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DALLAS, TEXAS Permit No. 2079
NIADA Unveils 2019 Used Car Industry Report
PAID
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PAGE 8
S TAT E A F F I L I AT E
W W W.NEWJERSE YIADA.ORG
MANAGEMENT MATTERS |
By Jennifer Finlay
PREPARING FOR A NEW YEAR
Evaluate Where You’ve Been and Where You’re Going We are coming to the end of 2019. Don’t let one year fade into another without really evaluating where you have been and figuring out where you are going. How was your year? Did you achieve your goals? Did you even have goals in place? What were your biggest struggles? Were you able to stay within budget? These are some of the questions you should be asking yourself in preparation for the coming year. Having a structured plan of action is one of the best ways to get started with a new year. Running a business is time-consuming and at times exhausting. Staying in front of potential problems or shortcomings that could sabotage your growth is critical to your success. I know firsthand how easy is it is to neglect things. Sometimes it’s tough to just get through the regular day-to-day tasks. You have bills to pay and payroll to handle. Then you have finding the right inventory, selling sufficient vehicles and the list goes on and on. But just keeping up will not push you forward. You know the saying, “You can’t keep doing the same thing and expect a different outcome.” If you want to sell more, grow the business, be more in compliance, build your reputation, etc., you have to work at it. The end of the year is the perfect time to create a plan that will work for you. Set aside some time and determine where you want to be this time next year. Here are a few tips and ideas to get you started. THINGS TO RE-EVALUATE Spending: One of the best ways to evaluate this is to look at your P&L and vendor statements. Highlight the non-fixed expenses. For example, your electric and water bills will not fall into this category. Non-fixed expenses would be things like water delivery, uniforms, printing expenses, office supplies, interest rates, bank fees and title services. Shop these items – see what else is out there. None of these vendors or suppliers will ever call you and offer you a better deal because you have been with them for however many years. It doesn’t work that way. If you find a better deal, call your current vendor and give them an opportunity to match or beat what you found. You will be shocked at the amount you can shave off your accounts payable. Internal processes: This could include anything from sales procedures to advertising methods, hours of operation, the amount of your dealer fee and any policies concerning deposits, money back guarantee or in-house warranties. Do you recall there being any issues with
any of them in the past year? Is your dealer fee still enough to cover what you need it to? Do you not have a dealer fee but wish you did? Are customers’ deposits refundable if they change their mind? Is that working for you? All of these things can be adjusted. I don’t advise you change these things back and forth throughout the year, however. That shows inconsistency and overall is not a good practice. But the end of the year is a great time to make these decisions and have a plan ready for January 1. Your exposure: Surprisingly I see many dealers fall short in this area. Of course, the end goal in this business is selling inventory. It’s how the money comes in to sustain operations. Too often I see dealers with tunnel vision focusing solely on that. There is a proper path to that end goal, and if you don’t recognize it you will never be as successful as you could be. Exposure is simple. It goes hand in hand with relationship building. It doesn’t have to cost a lot or consume a great deal of your time but it must be addressed consistently and frequently. So, what is this exposure I am talking about? Easy – get involved! There are so many ways to get your business in the spotlight. A great way to get started is by joining your local IADA. They have a huge network of dealers as well as industry resources that benefit dealers significantly. They also host events throughout the year that provide opportunities to build relationships with others in the industry. Another way to gain exposure and achieve brand recognition is to sponsor things in your community. This could be a toy or food drive, blood drive, a little league team or even have staff members trade off volunteering at an animal shelter or food bank. Most of these events will have some sort of literature printed to promote them. Your company name will be on it and given to their target market. This type of exposure has a dual outcome. First, it gets your name out there. Second, it makes everyone know you are the type of business they want to do business with. How will you get new and different exposure this new year? Training and education: This too is an area I see dealers neglecting. Don’t make that mistake. Proper and ongoing training and education is a must, starting with the onboarding of new employees. You should have a detailed description and job outline in place for each employee. This reduces confusion about what you expect and how you expect duties to be carried out. It seems like a simple concept but you
would be surprised how important it is. You know how you want the business to run. You have a vision of sales and customer service. Put a training process in place that will ensure your employees understand that vision and then give them the tools to make it happen. Continuing education is equally important, not just for employees but also for owners and managers. Regulations, laws, and statutes change more frequently than most dealers realize. Staying on top of changes in these as well as industry trends will keep you at the front, and out of trouble as well. Trying to stay in compliance with the DMV, the Department of Revenue, the Trade Commission, the attorney general and the IRS can be time-consuming and tedious when attempted on your own. There are several companies that offer training in these areas. Don’t try to go it alone. It’s more efficient when you have help. Think about what you need to learn in the coming year that will help protect your business. Safety: As a business owner, of course you want your employees to have a safe, hazardfree work environment. A safety manual is a good start, as well as regularly scheduled maintenance checks around the property. In addition, customer safety should be a priority. One injury could potentially cost you what you’ve worked so hard to build. An end of year physical inspection of the property and any equipment will determine if any repairs need to be made. Appearance: Take the time to pull up to your dealership slowly and thoughtfully. Look at everything. I mean, really look. Are things overgrown? Is the paint faded? How is your signage? We tend to overlook these things as we focus on getting other things done. Do the same thing when you step in the office. Is there clutter? Sit on the other side of your desk where your customer sits. See things from their perspective. How does it look? Do you have things to make your customer comfortable while they are there? Do you have an area for children to be occupied? The more comfortable your customer is the more you will keep their attention. So think about what you could improve. These are just a few things to think about when closing out a year and moving into a new one. It’s about striving to be better than the previous year. List your goals and changes you want to make and put a plan in place to make it happen. Jennifer Finlay CPFS is director of marketing and sales at Sure Title. She can be reached at jennifer@flatags.com.
