did you know 78 percent of customers who service their vehicle at a dealership also shop that dealership first when they buy another vehicle? That’s why it makes no sense to sell, say, a Mercedes Benz and then send that customer to a Mercedes dealership to have it serviced or repaired. This is crazy when you consider this Mercedes dealership will probably have first crack at your customer when they want another car.
It’s even crazier because you have a service center, and you worked hard to sell that car and all of the associated products. You worked hard to win your customers. Keep them! Since you have a service department, you should be recommending it to every customer. A good salesperson will even walk the customer to the service center,
introduce them to the service manager, and tell them this is the man to call if they have an issue, need an oil change, or have a question about their vehicle. Further, many service contracts have a 50-mile tieback clause. This was designed to encourage the customer to return to your store for service – if the car breaks down within 50 miles of your dealership, the contract covers a tow back to your dealership for repair work. This is an advantage for you in selling the vehicle, but it’s also an advantage for your customer, and worth sharing. Repairs are expensive and the elimination of the towing fee makes a big difference in people’s budgets. Of course, there could be circumstances in which the service department is unable to perform a repair, but this does not need to be shared with the customer. If the dealership cannot repair the car in their service center, their service manager should accept and sublet the job to the necessary repair facility. By taking the car to the alternate repair facility themselves, the service manager eliminates the other shop’s interaction with your customer. This prevents that garage from attempting to take advantage of, and profiting from, the service contract that you sold. It eliminates the competition’s opportunity to create a laundry list of repairs just because they see your service contract and prevents them from upsetting your customer. This practice also keeps your costs down, drives work to your service department, and, most of all, protects your customer. After all, you worked so hard to close them. Bring them back to your store where you can maintain control. Bottom line: Use your service department to do three things: •D rive profits: Do work in your own service department. Don’t give it to “the Mercedes store down the street.” •K eep customers repair costs down: Don’t let the competition pick your cars apart and give your customers a laundry list of repairs. •P rotect your most valued asset – the customer: These are your customers that you’ve worked really hard to close. Don’t send them to a shop down the street for another repair facility to do the work on the car you sold them. Remember, a repeat customer is much easier to work with than a first-timer. The more times you sell to the same customers, the more they trust you. The more the customer trusts you, the easier the sale gets. The easier the sale gets, the more profits grow. And then they send their friends and family! The profits you save can be your own! Danny Delich is the senior vice president at Peak Performance Team. He brings more than 30 years’ experience in the automotive industry, including ownership and operation of independent and BHBH dealerships.
ASSOCIATION NEWS
2019 SCHOLARSHIP RECIPIENTS
Victor and Ethyl Snyder Memorial Scholarship
Vic Snyder, IADAC and NIADA Past President
Victor and Ethyl Snyder would be proud to know their legacy lives on in the Memorial Scholarship program of their namesake. The young men and women listed below, who have a parent or grandparent who is an IADAC member, were awarded $1,000 each from the scholarship fund. The award helps them better afford tuition or books for the post-high school educational program of their choice. The Snyders believed young people would be well served with assistance for greater education and that concept has proven itself for decades. Congratulations to all! • Bradley Davis • Andrea Davis • Jared Davis • Kathryn Fleener • London Leinbach • Gregory Guajardo • Brayden Hanke • Amy Arey • Mina Imen We would also like to recognize donations from Bahram and Roshang Mehrad, Susan Carol Kroll and Cirimele & Associates to the scholarship fund in memory of Ojan Ghavimi, owner of Rose Import Motors.
WWW.IADAC.ORG
OCTOBER/NOVEMBER 2019 WEST COAST DEALER 5
ASSOCIATION NEWS
ASSOCIATION NEWS | By Larry Laskowski
EXECUTIVE DIRECTOR’S NEW MEMBERS MESSAGE Golden Opportunity
Those of us involved with IADAC are proud of the achievements we have made over the decades since our inception in 1957. However, there generally isn’t any time for celebrating or resting on our laurels as we move on to the next issue, constantly working to improve the industry. Sometimes our work takes us to hearings at the legislature or meetings with DMV, BAR or others. Often, the result of our time and effort does not reflect an immediate notable change we can claim as a “win.” But most of the time our request that independent dealers be considered results in changes that make your lives better. Rest assured that everything we do is with the dealers in mind. Whether you believe the work we do is of value or not, you are entitled to your opinion. But you should know that no other group looks out for you here in California. We have been responsible for helping to shape new legislation and regulation in sometimes subtle ways, just by sharing a dealer’s perspective. Now you have a rare opportunity to help the industry. Your industry. Your chosen career.
IADAC’s 51st annual convention is coming up and you should be there to show your support. Also, meet DMV’s new director, Steve Gordon, as well as deputy chief Kathleen Webb and chief of investigations Tom Wilson. This event is on Monday, October 7, in Sacramento. Registration is just $50, including lunch! Your presence shows you care about the industry. DMV leaders have plans to update antiquated processes and we have a chance to contribute. Do not miss this golden opportunity! We’ll also have guest speakers Ali Kamarei from Auto Legal Group, Gus Camacho presenting a BHPH/subprime session, Drew Tate with new California labor laws, Zach Klempf on digital marketing and Kristin Kelly and Sara McBride-Smith from New York Life. A vendor expo will feature companies displaying their newest products and services to help you become more profitable and streamline your business operations. There is still time to make this event! Look for the registration form elsewhere in this issue or go to www.iadac.org. Registrations should be sent in advance. Call 916-893-3306 with any questions.
