Modern Dealership - October 2017

VOLUME 1 • ISSUE 4 OCTOBER 2017

The GENERATION NEXT Edition

MARKET TRENDS: An In-Depth Look With David Mondragon

Is Technology Making Us Lazy?

Finding Profits with Gen Z?

LEXUS SANTA MONICA’S

MATT

UNGER

Keeps on Winning

YOU HOLD THE KEYS!

BEDROCK VALUES Look to Past Generations to Reach Today’s Shoppers

PHOTO: Rich Schmitt Photography

POWERED BY

WE BELIEVE THERE IS A BETTER WAY TO CONNECT WITH YOUR EMPLOYEES INTERNAL CRM & MESSAGING SEND DOCUMENTS • SEND DIRECT MESSAGES SEND TO MULTIPLE PEOPLE • SEND TO GROUPS BROADCAST MESSAGES TO ALL EMPLOYEES SERVICE TO SALES • SOCIAL MEDIA • HR PROCESSES • TRACKABLE SALES PROCESSES

CALL US TODAY FOR A TEST DRIVE

2

MODERNDEALERSHIP

(833) 842-5262 AutoAlert.com/Pando

EDITOR LETTER FROM THE

Dear Reader, The first car dealership in America was established in 1898. For a little perspective, New York City was divided into its five boroughs that year. Annie Oakley wrote a letter to President McKinley “offering the government the services of a company of 50 ‘lady sharpshooters’ who would provide their own arms and ammunition should war break out with Spain.” America did declare war against Spain, and ended the war later that same year with the signing of the Treaty of Paris. Poet T.S. Eliot turned 10 years old. Enzo Ferrari was born.

Car dealerships have seen a lot of changes in the last 119 years to become one of the strongest supporters of our economy. The auto industry is responsible for directly employing nearly 2 million Americans, for supporting approximately 4.5 percent of all U.S. jobs, and for generating more than $70 billion in tax revenues.

We’ve dedicated this, our fourth issue, to changes that industry insiders see coming in the near future and how dealers can adapt. As one of the leaders in providing consistently excellent customer service, Matt Unger of Lexus Santa Monica shares his tips for meeting—and exceeding—quickly evolving customer expectations. “It’s still all about relationships,” he says. Read more on page 28.

AutoAlert’s top product pro, Julian Johnston, discusses the changing approach to customer relationships in “Space Age Technology and Bedrock Values,” giving us a look at how we can reach the future shopper by looking to past generations. Check out his tips for humanizing communications at your dealership, starting on page 9.

Don’t miss the in-depth update on the state of the industry provided by Ford’s former executive director of retail innovation & strategy, David Mondragon. The news he shares in “How Healthy Is the Market?” might surprise you (page 18).

With seemingly endless new software solutions being offered to dealerships, Rex Weaver shares with us why making sure that everyone on your team has the same expectations for your new technology is just as important as choosing the right tool.

Other topics affecting the next generation of dealership owners discussed by our contributors include the power of the Hispanic consumer, how to reach Generation Z, the importance of dedicated service websites, ways to win big at used car sales, and more.

Happy reading … we’ll see you in 2018!

The MD Team

4

MODERNDEALERSHIP

COVER STORY

28

28

Serving Up a Win-Win: Make Your Customers #1 to Be #1 With Matt Unger, General Manager, Lexus Santa Monica

FEATURES

9

Space Age Technology and Bedrock Values

By Julian Johnston, Senior Director of Product Consulting, AutoAlert

18

How Healthy Is the Market?

34

Keys to Maintaining Profit with the Next Generation

By David Mondragon, Former Executive Director of Retail Innovation & Strategy for Ford Motor Company

NEXT GEN

By Robert Christman, Regional Director of Sales, Automotive at USA Today Network-Tennessee

MODERN SALES

40

Used Car Sales Made Easier – and More Profitable

By Kendall Billman, Senior VP, AutoAlert

44

Reaching Generation Z: The Next Wave of Car-Buyers

18

34 40

By Cathy Nesbit, Social Media Director, Harry Robinson Buick GMC

MODERN OPERATIONS

6

Take Advantage of the Online Path Paved for You

By Joe Webb, President, DealerKnows

16

Back to the Future, or the Jetsons?

You Decide!

By Brian Huth, Chief Marketing Officer, Sam Pack’s Five Star Ford

9

MODERN COMMUNICATION

23

Generation Next Is Generation Now

26

Can Social Media Serve a Purpose When Tragedy Strikes?

By Mat Koenig, CEO of BDA Spanish and Rockstar Auto Conference

D I G I TA L M A R K E T I N G 1 0 16

By Joey Little, Social Media Director, AutoAlert

MODERN FIXED OPS

12

Today’s Golden Opportunity

46

Technology: When Slow Is Fast, and Fast Is Slow

By Owen Moon, CEO of CarClick360.com and Service Marketing Executive for DriveServiceSites.com

By Rex Weaver, Director of Service Innovation, Lehigh Valley Acura

INSIGHTS

15

Where Will Millenials Take the Car Industry?

43

Who Wants Self-Driving Cars?

16 with

48

IN Mike X TH BO Davenport E

#1 in sales at Bachman Chevrolet: Louisville, Kentucky’s #1 Chevy Dealer

M O D E R N D E A L E R S H I P. C O M

5

TAKE ADVANTAGE OF THE ONLINE PATH PAVED FOR JOE WEBB YOU President DealerKnows

In my grumpiest oldman voice, I must say, technology has made us lazy. Our industry is filled with a bunch of entitled crybabies who wouldn’t know a hard day’s work if it bit them by way of an antiquated computer mouse with a broken trackball on their wellmanicured hands.

6

MODERNDEALERSHIP

Before you blow me off as a curmudgeon, stay with me for a minute. I might sound like some old person talking about the trials and tribulations of yesteryear, but it is, in fact, intended to be motivation for those younger agents fighting the good retail fight in today’s stores. Trust me when I tell you that we “upper classmen” of automotive Internet marketing and sales know you don’t have it easy. Every store has its own obstacles, whether they be poor-sighted management, visionless ownership, lack of marketing funds, sabotaging sales managers, old-school advertising initiatives, or unenthusiastic sales folk. In retail, everyone who wants to achieve more will eventually bump up against those comfortable with the status quo. Here is my gift for you: You don’t have to listen to them.

Those who’ve gone before you have already fought the good fight. People pushing away from smart marketing, digital advertising, advanced CRM utilization, and mobile engagement are no longer the majority, but the minority. More of those in executive management understand the concept of digital traffic, as much as showroom traffic. This has been a long time coming.

Embrace it and push forward.

There are some of us who recall what it was like without a CRM/ILM. We sold vehicles before you could access Internet on phones. Let me

JOE WEBB “SURFING THE NET” IN THE EARLY DAYS OF THE INTERNET. state—this wasn’t “the good old days.” This was misery. I didn’t become successful in retail until I leveraged technology and email communication to better engage and influence shoppers. I dedicated my work hours only to those shoppers who had conducted online research. I paid out of my own pocket to get an ILM for my store. I paid out of my own pocket and took vacation days to attend my first automotive conference.

I was sending video messages and using video marketing in 2006. Not to age myself further, but I sold Scions and Scion parts off of MySpace! Why? Because Facebook wasn’t available to everyone yet.

There are some individuals who paved the way for me as well. I give credit to those at the forefront who were a part of creating the first dealership websites, building the first automotive CRMs, experimenting with that little search engine known as Google. They came before me, and it meant I didn’t have to argue with my owner about the importance of a website or a good search ranking. They understood it. The battles those individuals fought allowed me to push harder and farther into new realms of automotive digital marketing.

M O D E R N D E A L E R S H I P. C O M

7

You could say those who came before me fought in the crusades. My generation helped reinvent the industry through countless civil and world wars. We fought and won against antiquated thinking, and our industry is now fully embracing the online age of enlightenment. You don’t have it rough. You have conflicts and skirmishes to handle, but not warfare. You have individuals as obstacles, not entire corporations. The path has been paved for you to go on the offensive. Don’t cower when you have a larger, more powerful army behind you. You’re more well-equipped with data, case studies, proven facts, and success stories supporting digital than ever before. Find your moxie. Fight with your backbone, and not a wishbone.