WWW.NEWJERSEYIADA.ORG DECEMBER 2019 DEALER NEWS 3
2019 Member Discount Book 2016 M E M B E R D I S C O U N T B O O K $5,000 IN AUCTION DISCOUNTS
2016 M EM BER DI SCO UNT BO O K 2016 M EM BER DI SCO UNT BO OK $50 BUY FEE ONE PER MONTH $5,000 IN AUCTION DISCOUNTS $5,000 IN AUCTION DISCOUNTS Long IsLand
new Jersey
syracuse
(TWO) $100 OFF BUY FEE / (TWO) $100 OFF SELL FEE – TOTAL $400 FROM EACH AUCTION = TOTAL $1,600
$50 BUY FEE ONE PER MONTH $50 BUY FEE ONE PER MONTH
Index
03.............................. Preparing for the New Year 06...............................NIADA Government Report 08.........NIADA Unveils Used Car Industry Report 09.......................................... Inventory Selection 12...............Safeguarding Social Media Accounts 14.......................... Foundation for Sales Success
Advertisers Index
Manheim............................................................. 11 NextGear Capital ............................................ 8-9 vAuto................................................... Back Cover
What’s New
F U E L S AV I N G S Take Advantage of Membership Benefits
Though colder winter temperatures can decrease your fuel economy, NIADA can still help you save money. Members across the country keep the number on the pump low with special fuel discounts that can save big. Access your fuel savings here: niada.savings4members.com/ programs/mySavings.spr.
Office
For information on how to become a member, please contact Paula Frendel: 855.694.2324 or njiada.pfrendel@gmail.com
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. For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com.
The New Jersey Dealer News is published bimonthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 760065203. 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 New Jersey Dealer News 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.
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
Long IsLand
new Jersey
syracuse
AUTO AUCTION – (TWO) $50 BUY FEE (TWO) $50 OFF SELL FEE (TWO) $100 OFF BUYBLOOMBERG FEE / (TWO) $100 OFFLong SELL FEE – OFF TOTAL AUCTION = TOTAL $1,600 IsLand new $400 J ersey FROM EACH syracuse
(TWO) $100 OFF BUY FEE / (TWO) $100 OFF SELL FEE – TOTAL $400 FROM EACH AUCTION = TOTAL $1,600 BSC AMERICA, BEL AIR, MD – $50 OFF REGISTRATION
BLOOMBERG AUTO AUCTION – (TWO) $50 OFF BUY FEE (TWO) $50 OFF SELL FEE BLOOMBERGBUFFALO AUTO AUCTION – (TWO) $50 OFF (TWO) $50FEE OFF SELL FEE AUTO AUCTION – $100 OFF BUYBUY FEE FEE / $100 OFF SELL
GARDEN SP T YO UR PR OF SP IT OT
Auto Auction BSC AMERICA, BEL AIR, MD – $50 OFF REGISTRATION
SPOTBEL AUTO AUCTION (FIVE) $50REGISTRATION OFF BUY FEE BSCGARDEN AMERICA, AIR, MD –– $50 OFF
MANHEIM ALBANY – $100 OFF BUY/ $100 SELL BUFFALO AUTO AUCTION – $100 OFF BUY FEE / $100 OFF SELL FEE
SP BUY T FEE / $100 OFF SELL FEE BUFFALO AUTO AUCTION –GARDEN $100 OFF Auto Auction YO UR PR OF SP IT OT
GARDEN SP T MANHEIM NEW JERSEY – 1 FREE 7-DAY POST SALE INSPECTION YO UR PR OF SP IT OT
Auto Auction GARDEN SPOT AUTO AUCTION – (FIVE) $50 OFF BUY FEE
GARDEN SPOT AUTO AUCTION – (FIVE) $50 OFF BUY FEE MANHEIM NEWBURGH, NEW YORK – $100 OFF BUY/ $50 SELL
MANHEIM ALBANY – $100 OFF BUY/ $100 SELL
MANHEIM ALBANY – $100 OFF BUY/ $100 SELL MANHEIM NEW YORK SKYLINE – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL
MANHEIM NEW JERSEY – 1 FREE 7-DAY POST SALE INSPECTION MANHEIM NEW JERSEY – 1 FREE 7-DAY POST SALE INSPECTION MANHEIM PENNSYLVANIA – $100 BUY/ $100 SELL
MANHEIM NEWBURGH, NEW YORK – $100 OFF BUY/ $50 SELL MANHEIM PHILADELPHIA – (TWO) $50 OFF BUY /OFF (TWO) $50 $50 OFF SELL MANHEIM NEWBURGH, NEW YORK – $100 BUY/ SELL
MANHEIM NEW YORK SKYLINE – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY FEE ($35)
MANHEIM NEW YORK SKYLINE – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL
MANHEIM PENNSYLVANIA – $100 BUY/ $100 SELL ROCHESTER SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT
MANHEIM PENNSYLVANIA – $100 BUY/ $100 SELL
MANHEIM PHILADELPHIA – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL STATE LINE AUTO AUCTION – 12 MONTHLY COUPONS FOR REGISTRATION
PHILADELPHIA – (TWO) $50 OFF Sell BUY / Fees...SAME (TWO) $50 OFF SELL $5,000 MANHEIM in Auction Discounts! Buy and AS CASH! PLUS...$4,000 in Vendor Coupons! ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY FEE ($35) ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY FEE ($35)
ROCHESTER SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT ROCHESTER SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT
STATE LINE AUTO AUCTION – 12 MONTHLY COUPONS FOR REGISTRATION STATE LINE AUTO AUCTION – 12 MONTHLY FOR REGISTRATION AS CASH! $5,000 in Auction Discounts! Buy andCOUPONS Sell Fees...SAME $5,000 in Auction Discounts! Buy and Sell Fees...SAME AS CASH! PLUS...$4,000 in Vendor Coupons! PLUS...$4,000 in Vendor Coupons!