6 WEST COAST DEALER OCTOBER/NOVEMBER 2019 WWW.IADAC.ORG
Welcome!
Chirag Shewa MCR Motorsports LLC 22945 Savi Ranch Pkwy Yorba Linda, CA 92887
Raymundo Reyes Freeway Motors 1411 Paradise Rd. Modesto, CA 95351
Michael Jester USA Auto Sale 4992 Olivehurst Ave. Oliverhurst, CA 95961
Anacani De La Cruz Valley Auto Sales 5353 Broadway St. Ste. C American Canyon, CA 94503
Nicole Dickstein RunBuggy 4315 East Santa Ana St. Ontario, CA 91761 Mohammad Saba Atlantic Auto Sales 3430 Fulton Ave. Sacramento, CA 95821
Francisco Medina Auto Marin 1610 4th St. San Rafael, CA 94901
F&I MATTERS | By IADAC Staff
SUBPRIME RECOURSE DEAL PRECAUTIONS
Know the Ins and Outs
Auto dealers know a variety of financing options is a necessity to selling vehicles. Many customers, however, do not qualify for top-tier rates such as those offered by credit unions. Thus, dealers regularly work with subprime lenders. Many subprime lenders offer recourse loans, which put the dealer on the hook if the customer fails to make a predetermined number of payments, usually between one and three. If a customer defaults within the recourse period, the lender will exercise their recourse option and dump the deal back in the dealer’s lap. This is where it gets interesting. The lender may not have done repossession, so it will be up to the dealer to perform that task. There are many laws that apply to repossessions and resale so it is in a dealer’s best interest to know all of them inside and out. Can I have my 6’ 5’’, 300 pound cousin help me pick up the car?
The customer had personal belongings in the car. Am I required to catalog them? I can’t find the vehicle. What do I do now? I found the vehicle but it is in a locked garage. Can I demand access? How do I notify the customer I have the car? Do I need to alert police I performed a repossession? The customer may have had equity in the vehicle. How is the surplus handled? These are just a sample of the many questions dealers face. It is nearly impossible to know all the ins and outs of all scenarios relative to recourse lending. Dealers should plan to attend the IADAC 51st annual convention in Sacramento on October 7, 2019, where BHPH/subprime expert Gus Camacho will present on this topic. Look for registration information elsewhere in this issue, or online at www.iadac.org.
At the very least, dealers should read and understand their dealer agreements with every lender they use, plus read and understand the back of the RISC (retail installment sales contract), which outlines the rights and obligations of both dealer and purchaser.
WWW.IADAC.ORG
OCTOBER/NOVEMBER 2019 WEST COAST DEALER 7
WASHINGTON UPDATE
| By Shaun Petersen
NIADA GOVERNMENT UPDATE Latest Government Issues and Activity
NIADA is your voice in Washington D.C., advocating for independent dealers, the used vehicle industry and small business. Here’s a look at the latest news and NIADA efforts regarding legislative, regulatory, PAC and grass roots activities.
GRASS ROOTS
Members of the Illinois IADA met with State Sen. Laura Murphy to discuss the controversial new law regarding sales tax on trade-ins.
L E G I S L AT I V E
NIADA’s National Policy Conference, held late last month in Washington D.C., offers independent dealers a chance to make their voice heard in the nation’s capital, allowing them to tell their story in face-to-face meetings with members of Congress. But it’s also a chance to advocate for or against bills that are currently being considered by the House or Senate and to discuss NIADA’s position on issues that affect the used vehicle industry and small business. This year there were three major issues on our agenda. First, we voiced our support for a pair of bills in both chambers of Congress – H.R.3182 and S.1564 – that would delay implementation of the current expected credit loss (CECL) accounting standard mandated by the Financial Accounting Standards Board and require a financial impact study of CECL’s effect on the U.S. economy, the availability of credit and small financial institutions such as credit unions, as well as nonfinancial institutions, insurers and government-sponsored enterprises. NIADA is concerned that the additional
reserves required by the CECL standard would reduce the amount of credit available for dealerships through lines of credit and would leave dealerships that provide financing less money to extend credit to their customers. Next up was the familiar subject of recalls, as Sen. Richard Blumenthal (D-Conn.) is once again pushing his proposal to ban the sale of used vehicles with an open recall. NIADA opposes such overbroad recall legislation, which harms consumers by devaluing their vehicles and does not increase recall repair rates. And finally, we reiterated NIADA’s opposition to tariffs on imported cars and auto parts, citing their potentially harmful effects such as increased vehicle prices and reduced credit availability.
