2012
DECEMBER
Visit vAuto at NADA 2013—Booth #842
, Denver, Colorado Automotive Group aw Sh ike M , aw —Mike Sh
Three years ago, Mike went looking for a solution to help him compete in the changing used car market — and he found Provision®. Mike and his team fully bought into the velocity management philosophy, and he knows that’s why his dealer group has been so successful. With Provision, Mike turns more inventory and makes more money on every sale. In fact, he experienced a 68% increase in used car sales last year — the largest of any automotive group in North America!
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AutoSuccess Magazine is published monthly at 2300 Hurstbourne Village Dr, Suite 1200 Louisville, KY 40299; 502.588.3155, fax 502.588.3170. Direct all subscription and customer service inquiries to 877.818.6620 or info@autosuccessonline.com. Subscription rate is $69 per year. AutoSuccess welcomes unsolicited editorials and graphics (not responsible for their return). All submitted editorials and graphics are subject to editing for grammar, content and page length. AutoSuccess provides its contributing writers latitude in expressing advice and solutions; views expressed are not necessarily those of AutoSuccess and by no means reflect any guarantees. AutoSuccess accepts no liability in respect of the content of any third party material appearing in this magazine or in respect of the content of any other magazine to which this magazine may be linked from time to time. Always confer with legal counsel before implementing changes in procedures.© All contents copyrighted by AutoSuccess Magazine, a Division of Systems Marketing, Inc. All rights reserved. Reproduction in whole or part is prohibited without express written consent from AutoSuccess. AutoSuccess may occasionally make readers’ names available to other companies whose products and/or services may be of interest; readers may request that names be removed by calling 877.818.6620. Printed in the USA. Postmaster: Send address changes to AutoSuccess Magazine, 2300 Hurstbourne Village Dr, Suite 1200 Louisville, KY 40299.
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THE LAUNCH OF THE 2013 HONDA ACCORD
leadership solution
JimmyVee & TravisMiller
2012 Wrap up
sales & training solution
marketing solution small change
Susie Horne, Account Manager John Warner, Sales-Improvement Strategist shorne@autosuccessonline.com jwarner@autosuccessonline.com
the big deal about big data
RussellGrant
Why are Dealerships So Far Behind Corporate America?
internet sales 20 group success
Brian Ankney, Account Manager super6@autosuccessonline.com
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2013 budgeting
36 38
PaulAccinno
the jewel or the vile? MarshBuice
20
A four-stage preview of the ‘road to reinvention’ for dealers
DalePollak
create explosive bodyshop revenue: 2013 is Your Year DaveDunn
optimize for mobile, or perish
AndrewPrice
Case study: White Bear Mitsubishi RichardHerod
10 22 30 AJLeBlanc
Case study: How JM Lexus Uses iPads in the Sales Process
08 20 24 28 SusanGivens
bridging the sales gap in the internet process
42
how to supercharge sales and profits during a build-out
18
MarkTewart
does your reconditioning process stack up? DennisMcGinn
business technology:
16 18 KevinMcMillen
30 percent of new car deliveries are dirty: SeanV.Bradley
14 BrianPasch
32 34 40 DealerPanel
No Time for Detailing Top Reason
Dave Davis, Editor & Creative Strategist ddavis@autosuccessonline.com
2300 Hurstbourne Village Dr, Suite 1200 Louisville, KY 40299 | p 877.818.6620 / f 502.588.3170 | AutoSuccessOnline.com/AutoSuccessPodcast.com | info@autosuccessonline.com
The Anatomy of a Marketing Campaign
Susan Givens, Publisher sgivens1@autosuccessonline.com
feature solution
WeLCOME TO THE NEW TRUECAR. More than seven years ago, we created our company. Thanks to you, we have a deeper understanding and appreciation of the automotive industry. The many changes we have made are a result of our commitment to a collaborative partnership with Dealers and Manufacturers. TrueCar is happy to announce the launch of a new advertising campaign, developed with direct input from you. Our ads celebrate our new direction and everything you’ve helped us learn. Please feel free to preview our campaign at www.TrueCar.com/Dealer
SusanGivens
sales & training solution
case study:
How JM Lexus Uses iPads in the Sales Process
JM Lexus has been the No. 1 volume Lexus dealer in the world for 20 consecutive years, as well as a winner of the prestigious Elite of Lexus award for 16 years. The dealership’s success is attributed to the corporate philosophy of parent company, JM Family Enterprises, which is comprised of five core values: Consideration, Cooperation, Communication, Accountability and Innovation. These guiding principles led the store to create a new sales process this past year called “The Customer First Experience.” “It’s what separates us from the competition,” said Jim Dunn, vice president and general manager of JM Lexus. “We were looking to continue treating our guests with professional care, but change the traditional car buying experience.” Two primary considerations drove the development of “The Customer First Experience”: The guest should set the pace, and the transaction should be more efficient and respect the customer’s time. Since technology plays a significant role in the purchase of a vehicle, it also became a key component in the sales approach. To help streamline the new process, the dealership started using iPads last spring, which were loaded with CRM, selling and delivery tools. “The Customer First Experience” begins with a JM Lexus product specialist, whose goal is to meet the specific needs of each customer by implementing seven primary steps of the sales process: 1. Guest Bill of Rights — As the guest walks through the dealership, the product specialist accesses the document on an iPad and discusses it with the customer to let them know what to expect from JM Lexus. 2. Vehicle Selection — Once the guest selects a model they are interested in, the product specialist pulls the vehicle up on the iPad for reference and verification. 3. Guest Priorities — With the iPad, the product specialist reviews what the guest’s priorities are to ensure that the vehicle package suits their needs. Rather than having a product specialist control the decision making, the dealership found that this part of the process built trust as well as increased consumer confidence in their own selections.
5. Videos — While the product specialist prepares the vehicle for a test drive, guests watch a technology tutorial that helps familiarize them with the latest advancements, as well as a testdrive video that keeps them engaged and strengthens brand awareness. 6. Vehicle Comparison — New-to-new vehicle comparisons give the customer a detailed look at the chosen Lexus model vs. the competition, eliminating the need to shop at another dealership. New-to-used comparisons help them evaluate the benefits of a new Lexus vs. a previously owned vehicle. 7. Delivery — Lexus has developed applications that enable delivery specialists to customize the delivery process based on the consumer’s comfort level with the vehicle technology.
From start to finish, guests love the new process. Transaction time is down 25 percent and JM Lexus received a 4.9 (out of 5) rating on DealerRater. “What sells vehicles is really a combination of our associates, the ‘WOW’ factor and our ability to leverage advanced technology like the programs we use on the iPad,” said Dunn. “The customer experience is one of the most critical factors in driving sales today,” said Jim Hughes, co-founder of IntellaCar, the iPad selling system used by JM Lexus. “Dealerships that offer an engaging experience have a real competitive advantage.”
Susan Givens is the publisher of AutoSuccess. She can be contacted at 877.818.6620, or by e-mail at sgivens1@autosuccessonline.com.
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4. Walkaround Presentation — Based on the guest’s selected priorities, the product specialist starts a vehicle presentation of the chosen Lexus model and package using the walkaround screen from the IntellaCar iPad selling system app. This helps answer specific questions that may come up.