For complete membership information please visit
www.newjerseyiada.org
4
DEALER NEWS DECEMBER 2019 WWW.NEWJERSEYIADA.ORG
MANAGEMENT MATTERS |
By John Chapin
HIRE CORRECTLY
Don’t Drive Yourself Crazy Holding Producers Accountable
!
It happened again last week: I was brought into an organization that did a poor job of hiring and had a bunch of salespeople who weren’t doing what they were supposed to be doing because they had a poor attitude, poor work ethic, or both. Some difficult conversations ensued and I was asked what could be done to make sure the salespeople were doing what they were supposed to be doing. Here is my answer. The most effective way to ensure people do their job is to hire correctly to begin with. If you hire the right people, you don’t have to hold their feet to the fire to get them to do what they’re supposed to be doing. If you hire people with the right attitude and work ethic, they will do the work. And while you do have to guide them and “trust but verify,” for the most part you can rely on them to do the job you hired them to do. If you hire people with either the wrong attitude or no work ethic, they’ll do as little as possible to fake people out that they’re working to stay on the payroll as long as possible. You’ll go crazy trying to hold them accountable but at the end of the day you’ll be worn out, they still won’t be doing the job, and you’ll have to let them go after spending a bunch of time, effort, and energy, not to mention money. So, step one is hire correctly. If you want me to send you my Rules for Hiring, just email me and I’ll be happy to do so. Next, reward your workers and punish your non-workers. Give people doing the right things plenty of praise. Also, reward them with gifts, bonuses, and other items that will motivate them. Use the stick with the people who don’t do what they’re supposed to be doing. On a related note, if you’re an
organization that requires salespeople to do call reports to ensure they are making enough calls, stop doing this with your good people. If someone is doing lots of good, clean business, and it’s obvious they’re doing what they’re supposed to be doing, don’t punish them by adding this task. It takes valuable selling time away from them. On the other hand, if you have people who aren’t making the sales and you know aren’t making the calls, then force them to document who they’re calling. Have them include the company name, name of the person, and contact information, phone number and, if possible, email. Then check up on them. You do this two ways: by calling the contacts and by going on the road with these salespeople. One of my favorite techniques is to call them during the day, ask where they are and where they are headed to and say, “Great, I’ll meet you at your next stop.” When it becomes clear they aren’t making the calls, which you already know, it’s time to either let them go immediately or give them one final ultimatum. By the way, the latter usually doesn’t work for long, if at all. That said, you will probably know within a week or two whether you made a good hire. I discover this very quickly when I start working with a new organization. One of the first things I do is to ask each of the salespeople to give me the number of new business calls they’re willing to commit to on a weekly basis. I do this before I meet with them in person. The salespeople with the right attitude and work ethic are usually realistic or high on their number. Also, they are usually already making that number of calls, or, if they aren’t, they immediately start making that number of calls. In other words, they
don’t wait for me to tell them during our first in-person meeting. The bad hires either say they are too busy to make new business calls, give me a low number, or give me a number they think I want to hear, even though they have no intention of making the calls. In addition, they always wait until the in-person meeting to start making calls as opposed to proactively making the calls as soon as they commit. The bottom line is if you hire correctly, your people will require very little accountability and hand-holding, but if you hire incorrectly, you’ll have to do massive amounts of accountability and even then, you still won’t end up with the results you want. Important note: I find executives with a background in sales usually do a poor job of hiring salespeople. Most of them see the best in people and are designed to connect with and get along with people. This can be a detriment when hiring. You only see what people are really like when you move them out of the relatively comfortable interview seat and put them through a rigorous, well-thought-out hiring process. Most salespeople are great interviewers, especially the ones that go on lots of interviews because they jump from job to job. If you don’t ask difficult questions, put any heat on them, or have any real hurdles in your hiring process, anyone is going to look good. You’ve got to test people and see how they respond and react. 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.