R E G U L ATO RY
The American Association of Motor Vehicle Administrators is working on a document, expected to be released this fall, that will provide state DMVs with a list of recommended best practices, including potential laws and regulations, for governing Internet sales from legitimate licensed dealers as well as what AAMVA refers to as “unlicensed dealer activity” – better known to dealers as curbstoning. The document will also address issues to look for in private party Internet sales and guidance for regulating online advertising. NIADA was part of the Internet sales working group that provided comments and ideas for the document. When it is completed we will review it and may have further comments. AAMVA is also in the process of producing a white paper on wholesale dealer transactions that will identify and discuss the way various states handle issues such as wholesale dealer licenses, issues to consider when writing regulations and limiting temporary tags, and will offer recommended solutions regarding shared office spaces and requiring wholesale dealers to have a physical location, and potential sanctions against violators. That paper is also expected to be released in the fall.
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Illinois: Illinois IADA, in conjunction with the state’s new car dealers association, is fighting an impending change in the way sales tax on trade-ins is calculated that will significantly increase the amount of tax paid on many auto sales. The change, part of a wide-ranging tax bill that was passed by the legislature and signed by the governor in June, will cap the sales tax credit for trade-ins at $10,000 beginning Jan. 1. Currently, sales tax is calculated using the difference between the purchase price of the vehicle and the value of the trade-in. So, for example, if a customer buys a $30,000 vehicle and has a trade-in worth $20,000, sales tax is paid on the $10,000 difference. Under the new law, the trade-in value for tax purposes is limited to $10,000, meaning sales tax would be paid based on the $20,000 difference. That would raise the sales tax for that vehicle by at least $625 and, depending on local sales taxes, it could rise as much as $1,000. That increase, in addition to hikes in the state’s gas tax – which was doubled – and license and title fees, would dramatically raise the cost of car ownership in Illinois and it would have a huge negative impact on dealerships and other auto-related business, including finance companies. In all, state lawmakers passed 21 new or increased taxes and fees totaling almost $5 billion this year in an effort to fund a $45 billion infrastructure bill and record $40 billion state budget. IIADA leaders have been meeting with state legislators to discuss preparing a bill to repeal the trade-in cap before it takes effect. That could be accomplished during the fall veto session – a session called to review and reconsider legislation after the legislature’s regular session. A veto session has been scheduled for Oct. 28-30 and Nov. 12-14. In addition, the association is working to raise awareness of the issue in the media and among the public, and has issued a call to action among its members to contact their state legislators to support a repeal. The trade-in tax issue will be among the featured topics of an IIADA Town Hall meeting to be held Oct. 8, during the NABD BHPH Subprime Conference at the Marriott Marquis in Chicago. All Illinois dealers are invited to participate. Shaun Petersen is NIADA’s senior vice president of legal and government affairs.
INDUSTRY NEWS | By Stephanie Krahnke
IN MEMORIAM: BILL PARDINI
Founder of Data Consultants
Bill Pardini, a beloved businessman in the San Joaquin Valley, died at the age of 66 on June 19 after multiple strokes. Pardini was an entrepreneur who started and ran many businesses over the years, including his most successful, Data Consultants, a car sales software company based in Fresno, Calif. Bill founded Data Consultants in 1983 as the original F&I (finance and insurance) software developed on the proprietary Z80 microcomputers. In 1984 it was the first F&I system ever to run on the IBM PC platform. Unlike many startups, Data Consultants was profitable every year right from the beginning. That was because of Bill’s dedication to excellence, passion, and knowledge of both the computer industry and the car sales industry. However, the company was not just a moneymaker to him. The employees were like family and he treated them as such. Monthly tri-tip barbecues, lunches, and extravagant holiday parties were just some of the extras Bill provided for his employees. In his own words, he wanted “employees who enjoy their work, and also enjoy providing services to our customers.” He would go out of his way to ensure the family atmosphere of the office. Dogs were always welcome and it wasn’t unheard of for children to accompany their parent to the office as well.
“He was the most generous guy and a great employer and it shows in the longevity of his employees,” said Data Consultants office manager Jaci Miller. Many employees have been working at Data Consultants for almost 20 years and Bill’s legacy will be continued by the current customer support team for many years to come. In addition to his generosity with his business, Pardini was an extremely charitable and compassionate man. Nearly everyone who knew him can tell you a story of something he provided to them that they desperately needed, without ever asking for anything in return. Examples include necessary surgeries not covered by insurance, help with a loan, landscaping of yards, donations to charities, and so many more. All of these were done without Bill ever seeking recognition. Bill was born in San Mateo, California, on July 13, 1952. He lived in California his entire life. His loves in life were collector cars – including his Ferrari Testarossa and several ‘69 Camaros – golfing, wine, traveling in the RV, and gardening. In his spare time, he also started a maple tree nursery in his backyard just for fun. He is survived by his five children – Therese, William, Jennifer, Stephanie, and Kimberly – and wife Margaret, as well as many grandchildren. He passed among family in Fresno, California.