DLR-ST
DAYS
GROSS PROFIT
UNITS SOLD
Week of August 25 Honda - WA Kia - OH Chevy - MO Buick - IL Chevy - NY
5 5 5 5 5
29 42 28 26 28
$109,973 $134,304 $136,316 $ 91,341 $168,213
Week of September 1 Chevy - CAN Nissan - CO Hyundai - OH Chevy - MO
5 6 5 5
20 40 50 25
$104,421 $201,339 $160,821 $130,221
Week of September 8 Chrysler - OH Subaru - WA Chevy - MI Indep - IN
5 5 5 5
38 35 25 31
$204,188 $224,762 $119,893 $172,113
We’re probably the only company that will tell you that every event we do isn’t perfect. 81% of our clients are very excited about the results we generate for them. The other 19% aren’t great, but our clients don’t lose money!
NOTE: We value our clients’ privacy. If you are serious about putting G&A to work for you, we are happy to provide all the references and details you can handle.
GUARANTEED RESULTS STAFFED EVENTS DIRECT MAIL & MARKETING CONTACT MATT BAKER 800-688-1370 mbaker@gamarketing.com
Accountability. Reputation. Results. Since 1994
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AJLeBlanc
marketing solution
small change
This month, I am interviewing Jesse Walker, Internet marketing director at both Lexus and Subaru of Pembroke Pines, which are part of the Craig Zinn Automotive Group of dealerships. Jesse started in automotive by selling cars in 1995 and has since worked as a vendor and trainer on CRM and other digital products and services with companies such as Cobalt. On the dealer side, he has built and run BDC and Internet departments for some of the largest dealers in the country. AJ LeBlanc: Can you give us a brief overview of your basic marketing philosophy? Jesse Walker: It’s the simplest and truest philosophy: If we’re not there, they won’t see us. We
have a myriad of advertising opportunities, but a limited budget. I concentrate on finding the most efficient ways to spend our ad dollars to ensure a steady flow of traffic to the stores. I avoid the “gadget” cash wasters and use tools that enable me to do more of what I know works. The solution isn’t always to “spend more”; it’s to “spend more wisely.” AJ: What marketing efforts do you implement in the stores on a consistent basis? JW: We do the typical mix for large stores; we do PPC, SEO, Video SEO, display and retargeting,
post ads and inventory through multiple digital pathways. In addition, we do traditional advertising, such as newspaper, TV and direct mail. AJ: Why is it important for a dealership to have Video SEO as a marketing strategy? JW: Off-page SEO, which is what Video SEO accomplishes, is critical to driving “unpaid” traffic to
your store. Creating that traffic requires quality links and content. SEO practitioners have been doing Video SEO in one form or another for several years, and it has always been an effective way to build quality back-links to your main site, giving your main site more relevancy in the search engines. AJ: Can you explain what Video SEO does for your dealership? JW: Videos perform well in search engine rankings. We can create videos to target specific
keywords, and then post them with a link which points back to our site. The difficulty of doing Video SEO on my own is the time that it takes to create quality videos, edit them and then upload them with the necessary “SEO friendly” text. We use a platform that creates, posts and links hundreds of keyword-targeted videos for me, which not only provides a traffic boost, but frees me up to work on other traffic-generating advertising mediums. AJ: How has a Video SEO strategy impacted your Websites’ visibility on search engines? JW: Getting Website pages to rank on the search engines is often more difficult than videos.
Sometimes, even if you get a page ranked for a particular keyword, it’s typically only one of the 10 slots on the first page results. Video SEO helps me to take over more of those 10 slots, so that I can dominate the search results pages while reducing other local dealers’ exposure.
AJ: How do you measure the effectiveness of your Video SEO strategy? JW: Back to the original point — do we show up? I constantly do searches to see how we rank. I also
have tools that tell me where I rank for certain keywords, but nothing takes the place of doing the search yourself and seeing how it comes up.
AJ: Lastly, when did your dealerships implement a Video SEO strategy, and what is the average increase your group’s stores have seen in sales and market share since implementing this strategy into your overall marketing plan? JW: We started in May of 2012. Website traffic has increased an average of 25 percent as part of our
SEO strategy, with Video SEO playing a huge role in that traffic. The beauty of Video SEO is that videos we placed six months ago still contribute traffic to our site today, as well as off-page SEO link value relevancy for our main Website. This store already did a lot of things right. When I came in at the beginning of 2012, we were already the seventh largest volume Lexus dealer in the country. What the store needed was a strong digital direction and process. My strategy is not reinventing the wheel; I just take what I know works and try to do it better. The “secret” formula was simply to drive more traffic and implement stronger processes to convert it. By keeping it simple, we’ve had a 29 percent increase in sales from last year and moved into fifth place for sales volume. We intend to keep the momentum going by constantly tweaking our processes and hitching on to new technologies that are in line with our strategy. AJ LeBlanc is the co-founder of Car-Mercial.com. He can be contacted at 866.795.9094, or by e-mail at aleblanc@autosuccessonline.com.
podcast interviewee
Latest Verified Sales Event Results!
The Anatomy of a Marketing Campaign
THE LAUNCH OF THE 2013 HONDA ACCORD
The days of single-faceted marketing campaigns are gone. Consumers interact with different media types and devices in real-time on a daily basis. Studies show that as the consumer’s ability to interact with media sources increases, the lines between online media and offline media sources continue to blur. The types of interactions and the degree to which each influences the consumer varies based upon age, gender and income level; thus, marketing campaigns have become significantly more complex. Staying competitive in this constantly evolving environment will require the ability to effectively execute multi-faceted marketing campaigns in an integrated fashion across multiple media platforms.
ACCORDING TO RECENT STUDIES
by Google/Sterling and R.L. Polk the majority of car shoppers spend 19 hours over the course of two to three months to research and select the vehicle they wish to purchase. Depending on the customer’s age, 18 to 25 information sources will play a role in influencing this purchase decision. Sixty percent of these sources are consumed online, 40 percent offline. In both cases, 67 percent of car shoppers will consume this information using up to four different devices. Although two out of the three top influencers are online, the No. 1 source of influence is the physical environments of the 2.5 dealerships the customer visits before making their final decision. This cross-media interaction is requiring dealerships to rethink their current marketing strategies and begs the question, “What does a truly integrated marketing campaign look like?” Recently, Honda announced that it would be heavily promoting the launch of the all-new 2013 Accord, and a group of Honda’s top performing dealerships set out to launch a well-executed, cross-media campaign to capitalize on this opportunity. This integrated marketing strategy was designed to maximize each dealership’s marketing dollars by working with the OEM’s mass media promotions to convert Tier 1 shoppers into Tier 3 sales opportunities. This campaign mirrored the look and feel of the OEM’s creative and delivered consistent presence across all 10 marketing tiers: traditional, digital, mobile, social, reputation, niche, targeted, merchandising, publicity and retention. In order to better understand the significance of this integrated marketing strategy, we will be taking a look at how it was designed, what went into creating it, and how it was executed.