WWW.NEWJERSEYIADA.ORG DECEMBER 2019 DEALER NEWS 5
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.
Sen. Chuck Schumer.
LEGISLATIVE “Cash for EVs”: Senate Minority Leader Chuck Schumer (D-N.Y.), has proposed a $454 billion plan that would include $392 billion in subsidies for drivers who swap their cars for “cleaner” vehicles. The plan, which would cost $454 billion over 10 years, would be similar to the controversial “cash for clunkers” program of 2009, offering rebates of $3,000 or more to consumers who trade in gas-powered cars eight or more years old for electric, plug-in hybrid or fuel-cell vehicles. The gas vehicles would then be scrapped. Schumer’s proposal also includes $45 billion in grants to upgrade the nation’s charging infrastructure and $17 billion in incentives to automakers to build or retool factories to produce zero-emission vehicles. Schumer said he plans to introduce legislation to enact his proposal if the Democrats win control of the Senate in the 2020 election. While a bill has not been written yet, NIADA is reviewing the proposal with key members of Congress. Mind Your Own Business Act: Sen. Ron Wyden (D-Ore.) has introduced legislation he said would create the strongest protections ever for consumers’ private data and would hold corporate executives accountable for abusing that information. Wyden said the Mind Your Own Business Act is aimed at preventing Facebook and other businesses from abusing sensitive information. It would give the Federal Trade Commission the authority to set strict new privacy and cybersecurity standards and impose severe penalties on companies – and their executives – that violate them. The bill would authorize the FTC to fine businesses up to 4 percent of their annual revenue for a first offense. Senior executives who knowingly lie to the FTC would face 10-20-year criminal penalties and their companies would be hit with tax penalties. It would also require companies to assess the algorithms that process consumer data to examine their impact on accuracy, fairness, bias, discrimination, privacy and security, and would give consumers the right to review the personal information a company has about them, find out with whom it has been shared
6
DEALER NEWS DECEMBER 2019 WWW.NEWJERSEYIADA.ORG
or sold, and challenge any inaccuracies. The legislation would beef up enforcement by hiring additional FTC staff and empowering state attorneys general to enforce regulations created by the bill. In addition, each state would be able to designate one “protection and advocacy” organization that could file civil suits against companies that violate privacy regulations. NIADA is reviewing the bill and preparing an appropriate response. REGULATORY Department of Labor: More than five years after President Obama launched a push to update the regulations defining which whitecollar workers are exempt from overtime pay, DOL has announced its final rule. The new rule revises the earnings thresholds for executive, administrative and professional employees to be exempt from the Fair Labor Standards Act’s minimum wage and overtime pay requirements. Beginning Jan. 1, the exemption threshold will increase to $35,568 per year ($684 per week) from the previous level of $23,660 ($455 per week). Up to 10 percent of that amount can be satisfied by nondiscretionary bonuses or commissions. The new thresholds account for growth in employee earnings since the thresholds were last updated in 2004. Obama’s DOL proposed more than doubling the salary threshold and adding a mechanism to automatically update it annually, tying the threshold to a fixed percentile – likely 40 percent – of salaried wages. NIADA filed comments opposing that drastic increase, noting no data had been provided to support the increase or to suggest salaries had risen at a rate remotely comparable to the proposed threshold increase over that same time. Following litigation and the election of President Trump, the proposed rule was reworked and finalized. The new rule will make 1.3 million American workers newly eligible for overtime pay. Consumer Financial Protection Bureau: The CFPB announced the creation of a task force charged with finding ways to harmonize
and modernize federal consumer financial laws. The bureau said the task force will examine the current legal and regulatory environment facing consumers and financial services providers and make recommendations to CFPB director Kathy Kraninger about how to improve and strengthen consumer financial laws and regulations. The group’s assignment is to produce new research and legal analysis of those laws with a focus on updating consumer credit laws and the regulations that implement them, identifying areas that require additional research, finding ways to improve consumers’ understanding of markets and products, and pointing out potential conflicts or inconsistencies in existing regulations and guidance. Kraninger said the evaluation is necessary “to identify where there might be gaps or where regulation should be simplified or modernized.” NIADA will engage the task force and discuss any recommendations it makes. For more information, including an application to serve on the task force, visit www.consumerfinance.gov/about-us/ taskforce-federal-consumer-financial-law. Credit reporting workshop: The CFPB and FTC will hold a free public workshop Dec. 10 at the Constitution Center in Washington D.C., to discuss credit reports and employment and tenant background screening reports. The workshop’s goal is to bring together stakeholders – including industry representatives, consumer advocates and regulators – for a dialogue on the many issues impacting the accuracy of consumer reports. Topics will include non-traditional data in credit reports and credit scoring models, new technologies and data management practices, how consumers discover and dispute inaccuracies, identity theft and more. Comments on the issue may be submitted electronically until Jan. 10 at www.regulations. gov/docket?D=FTC-2019-0073. NIADA plans to file comments. Shaun Petersen is NIADA’s senior vice president of legal and government affairs.