WWW.IADAC.ORG
OCTOBER/NOVEMBER 2019 WEST COAST DEALER 9
ONLINE MARKETING |
By Kathi Kruse
6 SIMPLE FIXES
Making Your Website More Customer Friendly One of the highest priorities for dealers in 2019 is to make their website more customer friendly. However, even though most dealers agree it’s a priority, the resulting website often doesn’t live up to what they envisioned. I recently spent a few days doing a website audit for a local dealer. I was investigating their competitors and found a lot of sites that desperately needed updating – many were not even mobile-friendly. Bad website design, outdated aesthetics, and poor usability are all credibility killers. The Internet does not hand out second chances. No matter what you want people to do once they click to your site – buy, sign up, inquire about service, etc. – it’s all about conversions. Your website’s main role is to compel visitors to take action. Your dealership website must include a strategy to convert visitors. There’s a simple dealership website secret many seem to miss: If you make your website more customer friendly, your conversions will improve. But where do you begin? It’s best to focus on the simple fixes first. 6 SIMPLE FIXES Here are areas that can be modified to improve user experience, engage visitors longer, and answer their questions – thereby setting your site up to convert more customers. Clearly State What You Do Studies show you have less than 10 seconds to convince visitors to stay on your site. If they don’t feel their needs are addressed, they will click away – often to a competitor. To gain several minutes of user attention, you must clearly communicate your Unique Value Proposition within 10 seconds. Also known as a unique selling proposition (USP), your UVP is a clear statement that describes the benefit of buying from you, how you solve your customer’s needs and what distinguishes you from the competition. Your unique value proposition should appear prominently “above the fold” in your hero image section at the top of your homepage. Easy to Find Contact Info Many websites still don’t give visitors an easy channel for getting in touch with the dealer. Some websites don’t even have an email address or contact form. Make your website more customer friendly with these simple fixes: • Make sure you have a “Contact Us” page. •P ut a link to your contact page in a conspicuous place in your header menu. •C reate “click-to-call” and “click-to-email” links so mobile users can easily reach you. Simplify Choices Hick’s Law is a popular theory. It states,
“The time it takes for an individual to make a decision is proportionate to the possible choices he or she has.” In other words, by increasing the number of choices, the decision time is also increased. You might be tempted to copy Amazon in their presentation of seemingly unlimited choices, but do everything you can to fight that urge. The reality is too much choice is overwhelming and often leads to customer inaction. Wading through a lot of information involves the conscious brain, and results in decision avoidance. The brain dislikes figuring out how one choice is different from the others. Simplify choices so they are easily distinguishable from one another. When presenting choices, keep in mind the brain is lazy and unwilling to wrestle with things. Make it easier for customers to choose by limiting the number of options, showing what makes an option different from the others, and visually emphasizing the choice you want them to act on. Simplify Menu Navigation The navigation on your site serves two purposes: • I t helps the user find what they’re looking for. • I t helps your search engine rankings. Website visitors should come first, search engines second. Use descriptive navigation instead of generic text. Use words your visitors would use and words your visitors are searching for. It’s fewer clicks for the user and it helps search engines indicate your relevance. Keep menus short and concise so they serve the user’s needs. Avoid the temptation to over-complicate. Your customers are on your website to do something, so the navigation should help them do that thing as quickly and pain-free as possible. Pricing The debate on whether or not to include prices on the dealership website rages on. Why? Because every dealer is different and website owners look to Google to help them decide, which often only confuses the situation. The fact is to make a website more customer friendly, there are good reasons to list pricing, or at least a “starting at” price or range of prices: • Give visitors what they want. If someone loves what they see but they have to email you to get pricing, you may never hear from them. And, poor user experience may cause them to tell others. • Saves visitors time. People have an idea of what they can spend. Pricing saves time for those people who aren’t your target customer for budget reasons.
10 WEST COAST DEALER OCTOBER/NOVEMBER 2019 WWW.IADAC.ORG
• Save yourself time. Pricing on your site allows potential clients to figure out what a vehicle or service will cost them without bombarding your inbox with inquiries. Clear Calls to Action Calls to action (CTA) should be strategically placed and designed to stand out. Buy now buttons, lead forms, contact pages, click-to-call buttons, newsletter sign ups and more are all crucial to your website performing the way it should. Use strong command verbs: • When a visitor is on a specific vehicle, “Schedule a Test Drive” is a good next step for them. • How about a simple vehicle inquiry? Start your CTA with words like “Find Out More” or “Got Questions?” • Are you looking for more newsletter subscribers? Start your CTA with words like “download” or “subscribe.” • Want someone to request more information? Try “fill out a form for…” or “find out how…” Guide your website visitors through the buying journey with strategically placed, clear calls to action. Focus your efforts on outstanding website user experience. Ninety-five percent of all vehicle purchases begin online. Take a few minutes and go through your website as your customer would. Make note of what works for you and what doesn’t. Take these simple fixes to make your website more customer friendly to your company website provider. Ask them to consider each one and how it may improve your conversions. The changes will help you avoid the negative results that happen on your store’s website and ultimately delight your customers. Kathi Kruse is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc., which coaches, trains and delivers webinars focused on integrating social media and online reputation management into dealership operations. She can be reached at kathi@ krusecontrolinc.com.