STEP 1: DEFINE
STEP 3: DELIVER
Planning is the most important element of any successful marketing campaign. In their book What Sticks (named No. 1 Book on Marketing by Ad Age) Rex Briggs and Greg Stuart calculated that failing to properly plan results in marketers wasting 37 percent of their marketing investment. Reasons for the waste include failure to understand underlying customer motivations for buying, ineffective messages and inefficient media mix investment.
The ability to effectively coordinate the simultaneous delivery of numerous media assets to multiple destinations is perhaps the single biggest challenge of executing an effective integrated marketing strategy. This is especially true in the traditional dealership environment where marketing coverage is often achieved by relying on a large number of independent vendors.
In order to get the most from their ad dollars and avoid these pitfalls, the participants in this campaign worked with their marketing agency to identify the following: MARKET: Customers who have the highest statistical probability of purchasing a Honda. MOTIVATORS: The motivators that persuade these consumers to make a purchase. MESSAGES: The messages that best leverage the motivators of each market segment in order to facilitate a sale. MEDIUMS: The most effective traditional and digital mediums for delivering the maximum reach for the least amount of money. During this process, four unique market segments were identified and it was determined that this campaign would deliver multiple messages centered on the unique value proposition that the 2013 Accord offers. To maximize the impact of their marketing spend, this campaign would limit the portion of the ad budget allocated to mass market media sources (where the OEM would be spending its money) and concentrate the majority of its budget on in-market media sources so that the participating dealerships could focus on engaging and closing in-market shoppers.
STEP 2: DESIGN Every effective campaign is a blend of art and science. To achieve success, the art (what the different elements of the campaign looked like) and the science (how the different elements within the campaign interact with each other) must be designed to work together seamlessly across multiple media platforms.
CREATIVE ASSETS In order to leverage the brand value and increased brand awareness associated with Honda’s Accord Launch, the creative assets for this campaign were designed to mirror the look and feel of the OEM’s ads. Every e-mail template, banner ad, targeted mail piece, Facebook ad, dealership banner and vehicle brochure was made to deliver a consistent and compelling message. According to Google’s Automotive Influence Study, the dealership experience is the biggest influencer in the customer’s purchase decision. To take advantage of this, the dealerships participating in this campaign displayed OEM-quality materials in their showrooms and service areas that were designed to complement the promotions and offers they sent to their customers. This approach allowed consumers to view a consistent brand experience across all marketing channels and allowed dealerships to leverage Honda’s strong brand values to build trust with their customers.
ARCHITECTURE In order to capitalize on the branding and messaging developed for this campaign, every traditional and digital asset was designed to work with the other assets in the overall campaign. In addition to linking every asset to conversion-focused campaign Websites, digital assets were optimized to deliver tailored messages based on the demographics and profile of each prospect. The ability to customize messaging is extremely important because different customers are often attracted to the same offer but for completely different reasons. Although the enhancements offered by the new Honda Accord have broad appeal across multiple age groups, the reasons for wanting these enhancements vary greatly based on the motivators and profile of the shopper. For example: the technology enhancements in the new Accord are attractive to multiple age groups. Younger shoppers desire these features for their ability to connect with social networks and wirelessly listen to online radio stations like Pandora and Slacker. Older shoppers desire these features for their ability to keep them safer and operate more efficiently while driving. Either way, designing the architecture correctly allowed this campaign to cosistently deliver relevant messages and offers based on each consumer’s unique profile and online behavior.
The dealerships participating in this campaign chose a full-service marketing agency with a proven track record for executing integrated marketing campaigns. This decision allowed these dealerships to avoid the headaches and expense associated with coordinating efforts across multiple vendors and provided them with the convenience of having a single point of contact to orchestrate the entire campaign.
STEP 4: MONITOR AND IMPROVE One of the biggest advantages of having a single agency orchestrate your integrated marketing campaign is the ability to see how all of the various components work together. This provides valuable insights into what is and is not working and gives those controlling the campaign the ability to make adjustments in real-time. One of the biggest threats to any campaign is the inability to effectively convert incoming opportunities into profitable sales. According to a recent study by AutoTrader.com, 67 percent of customers who call a dealership are never asked for an appointment. CallRevu, one of America’s leading call monitoring companies, confirmed the severity of this challenge in its 2011 Million Call Study – reporting that 50 percent of all incoming sales calls terminate without asking for the customer’s contact information. To address this challenge, the Accord launch campaign included a 24 / 7 monitoring service that monitored 100 percent of all incoming calls and automatically alerted managers in real-time when a sales call was being mishandled. This process helped to significantly reduce profit leaks and added to the overall performance of the campaign. In addition to real-time opportunity monitoring, Tier 10 Marketing, the agency selected to design and implement this campaign, compiled all of the data generated throughout the campaign into a single, easy-to-read set of reports. This allowed each of the dealerships participating in the campaign to see how each of the different components performed and gave them visibility into where they could improve in the future.
CONCLUSION Fully integrated marketing campaigns create significant advantages for both the customer and the dealership. Customers receive a consistent brand experience across all media platforms that delivers relevant offers based on their individual preferences. Dealerships reap the benefits associated with generating higher customer engagement with less effort from more focused marketing budgets. In short, customers have changed the way they shop. To take advantage of this shift, the most successful dealerships are moving away from their high-effort, multi-vendor marketing programs and trusting full service marketing agencies like Tier 10 Marketing to orchestrate more effective, lower effort, integrated marketing strategies that allow them to target, market, sell and retain more customers with less effort and expense.
BrianPasch
leadership solution
30 percent of new car deliveries are dirty: No Time for Detailing Top Reason In a recent survey of 1,000 new car dealers in the U.S. conducted by Automotive Research Initiatives (ARI), only 70 percent of the new vehicles delivered to consumers were clean. The survey found that many dealers did not have processes in place to ensure that a vehicle was washed, vacuumed and detailed prior to a delivery appointment when the customer came to pickup their vehicle.
dealerships in your market or, worse, at your own store?
One dealer surveyed said, “We do our best to deliver a clean car, but it is hard to get the my team on the same page. Delivering a clean car is important to my brand. I’ve tried numerous times, but some ‘old dogs’ just refuse to take the car around to our detail crew in time.”
Today’s CRM systems are the incubators of sales prospects. CRM systems provide a critical role in maximizing the ROI of a dealer’s marketing budget. CRM systems can fill in for errors of omission, and can work 24/7 to keep customers engaged with the dealership.
If you are working at a franchise dealership, I’m sure that there are processes in place to make sure every car is detailed without exception. Correct? Are you having a hard time believing the results of this survey from ARI? Are you wondering if this is happening at franchise
Well, rest assured that we would never know because there is no Automotive Research Initiatives and this preposterous survey never took place. I created this opening with a purpose. All cars get detailed before they are delivered. It gets done because it is non-negotiable. My question to dealers is that, if it is in our culture to never present a dirty car to a customer on delivery, then how come we can’t create a culture that phone and showroom ups always get logged into the CRM?