COMPLIANCE MATTERS | By Donald S. Dinsmore, Esq.
DEALING WITH THE MOTOR VEHICLE COMMISSION
Pointers for Success
No one wakes up in the morning and says, “Today I want to wrestle with the Motor Vehicle Commission.” As an independent car dealer, however, it is an agency you are forced to deal with on a regular basis. Having served within the MVC for almost six years before re-joining the private sector, I would like to share some helpful pointers to make your experience a lot less stressful, and much more productive. Let’s take a look at some of the more common issues that come up, such as getting a question answered, dealing with a prehearing conference and making change happen within the system. When it comes to finding answers, there are two types of questions you might have when approaching a government agency: general or specific. For general questions, always check the website first at www.state.nj.us/mvc/. There is a subheading for businesses which lists all the business licensing services MVC provides. If that doesn’t offer a solution to your specific problem, you can reach out to the MVC customer service helpline at 609-
292-650 and ask to speak to the Business Licensing Unit. When you call, have pen and paper ready to write down who you spoke to, when the conversation occurred and what you were told. Be polite. Remember, the employee you’re talking to is a person, too. They will be much more likely to be helpful if you approach them in a cooperative manner. If the answer you get is confusing, I would recommend asking for the employee’s email and email them for an answer in writing. You can also ask for a manager if you feel an answer is unsatisfactory. Always take down what was said and when. It will be important if you need to escalate an issue to a manager, director, or senior management. Let’s say you have received a Notice of Proposed Suspension from the commission because something was not deemed correct. It could be a problem with one of your audits, an issue with the usage of your dealer plates or a host of other matters. Read this notice carefully. Take advantage of any offers to have your case heard in a pre-hearing conference. Take
them up on their offer to provide discovery regarding your matter as you could find valuable information that might be to your benefit. Reply to them in the manner they request within requested deadlines. Send your reply by certified mail or overnight delivery so you have proof they received it. Some of the regulations and proof issues involved can get complicated in particular instances. Consider hiring an attorney who is familiar with motor vehicle dealership issues. There may be occasions you find a practice of the commission harmful to your business. What if you want something changed to facilitate your business and businesses within your field? This is the most difficult thing to accomplish. First, try escalating the matter through MVC’s chain of command to find someone with the authority to change something or tell you the root cause. There is a good chance your dilemma is a result of a regulation or statute preventing change. That is where your membership in organizations like NAIDA and NJIADA can be very beneficial.
WWW.NEWJERSEYIADA.ORG DECEMBER 2019 DEALER NEWS 7
ASSOCIATION NEWS
2 0 19
A PUBLICATION OF THE NATIONAL INDEPENDENT AUTOMOBILE DE ALERS ASSOCIATION
Most Comprehensive Picture of the Used Vehicle Industry
Section 06 LOOKING
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NIADA UNVEILS 2019 USED CAR INDUSTRY REPORT
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NIADA presents its 2019 Used Car Industry Report, an annual array of facts and statistics that provide the clearest, most comprehensive picture available of the state of the used vehicle industry and the trends shaping its future. The report, which was unveiled in September at the NIADA National Policy Conference in Washington D.C., was delivered to association members along with the October edition of Used Car Dealer. It’s also available online – free for NIADA members and for purchase by non-members – at www.niada.com. The report includes new insights into familiar areas, including the 2019 Car Buyer Journey Study from Cox Automotive, an important look at the customers purchasing used vehicles and how they shop; Edmunds’ Used Vehicle Outlook, including CPO data; GoldStar by Spireon’s look at GPS technology’s effect on the impact of impound fees; CarGurus’ section on auto buying patterns by body style; and the latest on digital consumer
experiences in auto finance from RouteOne. The report also explores new areas, such as Dominion/Cross-Sell’s look at Carvana’s business model and how to compete with it, Carfax’s research into merchandising in today’s digital world, tips from Home Loan Investment Bank to help customers get credit application approvals, TrueCar’s study of trade-in process trust issues, insight into dealer ROI from Autosoft and a section detailing the rise of mobile chat and lead generation data through that growing marketing medium from new NIADA industry partner OfferUp. And, of course, the Used Car Industry Report includes the staples – NIADA’s member and business confidence surveys, Buy Here-Pay Here benchmarks from NABD, Subprime Analytics and NIADA Dealer 20 Groups, used car sales by channel by month from J.D. Power/NADA Used Car Guide, information on the auto finance market from Equifax, Black Book’s retention values analysis and Auction Perspectives from industry leaders.
ACCELERATE |
By GWC Warranty
INVENTORY SELECTION
Trust the Data
When it comes to acquiring the right inventory for your lot, it’s easy to go with your gut and buy a car based on your experience and savvy. But what if your general industry acumen could be augmented by data and information that will help you find cars that can fly off the lot just as quickly as you get them there? To find out if you are seeking out the right inventory for your lot, you have to be able to look in the mirror and answer a few questions honestly. If you can do that, your acquisition strategy can go from trusting your instincts to trusting the numbers.