You’re more well-equipped with data, case studies, proven facts, and success stories supporting digital than ever before. Find your moxie.

Moreover, we ask this newer generation to come together. My generation prided ourselves on working together to improve the industry as a whole. We built our reputations through our hard work. The concept of personal branding wasn’t a goal for us; it was a by-product. Don’t worry about your individual accomplishments. Work toward making everyone around you better. We want to add you to our army of do-gooders. Don’t function as a self-fulfilling mercenary only out to improve your own lot in life, but instead create a better outcome for the whole of automotive.

You no longer need to convince others of the value of CRM, social media, paid search, reputation management, and the like. You just need to put them into play with consistency and enthusiasm.

The march toward a more progressive, lessantagonistic online automotive marketplace has begun. We hope we’ve made you front-line ready to succeed. You have all of the weapons needed at your disposal. You just need to recognize your power, and use it to the fullest. We ask that you carry our legacy forward. You’re the next generation of automotive leaders. You’re welcome.

8

MODERNDEALERSHIP

MODERN OPS

So here is our request of the newest generation of progressive retail champions from those of us who came before you. Push forward more than complain. You don’t have to butt up against the hardest battles. The game-changing tech that improved customer engagement has already been invented by those before you. You just need to embrace it and use it even better than we did. Find new uses for even more advanced technology.

D I G I TA L M A R K E T I N G 1 0 1

By Julian Johnston, Senior Director of Product Consulting at AutoAlert

Space Age Technology and Bedrock Values Looking to the Past for Success in the Future With every press release about autonomous vehicles, or targeted ad for a product that you literally just talked about, or price tag that adjusts based on purchasing habits, it’s easy to feel that we are barreling into a futuristic world à la the Jetsons. (Thanksgiving-flavored dinner pill, anyone?) Hell, I read an article the other day talking about how FB discontinued their artificial intelligence efforts because “the robots became too smart and developed their own language.” Think about that one for a second. MIND=BLOWN.

M O D E R N D E A L E R S H I P. C O M

9

Our industry is no different as we try to navigate through this constantly changing world of digital marketing. It seems like every time we turn around there’s a new concept we have to learn, a new acronym to google, a new strategy to deploy, while at the same time keeping our eye on the goal that truly matters: selling and servicing more vehicles than we did last month, last quarter, last year. And the scary part is, this trend doesn’t appear to be slowing down anytime soon. Truthfully, I don’t envy the operators or marketers of a dealership, simply because they have to be a jack-of-all-trades just to keep up with everything.

1. Start with the customers you already have.

As we continue to try to keep up with constant innovation and make sense of this whirlwind of information, a lot of us have forgotten the most important part of our business: relationships.

We know in this industry, more than any other, in the minds of the customer we are the bad guys.

So, for us to be able to tear down their walls, build trust, and earn their business is a massive victory.

It is bad that we aren’t placing more effort in making sure our customers know how important they are to us. But you know what is even worse?

We are relying on the processes within our CRMs to handle all of the communication to our most important asset, and these processes are often nothing more than guesswork. You can rest assured that most communication going out is the wrong message, at the wrong time. So, all that work building trust is squandered by ineffective follow-ups that disengage these customers from your brand.

I don’t think I’m saying anything revolutionary, because deep down we already know that relationships are the core of our business— it’s just time to bring them to the forefront of our marketing strategy. And who better to look to for insight on how to build genuine relationships than our previous generations?

Our grandparents are more equipped to handle this world of social media because they didn’t think twice about bringing a casserole to a sick neighbor. In business, sales people knew and greeted their customers by name—knew their families, their birthdays, often even what their mutual interests were. In fact, it was these relationships that built the foundation of the dealerships we are operating today.

My challenge for you is this: As we continue to move toward a Jetsons world, it is the Flintstone mentality that will win.

If we match this relationship-focused strategy from the good ol’ days with the capabilities of modern technology, we can scale what our grandparents did so well and build meaningful relationships within our markets. For some of us, this mind shift will force us to change the culture of our dealerships, which at first may seem to be a daunting task; however, here are three things you can focus on today that will have a profound impact on your dealership going forward.

10

MODERNDEALERSHIP

We get so focused on acquiring new business that we have a tendency to forget about the customers we already have. In fact, when I speak to dealerships, they can generally rattle off stats on how well their internet department is doing; however, if I ask, “How are you following up with your sold customers?” I generally get one of two responses: 1. They have no idea, or 2.

An admission that it is the weakest part of their dealership, which is crazy to think about because we have already done the hard part.

It is time to reengage.

At the very least, it is time to do an audit on your CRM. What type of communication is going out? Put yourself in your customers’ shoes and think about how you’d feel if you received this communication. I think you will be shocked by how irrelevant the message actually is. Now, if you’d truly like to have this part of your business covered, consider replacing a “time based” follow-up plan with a “data based” follow-up plan.

Find a partner who gathers all the relevant data on your customers in one place to determine exactly who you need to reach out to, with what message, at what time.

2. Empower your employees to be advocates of your dealership.

Your employees hold the key to the relationships in your market. They are the reason a customer will drive 30 minutes out of the way to come to your dealership … because they “know a guy/ girl.” If we can agree that relationships are the foundation of our business, then let me ask, where are relationships being built in today’s world? On social media! Make it easy for your employees to engage with their friends and family by giving them relevant information to share. Often your employees will have their own demographic reach on Facebook or Twitter that your dealership simply couldn’t reach otherwise. Make it easy and fun with AutoAlert’s PandoSocial. You might not ever know when consumers will decide they are ready for a new vehicle, but your goal is to make sure they know that their friend—your employee—is their insider that will help them navigate the process.

3. Your reputation is more important than ever.

Today’s shoppers will seek out your reviews online.

They’ll pay attention not so much to negative reviews but how you handled those customers’ concerns.

Again, it all comes back to relationships, and they’ll put themselves in these customers’ shoes and want to see you treating them well. Much like in the past, your reputation can make or break your business—the only difference is reputation went from word-of-mouth to documented online for the world to see. “The customer is always right” is an older generation maxim that definitely applies. Use tools like ReputationPro to monitor your online reputation and ReviewBuilder to build positive reviews.

It is important to know that the only thing we can count on in this industry is change; however, as we navigate this futuristic world of digital marketing, it’s Stone Age ideals that stand the test of time. Regardless of what the next “big thing” is, we should always make decisions based on how it will help foster a relationship with each of our customers. Let’s face it: For many of us, this is why we got into the business in the first place—we like people. Care about your customers and they’ll care about your dealership.

“ Can we please deploy some soul, and scale it?!”

– Gary Vaynerchuk M O D E R N D E A L E R S H I P. C O M

11

TODAY’S

Golden Opportunity: Dedicated Service Websites

By Owen Moon

CEO of CarClick360.com and Service Marketing Executive for DriveServiceSites.com

The wheel. The steam engine. The internet.

These inventions were all important moments in American history that still have a strong impact today. While today’s dealerships spend thousands of dollars every month trying to reach people who are shopping for vehicles online, many ignore their most profitable area—the service and parts departments.

How big is the automotive parts and service market? $340 billion annually! Today, dealerships only capture about 30 percent of this revenue.

The other 70 percent is going to non-dealers, like Meineke and Jiffy Lube. A statistic from NADA says, “Less than 3 percent of any dealership’s website contains service content.”

That’s why I call this The Golden Opportunity!

So how do dealers get this revenue back as well as position themselves as superior in the market? The answer is a dedicated service website for their dealership.

12

MODERNDEALERSHIP

With a dedicated service website, you can give your service department the look and feel it deserves while helping your dealership show up in online searches for the services you offer.

Why should a “quick lube shop” get the service business of your customer? The answer is that it shouldn’t, but its website content makes it show up first in searches.