Despite all this value and potential that CRM systems can offer, compliance and utilization at dealerships across the country is painfully low. It amazes me that entrepreneurs make excuses for the hundreds of thousands of dollars that are left on the table each year by not enforcing compliance with CRM processes. It is also shocking how many CRM implementations have no predefined workflows or communication templates. What happens when dealers create CRM and phone processes and hold their teams accountable? Normally, that will result in a doubling lead conversion rate. One Toyota dealer who I consulted with saw their closing ratio go from nine percent to 19 percent in 120 days through a focus on phone and lead-handing processes. The Internet department went from selling 50 cars a month to 140 cars a month in six months. Dealers can dramatically change their sales and profitability by focusing on the basics of lead and phone handling. Having a car detailed on delivery would be considered “basic blocking and tackling” for car dealers. Would you agree that answering the phone correctly and pursuing leads systematically is also basic blocking and tackling? If so, why are dealers so forgiving when Internet processes fail 50 percent of the time? To all the dealers and sales managers reading this article, I have a simple question: Would you allow 50 percent of your new car sales to be delivered dirty? Of course not. So why are so many dealers happy with seven to 10 percent closing rates when they should be averaging 16 to 20 percent? Is leaving half the deals on the table acceptable in your dealership culture? Why are CRM processes left so open ended? Have you done the math on what your P&L would look like if you doubled your lead-to-sales ratio? With 2013 just around the corner, it is time to get back to the basics of structure, process and accountability with Internet leads and phone calls. If dealers focus on the basics, they will find that their sales forecast for 2013 will look much brighter by just focusing on the existing leads that they already can generate. Will there be new ways to increase leads and connect with online shoppers in 2013? Indeed, and I will be first to share them with readers of AutoSuccess. I could not be more excited about the prospects for the year ahead.
Brian Pasch, is CEO of PCG Digital Marketing and the founder of the Automotive Internship Program. He can be contacted at 866.849.1560, or by e-mail at bpasch@autosuccessonline.com.
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podcast interviewee
However, before dealers focus on ways to generate more leads, they need to inspect how they work the leads that they already have. That would be a great New Year’s resolution for our industry.
SeanV.Bradley
leadership solution
internet sales 20
group success Thank you to everyone who was a part of the Internet Sales 20 Group in Chicago — to say the event was successful would be an understatement. It was a historic event. It was the first event for Internet sales, BDC and digital marketing that actually was a full blown “20 Group,” including benchmark composites, massive amounts of interaction from the audience, dealer principals, GMs, GSMs and high-level Internet/BDC directors. It featured a $1,000 cash giveaway for the “best idea” contest that the actual 20 Group members voted on, and one of the most powerful “action plan/exit strategy” sessions ever to happen at a workshop in our industry. We had nearly 60 dealership executives attend, plus some of the absolute best and brightest speakers and subject matter experts in the country. The first difference of the Internet Sales 20 Group and any other event in the industry is that we conducted a massive amount of field intelligence and invested more than $25,000 to research our attendees before they even showed up to the event. We created a “mini” composite that evaluated six key performance indicators (KPIs) for the first 20 dealerships that registered for the event: 1. We looked at how they handled the phone process. We conducted two different “mystery shop” calls, at two different times. We recorded and graded the calls. 2. We evaluated their online reputation, using software from Social Dealer. 3. We evaluated their social media relevancy using software from Social Dealer. 4. We evaluated their dealership Website effectiveness. 5. Car-Mercial conducted SERP reports to evaluate their search engine optimization (SEO) penetration. 6. Dealix and Dealer Synergy evaluated their third-party lead opportunities. People were floored when they walked into this Internet Sales 20 Group and received not only a full-color workbook, but also a sealed manila envelope that included a composite of 20 different dealerships in the room. A third of the room was analyzed for more than 30 days, prior to the workshop. No other workshop has ever done that before. Usually, you will have data, white papers or statistics from a national source, within the last year, but never from your own workshop group with a third of your own peers. The field intelligence was priceless. This composite was used as a conversation starter for the workshop. We would review each of the categories, each of the rankings and then open it up to the barrage of questions from
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the dealers in the audience. Questions like “Why did ABC Dealer do way better than I did on the composite for online reputation?” A question like that would unleash the comments, suggestions, strategies and ideas from the other dealer principals, GMs, Internet/BDC directors and industry experts. It was amazing! We had one of the most interactive dealership panels with: • Durran Cage, who is the GSM of Alan Vines Automotive in Tennessee and was the September cover story for AutoSuccess • Paul Sansone Jr., the dealer principal of Paul Sansone Jr. Auto Mall in New Jersey • Joe Turner, the eCommerce director of The Neil Huffman Auto Group in Kentucky • 30+ Car Guy Robert Wiesman, who is based in Maryland With the volley of questions and answers, it was like watching a professional tennis match. These people were engaged. We saw dealer principals and GMs interacting with each other in healthy debate. What was one of the most powerful things that I saw during this exchange was how important it was for the dealer principals and GMs from different dealerships, different markets and different franchises to communicate with each other and share information. It is one thing to hear from a vendor or a trainer, but it is another thing if you are a dealer or GM and you are listening to a peer going into detail about how they are successful with Internet sales, BDC and digital marketing. While you might not believe all of the hype from a vendor or some outside company, it’s hard to dispute another dealer principal or GM who comes prepared to the Internet Sales 20 Group with their benchmark composite, financial statements and facts. For another panel of industry experts, we had: • Ralph Paglia of Automotive Media Partners • JD Rucker of KPA / TK Carsites • LA Williams, blind phone master from Dealer Synergy • Frank LaPorte of AutoBytel This panel was off the charts as well. It seemed like Ralph Paglia and JD Rucker were a perfect combination for the audience, both so filled with information, ideas and strategies for the audience. Frank Laporte, a veteran of ABT, brought a ton of insight to the table, and the crowd was blown away by LA Williams — he was an inspiration to everyone in the room. LA can only see people by how they sound, and his insights on phone kills was appreciated by all. AutoSuccess Publisher Susan Givens killed it with her workshop on AutoSuccess Best Practices. She highlighted some of the top dealerships and practitioners in the country. I want to thank the sponsors and speakers for making this event a colossal success. Our title sponsor, Higher Gear’s CEO Robert Gruen, conducted a workshop on CRM and delivered a powerful message: it isn’t just about picking the right CRM provider; it’s about the details in the CRM. It’s the way you set it up and the content you put into it. It’s the automated action plans, the way you train your entire dealership on it and the way you hold everyone accountable on using it that makes it effective. And by far another strong differentiator was The “Exit Strategy.” A lot of us attend workshops and leave with great ideas, but we fail to execute those ideas. We created an “exit strategy” and literally worked with each individual attendee to create an executable action plan, based on what they learned at the Internet Sales 20 Group, to take back to their dealership for immediate implementation. Accountability partners were assigned and an accountability partner contract signed, ensuring the implementation and success of the action plan. Most workshops end once the attendee walks out the door, but not the Internet Sales 20 Group. All attendees are invited to join their own private group on www.automotiveinternetsales.com where members are encouraged to interact and build upon what they learned. The next Internet Sales 20 Group will be in Dallas, Texas on March 19-21, 2013. If you missed our Chicago event, this one’s for you. Sean V. Bradley is the founder and CEO of Dealer Synergy, a nationally recognized training and consulting company in the automotive industry. He can be contacted at 866.648.7400, or by e-mail at sbradley@autosuccessonline.com.
KevinMcMillen
leadership solution
business
are Dealerships So Far technology: Why Behind Corporate America?