COMPLIANCE MATTERS | By Zach Klempf
TCPA AND TEXT MESSAGING
Are Your Dealership’s Texts Up to Code? Could your auto dealership bounce back from a $2.5 million mistake? Sounds daunting, doesn’t it? Well, the executives at Lithia Motors faced that very real question just a few years ago. The source of their troubles was a text messaging law called TCPA. In 2011, Lithia Motors of Medford, Oregon, sent a short text message to 57,800 consumers. A week later, they sent a second message to 48,000 of those people. What followed was a class action lawsuit that forced Lithia to settle for $2.5 million. Luckily for Lithia, they are one of the country’s largest auto groups. But could your dealership take a blow like that? For most independent dealers, the answer is a resounding “no.” How can dealers avoid this fate? The answer is simple, although not always easy. Complying with TCPA text messaging rules can be challenging if you don’t have the right tools in place. TCPA Text Messaging Laws and Lawsuits TCPA, or the Telephone Consumer Protection Act, is a 1991 law that prohibits companies from sending any form of unsolicited communication to customers via telephone technology. TCPA applies to prerecorded messages, robocalls, faxes, and, yes, text messages. For a dealership to call or text a customer, they must have prior written consent. But that’s not all. Business communication must also comply with several other conditions as outlined by TCPA. Lithia Motors is not the only dealership that has paid for violating TCPA. In 2016, Interstate National Dealer Services agreed to a $4.2 million class action settlement after sending robocalls to customers with unsolicited offers. In 2017, another dealership faced legal action for texting customers about a vehicle recall. This message seems innocent enough, but because the recall wasn’t covered under the car’s warranty, the plaintiff claimed it was a scam to get her to buy more services. The lawsuit was unique because it expanded TCPA law to “service-related” communication instead of just marketing. The latter case illustrates just how fine a line dealers must walk with texting customers. If only one of your salespeople makes a mistake, the penalty could be steep. Fines for violating TCPA can cost up to $500 per text message. How to Keep Text Messages TCPACompliant One of the biggest risks for dealerships is salespeople messaging customers from their personal phones. Those messages are not TCPA-compliant, which means your dealership is at risk of facing legal action.
Maintaining TCPA-compliant text messages takes a lot of work. Luckily, there is a shortcut for dealers to maintain compliance without all the hassle. But before we get to the shortcut, here are the guidelines dealers should follow to adhere to TCPA. •A cquire written consent. First and foremost, GMs should ensure all communication with a customer has been agreed to beforehand. Consent must be in written form and consist of a double opt-in. In other words, when a customer agrees to share their phone number with you, dealerships need to send a follow-up message that asks them to confirm. That message could look something like this: “ABC Motors News and Deals Updates. Messages sent weekly. Reply HELP for help. Reply YES to confirm your sign up.” A customer must reply with a Y or YES to start receiving messages. This is to ensure customers are not signed up without their permission. •B e specific and share important information. Customer consent is not universal. Dealerships need what’s called “contextual consent,” which means customers agree to specific types of communication, like marketing or service-related messages only. Dealerships need to be specific when requesting permission. Instead of asking customers to simply “subscribe,” dealers should ask them to, “subscribe to weekly promotional deals and updates.” Dealers also need to make customers aware of any fees they might incur. With some cell phone data plans, customers must pay for each text message received, so dealers need to include “message and data rates may apply” in their opt-in messages. A dealership’s privacy policies should be easily accessible on their websites. Add a link to your company’s privacy policy in the footer of your website. Make sure an attorney reviews the policy. •S tick to your word. Even after obtaining consent from a customer, dealerships can still violate TCPA by not sticking to their word. Remember, customers must consent to specific types of communication. If they sign up to receive vehicle recall messages, you cannot send them marketing messages without consent for those, too. Consent is also broken by sending more messages than promised. If you say messages will be weekly, but you send them out daily, those extra messages are considered unsolicited and in violation of TCPA. The rule regarding contextual consent is simple: Do what you say you were going to do and nothing more.
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•A llow customers to opt out at any time. Just as important as opting in is giving customers the opportunity to opt out at any time. Every message sent by your dealership should include, “Reply STOP to cancel” at the end. Dealers need to maintain a Do Not Call list of all customers who have opted out. It is critical this list is maintained and followed. Many TCPA class action lawsuits are filed because dealers ignored customers’ requests to be removed from call lists. •S tay up to date on changing regulations. Since becoming law in 1991, TCPA has evolved several times. The most recent example is the “services-related messaging” lawsuit mentioned above. With each new case, TCPA’s interpretation changes. It’s important to stay up to date with the latest reading of the law to avoid unknown pitfalls. Take the TCPA Shortcut: Use a CRM System If maintaining TCPA text messaging compliance sounds like a lot of work, you are right. From managing opt-ins to auditing messages to keeping up with new regulations, TCPA compliance is a full-time job in itself. Luckily for busy independent dealers, there’s to a shortcut to TCPA compliance that will save you significant time, money, and headache. The secret is using an automotive CRM with built-in, TCPA-compliant text messaging. CRM systems automate the process so you and your salespeople can focus on the customers. When you add a phone number to your CRM, the customer automatically receives an opt-in message. Each message after that includes optout instructions, and the CRM keeps your Do Not Call list up to date. Additionally, all text messages are stored inside the system, not in a salesperson’s private phone. If a salesperson ever leaves the dealership, they won’t take any sensitive customer information with them. CRMs also make sure your salespeople stay TCPA-compliant with phone calls. No matter the method of communication, using a CRM ensures your dealership stays on the right side of the law and away from lawsuits. Using a CRM to Stay TCPA-Compliant It’s smart to use text messaging to communicate with customers. However, dealerships absolutely need to protect themselves from expensive TCPA violations. The steps to staying TCPA-compliant are clear, but implementing them on a regular basis is difficult and time-consuming. The better way is to rely on a CRM system to take care of it for you. With the right tools, TCPA-compliant text messaging is easier than you think. Zach Klempf is founder & CEO of Selly Automotive. He can be reached at 415-562-7104 or zach@a1softwaregroup.com.