MODERN FIXED OPS

The truth is that the manufacturer-trained technicians with OEMstocked parts are the better choice to work on the customer’s vehicle, but this is not discussed nearly enough. Also, dealerships are not enticing their customers with specials on routine maintenance, like the “quick lube shops” are. Many customers assume the oil change at the dealership is overpriced and not worth the call, plus they would probably only see the word “oil change” once, if at all, on the dealership’s main website, without any real reason given to go there for the service. Not to mention, dealership amenities for service customers—gourmet coffee, kids’ area, luxurious lounges, loaner cars, and snacks—are a far cry from the “quick lube shop” experience, but how often are they discussed?

These superior amenities, specials, services, and parts are front and center on the dedicated service websites from Drive Service Sites (www.driveservicesites.com), as is the ease of scheduling an appointment and the call to action to do so. All this in a customized design that considers the mobile experience first that ranks organically and positions the dealership to flood page one with key words to increase SEO. I suggest that dealers use an incognito window to google their own brand, plus location and various routine maintenance services (Target City + Brand + Service). If I were them, I would want to use as many key words as possible on page one of their site, because it’s full of gold.

The Golden Opportunity is here.

It’s time for dealers to dominate the market for service business by allocating a portion of their dealership marketing budget to digital fixed ops marketing—and start winning back parts and service customers with a focused strategy.

M O D E R N D E A L E R S H I P. C O M

13

14

MODERNDEALERSHIP

WE BELIEVE WHEN YOU FIX COMMUNICATION THROUGHOUT YOUR DEALERSHIP, EVERYBODY WINS.

WIN WIN WIN FOR YOUR

CUSTOMERS

Communication attached to the customer offers clear, consistent messaging all in one place.

FOR YOUR

EMPLOYEES

Let your staff know where they are supposed to be. No more intercom announcements.

FOR YOUR

DEALERSHIP

Less confusion and less wasted time.

CALL US TODAY FOR A TEST DRIVE

(833) 842-5262 AUTOALERT.COM/PANDO

M O D E R N D E A L E R S H I P. C O M

15

In 1886, a phone book printer ran out of white paper for the local businesses and used yellow paper instead, creating the all-new business section.

This gave customers business information at their fingertips and allowed them to shop from full-page advertisements for products and services. Business owners quickly responded by spending their advertising dollars on this direct-marketing tool.

Twelve years later, an automotive ad in a local newspaper promoted ditching the horse for a car, and then came home radios and televisions. So for most of the 1900s, dealers spent their advertising dollars on print, radio, and television ads. Over a century later these traditional spends have become a marketing habit for many dealers and have created blocks to adjusting to the modern consumer’s needs.

Through the 1990s and into the 2000s, the “world wide web” quickly gained traction, as the internet became more user-friendly with seemingly unlimited information. Today, business information is available to consumers as quickly as an internet search. Dealers need robust websites updated daily, plus SEO/ SEM spends to make sure our sites are the first one shoppers view. We also need banner ads delivered to the low-funnel shoppers in our market area who are ready to make a purchase.

16

MODERNDEALERSHIP

The cutting-edge dealers will be geofencing other area competitors’ customers to deliver their ads while they are shopping. We can geotarget potential customers at local sporting events or while they sit at their kid’s high school graduation with low-cost car ads for their college commute. Your management team will also want to buy all the third-party leads and post inventories on sites like Cars.com, Autotrader, Edmunds—and the list goes on.

Don’t forget social marketing with Facebook, Instagram, YouTube, and Twitter, and snapchatting with friends.

How Much Money Are You Willing to Spend?

Today, dealers can advertise to auto intenders on broadcast TV, cable TV, or OTT (over the top) TV. By 2019 it’s expected that 58 million people in the U.S. will abandon cable and broadcast for OTT TV, according to Premion Media. They will watch their favorite series on any device, anytime, anywhere. That’s 20 percent of people age 18 to 49 who will not view your message if you don’t place non-skippable commercials. Getting your message on local radio stations or internet radio such as Pandora or iHeartRadio are just a couple of other choices dealers have. Websites, SEO, SEM, third-party sites, email blasts, e-newsletters, Facebook, Intragram, Twitter, YouTube, geotarget this or geotarget that. This is a lot to wrap your mind around, but with the proper digital strategy, your business can grow.

For the last 100 years, the car business hasn’t changed; your customers are still the best source for repeat and referral business, so data mining with AutoAlert should be your main focus! Conquest business is best done locally by branding and marketing with your team through community events.

Taking advantage of all these new marketing options can be difficult to fit into your budget, but a marketing plan will help sort out what is working. Spending money with traditional broadcast television and radio is fine for a large-area reach, while cable and OTT smart TV budgets can be used to saturate a selected area. Scheduling timely delivery of digital banner ads within the area you’ve selected to saturate via your cable programing can increase customer interaction.

don’t completely answer the customer’s questions, stop spending your money on more leads. What is your ROI for all of the places you spend your money—and most of all, did you sell more cars?

If spending money on your website and its placement is important, having third-party sites plus other leadgenerating sources is imperative. Email blasts and social marketing can help target your market area, but don’t spend more than your infrastructure can handle. If your internet response times are longer than 20 minutes and your team’s email responses

You decide!

Marketing our dealerships in the future may include virtual-reality headsets in place of today’s mobile video recordings. Emails could be replaced by texts, YouTube, Instagram, Twitter, and Snapchat. In this new world of 5G (5th generation) networking, we’ll have higher capacity than current 4G, allowing a higher density of ultra-reliable mobile broadband users supporting all our devices. Talking to your watch while watching videos on it, just like George Jetson at his full-time job, working two hours a week for Spacely Space Sprockets, as a digital index operator? Welcome to our new world!

MODERN OPS

What’s a Dealer to Do?

Jetsons?

or the

By Brian Huth

Chief Marketing Officer, Sam Pack’s Five Star Ford M O D E R N D E A L E R S H I P. C O M 17

HOW HEALTHY IS THE MARKET?

By David Mondragon, Former Executive Director of Retail Innovation & Strategy for Ford Motor Company The automotive industry is preparing for massive change with far-reaching structural and economic implications for our dealers and workforce. On the surface, key economic drivers remain well positioned for growth. Market indicators that should be high are high, and indicators that should be low are low. Consumer confidence is at a seven-year high, the stock market is at an all-time high, and housing starts are up from prior year‌ a leading indicator for truck sales. Average gas prices remain well below $2.50 per gallon, unemployment remains low, inflation and interest rates are low ‌ all signs of a strong economy and healthy industry.

18

MODERNDEALERSHIP

U.S. SEGMENTATION TRENDS 17 PPTS

14 PPTS

53% 39%

44% 36%

47%

33%

3 PPTS 14%

2009

2016 CARS

2017 YTD

2009

2016 2017 YTD UTILITIES

2009

17%

17%

2016 2017 YTD TRUCKS

Full-year industry sales estimates remain in the 17 million range, down slightly from 2016 but extremely strong from historical reference. That said, two industry trends continue to challenge our industry.

The first challenge is segmentation shifts: From 2009 to 2017 YTD, the U.S. car segment has declined 17 points. Car sales now represent only 36 percent of our retail industry, with strong growth in utilities and trucks over the same time period. This shift has been supported by low gas prices, an aging population that prefers the confidence and functionality of SUVs, and higher margins associated with SUV and truck sales vs. cars for both dealer and manufacturer. Cars have traditionally been the gateway to automotive brands, bringing in first-time buyers who eventually move up the brand ladder.

Over time, high-cost entry associated with SUVs and trucks will challenge certain brands and their ability to attract and retain highly coveted first-time buyers with fewer low-cost car entries in market.

Today, millennials represent only 30 percent of car sales. According to Automotive News, these consumers will represent 40 percent by 2020, with a tipping point of 50 percent coming soon after.

The second challenge is long-term financing: According to Edmunds, the average retail contract length in 2016 was 69 months, the highest on record. Industry incentives are at record levels, and vehicle pricing continues to grow as new models, more trucks and SUVs, and electrification come to market. Unfortunately, household income is not growing at the same rate, and new forms of consumer financing such as balloon payments, shared ownership (both lease and retail), and longer-term financing models will be imperative to support higher industry volumes.