Dealerships were amongst the first community businesses to be computerized. So why are most dealers having such a hard time with e-mails, spam, viruses and other computer issues? Dealerships are essentially behind because they were so far ahead. Dealer management systems were developed long before the technology reached the masses — long before there were PCs, e-mail and today’s plethora of PDAs and smartphones. Today’s dealership looks nothing like the dealership of the past. Remember when there used to be satellite dishes (lots of dishes — one for each franchise) on the roofs of dealerships and dumb terminals on the desks? That was how we communicated with the DMS and OEMs. Remember the day of servers underneath a desk or in a closet next to the reams of paper and extra toilet paper? Unfortunately, this early computerization delayed the utilization of PCs and certain common programs. We now have PCs on just about every surface of the dealership, and smartphones and tablets sprinkled all over the store. Regrettably, they don’t all sync with the e-mails — or each other — and most are using outdated or unlicensed software. As technology and digital marketing take a greater role in selling cars, every dealer needs a competent, reliable and current data infrastructure. If you’re wondering if any of this is important to your dealership, ask yourself the following questions:
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• Does your organization have a mix of hardware devices? (Do your employees use Windows PCs, Apple Macbooks, iPhones, iPads, Android, Blackberry and Windows phones?) • Do you have any issues with e-mails — receiving, responding or syncing — across all devices? (Do you find your important e-mails are not accessible in real time across your devices? Are e-mails on your computer but not on your phone, and vice versa?) • Are you concerned about compliance with e-mail and privacy in communicating with your customers? (Just like everything else in our industry, tech communication is becoming regulated and, if you want to be compliant, you need to make sure the solution you choose is secure, secure and, most of all, secure.) • Do you have an anti-virus/anti-malware and software-installation strategy? (Most dealers either have purchased anti-virus software or are using a free version to protect their computers. You get what you pay for.) • Employee access — who has access to your customers and company communication? (When an employee leaves the organization, can you be confidant they aren’t taking valuable clients or communication with them? Do the e-mails and contacts stay with the dealership?) Corporate America handles these issues with Microsoft exchange servers and, if you answered “yes” to any question, then you should consider the same. In the past, that would have meant a substantial investment. Now the solution is already at your store and all you need to do is tap in. What previously would require equipment, back-up, licensing and more is already around you and yours to tap into — on the cloud. You can easily transfer all your employees to a Microsoft cloud-based exchange solution for dollars per head. Moving to cloud-based services enables your employees to interact more efficiently and access information from nearly anywhere, on many types of devices, which increases their productivity. Imagine life on a full-fledged platform with e-mail, calendar, contacts, team sites, anti-virus, anti-malware, desktop management, operating system upgrades and remote support. Corporate America does business that way, and so should you. For your free copy of “Get in the Cloud,” send an e-mail to the address below with the subject line “Cloud.” Kevin McMillen is the CEO and founder of Ryan Tech. He can be contacted at 866.393.3919, or by e-mail at kmcmillen@autosuccessonline.com.
sales & training solution
RichardHerod
case study:
When you walk in the front door of White Bear Mitsubishi, it doesn’t look like your typical car dealership. In a state where hockey is the dominant sport, this dealership is filled with record pennants that are hanging from the ceiling showcasing the dealership’s journey the past two years. These banners proudly show they were the No. 1 dealer in Minnesota in 2010, the No. 1 dealer in the Upper Midwest in 2011 and a series of banners in 2012 that would raise the eyebrows of anyone knowing they sell Mitsubishis.
This year, White Bear Mitsubishi did something out of this world. In September 2012, they set the world record for number of Mitsubishi Outlander Sports delivered in a month. They also set the U.S. record in March 2012. White Bear Mitsubishi general manager Richard Herod III said, “I’m very proud of the team at White Bear Mitsubishi; these hard-working men and women continue to make me proud.” It took
White Bear Mitsubishi
two-and-a-half years for White Bear Mitsubishi to transition from Saturn of St. Paul to the leading Mitsubishi dealer in the Upper Midwest. White Bear Mitsubishi has done a great job of re-establishing the Mitsubishi brand in the Twin Cities, as well as their own dealership brand. Their agency of record, Cuneo Advertising, launched the inventive White Bear campaign (comprised of a silent, seven-foot white bear — an employee of the dealership) in August 2011. According to Ben Fruehauf, creative director at Cuneo Advertising, “By mixing a humorous message with great deals and incentives, we were able to strike the perfect balance of brand and retail. Utilized across various forms of messaging, this creative brand strategy was successfully executed to drive sales and ultimately help White Bear Mitsubishi set the Outlander Sport world sales record.” This series of commercials have the right balance of dealership offers and humor. The commercials are even season specific. For example, in one commercial called “Hibernation,” the general manager is trying to convince their mascot not to hibernate because they’ll need extra help selling lots of all-wheel-drive vehicles during the winter. The dealership gives every customer who purchases a vehicle a miniature stuffed White Bear at delivery, buckled in the back seat of their vehicle. “We see customers come in for oil changes with their White Bear still in the back seat,” Herod said. When visiting their Website, everything is branded with White Bear elements. The Website also features engaging videos produced by Unity Works Media showcasing the same marketing elements and treatments.
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White Bear Mitsubishi maintains a Facebook page to better interact with their customers. Employees are encouraged to take pictures of new owners with their new vehicle purchase and post to Facebook. Large-scale marketing events, including the Minneapolis Auto Show and Minnesota State Fair displays, have also helped create the recordsetting pace. A strong television presence and White Bear stuffed animals aren’t the only reasons White Bear Mitsubishi has success with selling Outlander Sports. Herod said the world record was set because, “My team believes in this product. Mitsubishi makes an awesome product, with a great warranty at a competitive price.” The best part of this story is that most of the Saturn dealership employees remained, even though this store had a questionable future when the Saturn franchise was eliminated by General Motors. Steve Thureson, sales consultant at the dealership for 15 years who made the transition from Saturn to Mitsubishi, said, “Our customers come in and recognize the same people who sold them cars in the past when we were Saturn. Our values are like the heavy rocks in the river: The current may change, but our values never move.” White Bear Mitsubishi is part of the Rydell Automotive Group, which, as Herod said, “looks to be a Main-Street business, not a Wall-Street business.”
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866.618.8470
Richard Herod III is the general manager of White Bear Mitsubishi. He can be contacted at 866.618.5284, or by e-mail at rherod@autosuccessonline.com.
One Solution Proven to Sell More Cars!