ACCELERATE | By GWC Warranty
PUT THAT LOBBY MONITOR TO WORK
Make Your Job a Little Easier Something as simple as a monitor in your showroom can go a long way toward helping how your business performs in the F&I office. Having videos on a loop that help customers get on board with the idea of a service contract is a great way to make your F&I job a little bit easier. The great thing about video is it helps customers get to the decision about a VSC on their own rather than being sold the service contract. In these instances, customers feel like the VSC purchase was their idea and therefore feel more comfortable with the value of a VSC purchase. Cost of Repairs A video that describes the cost of common repairs gives customers an idea of what they might be on the hook for if something small or major were to happen to their vehicle. The reality of buying a used car is they are more likely to break down over time. As long as customers know what these repairs can cost, they can justify the cost of a VSC once they get to that point in the process.
Customer Reviews If you work with a quality VSC provider, they should have content on hand to show how they’ve taken care of customers in the past. You can sell customers on the peace of mind associated with a service contract, but seeing how it actually paid off shows just how valuable a VSC can be in a customer’s time of need. Coverage Videos Once customers have an idea of what some common repairs cost and how valuable a VSC can be during a difficult repair experience, you can begin to educate them on the coverage levels you offer. Using video to educate your customers on different coverage levels shows them what is covered under different plans. If they know components they want to protect, they’ll connect that knowledge with the coverage level videos to start making up their minds on what product to purchase. When it’s all said and done, these videos plant the seed about service contract early on, so when the time comes to present your coverage options, your job can be a little bit easier and the sale a little bit smoother. MARKET WATCH | By The Car Connection
AGING CARS
Average Age of a Car on US Roads Hits Record High The average age of a Americans aren’t saying goodbye to car in the U.S. hit a new their vehicles like they used to. The average age of a car in the U.S. hit record, according to the a new record, according to the results results of a study recently of a study recently released from IHS Markit. The average age of a vehicle is released from IHS Markit. 11.8 years old as of 2018. The average age of a A few factors have likely contributed to the climbing age of vehicles. To start, vehicle is 11.8 years old as longer-term loans are available with of 2018. many consumers financing cars for six or seven years. Thus, they’re hanging onto cars and maintaining them longer. Secondly, IHS Markit said vehicles are simply built far better than they were in the past. Both factors have helped the fleet of cars on American roads stick around longer. The auto industry also experienced a boom throughout this decade. Many buyers likely won’t be swapping into a new vehicle until sometime next decade. Even then, the study said the average age should climb past 12-years-old next decade.
Breaking down the information by region, western states have the oldest vehicles at 12.4 years old. The northeast’s fleet of vehicles is younger at 10.9 years old, which busts the myth that New Englanders keep their cars forever. Although there isn’t conclusive evidence, weather conditions could play a part in helping cars stay on the road longer in the west than in the wintry northeast. State-by-state, Montana is home to the oldest vehicles on the road with an average age of 16.6 years. The state with the youngest vehicles is Vermont at 9.9 years.
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OCTOBER/NOVEMBER 2019 WEST COAST DEALER 13
ASSOCIATION NEWS |
By Shaun Petersen and Adam Crowell
INTRODUCING THE NIADA COMPLIANCE MANAGEMENT SYSTEM POWERED BY COMPLYNET
Helping You Maintain a Culture of Compliance For years, government regulators have demanded that dealers maintain a strong compliance management system to comply with the numerous and ever-changing laws and regulations that apply to dealerships. Those regulators have not been shy about taking enforcement action against dealers who don’t comply. Agencies such as the Consumer Financial Protection Bureau have said businesses under their authority must establish a “culture of compliance” that includes frequent self-policing and effectively remediating issues promptly. They have dropped heavy hammers on businesses when those criteria have not been met.
A major benefit of the NIADA CMS is it removes the hassle from documenting a culture of compliance through its well organized and thought-out systems, which automatically alert employees about the need to take training, complete tasks and resolve issues.
In addition, the Occupational Safety and Health Administration has criminally prosecuted business owners and managers in the automotive industry when the failure to adhere to the appropriate standards have resulted in injuries. Other agencies, including the Federal Trade Commission, have recently taken enforcement action against automotive businesses for “lax” practices that result in the risk of economic injuries to others. To assist dealerships in establishing, maintaining and documenting a culture of compliance, NIADA has partnered with ComplyNet, an auto industry leader in environmental health and safety, sales and finance, and information security compliance management solutions, to offer an all-in-one workforce compliance management system (CMS) for tracking all compliance efforts – on-site and online. The NIADA CMS has the capability of tracking: • Online compliance training. • Review and acknowledgement of policies, procedures and guides by employees. • On-site inspection and audit results. • Resolution of discovered compliance issues. • Handling consumer complaints. Subscribing dealership managers and supervisors have the ability to easily determine how well their teams are meeting their compliance objectives directly from the NIADA CMS, through intuitive data visualization tools that dynamically and interactively enable managers and supervisors to better manage those compliance efforts. To minimize the most common risks to a dealership, the NIADA CMS primarily focuses on sales and F&I compliance, environmental health and safety compliance and information security awareness compliance. Employees are educated on applicable subject matter based on their job roles through policies and guides that must be reviewed and acknowledged by the employee, as well as through online training that tests employees and recurs periodically to breed familiarity with the subject matter. Topics covered include: • Adverse action. • IRS 8300 tracking and reporting. • OFAC. • Risk-based pricing.