M O D E R N D E A L E R S H I P. C O M

19

CAR PURCHASES BY AGE 2011

2016

2020

2025

TIPPING POINT

80% 70% 60%

50%

50%

40% 30%

20%

Gen Z/Millennials Gen X/Boomers (Under 40) (Over 40)

Gen Z/Millennials Gen X/Boomers (Under 40) (Over 40)

Gen Z/Millennials Gen X/Boomers (Under 40) (Over 40)

Gen Z/Millennials Gen X/Boomers (Under 40) (Over 40)

Source: Automotive News

Edmunds also reports that negative equity for consumers is at an all-time high, with an estimated 32 percent of all trade-ins toward the purchase of a new car in 2016 underwater. This trend will continue to grow in the years to come as vehicle prices continue to outpace household income.

A Changing Landscape Disruption has become the new normal in our industry, with new retail models showing no sign of retreat.

Real-time retail is here to stay as consumer demand for transparency, instant gratification, and mobile reach relentlessly encourages faster change. Our world has quickly moved from analog to digital with massive amounts of data driving decisions. Consumers track all aspects of their lives from health to finance online, and according to Digital Commerce 360, researchers predict e-commerce will account for 17 percent of all U.S. retail sales by 2022. The U.S. will spend about $460 billion online in 2017. These figures will continue to climb as mobile and internet use expands in the U.S., and the automotive industry will be heavily influenced by this trend.

Transportation shifts to ride-sharing companies such as Lyft and Uber will continue to expand. New subscriptionbased models like Clutch will challenge conventional purchase models, and pay-as-you-go platforms will emerge as millennial consumers, not satisfied with traditional automotive ownership, will choose emerging options to fit both lifestyle and budget categories.

20

MODERNDEALERSHIP

Real-time retail is here to stay as consumer demand for transparency, instant gratification, and mobile reach relentlessly encourages faster change.

Risk- and conflict-adverse millennials and Generation Z consumers shift the stage for a new retail environment of the future. Today, millennials represent only 30 percent of car sales. According to Automotive News, these consumers will represent 40 percent by 2020, with a tipping point of 50 percent coming soon after.

The tipping point will move us from hightouch, high-cost showroom sales to low-touch, low-cost digital sales. Higher use of artificial intelligence will enhance communications with customized, realtime customer interaction to support sales at reduced cost. Lack of consumer trust in manufacturer and dealer by millennials will create an opportunity for social media to fully replace traditional advertising. Precise one-to-one marketing will tailor messages to both shopper and owner, allowing dealers to connect to customers more efficiently.

Over time, the compression of retail margins and potential for a softer industry will ripen the vine for industry aggregators. Large dealer groups and industry disrupters await opportunities that come as long-time owners decide to cash out.

Electrification of our industry is approaching fast. Many brands and countries are pledging 100 percent adoption in the near future. Sources predict that by 2034, half of all new-vehicle retail sales will be electric, which could bring dramatic changes not only to the front-end of your business but also to your service department. Think about the implications of selling vehicles without traditional ICE powertrains.

Also think of the economic shifts in power as longtime oil-producing states face lower demand with mass adoption of electric powertrains.

Autonomous vehicles also bring huge implications to our retail environment. IHS Automotive estimates the autonomous vehicle industry will hit 21 million units globally by 2035. Who will handle the sales and service of these vehicles? Will automotive dealers be forced to compete with large leasing companies for this business?

Future Impact on Dealerships According to NADA’s “Dealership of Tomorrow� study released in January 2017, the majority of vehicles will continue to be transacted at or by a dealership through 2025. This gives us time to prepare and respond to these seismic shifts in our industry. Dealers who see these shifts not as threats, but as opportunities, will prevail. The U.S. franchise model is the envy of the world, and dealers, brands, and manufacturers who stay ahead of the curve and adapt quickly will not only survive, but thrive.

Disclaimer: All opinions and comments shared in this article are expressly those of the author and therefore are not associated with any company or brand, unless specifically noted in the article.

M O D E R N D E A L E R S H I P. C O M

21

22

MODERNDEALERSHIP

GENERATION NEXT IS GENERATION

NOW

By Mat Koenig, CEO of BDA Spanish and Rockstar Auto Conference As the founder and CEO of a Spanish language marketing company, BDA Spanish, the first question I get from most dealers I meet is “You speak Spanish, right?” And my answer is no, I got a D in Spanish. This always leads them to ask, “What made a white guy from Michigan decide to create a Spanish automotive classified site—the only true Spanish automotive website platform in the United States?”

The answer is simple, and I’ll share it with you at the end of this article. But first I’m going to share some important information about why you want to care about Spanish-speaking shoppers too.

I’ve been in the automotive industry for just over 23 years.

During this time, I’ve heard a lot of stereotypes when it comes to Hispanics: • They only buy used cars.

• They can’t get financed because they don’t make as much money.

• They don’t buy from dealerships; they buy on craigslist.

• They can’t speak English.

• They aren’t online as much and don’t shop on their phones.

Like all stereotypes, these are totally false and could be costing your dealership big bucks!

M O D E R N D E A L E R S H I P. C O M

23

The Biggest Mistake Dealers Are Making Is Stereotyping the Hispanic Population According to an April 2017 article by Sara Hasson at Univision, U.S. Hispanic buyers are driving new vehicle sales growth in the United States. She states, “In 2016 U.S. new vehicle sales hit a record high. With a mature market comes the pressure to find organic areas for growth, and no other segment of the population is driving more positive growth in the auto industry than U.S. Hispanics.”

“ No other segment of the population is driving more positive growth in the auto industry than U.S. Hispanics.”

Hispanics Aren’t Just Buying—They’re Buying MORE “On average, Hispanic [car buyers] are 12 years younger than non-Hispanics and return to buy new vehicles at the same rate as total market, every 3.4 years. Therefore, Hispanics have the potential to buy 3-plus more new vehicles in their lifetime.”

¿Hablas Español?

According to The Nielsen Company, you need to understand that “two languages are better than one.” The article reads, “In total, 55 percent of Hispanics are bilingual, while 27 percent are English-dominant and 19 percent are Spanish-dominant.

Spanish is still spoken by many of the English-dominant speakers, however, and the growing importance of Spanish makes dual-language competence a benefit for marketers in mainstream America.”

So Hispanics aren’t generation next— they’re generation NOW, for anyone who wants to increase sales and recessionproof their dealership. With a solid plan, just about any dealership can create consistent growth over the next 20 to 30 years by focusing on Hispanic buyers.

“ Two languages are better than one.”

Hire Hispanic People Who Speak Spanish You can’t serve people well if you don’t speak the language. George Lopez said it best when he said, “We can speak English … we just don’t want to speak it with you.” What he didn’t say is 8 out of 10 Hispanics speak Spanish at home, so you need staff who can serve people in the way they prefer. Plus, according to Pew Research, 33 percent of Hispanics speak “less than very well” English at home, or no English at all, so how much business are you missing?

Have a Presence This isn’t rocket science. Just like your English marketing, you need to have a place for people to view your cars in Spanish. That means developing a Spanish website or listing your cars on a Spanish classified site like www.buscadordeauto.com so Hispanic shoppers can view vehicle information in the language they prefer.

Help Them Find You Once you have people in place and a presence online, it’s time to promote your dealership, products, and staff to the Hispanic community. Facebook, Google, and Bing are great places for targeted ads to reach Hispanic buyers as long as you have everything else ready to serve them well.

I said I’d come back to why a white guy from Michigan with a D in Spanish founded a Spanish marketing company, so here it is: I got an A in economics. With the growth of Hispanics in the United States, I knew that this would be the best way for car dealers to consistently grow their sales, year over year, if only they would learn to say hola to Hispanic buyers.

MODERN COMMUNICATION

How to Serve Hispanic Buyers at Your Dealership

Can Social Media Serve a Purpose When Tragedy Strikes?

By: Joey Little Social Media Director at AutoAlert

S

ocial media is about connections—keeping in touch with those we care about. In business, this certainly includes our customers and employees.

Although most of our posts could be categorized as “light entertainment,� sometimes the expansive reach of social provides the perfect forum to make a real difference.