“After installing ELEAD1ONE, we had our best net profit month in the history of the store. I have to admit, the continued use of the system and the call center has reaped positive benefits for our store. There is absolutely zero doubt in my mind that our company did their homework and made the right CRM decision.” Jeff Hicks General Manager, Crown Honda of Greensboro
888.431.6928 | sales@eleadcrm.com | www.elead-crm.com © Data Software Services, L.L.C. 2010-12
AndrewPrice
marketing solution
optimize for mobile,
or perish Your dealership might have a decked-out Website that you’re quite proud of. It integrates a sharp design with an intuitive user experience, where customers can access your inventory and schedule maintenance appointments. Every time you open your browser and look at it, you’re filled with an immense feeling of pride and satisfaction. However, no matter how clean and useful your Website is, it will be considered a dinosaur in just a few years if it isn’t optimized for mobile Web use. According to a comprehensive study by Marketing Power, there are approximately 1.2 billion mobile Web users worldwide. In fact, 94 percent of smartphone users will be mobile Internet users for the calendar year 2012, with each individual surfing the Web via their phone on an average of 1.05 hours per day. The idea that mobile Web usage is on the rise might not come as any surprise to you, but the rate at which users depend on them might. To be more specific, the number of smartphone shoppers will reach 72.8 million in 2012, with tablet users at 54.8 million. That’s a lot of people who are researching and finding dealerships away from their desktop and laptop. In fact, mobile Internet usage is expected to surpass desktop usage by 2014. The number of fish in the mobile Web pond is growing faster than the world is adapting. You can either step into relevance, or wither with those who stubbornly cling to traditional
methods of search. OEMs have taken the initiative and created mobile-optimized pages where users can find information and view photos without having to navigate through a traditional site on a small smartphone screen. By creating a mobile-optimized interface for smartphone and tablet users, you are making the research and location phase a convenient experience. And that’s what everyone wants — convenience. You can probably relate to your own experiences where it took too long for a page to load, or you grew frustrated over the complicated navigation of a site on your mobile device. According to a 2011 study by Equation Research, 46 percent of mobile Web users are unlikely to return to a Website they had trouble accessing from their phone. Now, put yourself in your customer’s shoes. Are they having complications accessing and utilizing your Website on their phone/tablet? If the answer is “yes,” then you have a user experience makeover on your hands. Optimizing for mobile is paramount. A study by the Aberdeen Group titled “2011 Metric-Driven Mobile Marketing” revealed “companies that optimize their mobile Web content outperform those that don’t by 80 percent in the year-over-year increase in Web traffic.” Those companies also display a 55 percent greater yearly increase in the number of repeat visitors compared to those companies that don’t optimize for mobile Web. It’s really quite simple: Adapt or die. The numbers are undeniable and are trending in mobile’s direction. Most dealerships depend on customers finding dealerships via the Internet, and if Internet usage of mobile devices is expected to surpass that of desktop usage in only a year or two, it stands to reason that if your dealership doesn’t create a mobile-friendly Website, you will lose a large portion of the market. Other than creating a mobile-friendly Website, dealerships should seriously look to convert any useful tools and widgets from their Website to mobile apps. Does your Website have an inventory locating tool? Do you have detailed model pages with pictures and descriptions of each car on your lot? Do you have any payment calculators? Customers have a voracious appetite for information. If you provide that information in a convenient and cool way (yes, apps can be cool), customers are more likely to choose your dealership. Andrew Price is the president of automotive at CallSource. He can be contacted at 888.821.3770, or by e-mail at aprice@autosuccessonline.com.
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DaveDunn
sales & training solution
create explosive bodyshop revenue:
2013 is Your Year
That’s right: Your economic fortunes will rest on your ability to be malleable and flexible. Nowhere do you need change more than in your bodyshop. 60-Year-Old Production Model
Most dealer bodyshops are operating with an antiquated production model. They often have employees who are more like sub-contractors. The mission statement of the dealership is probably focused on customer experience and professionalism. The systematic practices in the bodyshop are likely misaligned with the real dealership mission. The pay plan in the bodyshop is unwittingly counter to creating the revenue boost that is there for the taking.
stall has a car in it, that means at minimum half of the cars on the floor are not being worked on 100 percent of the time. We find most shops have a resource capacity of more than double their current volume. There are many reasons why space is so poorly used in dealer bodyshops, but usually it’s because the manager has never really been trained and/or educated. Most bodyshop managers learned it from a guy who learned it from a guy who did it wrong. Reasons
One of the reasons staffing and stall density is so bad is a failure to properly handle the sales and estimating process. Many estimates are written without a proper and thorough inspection. The bodyshop manager has weak sales acumen and has allowed the insurance companies to dictate the process. My clients have learned to get an authorization from the car owner early in the process, enabling a tear down and more thorough estimate. Once a thorough estimate and parts order are developed, there are fewer delays built in to the process. In many cases, the technician can start on the car with fewer or no delays. The technician doesn’t need multiple cars to work on because he can remain on the one job until it is completed. Another cause of poor space utilization is flat rate and commission pay plans. These plans are not bad in themselves; however, when a technician begins to reason that he is a subcontractor, he may not manage anything but his own paycheck. The ideals you espouse in your mission statement maybe the farthest thing from his mind. The technician will argue that he needs multiple cars to be efficient. The problem with allowing a technician to jump back and forth on multiple projects is that it destroys your cycle time. Cycle time is a key metric in CSI and insurance acceptance. So, while you may have a highly paid and personally efficient technician, your other partners may be getting shortchanged. Additionally, you will have cars sitting around not being worked on and not utilizing space fully. If you are interested, I will e-mail you a free resource capacity calculator that you can play with. Basically, you will load the required fields with your known data. Then all you have to do is play with the staffing density field and notice how large the impact is when you tighten staffing density, let’s say from 3:1 to something more effective like 1.5:1. I think your head will explode, and so will your revenue, when you take the right steps.
Poor Space Utilization
Most shops still have a stall-to-technician ratio of somewhere between 2:1 and 3:1. So, if every technician has two or three stalls, and every
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Dave Dunn is the founder of Masters School of Autobody Management. He can be contacted at 866.386.0042, or by e-mail at ddunn@autosuccessonline.com.
podcast interviewee
The elections are over, the Mayans were wrong (or at least misinterpreted) and your bodyshop is poised to be a great revenue generator. Bill Gates gave a relevant synopsis as to economic drivers to consider. Gates has defined the last few and current economic drivers: • The 1990s was the decade of re-engineering. (We were getting ready for Y2K and it fueled a hot economy) • The 2000s was the decade of consolidation. (The big ate the small) • This decade, 2010 and beyond, is the decade of swift change. The big eating the small will be less important than “the fast eating the slow.”
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th #842
MarshBuice
sales & training solution
er lly rd as fu o w n in at ” ca ace wh ter. ng f , s ni st e lu ar u tim its w m o re ou n se fo y In lo or tion les. s to g in ec sa in in rej in beg tra e ul of r th ssf em nt fo ce e g ou ou uc siv am y s en o are me xp “N rep co n e e a p b to nce o
the jewel or the vile?
The word “jade” is a heteronym (a word with the same spelling, yet different meaning) commonly used in our sales profession. As a noun, it is known as a beautiful, expensive gemstone, but when used as a verb, jade is defined as “worn out, broken down, worthless and dull.” If your career in sales could be summed up using the word “jade,” would it be known as the noun or the verb? Obviously, the meanings are distinctly different.
be a game-changer; you were adamant about being known as the best salesperson your dealership has ever seen. Standing on the showroom floor, you tallied your predecessor’s names that were enshrined into the ranks known as “Top Producer” and vowed to have your name permanently etched among them from this point forward. Mentally, you knew there was no other salesperson compared to you; you were a jewel surrounded in a case full of ordinary stones.