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• Red Flags Rule. • Safeguards Rule. • Disposal Rule. • Unfair and deceptive acts and practices (UDAP). • Used Car Rule. • Repossessions. • Hazard communication. • General safety. • Lift safety. • Bloodborne pathogens. • DOT hazmat for hazwaste and disposal. • General cyber awareness. • Email phishing. • Payment card industry standards. A major benefit of the NIADA CMS is it removes the hassle from documenting a culture of compliance through its well organized and thought-out systems, which automatically alert employees about the need to take training, complete tasks and resolve issues. There are other benefits, too. Insurance carriers would rather do business with a dealership that is serious about mitigating its risks and can document all of the various ways the dealership is a better risk than the next one. Sometimes those insurance carriers will compete for that business by offering better premiums. That pleasant consequence is sometimes unintended, but it should be an intended strategy in operating your dealership since less expense equals greater profit. The information captured in the CMS can be leveraged by a knowledgeable insurance agent to tell that great story. NIADA and ComplyNet have collaborated to offer affordable monthly subscription plans to the CMS that will accommodate small and large dealerships alike. For more information about the NIADA CMS and plans, visit www.niada.com and click on the “Compliance” tab. Additional on-site inspection, audit and training services can be provided to NIADA members by ComplyNet. For information about those additional services, visit www. complynet.com or call 1-800-653-1869. Shaun Peterson is NIADA’s senior vice president of legal and government affairs. Adam Crowell is president and general counsel of ComplyNet, which has combined on-site auditing services with intuitive software to assist dealerships in achieving regulatory compliance goals, mitigating risks and retaining talent since it was founded in 1994. He can be reached at adam.crowell@complynet.com.
INDUSTRY NEWS | By Used Car News
MARKET WATCH | By Used Car News
HYUNDAI GIVES GRANT CARS.COM NAMES TOP FOR CANCER FIGHT
$100,000 Hyundai Impact Award Grant Hyundai Hope On Wheels, a nonprofit organization supported by Hyundai and its U.S. dealers, announced a $100,000 Hyundai Impact Award Grant to the University of Illinois at Chicago to continue its long-standing fight against pediatric cancer. The institution is one of 77 recipients receiving a combined $16 million in new grants this year to develop innovative approaches to finding a cure for the disease. The Hyundai Impact Award was to be presented to Dr. Mary Lou Schmidt,
MIDSIZE SUV
2019 Hyundai Santa Fe Ultimate 2.0T AWD
chief of the hematology/oncology section in the Department of Pediatrics at UIC’s College of Medicine. HHOW remains one of the largest funders of pediatric cancer research in the nation.
AUCTION NEWS | By Used Car News
MANHEIM ENHANCES SIMULCAST
New Features Rolling Out
Manheim is introducing several new features to its Simulcast technology, which debuted in 2002. As use of this digital auction platform, which debuted in 2002, continues to grow, Manheim is boosting its investment and improving its dealer experience. New features include: • One platform that makes it easier for dealers to view the bidding/buying experience. • Odometers and auction lights, indicating any special conditions of the sale, are now visible for vehicles on the run list. • Visible proxy bid amounts to remind dealers they have already placed a bid. • Photo tabs that provide more visuals, larger images and multiple views, allowing dealers to see the vehicles from different angles without being onsite, and more. These enhancements will be rolled out to clients later this year and into early 2020.
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© Photo by Christian Lantry
The 2019 Hyundai Santa Fe Ultimate 2.0T AWD won top honors in Cars.com’s 2019 Mid-Size SUV Challenge, beating out five contenders. The 2019 Hyundai Santa Fe received the highest score based on 17 separate categories including frontand backseat comfort and amenities, ride quality, handling, braking and value. Other features were considered as well, such as touchscreens, media and connectivity, which address audio and smartphone mirroring like Apple CarPlay and Android Auto. The judges’ ranking of the midsize SUVs: 1. 2019 Hyundai Santa Fe Ultimate 2.OT AWD 2. 2019 Honda Passport Elite AWD 3. 2019 Ford Edge Titanium AWD 4. 2019 Nissan Murano Platinum AWD 5. 2019 Chevrolet Blazer Premier AWD 6. 2019 Jeep Grand Cherokee Limited 4X4 “The Santa Fe is a home run for value, with the most generous buffet of luxury features and advanced tech in the midsize group for the lowest price by a lot – barely more than some top-trim compact SUVs,” said Cars.com’s Washington, D.C., bureau chief Fred Meier, who was one of the challenge’s judges.