What has sold in the past? If you can go back into your books and find makes and models that have sold particularly quickly, you might just find a few surprises. Your customers might tell you they want more trucks and SUVs, but the data show that economy cars or luxury sedans move more often. You want to buy what your customers tell you they want, but your bottom line could benefit by buying vehicles you know will move quickly. Have you ever bought a car for you? Here’s where you really need to be honest with yourself. We’re not talking about getting
a car at auction for you to own yourself. Rather, we’re talking about a vehicle you bought because it appealed to your tastes. This is an instance where your gut tells you that you’re buying a great car – and you very well may be – but are you buying a car that will sell quickly? It’s imperative you resist the urge to bid on a car just because it’s a car you’d like to see front and center on your lot. Are you looking in the right places? We’re all creatures of habit. We know the auctions we like – we’ve had success at them in the past and we don’t see a reason to change. However, today’s automotive industry is ripe with vehicles you can find at the right price. Have you checked online auctions? What about competitors that have trouble selling a vehicle that’s in your sweet spot? How about giving a shot to that auction a couple hours away you’ve heard so much about? Trying a new source for your inventory could be just what you need to find more of the right cars at just the right prices. Once you’re able to take a hard look in the mirror before heading out to the auction and answer these three questions, you’ll be well on the road to moving metal at a faster pace than you’ve ever seen before.
MANAGEMENT MATTERS | By Rex A. Collins CPA, CVA
MANAGEMENT SUCCESSION
Preparing for the Transition
It’s going to happen. At some point you will transition your dealership to another owner, whether it is one of your children, an employee or an outside buyer. Doing it right requires advanced planning and a multitude of considerations such as the financial security of the business, transfer of wealth, taxes, future business strategies, family values, and your long-term personal goals. Most of all, transitioning to a new set of leaders is critical to ensuring the ongoing success of the dealership. Managing leadership succession involves a number of difficult steps, including consensus building and assembling key parties into a succession planning team. Knowing when to start is one key to an orderly transition. The longer you wait to get your team together, the more difficult the initiative becomes and the more obstacles you will encounter in making the transition. At a minimum, an owner should start planning three to seven years in advance of selling or retiring. We recommend starting when the dealership demonstrates the ability to generate consistent profits and the current owner reaches age 50. Some of the usual starting considerations:
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• Will your children be coming into the business? If so, how will each be involved? This will require educating children about the functions and conditions of the business and making sure everyone involved remains open to the evolution of, or changes in, the succession plan. • If no children are involved, how and when will a successor be determined? • Or should you simply sell the business and monetize your investment? Starting early is also important, as any succession plan should include a contingency plan addressing an untimely death, disability or other unexpected event. This also gives you time to build your succession team. Your team could include family members, employees, a banker, a member of your 20 group, and outside advisors. Regardless of the makeup of the team, it should exhibit four characteristics: trust, openness, realization and interdependence. A team with those qualities will be able to overcome what are bound to be multiple hurdles and challenges in negotiating the process toward a successful successor. A succession plan will address four phases of transition: • Initiation or point of entry: When succession planning begins.
• Selection and assessment: Choosing the leaders for the next generation based on accomplishment and dedication, which could involve psychological and other testing. • Education and training: Ensuring the successor has the skills and knowledge to continue a profitable operation. • Passing the baton: Transferring authority and accountability to successors. Some common issues to address: • How to encourage your children to think positively about a succession plan. • How to determine when children are mature enough to be considered as successors. • Who should succeed as dealeroperator or CEO? • When should the current dealer retire? • What are your options in terms of a prospective leader? • Should you sell the business to an external buyer? • A personal development plan for the successor dealing with “operational” skills – technical, financial, and organizational issues – and “essential” skills – the ability to communicate with staff and customers. • A leadership development plan, including creating a vision for the future of the business, commanding respect and being professional. • The transition process, including the changing roles of the current and succeeding dealer, their evolving job descriptions and who’s making key decisions at what points. • A plan to communicate the succession to your constituents, including family, company and community • The organizational succession plan, including how top management will be affected, the career paths of key managers, and the future participation of family members in the business. A successful management transition is not only key to ongoing profitability but to the legacy of the retiring owner. As famed management consultant Peter Drucker said, “The final test of greatness in a CEO is in how he chooses a successor and whether he can step aside and let the successor run the company.” Rex Collins is a principal at HBK CPAs and Consultants. He directs HBK’s National Dealership Industry Group, which provides tax, accounting, transactional and operational consulting exclusively to dealers. Rex can be reached at rcollins@hbkcpa. com or 317-504-7900.
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SOCIAL MEDIA | By Kathi Kruse
SAFEGUARDING DEALERSHIP SOCIAL MEDIA ACCOUNTS Make Sure Your Business Page is Secure
Even though social media has become mainstream, there are surprisingly many dealers who haven't secured their social media accounts. I’m regularly asked by dealers about the best ways to safeguard their social media accounts. Rather than leave things up to chance, let’s discover the best practices for securing your online accounts so you can feel more comfortable about one of your most valuable company assets. We've all witnessed at least one of the embarrassing or dangerous debacles that happen when social media accounts are not secure. I want to make sure this doesn’t happen to you.