Do you remember why you were first hired as a sales professional? You were hired because you convinced your sales manager that you were a gem. You dressed in your Sunday best clothing, ornamented with your finest jewelry and truly looked the part you were auditioning for. Even though your sales manager viewed you as a little rough on the edges, he bought what you were selling and believed, with enough polishing and crafting, he could emulsify your best qualities.
No amount of training or forewarning can fully prepare you for the rejection you must face in order to become successful in sales. In no time, what was once an expensive gem begins to lose its luster. Because of the insurmountable amounts of rejection, you become tired, worn-out, dull and weary. In what seemed like an overnight conversion, your career leaped from the illustrious noun and cradled into the verb called jaded. You begin to look at customers as a liability and no longer an asset. As it is written, “Seek and ye shall find.” At one time, every customer was a treasure chest of opportunity, rich in rewards; today, your Up looks like a toxic dump, the by-product and waste of another dealer’s lot.
With high self-esteem and grandiose expectations, you hit the lot with aspirations to
Instead of looking at your customers with adoring opportunity, you scornfully glare at them with disdain and contempt for having the audacity to interrupt your lunch, resulting in you becoming the Act 1, Scene 1 rendition of We’re Just Shopping Today. With a mouth full of fries and barbeque splatters on your shirt, you begin to ask narrowing questions to quickly find out what your Up’s beacon score, payment range and trade-equity position is in an effort to circumcise your efforts. With a barrage of questioning in tote, you hurriedly determine whether your customer is worthy of receiving your full product presentation production, or will they only receive a teaser trailer in an effort to blow them off of the lot. You are guilty of asking these detrimental kinds of questions in order decide if you should enter into a long-term relationship with your customer, or just instead drop them like a bad habit. You’ve resigned the position of being an image consultant, no longer motorvating your customers into upgrading their transportation image, and instead resorted to a professorship position giving your customers the “Rules of the Lot” and lecturing them on how they need to buy a car. Jade is noted by its tremendous strength and beauty. It comes in many different colors and, in many ways, is as strong as steel. Jade is mined and sold in large chunks; the buyer is gambling because he has no idea the quality of jade inside of the rock. You were hired because your manager took the gamble and viewed you as a gem among rocks. You possess a unique combination of magnificence as well as strength, but it must be worked, tried and chiseled in order to showcase its brilliance. The sales profession is a kind of metamorphic activity that only time and hard work can distinguish the best from the rest. It takes many years for a rock to become a gem, but only seconds of the wrong perspective and wrong thought for a gem to be reduced to a mere rock. Never lose your radiance.
Marsh Buice is the sales manager of Mark Dodge,Chrysler, Jeep. He can be contacted at 866.535.5006, or by e-mail at mbuice@autosuccessonline.com.
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podcast interviewee
I’ll see you next year on the blacktop!
(888) 277-9660
aultec.com
DalePollak
marketing solution
a four-stage preview of the ‘road to reinvention’ for dealers While researching my just-released book, Velocity Overdrive: The Road to Reinvention, a 33-year-old Chevy dealer in Texas described how he’d changed his thinking about retailing used vehicles.
number of vehicles in various segments (e.g., compact cars, trucks, etc.) that match the best sellers for the market and their retailing preferences. Dealers adjust the strategy to meet seasonal changes in demand, and manage this portfolio in a manner that mixes pricing and expectations for profitability to retail vehicles quickly. A key component: Dealers focus on “total gross” versus “average front-end gross” as they manage individual vehicle investments.
“This is a religious change,” he said. “Understanding that is the thing that separates the men from the boys. We’re going from Christianity to Buddhism. It’s a big deal. It affects everything and how you do it.”
2. Focus on efficiencies — As dealers adopt an investment-driven mindset for used vehicles, they quickly recognize inefficiencies that slow their ability to maximize ROI. The two most common trouble spots: Cars don’t move quickly enough through their service departments and they do not get “pictured and posted” online in a time-efficient manner. At some dealerships, this problem translates to a seven-to-10-day gap from the time a car’s acquired and it’s fully online- and frontline ready. To address the delays, dealers implement new processes that trim the timeline to three days to maximize a unit’s potential as a retail unit and a time-sensitive investment.
The following are four stages of reinvention that point to areas where all dealers can improve sales and profitability in used vehicles and beyond: 1. An investment-driven mindset for used vehicles — Dealers are taking cues from investment managers who oversee financial portfolios for their clients. The approach starts with a strategy —determining the kinds of investments (e.g., used vehicles) that will offer the best return on investment (ROI) in the shortest time with the lowest degree of risk. For dealers, the strategy translates to a sketch of their inventory composition based on the
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3. Collaborative culture — Traditionally, many dealers have viewed each dealership department as its own distinct operation. This long-standing management philosophy creates “silos” that, to varying degrees, can undermine a dealership’s overall performance and profitability. A prime example: The service department’s focus on customer pay work at the expense of the used vehicle department’s ability to maximize its ROI and inventory turn potential. To address this, dealers can work to create a culture of collaboration between managers — one where their performance and pay plans are tied to the entire dealership’s success. 4. The Internet disconnect — In many dealerships, there is a “disconnect” between the online and in-store showrooms. The problem: Online, dealers have begun to embrace market-based pricing and consumers’ desire for transparency. Offline, however, many dealers have not changed their sales processes to carry the experience shoppers encounter online into their showrooms. Addressing the “disconnect” has many components — from up-front price validation to the elimination of standalone Internet departments — that combine to offer customers a more satisfying in-store experience. Some dealers are venturing into e-commerce-based models to further satisfy customers and distinguish their dealerships from the competition.
For the Texas dealer, the “religious change” came quickly. In six months, his store had turned the results of his reinvention into successful, standard operating procedures. The timeline depends on the ability and will of dealers to turn their frustration into fruition. Dale Pollak is the founder of vAuto and a best selling author. He can be contacted at 866.867.9620, or by e-mail at dpollak@autosuccessonline.com.
podcast interviewee
The dealer’s self-described conversion isn’t all that uncommon. In Velocity Overdrive, I share similar stories of several dealers who grew tired of hitting the same walls, again and again, in their used vehicle departments. The dealers have turned their frustration over aging cars, wholesale losses and ho-hum sales volumes into conscious, concerted efforts to change the way they did business.
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2012 WRAP Up To better gauge what’s going on the sales floors of dealerships in the U.S., AutoSuccess and Dealer Elite have started a new dealer’s panel. For the second installment of our panel, we again spoke with Jim Evans, owner and president of Evans Motorworks in Dayton, Ohio; Chris Saraceno, vice president of Kelly Automotive Group in New England; and Tony Provost, president and dealer principal for Nissan of Bourne in Massachusetts. This month, we’ll look at the marketing plans of these dealerships, and what they are projecting for 2013.