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OCTOBER/NOVEMBER 2019 WEST COAST DEALER 17
SALES MATTERS |
By John Chapin
THE DIFFERENCE BETWEEN SUCCESS AND FAILURE
Important Factors
Several important factors separate those who succeed in selling from those who fail. Although some of the following items are arguably more important than others, they are all critical to a salesperson’s success. When I talk about top salespeople, I’m referring to people who are not only great at the profession of selling, but also great human beings. T W E LV E S U C C E S S FA C TO R S
Great Attitude Top salespeople have a positive, “can do,” winning attitude. Specifically, they have enthusiasm, drive, competitiveness, and confidence. Top salespeople are highly motivated to succeed. They see selling as a competition, and they love competition. Top salespeople do whatever it takes to win – ethically – and they do not quit. They are extremely persistent. They are always moving ahead, changing, growing, and pushing through the bad times until they make it. They never give up on themselves and their dream of success. Top salespeople have a win-win attitude. They are genuine and truly like and care about other people. Action Oriented Top salespeople are people of purposeful, focused, well-thought-out, massive action. They are clear about what they are doing and why they are doing it. They don’t procrastinate. They are protective of their time and use it wisely. Top salespeople have a plan and they work their plan every day. They know what actions lead to success and that’s where they spend their time. Preparation Top salespeople are prepared for anything and they over-prepare for everything. They never wing it. They have prepared scripts, presentations, answers to objections, and proposals. They practice, drill, and rehearse. They never rest on their laurels and are always looking for ways to improve. They are ready for anything and expect the best, yet have a plan if anything else shows up. Businesslike and Business-Savvy Consumers are smarter and competition has increased. Top salespeople partner with customers and build a compelling business case based upon what’s best for the customer. They know their customers’ business and problems intimately. They ask intelligent questions that set them apart from other salespeople and, more important, let the customer know they thoroughly understand the business. Top salespeople know and embrace technology, but not to the point where they distance customers and/or remove the human element.
Ability to Stand Out from the Crowd Top salespeople differentiate themselves. They don’t sound or act like other salespeople. They are original. A top salesperson doesn’t come across as someone trying to sell. He or she comes across as an interested and informed party there to help. Top salespeople have an aura of respect. The way they walk and talk demonstrates they are professionals and, in turn, are treated professionally. Top salespeople are real, human, and down to earth, and people like them for this reason. Their caring, sincerity, and helpful dispositions stand out. They are memorable. Likeability, Trustworthiness, and the Ability to Build Relationships Selling is about doing everything necessary to build solid, loyal, long-term relationships. Top salespeople develop and nurture customer relationships and consider most of their customers to be friends. They have the ability to put people at ease and win others to their side, to establish a connection and build rapport quickly and effectively. They build trust and credibility. They are genuine, open, and honest. They convey a sincere interest in other people, what makes them tick, and what interests them. They truly like to serve people. Effective Communication Top salespeople are great communicators, knowing what to say and when to say it. They actively listen and are able to hear people well and read between the lines. They ask good questions, listen well to the answers, and take notes. Top salespeople don’t confuse people by giving them more information than they need. Yet they give them enough information to make a well-thought-out buying decision. Top salespeople have frank, direct conversations with people. Empathy Top salespeople have empathy for their customers and prospects. They are able to put themselves in other people’s shoes. Top salespeople enjoy helping people and they believe, with every fiber of their being, that buying their product or service will help people. Professionalism, Integrity, and Work Ethic Top salespeople are complete professionals with complete integrity. They have a great work ethic. They are always on their best behavior, aware they never know who is watching them. Top salespeople are honest. If they don’t know an answer, they admit it, find the answer, and follow up promptly. They are straightforward.
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Top salespeople work both hard and smart. They don’t rest on their laurels when things are going well. They go the extra mile and always deliver more than they promise. They return phone calls and reply to correspondence promptly. Top salespeople take 100 percent responsibility for everything they do, both professionally and personally. Team Player and Leader Top salespeople look for ways to contribute to the team. They share information and success stories that may help other salespeople in their company. They pull for their peers and colleagues. They use a big sale by another person in the office to motivate them. They are focused on becoming better as individuals and believe that by doing so, they help the people around them improve and make their company stronger. Top salespeople work well with other departments and develop strong professional relationships with co-workers. They get along with everyone. Top salespeople are leaders. They expect to be at the top and they are comfortable there. They do not look down on or see others as inferior. Continuing Education and Training Top salespeople are always getting better at selling. They read sales books, listen to sales information at home and in their car, watch videos, and talk to other successful salespeople. They constantly look for ways to improve. They know selling and they know their business, yet they also know there is always more to learn. They study their competition inside and out. Top salespeople stay upto-date on all new developments in their industry and everything that could affect business. They are constantly looking through trade publications and magazines. Company Product and Support Top salespeople cannot remain at the top without reliable products and support. They pick companies and products in which they can believe 100 percent, and they continue to look for reasons their product is better than any other. While 12 factors may seem like a lot, the keys are having a great attitude, a sincere interest in helping people, and a burning desire to succeed. John Chapin is a sales and motivational speaker and trainer. He has over 31 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. For more information, visit www.completeselling.com or email johnchapin@completeselling.com.