SECURING YOUR SOCIAL MEDIA PROFILES I break this down into easy-to-digest parts. You can examine each one, determine if you're on the right track and make a course correction if necessary. Step 1: Always use work emails for social media admins. Provide your social media manager (or any employee) with a work email address, one that you as the owner have control over, such as [employeename]@ [yourwebsiteURL]. The email must be hosted on your own server and your IT department should always have control of it. Some employees want to use their private emails. This should be avoided at all costs. Why? If they ever leave, they have access to your social media accounts and you do not. Step 2: Periodically confirm your admins. Make sure your social media manager and other social profile admins are using their specific work email addresses. If something happens – they leave, you terminate them, they become unable to perform their job, etc. – you'll have control over that email and, if necessary, you can change the password immediately. Step 3: Setting up Facebook. All Facebook Business pages are created and set up using a personal profile. You log in through a personal account to access the business page. I recommend using an email address similar to what I suggested above or socialmediamanager@[yourwebsiteURL] to set up the personal profile for company use. You may also use the owner’s personal Facebook login if he or she is using Facebook. Since the email address will always stay with the profile (you cannot change it), you’ll want to keep the email address accessible
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should you change personnel. Next, you'll “create a page” (as Facebook calls it) while logged into that personal profile. Once the Business Page is set up, you’ll make 3-4 more trusted people admins of the page, such as: • Your social media manager. • You, your GM or CEO. • Your CFO or HR manager. • IT manager. ProTip: If your Facebook page and other profiles are already set up and/or you’ve been using them for a while, perform an audit of the “admins” on each platform to make sure you’re following these best practices. Don’t wait until it’s too late – after someone has left and you’ve inadvertently given up control of your page to nonstakeholders. Again, the social media manager should only be able to use their work email address to access any profile. If they ever leave, you'll have control over it and change the password immediately. If someone such as your social media manager has accidentally or unknowingly made himself or herself an admin using a personal email, you can easily remove them as an admin and invite them back using their work email address.
ADDITIONAL SAFEGUARDS It's important to cover all your bases when it comes to dealership assets and reputation. Safeguard against common catastrophes by including these steps in your overall digital strategy. Hire the right person. I know that sounds obvious but I always mention it to reinforce the importance. Here's what nobody tells you: hiring a social media manager is a challenge. During the hiring process, you'll need to figure out who measures up and who doesn't. Many owners or HR managers don't spend a lot of time on social networks so it's quite a challenge to figure out who the best candidate may be. When you're ready to hire your social media manager, pose specific questions to your candidates. Their answers will inform your decision and help you pick the right person. Ask candidates questions such as: • What social media platform(s) is/are best for our dealership? Why? • What's the most important thing a social media manager should be doing? • Have you ever had to handle a social media crisis? If so, explain the outcome. • What social media strategies do you plan to use to generate leads? • What should your first goals be?
Implement a policy for employee use of social media. Things happen. Even good employees are capable of going to the dark side. The name of the game is to provide an environment that mitigates it. Negative environments often reflect company culture, employee morale and job satisfaction. Most owners/GMs believe they are providing a safe, productive, supportive and enjoyable workplace. However, employee perceptions don't always align with management assumptions. Regardless of the reasons negative outcomes happen, it's best to have a clear cut social media policy that everyone agrees to and adheres to. Should something go wrong – such as a disgruntled employee taking over your social media accounts – a policy for employee use of social media itemizes the penalties for specific behavior, creating a deterrent should things not go as expected. At Kruse Control, we provide such policies for clients. Your social media policy should: • Set the parameters for employee use of social media. • Describe the value of social media. • Briefly outline each platform and best practices. • Describe any unique, company-specific situations where a problem can arise. • Establish protocol when a situation calls for escalation. • Discuss how to handle a problem or crisis. The target outcome of a social media policy should help your dealership market itself successfully on social media while protecting it from precarious situations that lead to outright debacles. The social media policy should be included in your hire package for all new employees, along with a signed acknowledgement to store in their personnel file. For current employees, I would have a meeting explaining you're planning on implementing a social media policy and convey why it's important. Pass out a copy of the new policy and allow a few days for each employee to review it (and for you to answer their questions). Then, within a week or less, require them to return the signed acknowledgement to the HR manager. A word of caution... Under no circumstances should a dealership ask for access to employees’ personal social media accounts. Many state legislatures have drawn a firm line on the matter. Nearly half of states have passed laws prohibiting employers from asking applicants and employees for their social media login information, or to bring
MARKET WATCH
up their social media pages in the employer’s presence, change their privacy settings to make the page accessible to the employer, or add anyone as a “friend” or contact to a social media page. This practice also sends very negative messages to your rank and file that you don't trust them. There's no real benefit to asking and it does a lot of harm. Instead, allow your social media policy to do its job. Every dealership has distinct and important needs. To create the best possible outcomes, it's crucial to incorporate a company's unique needs, specific daily operational situations, and employee relations into each social media policy. There have been far too many situations where dealership social media accounts have not been secured. Please use these steps to assess your own process and policies. As always, I’m happy to answer your questions. 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.