When Hurricane Harvey blasted Texas on August 17, it was the first major hurricane to make landfall in the U.S. since Wilma in 2005. More than 40 inches of rain fell in many areas in just four days as Harvey slowly meandered across the state, causing catastrophic flooding. Hundreds of thousands of homes were affected, displacing more than 30,000 people and prompting more than 17,000 rescues.

There were 77 confirmed deaths. Economic losses are still being measured but are estimated to be between $70 and $200 billion.

The tragedy is overwhelming and leaves many wondering what, if anything, can be done to help.

This is when social media really can make a difference. Many businesses have hundreds if not thousands of followers, who each have their own large number of followers. Ultimately, what is the benefit to this reach?

It might not be posting words of encouragement or sending prayers and good thoughts for those involved, which could be seen as “Hey, look how concerned and kind we are,” or worse, as a subtle opportunity to sell. Some customers could be offended by words like “prayers,” and although you do want to be yourself on social, as a business it’s best to remain as neutral as possible and think about everyone’s perception.

Where social really works in these situations is when your business wants to take definite action, like the team at Gary Crossley Ford did immediately after Harvey hit.

“IT WAS A BIG SHOCK HOW BAD THINGS REALLY WERE DOWN THERE,” DEALER PRINCIPAL TODD CROSSLEY SAID. “EVERYBODY WANTED TO HELP.” The two wanted to do it right, so they enlisted the help of the Teamsters Joint Council #56, True North Hotel Group, ABF Freight, and others to iron out all the details, like how to transport the items and where to take them.

One of the requirements was that items couldn’t be sent singly—they had to be on a pallet, wrapped.

Knowing that nobody would buy an entire wrapped pallet of anything, Crossley’s team knew they would need to find a way to clear this hurdle. They decided to move forward without wasting any time.

“It was a big shock how bad things really were down there,” Dealer Principal Todd Crossley said.

“Everybody wanted to help.”

“Once we knew that people who needed this stuff were actually going to get it, we reached out to the community on social,” Crossley said. “We told them we have a safe, reliable place to give food and other necessities.”

Crossley knew that giving money was an option, but that it’s not always possible to know exactly where the money is going and how it’s being used. He decided to take a more direct approach, partnering with John Ferguson of Ferguson Properties to collect basic necessities that so many were left completely without.

The response was overwhelming. Gary Crossley Ford’s showroom soon became a storage space for all of the food and supplies. The Facebook post caught the attention of friends at Price Chopper, a local grocery store, who donated plastic to wrap the items, which ABF offered to pallet.

“ONCE WE KNEW THAT PEOPLE WHO NEEDED THIS STUFF WERE ACTUALLY GOING TO GET IT, WE REACHED OUT TO THE COMMUNITY ON SOCIAL,” CROSSLEY SAID.

In all, nine pallets were wrapped up, packed up, and trucked down to Texas about a week after the hurricane hit.

Social media allows us to connect with people online and in real life. In times of tragedy, it can serve as a tool that can be used to help our friends, our neighbors, our community, and our country, if people are willing to take action.

Serving Up a

Make Your Customers #1 to Be #1 – Matt Unger’s Tips for Gen Next Dealers When it comes to car sales, the game is changing—fast.

That’s not bad news, says Lexus Santa Monica General Manager and former beach volleyball pro Matt Unger. His key to surviving and thriving in a challenging marketplace?

“It’s still all about relationships,” Unger says. “To continue to make customers happy in the car world, it’s a great feeling.”

28

MODERNDEALERSHIP

M O D E R N D E A L E R S H I P. C O M

29

That great feeling has translated into decade after decade of success at Lexus Santa Monica.

The dealership is one of LAcarGUY’s 10 awardwinning dealerships, serving the Los Angeles area since 1964. Unger got his start at the dealership as a sales manager 20 years ago, then became general sales manager before being named partner and general manager in 2015. Through all his various roles, creating the perfect customer experience has been his number-one goal.

It’s safe to say he’s succeeded. The dealership has received the prestigious “Elite of Lexus” award an impressive 22 times, acknowledging perfection in customer service. This no doubt has contributed to the fact that their number of repeat customers keeps growing.

The years Unger dedicated to leading the California State University, Northridge (CSUN) volleyball team—while breaking record after

30

MODERNDEALERSHIP

record—plus his 10 years as a pro beach volleyball player, helped shape his approach at Lexus Santa Monica.

“Volleyball definitely carries over in leading people. Especially in six-man, when you’re the setter, the captain, you’re making decisions not just for yourself but for the whole team.”

When he was inducted in the CSUN Volleyball Hall of Fame last year, former head coach John Price was quick to point out what set Unger apart. “If this were football, Matt would have been the quarterback. He understood more than anybody what he needed to do to be successful,” Price told the university paper.

No question Unger has used his strong leadership skills to drive the Lexus Santa Monica team to succeed. Now he’s sharing his best tips for dealerships to retain customers and see continued growth in a quickly changing market.

M O D E R N D E A L E R S H I P. C O M

31

Technology is making just about everything faster. Long gone are the days of having to go to a video rental store to get a movie—now we just Netflix it. From buying online and instant downloads to calling a ride and having it show up in three minutes, customer wait time is greatly shortened. This carries over to automotive, where Unger says showing customers you value their time is the most important thing you can do for them.

“Efficiency is essential. We need to make sure we don’t waste any time, and that we’re efficient with our customers’ time,” he says. “And be transparent. If you tell a service customer their appointment is going to take 60 minutes, make sure it takes no more than 60 minutes.”

One way to honor your customers’ time is to use a software tool that keeps your team connected at all times. The more you can automate your sales and service processes and simplify your communication, the better. Unger and his team have seen great success with AutoAlert’s easyto-use Pando app.

32

MODERNDEALERSHIP

“It’s been a total game-changer for us,” he says.

“Our first goal is always to make our guests happy, and this has been a great tool for helping with that.

We’re not chasing employees down anymore.”

Unger also uses a BDC to set service appointments as a courtesy for customers, so they don’t even have to think about when to service their car. And as the ROs at Lexus Santa Monica continue to climb, Unger has another solution for meeting the growing need.

“I have plans for opening a second service department. Service is the backbone of what we do, and always will be,” Unger says. “As we continue to grow to 130, 140 ROs per day, what kind of stress does that put on our people? We need to continue to be more efficient.”

It’s more important than ever for consumers to know that you value them and can provide exactly what they need. Automated CRM communications get thrown in the trash, or worse, create a bad feeling around your dealership for your customers.

They don’t want to be sold. Unger uses a powerful data-mining tool to guarantee the right conversation with each and every customer. One area where he’s seeing a lot of success with this is in service to sales.

“We’re reaching almost 100 percent of our guests with PandoAlert,” he says. “These opportunities are a win-win. They get a new car with the same payment, and we get a nice used car that we can certify.”

The tool allows Unger’s team to quickly view the best deal for every customer and either offer that deal right away, if the time is right, or print it out and attach it to the RO, giving the customer the freedom to look it over later.

The team at Lexus Santa Monica also checks in with customers every six months, just to make sure they’re still happy with their purchase and don’t have any concerns. It’s a true service, without any expectation attached to it.

Unger is also proud to meet the growing need for green cars and new technology. Lexus is a leader in green automotive, releasing the first hybrid luxury car in 2005: the RX 400h. Although he acknowledges that fully autonomous has its place (“like when you have a long, straight commute and can get some work done”), he’s certain there will always be people who just love to drive. Providing environmentally friendly options for them, as well as the latest in safety technology like collision prevention, makes him proud to be a part of the Lexus family.

Valuing your customers’ time, and providing more precisely what they want, just might already exceed your customers’ expectations. But Unger doesn’t stop there. He stays open to the quickly changing times and then adapts to go above and beyond.

For example, in addition to offering loaner cars to busy service customers, a Lexus Santa Monica employee will take an electric bike out to customers’ office or home, leave the bike, take their car in for service, and then return their car once service is complete. The team also arranges Uber rides for customers who prefer that.

Unger acknowledges that although Americans love their cars, very few love dealerships. So he’s staying flexible by adopting technology like e-contracts to allow purchases to be made via iPad, with delivery of the brand-new car straight to the customer.

He even sees a possibility in the near future for building showrooms at malls and other high-foottraffic locations.

“People want the no-pressure, no-haggle type of experience that Tesla provides, and I think there’s an opportunity there for us to do that. Make it a nice, relaxed atmosphere for the customer and generate some leads,” says Unger.

Ten years from now, people will still want to drive cars. Yes, there will be more autonomy with vehicles and more technology to improve driver safety, but according to Unger, this can’t ever replace the freedom that comes from being in the driver’s seat.

“A lot of people just love their cars, love driving,” he says. “I don’t see that ever going away.”

M O D E R N D E A L E R S H I P. C O M

33

KEYS TO MAIN PROFIT WITH GENERATION

34

MODERNDEALERSHIP

NTAINING THE NEXT By: Robert Christman Regional Director of Sales, Automotive.

USA Today Network-Tennessee.

Falling gas prices. Rising gas prices. Hurricane Harvey devastates Southeast Texas. Hurricane Irma crushes Florida. All of these are major factors in the auto industry today, shifting the needs and desires of the buying cycle. Change is happening all around us.

How do we keep up with the change?

Or better yet, get ahead of it?

M O D E R N D E A L E R S H I P. C O M

35

Millennials represent 77 million Americans, or one-quarter of the U.S.-buying population.

They wield $1.3 trillion in buying power.

Getting ahead of this generation is not as daunting as you may think when you know what they’re looking for:

A VEHICLE WITH ALL THE BELLS AND WHISTLES, INCLUDING THE LATEST TECHNOLOGY. A SAFE VEHICLE THAT WILL LAST AND HAVE MINIMAL UPKEEP COSTS. A PERSON THEY CAN TRUST AT THE DEALERSHIP. TO BE COMMUNICATED WITH, IN THE WAY THEY ARE MOST COMFORTABLE. Before we talk about how to reach this generation, let’s talk about how we hold a profit when dealing with this consumer.

36

MODERNDEALERSHIP

With the fluctuating gas prices, the next generation has moved away from sedans.

I spoke with an influential Ford dealer in Tennessee recently, and he is wondering if we’re looking at the death of the sedan.

I don’t believe it’s a death watch, but it certainly is the thinnest part of the auto market today.

Profits are being held with light trucks, crossovers, and CPO vehicles, so let’s focus on these three and how we can move more profitable vehicles faster.

How do we do that?

First we focus on CPO vehicles. They offer the trust (at the dealership level), safety, and latest technology at the lowest cost for the consumer. That covers three of the four things today’s consumer wants and has the highest grosses for you.

Second, focus on your social media presence. Places like Facebook, DealerRater, and Google+ are visited by just about every millennial today, and these reviews are extremely vital to their decision-making!

Two out of every three in this segment are influenced by social media reviews. Plus, they want to connect with the salesperson before they come into your store.

Have happy customers leave reviews about your store... ...and about your salesperson on the top social media sites from their own devices while they are still at your store. They’re never more emotionally connected to your store, your salesperson, or their new purchase than at the moment of purchase! Leverage this to win future customers.

Third, mine your own data and your service drive for new CPO customers. You have new opportunities for sales in your own CRM, DMS, and service bays that are being left to walk across the street to your competitor.

M O D E R N D E A L E R S H I P. C O M

37

Many of your previous used or CPO customers bought those vehicles instead of a new vehicle due to no or damaged credit. After two years of payments, they should have better credit and maybe the itch to step up to a more modern, upgraded vehicle. Have a salesperson work the service drive and talk with your customers.

At the same time, have someone pull email addresses and phone numbers for all preowned sales from 18 to 24 months ago and promote your light trucks, crossovers, and CPO vehicles. Follow those emails up with phone calls.

Work them!

Finally, communicate with this generation the way they want to be communicated with.

That means through social media, blogs, and text and mobile ads.

Have an active social media strategy that speaks to the millennial with meaningful content. If they don’t connect with your content, they won’t connect with you and won’t buy from you. Post often and keep your content fresh.

Use text. Send photos, comments, and videos to their smart phones—85 percent of this segment has a smart phone, and they use it 45 times per day. How better to be top-of-mind than to be active with them via text?

Finally, since they look at those phones 45 times a day, connect with them via mobile ads. Put your advertising on sites that retarget your consumer. Know your buyer, their demographic, and what they look for.

Then through mobile ads, be in front of them early and often.

The next generation is not as complicated as you think.

They want the most for the least and want to be validated in their decisions before they make them. They live on their smart phones.

Knowing these basics and leveraging the technology available that allows us to speak their language will also keep us ahead of the many changes in the industry, and to maximize profits in a tightening market.

Where will millennials take the car industry? based on a 2017 poll of 501 car-owning millennials

93.01 %

believe it is a necessity to own a car in today’s society mobile apps like Uber & Lyft have made

16.57 % of millennials re-think car ownership

20.76 % DO NOT believe cars will be necessary in 20 years

approx.

50 %

of millennials would prefer to buy a “green” car over a traditional car

... give up manually driving a car for a self-driving car?

of millennials would.

67.3 % 80.8 % claim they know how to change the oil in their cars

source: www.lendedu.com

43 %

stated that they could change a tire if they needed to

USED CARS SALES MADE EASIER -

and more profitable

A MORE PRECISE WAY TO MEET CUSTOMERS’ NEEDS

By: Kendall Billman Senior Vice President of AutoAlert 40

MODERNDEALERSHIP

SOMETIMES WHAT YOU’RE LOOKING FOR ... ... is right in front of you. When it comes to profitable, effective sources for building your preowned inventory, it’s time to take a closer look at your DMS. With advanced tools and processes, your dealer management system can easily become the best place to find pre-owned cars that sell quickly and turn a big profit.

And that’s exciting. Used cars have historically been a money-maker for dealerships, but sourcing them involves a good amount of resources: time, energy, money – not to mention a good amount of guesswork that can render those resources a wasted effort. Live and online auctions leave dealerships bidding against each other, lowering their margins. And cars sourced this way involve auction fees, transport costs, money spent on repairing and reconditioning, and fixed costs like interest from floor-plan financing.

The longer cars sit on the lot, the more expensive they become.

With the demand for CPO and preowned growing, it’s more important than ever to build a solid inventory of cars that your customers can rely on as being highquality and a good fit for their needs.

This will build customer loyalty as well as your dealership’s reputation.

Advanced data-mining tools allow you to easily turn your DMS into a source for CPO and preowned that are in high demand, turn fast, and increase your profit margin.

An excellent example of the simplicity of this solution happens every day in your service lane.

Getting customers on the lot is more than half the battle, right? You can be alerted ahead of time to who’s coming in for service today, and who just entered the service drive. Be ready with the service-to-sales opportunity they are most likely to be receptive to (trade keys, upgrade, etc.).

Given this knowledge, you have a better chance of sourcing their car, if you want it.

This is where mining your DMS and using that information the right way—combined with big data like consumer shopping behavior— comes into play. With AlertMiner, receptivity is determined by real-time data such as where they are in the car-buying process and their unique car “position,” which could include how far into their retail or lease contract they are, how close their warranty is to expiring, and more.

Let’s take a closer look at retail contract customers as an example.

Currently, the contract average in America is 69.5 months, with 10 percent extending to 84 months. Long-term contracts are good because more customers can afford cars this way, but bad if you have to wait seven years for another sale. Our data shows that customers with 60-month contracts are ready to convert at about 30 months. We’ve also found that as customers come closer to paying off their contracts, they’re less likely to convert. Have you analyzed your current retail and lease customers to define their term segments? What about your average trade cycle per segment?

“AutoAlert is by far our best tool for ROI. The profits are much higher with AutoAlert. We can engage a customer who is not in the market, keep their payments the same, get them into a new car with no money down, and our profits increase on the deal as well, so it’s fantastic for the dealership and the customer.”

BRAD MUGG

managing partner at Norm Reeves Honda Superstore

42

MODERNDEALERSHIP

As another example, mileage alerts give you insight into your customers’ driving habits.

Say John has 24 months to go on his lease but is already over his mileage allotment and is receiving penalties. Letting him know this is a great service to him, and helps keep your dealership front-of-mind when he’s back in the market. But maybe you already know that he’s back in the market because you’ve been receiving data on his shopping behavior.