MAGAZINE TOUTS BEST USED CARS FOR TEENS
Used Car Rankings
U.S. News & World Report has unveiled its list of Best Used Cars for Teens. Used car rankings are based on model categories, rather than price. • Large car category: 2016 Buick LaCrosse • Midsize car category: 2016 Toyota Camry/Camry Hybrid • Small car category: 2016 Toyota Prius • Small SUV category: 2016 Hyundai Tucson • Midsize SUV category: 2015 Chevy Traverse To be named a Best Used Car for Teens, U.S. News required a vehicle be from the 2014 through 2016 model years, as cars from earlier years don't have enough advanced driver assistance technology to be considered the best for inexperienced drivers. Also considered were high dependability, safety ratings, ownership costs and positive reviews, as well as available tech that can help prevent crashes or lessen their severity. The 2019 Hyundai Accent topped the list of best new cars for teenage drivers, according to U.S. News.
WWW.NEWJERSEYIADA.ORG DECEMBER 2019 DEALER NEWS 13
SALES MATTERS |
By John Chapin
THE FOUNDATION FOR TOP SALES ACHIEVEMENT
Ingredients to Build a Solid Sales Foundation As the saying goes, “A house is only as strong as its foundation.” It takes a strong foundation to ensure sales success. Following are six high-achievement ingredients necessary to build that strong foundation. Be in sales for the right reasons. The first thing I look for in a potential new sales rep is people skills. To have longterm success and become a top achiever, you must be able to understand and communicate with people while also having a great capacity for empathy. Genuine care and a desire to serve and help people is a must. One must also have a burning desire to succeed. A desire to make a lot of money is a good place to start. But it’s also important to know why making a lot of money is important. These reasons should be ones that enhance the life of the salesperson as well as the lives of those around them and the world as a whole. The right attitude and beliefs. What is your daily attitude like? Do you always see solutions when you face problems? Do you stay positive in the face of all challenges? Looking for the positive side of a situation is a habit, and, like most good habits, it can be developed. I’m not saying you need to have a smile on your face 24/7 and believe issues never arise in life. I am saying don’t allow yourself to go to the other extreme of complete negativity and get overwhelmed to the point where you can’t act. When you see a tough situation, recognize it, try to find some positives, keep a good attitude, and ultimately resolve the situation as quickly as possible. What is your motivation level? You need to be highly motivated and ready to work as hard as you have to in order to reach the top and remain there. How about self-confidence? To get to the top in selling requires high self-confidence and high self-esteem. Are you a self-starter or do you need someone to give you a push? To get to the top in sales, you must be a self-starter. You must be motivated from within rather than needing someone to keep pushing you or keep you driven to succeed. To get to the top, you must also be a consummate professional and exude integrity – at all times. Finally, do you see yourself as a person who is completely responsible for your life and what happens in it? This kind of
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responsibility is the cornerstone needed for great achievement. A willingness to pay the price for success. How far are you willing to go to be successful? There is a price for success and top salespeople have chosen to pay it. Are you willing to do whatever it takes, ethically, to get to and stay at the top? “Hanging out” with the right people. Who do you hang around with and where are they going? You must hang around successful people who are growing personally and professionally and who support your goals and dreams. Birds of a feather do flock together, and the wrong group of people can drag you down quickly. This doesn’t mean you need to immediately discard your friends and family if they aren’t completely supportive of you. However, as you progress toward your goals, you may find yourself gathering a new group of friends and hanging out with certain negative people less often. Let friends and family know the track you’re on and ask them to help or even to join you in the adventure. Good health. How is your health? It isn’t possible to operate at your highest levels, both mentally and physically, if your health isn’t good. If you are tired, run down, or frequently ill, you will not be motivated, and you will not perform well. You need to get plenty of sleep, eat properly, and exercise on a regular basis to be a consistently top salesperson. Good health also includes your overall mental condition. While sleeping, exercising, and eating right will help your mental state, you must also develop the ability to handle stress, unexpected problems, and other similarly negative things that may affect your emotions. A life with balance and growth. While the beginning of your sales career, or a new job, will be heavily weighted toward your career for the first three to five years, you don’t want to go all-in on your career at the expense of everything else. You must still make time for health, the people in your life, and other things that are important to you. Considering you have 168 hours in a week, there is time to spend 70 hours, or more, at work, and still take care of the other areas your life. But it’s going to require you be a master of your time.
THESE SIX INGREDIENTS ARE NECESSARY FOR CONSISTENT, LONG-TERM TOP PERFORMANCE. IF YOU DON’T HAVE THESE SIX ESSENTIAL INGREDIENTS IN PLACE, YOU WILL FACE SOME DAUNTING CHALLENGES. For short periods, you can devote an inordinate amount of time to one area of your life and neglect the others. However, if you do that for too long, your attitude will suffer tremendously, along with your health and relationships. You may not get to each area every day, but in the course of a week be sure each area of your life is getting its share of attention. Finally, you must be passionate about what you are doing, and you must always be growing personally and professionally. These six ingredients are necessary for consistent, long-term top performance. If you don’t have these six essential ingredients in place, you will face some daunting challenges. The good news is all of these can be learned. Granted, few of them are mastered easily if you haven’t already developed them. However, if you are truly committed to becoming a top salesperson, you can develop them. There is always hope. 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.