That’s an opportunity. Now you can engage in the right conversation with him at the right time.

There are times when you want to build a specific inventory of cars, whether it’s a particular make and/or model or a particular type, like CPO. AlertMiner is a tool that helps you find and source these cars quickly. Some dealerships even make a game of converting these opportunities, awarding sales and service team members who bring in the most cars. And because AutoAlert opportunities have proved to convert at a higher rate than opportunities sourced other ways, your team will gain confidence with increasing success.

And then there are times when you know exactly the car you need.

Let’s say you have a customer whose daughter, Sara, is looking for a top vehicle for her first car. A 2014 Ford Mustang fits the bill perfectly, exactly what she wants.

A great service you can provide is to look at upcoming service opportunities for just the right car. Mary is bringing her red 2014 Mustang in for service next week. Maybe Mary will forego service when you give her a printed-out upgrade offer with a similar payment, based on her current shopping behavior. Sara’s parents will love that you have a story on the car. And if Mary isn’t ready to upgrade, your DMS is full of other opportunities!

When it comes to preowned cars, knowing exactly what your customers want – and being able to provide it when they want it – will make your dealership stand out in today’s quickly evolving market. It will also make your sales of preowneds more profitable.

MODERN SALES

WHAT MAKES THEM MORE RECEPTIVE TO A DEAL?

F 8,500 VEHICLE OWNERS B A S E D O N A N AT I O N W I D E S U R V E Y O

Who wants SELF-DRIVING CARS? about 1 /4

of centennials and millennials trust fully autonomous technology today

however...

18-23% increase

all generations show an when asked to forecast whether they will trust it 10 years from now.

Traditionalists (born before 1945) In 10 Years Now

28.4% 8.1%

Boomers In 10 Years Now

29.6% 11.4%

Gen X In 10 Years Now

31.5% 13.3%

Millennials (Gen Y) In 10 Years Now

38.1% 18.9%

Centennials (Gen Z) In 10 Years Now

44.1% 20.9%

WHO HAS THE STRONGEST DESIRE FOR AUTONOMOUS VEHICLES?

59.6% of centennial men had the strongest desire whereas, traditionalist women indicated the least desire

13.3% s o u r c e: www. au t olist .co m

Reaching Generation THE NEXT WAVE OF CAR-BUYERS

BY CATHY NESBIT

Social Media Director at Harry Robinson Buick GMC

I’ve been in research heaven discovering what defines Generation Z, learning which social media strategies influence this “generation next,” and what science says about how they buy.

For the most part, all generations are made up of 16 personalities, so to say a generation is defined by this personality trait or that one is junk. No generation is the “collaboration generation” or the “feelings generation.”

Just because people are put in collaborative situations and told that extroversion is more desirable doesn’t mean that all of them enjoy it one bit. And as for feelings, there have always been those led by logic and those led by feelings, so there’s also not a feelings generation. Granted, some generations may be more self-important or more open, but they’re not overall more feeling.

By 2020, Gen Z will account for 40 percent of all consumers, so we need to get on their radar ASAP. Within the next five years, they will become the fastest-growing generation in both the workplace and the marketplace.

Some great things about Z are they are more involved in volunteering (one in four), and they very much value the opinions of their parents and close family (which is very, very good for you if you’re the go-to car gal for the parents). They are aware of the stigma about millennials and do not want to be labeled the same way. They are self-aware, self-reliant, innovative, and goal-oriented.

So, how do we define a generation? We define them by the things we can’t possibly understand. The things a new generation grows up just knowing and understanding, but to which we have to evolve. The telephone, radio, television, computers, cell phones, rock ’n’ roll—you get the picture.

Gen Z doesn’t remember a time before social media. As a result, they document life, whether asking for recommendations or hyping their last big purchase, by sharing on social media. Given their age, their defining moments are still happening. Key things that have affected them as a generation

44

MODERNDEALERSHIP

Where Do We Find Them?

They’re everywhere. They prefer Snapchat and Instagram, and increasingly, Instagram Stories. They view Facebook as something for older people, but they love their grandmas, and most of them (66 percent) have a Facebook profile.

As long as we exude the qualities they idealize, reaching them is as easy as finding them.

Be Real

They don’t have an 8-second attention span; they have an 8-second BS meter, and once they decide you’re not authentic, they’re done.

Be a Product Expert

They can learn anything on YouTube, from how to play a song on the violin to how to change their brakes. They will turn to those they trust, those who are authentic, and those who know their stuff.

Provide Great Service

They don’t want special treatment, but they are a more traditional group and expect common decency and excellent customer service.

Thank Them

They see themselves as the manager of their own personal brand, and they are willing to “endorse” people and businesses who are real, who they consider to be an expert, who provide excellent service, and who appreciate their business. The more endorsements, reviews, and recommendations you can get translates to more customers (and more money) for you.

Give Back Many in Gen Z are volunteers who believe it’s important for everyone to give back. They want to align themselves with people who are authentic in their giving-back efforts and who care about a cause enough to give back. They prioritize working with a company that shares their philanthropic outlook.

If you broadcast these qualities on social media channels, you will win your share of Gen Z customers.

Overall you can see that reaching Z isn’t mysterious, hard to figure out, or even that different, at its core, from past generations. If we embrace these principles, we can engage this generation.

I’m excited to see Generation Z coming of age. Just like the generations before had to learn to accept rock ’n’ roll, we have to adapt to the ever-evolving mobile world in which we now live. There will always be a next new big app, but being real and building value never goes out of style.

M O D E R N D E A L E R S H I P. C O M

45

MODERN SALES

include the Great Recession’s impact on their parents, student loan debt as a crisis in America, the Affordable Care Act, growing up with a black U.S. president, the legalization of gay marriage, the legalization of medical marijuana in many states, and the fact that there have “always” been twentysomething entrepreneurs who are billionaires. Also, social media has always existed for them, Baby Boomers are their grandparents, and they think millennials are old.

Technology:

When Slow Is Fast and Fast Is Slow

By Rex Weaver

Director of Service Innovation at Lehigh Valley Acura

When service-to-sales first started, it involved little more than a tablet and actually seemed to go pretty well. The vehicle arrived, and after greeting the customer and scanning the VIN, the appointment popped up on the tablet and showed the existing customer.

It went downhill from there.

As we scrolled through the series of screens and continued the walk-around on the vehicle, all the way up to the point where the client signed the tablet and was escorted to the lounge, it was a pretty great experience. But to a service advisor, the process just took more time.

True, it did, but the problem wasn’t that it took longer; the problem was that the advisor thought it shouldn’t take longer.

This is where the understanding of technology’s purpose, and not just the introduction of technology, comes in.

Quicker AND Better vs. Quicker OR Better Technology has provided all of us with so many advantages and opportunities, and there are more seemingly every second. But at your dealership you need to make sure that the purpose of the technology gets explained to the team before the technology is rolled out.

Let’s break some of these tools into two simple categories of purpose: Engagement and streamlining.

The tablet that was introduced in the service 46

MODERNDEALERSHIP

drive was meant to be an engagement tool.

The client is greeted in the service drive and the device allows the advisor to gather and electronically document information and connect with the client at the same time, as well as have the opportunity to examine the vehicle for some basic concerns and perhaps even allow the client to point out some specific repair requests.

And of course, it also gives the advisor the chance to make some upsell recommendations while in the drive.

The tablet also comes into play when we reach the “status report” stage of the process, allowing the advisor to share the findings of the multipoint inspection with the client in a more engaging atmosphere, i.e., without uprooting the client from the lounge to go to the work station, approve the service, and go back to the lounge to wait.

Prior to the tablet introduction: The client comes in and sits at your desk. You get the initial repair or maintenance requests. The client then goes to the lounge. When the MPI results need to be shared, you ask the client to come back to your desk and review the requests, and then after agreement, the client goes back to the lounge.

Another example of a streamlining tool is the electronic version of your multipoint inspection (EMPI) tool. If there is integration between your DMS and EMPI tool, the generation of the repair order automatically populates your dispatch MPI as well as your parts team, so even without the piece of the paper, the process is moving forward. If the additional steps include your technician, he can push MPI results from his work station to the advisor without leaving his work station.

Another example of engagement through technology is big data. This term has been batted about for years, and there is not only a misunderstanding of the term but also a misunderstanding of the purpose of the science of big data.

Every dealership has data. As a matter of fact, you have a lot of data. The purpose and science of BD isn’t in the gathering of it (although this is important); it’s the aggregating the data and using it for your specific purpose.

And one of your purposes definitely should be marketing. And marketing is certainly engagement.

ratios are higher, days of the week or month that she made bigger investments into service work, services that are typically denied, services that are typically accepted, etc.—then market toward that behavior for the greatest success.

For example, if your client always buys brakes but never buys tires, stop sending coupons for brakes and start sending them for tires.

If your client always gives you a great review when he spends a little and always gives you a bad one when he spends a lot, make sure that you’re providing him with an extra-special experience during those more expensive service visits.

Having all of this data is possible without involving a big data company—but you’ll spend days examining each client’s behavior and launching a strategy from there. Or, you can have someone do it for you.

Let’s face it: The days of having a client fit into your business model are long gone. The days of having your business fit into the lifestyle and needs of your clients is here.

Let’s look at what data you currently have on your clients:

• Names • Delivery dates of vehicles • Service histories • Value (meaning the amount they’ve spent in sales and service)

So the problem isn’t data. The problem is how do you segment and effectively use the data to personalize the service and sales experiences for your clients.

Let’s face it: The days of having a client fit into your business model are long gone. The days of having your business fit into the lifestyle and needs of your clients is here.

MODERN FIXED OPS

So actually, your tablet is both an engagement tool and a streamlining tool, especially if additional repair requests are pushed to both the technician and the parts department, and the repair process then continues seamlessly while still engaging with the client.

Another tool at your disposal for gathering data on clients isn’t the newest piece of technology; in fact, it’s probably the oldest one: Ask them.

Spend time with your clients and let them know that you want their experience to be a special one. Tell them you want to tailor their visit to meet their specific needs, and you’ll see that when your priorities are in line, the experience will be excellent for both of you.

When technology is introduced to your service process, spend time with your team to make sure that they have an understanding of what the technology is supposed to accomplish. It’s not always to make life faster; sometimes, it’s to make life better.

If you take one client and look at all of her data—not just the basic stuff you already look at, but everything, like typical time of arrival, time of day when her closing M O D E R N D E A L E R S H I P. C O M

47

IN TH BOX Mike E Davenport with

#1 in sales at Bachman Chevrolet: Louisville, Kentucky’s #1 Chevy Dealer

Mike Davenport didn’t become a 30-car-a-month sales guy overnight. It took hard work, innovation, and dedication to get there. In addition to his impressive sales numbers, Davenport is well known as a leader in personal branding – an empire he’s built through careful attention to his customers and the creative use of social media.

48

MODERNDEALERSHIP

The first car I purchased was a 1998 Dodge Stratus, manual transmission, five-year lease. I was 18 years old – and I got screwed. I got pounded over the coals on that deal [laughs].

Technology has impacted my job in every way!

For almost 18 years now, email, video email, text messaging, YouTube, Facebook live, YouTube live, Twitter, Snapchat, all that stuff – literally while we are doing this interview someone has hit me up saying, “I love your Snapchat! I love your YouTube! I want to buy a car from you.” I’m just trying to hustle and grind and make a good living, and doing it in an honest way to show people that there are more good people in the car business than there are bad, like the stigma suggests. Technology has changed a ton and has helped me to sell more cars, but also to get out there that there are good people in the car business.

We just took on a company to broadcast all our customers’ pictures. We have this TV that everyone would love to have in their man cave – it’s three 60inch TVs wide, three 60-inch TVs tall. It puts up our customers’ pictures and really engages them. They get a text message and can broadcast the picture to any of their social media with the hit of a button.

Well [smiling] … editing videos, scheduling Facebook posts. I’m on two hours of sleep right now. I stay up all night working on stuff: storyboarding videos, thinking of ideas… what am I going to do next on YouTube?

What am I going to do next on social media? That’s what keeps me up.

The biggest thing has been the customer response.

You can go to my YouTube channel and see all the positive responses – “I love your stuff,” “Keep it up,” etc. There are trolls out there, the keyboard warriors, and I love them too, because it means I’m doing things right. But all the people who leave encouraging remarks, that’s phenomenal. That’s the biggest thing.

M O D E R N D E A L E R S H I P. C O M

49

What’s the biggest change in automotive retail since you started?

The biggest change is transparency, which is a good thing.

I tell this to my customers all the time when they want to come in and try to negotiate a car deal. I tell them that when everyone is fast asleep at 2 a.m., except for me, and you are looking at all these websites where all the inventory is pushed to, we have five seconds to capture your attention. That’s been the biggest change. Back in 2000, we would pick up a phone and say, “Hey, when’s the best time you can come in? We won’t let price get in the way.” We didn’t put everything on the internet, and call for price doesn’t work now. That’s a big change.

How did you become a 30-car-a-month sales guy?

I was plateauing, so … I started to go to conferences, interacting with vendors and other sales professionals, who gave me great ideas that I could run with. As soon as I started investing my time – and it takes a lot of time and effort and money – but as soon as I started doing that, I saw my sales go up. I got more ideas, new ideas, new stats of how the customer is doing things based off of AutoAlert, TrueCar, and others. It’s helped me come back to the dealership level and combine those stats with the customer information. My customers say I’m absolutely right based on their experience, and it closes the deal a lot faster.

Who is your mentor?

I look up to Grant Cardone a lot. The way we met wasn’t the best way [smiles] … I called him a washed-up has-been [on Facebook], but once I realized who he is, what he did, now I’m his biggest fan and we’ve become good friends. I wear his bracelet, Champions Dominate, and it reminds me every day to go in, hustle, grind, don’t make excuses – just go out and do it and don’t care what anyone else is doing around you.

Best car on the market right now?

“

You can’t ask thatt question when I’m ’ the Chevy vy dude!

”

It's Time for a Clearer View of Your Marketing Investments With VistaDash, you can: Measure engagement VistaDash goes beyond your basic website metrics, switching the conversation from quantity to quality.

Hold Vendors Accountable Promises can only take you so far in the world of digital marketing—you need results. That's where VistaDash comes in.

Save Time & Money Spend your money and time wisely with an at-a-glance assessment of which campaigns are winning over customers–and which are falling flat.

Schedule your FREE, 10-minute demo today!

(877) 804-1109

www.vistadash.com

Fi na l ly a Clear View

52

MODERNDEALERSHIP

out of manual.

O D E R N D E A L E R S H I P. C O M 53 AI DESIGNED FOR AUTO DEALERSMAT conversica.com/auto

ARE YOU READY TO GET SERIOUS ABOUT YOUR INVENTORY?

WE HAVE GONE FROM 30 UNITS A MONTH TO 90 A MONTH.

Store went from 14 turns to 19 turns, selling 250 cars carrying 190 and gross is $400 higher than months ago.

ARE YOU READY TO GET SERIOUS ABOUT YOUR INVENTORY? J. Hodge - Owner, Ford store Matthew Lasco from Lasco Ford INTRODUCING

Weekly Calls

with management team

Accountability Partners

and a second set of eyes on your inventory

Proprietary Reporting

on inventory status, marketing, stocking and ROI

AN EASY-TO-USE SCORING & CONSULTING TOOL

ONLY FROM

INCREASE GROSS VOLUME 20-30% STARTING AT &$495/MONTH YO U R V I R T U A L D E A L E R S H I P M A N A G E M E N T T E A M

VISIT LOTPOP.COM TO REQUEST A NO OBLIGATION FREE EVALUATION OF YOUR DEALERSHIP

M O D E R N D E A L E R S H I P. C O M

55

POWERED BY

WE BELIEVE THERE IS A BETTER WAY TO CONNECT WITH YOUR CUSTOMERS

REAL OFFERS REAL CUSTOMERS REAL CONNECTIONS

CALL US TODAY FOR A TEST DRIVE

(833) 842-5262 AutoAlert.com/ONE-TO-ONE