Chris Saraceno Tony Provost Jim Evans
we’re going to market on a daily basis so we know where we stand moneywise and delivery-wise. We’re pretty good at that now, but we’re really going to hone our skills. We did it in October, and October was very good for us; better than most are doing out there. We just want to take our game to another level and not worry about who’s doing what around us. AutoSuccess: What are your stores doing to forecast 2013 objectives? Share the specific process/procedure you will use. Jim Evans: We look at several different things. Obviously, we are
tracking month by month and looking at the trend increases by manufacturer. We look at the SAAR (seasonally adjusted annual rate), increasing our market spend and going on the offensive to capture market which gives us a directional of what people think the industry is going to do. Then we look at what the manufacturers think the industry is going share, we’re looking to continue that major media spend. We’ve actually to do (we have three manufacturers here), and then we look at what are gone back to more traditional media, which is interesting compared to we trending for that manufacturer. The other factor we look at is market what you read in automotive publications. We’ve put a focus on radio in registrations — what’s happening in our marketplace. And then the 2012, and based on the success we’ve had, will continue that in 2013. strongest tool we use to look at our objectives is our 20 Group market Chris Saraceno: We actually pretty happy with what we’re doing now. book (we’re a member of an NCM Market Group). The composite book gives us data on a microscopic level. You build the building blocks of We’ll probably put more money into social media, which we started to do in 2011. We project to put another three to five percent of the budget the forecast by looking at the underside of it first, and then end up with departmental goals and then a dealership forecast. towards social media, as compared to 2012. AutoSuccess: What are you looking at for marketing in 2013? Jim Evans: Because we had a lot of success in 2012 by dramatically
Tony Provost: We’re going to be more aggressive this year, and not
worry about what the factory is doing. In January, February and March, we’re going to be doing a tremendous amount of Google Analyics and put a lot more money in there. We’re going to be more aggressive with the Web, as well as major market TV. We’re going to be on TV probably 312 days of 365 this coming year. We’re going to do well with that. It’s going to have an impact, and more people are going to want to do business with us this year.
AutoSuccess: How are the lessons learned in 2012 affecting your plans for 2013? Jim Evans: Besides the media change, we made a dramatic attempt at
changing the dealership culture to become extremely customer-centric. We launched an expansive customer rewards program that affects not only sales, but also service, parts and our detail department. We have learned that if we pay attention to our customers, they’ll reward us by giving us their business.
Chris Saraceno: The main lesson we learned is that you cannot implement a new process without a written, agreed-upon procedure, while reviewing actual data. For example, we have a “service to sale” process in place: If we have 30 customers scheduled for service on a specific day, we would rather focus on the 12 customers we know would benefit from the presentation, rather than just guessing and winging it. We’ve also realized that it is challenging do everything on our own and, in many cases, it’s better to partner with some really good vendors that do a great job with a specific function or area. Tony Provost: We’re going to put our expectations very high on a monthly and 60-day basis, and we’re going to increase our volume probably by double next year, and triple our profits — and everyone’s on board with that. We’ve talked with our parts and service people, as well as our technicians, salespeople and F&I. Everyone knows what their part is going to be, and
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Chris Saraceno: We review and discuss several factors with our yearly forecasting. We look at units in operation in the market area and we review information from each manufacturer to see what they’re expecting from us — we always want to make sure that our forecast either meets or exceeds what the manufacturer is expecting. We discuss the SAAR, which gives us some indication what subject matter experts believe the industry will do in 2013. We also take into account the leaders we have in place at each store and the economy in that market, and then we project one-to-one new to used sales. The Kelly Automotive Group has always done very well with used vehicle sales — if we project we’ll sell 50 new cars, we project we’ll sell 50 used cars. For grosses, we’ll typically review the average gross of each of the manufacturers and we’ll usually project more. We believe we should never be average; we should forecast above average.
All the leaders will be meeting for two days in mid-December to present their forecasts specifics and describe how they plan on accomplishing this. I do know that there’s no one projecting less than a 10 percent increase in their department. Tony Provost: Looking at 2013 as a whole, we believe new and used
cars are going to see about a 20 percent increase. I think that’s where it is for our store. We’ll have a minimum of a 20 percent increase on our new car side of things, and about a 30 to 35 percent increase on our used car. The reason why we think that is that we wholesaled a lot of our cars last year, and this year, we’re going to keep a lot more of them, and we’ll do a much better job of that. If we can get our hands on the product that we know is going to be hot, we’re going to do much better. With the Sentra and Altima, we’re already selling them. If we can get our hands on enough of them, we might even increase our volume more than that. If you have questions or are a dealer who would like to be considered for the panel, please contact us at thepanel@autosuccessonline.com.
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DennisMcGinn
leadership solution
does your reconditioning process stack up? Why do some dealerships delay replacing manual reconditioning process controls when doing so can be done quickly, inexpensively and with significant benefits? The predominant answer is, “We’re not ready.” Making reconditioning process changes typically includes the fixed operations manager and used car sales manager — and they, on occasion, work under conflicting success measures. Given this, and other factors from previous attempts to patch-up the “recon process,” some may be reluctant to “fix” it again. The result? Nothing gets improved or changed until there is another incident or blow up. Fixed operations works best when there is a steady flow of work to be dispatched; thus, keeping everyone busy and paid, but not regularly being pushed more. However, given technicians are usually paid by the job, they naturally are anxious to add on more work, and this can lead to burn out. The used car sales manager works best when the front lot is fully stocked and every car is pictured and online. He or she expects to see cars on the front line soon after they arrive and trades are cleared. Adding to the challenge, many dealers allow the selling of cars that are still in the recon process. Grosses are higher because the customer is willing to pay more just to keep the car unavailable. This practice is good for sales, but disruptive to the reconditioning process. Weekends and month ends always create a push for recon departments when buying traffic spikes. Matching resources with the demands is not so simple when you have a fixed number of resources, a need for a steady workflow and sales wanting to sell cars that are still in recon. How can this complex and never-ending cycle be tamed? The solution is quite simple and readily available: Move to a real-time workflow process improvement for reconditioning — know your real numbers in real time. Everyone, including the fixed operations manager and used car manager, shares one set of metrics, which supports informed trade-off decisions to be made when required. “We’re Not Ready.”
Poll your recon team and ask them to list their top two barriers to increased efficiency. Tally the responses from your mechanics, parts, body shop, PDR and detail. Based on my experience, the following list will cover most of what you will hear. 1. Hand-off between steps 2. Changing priorities 3. Management approvals 4. Waiting parts 5. Staffing Now, imagine a real-time workflow system, which provides complete transparency and accountability. Hand-offs are done with a single click, mobile messaging is sent to provide immediate approval to smooth out the flow of incoming cars and subcontractors with Web access know the exact parts to bring before they leave their shop. Though a workflow system can provide so much more, this should be an easy comparison for “are you ready?” A reconditioning process that lacks automation for immediate communication will not get the job done unless your business is flat and predictable. Smart mobile devices eliminate “I did not know” and “no one told me” excuses and are replaced by texts, e-mail alerts and detailed notes. Employees can expect approvals in minutes for pending work. After all, you are hard pressed today to find employees and subcontractors who are not already using mobile technology for messaging and access to Web sites.
Dennis McGinn is the founder and CEO of Rapid Recon. He can be contacted at 866.268.3582, or by e-mail at dmcginn@autosuccessonline.com.
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podcast interviewee
2012 brought hard evidence of dealers with volumes from 50 per month to 400 per month per store and putting up one to three more turns using recon workflow technology. If you would like to receive best-in-class benchmarks for a typical set of steps, along with a workflow template you can use to compare your own steps, just send me a request.
PaulAccinno
marketing solution
2013 budgeting
NADA reports that there were 12.7 million new vehicles sold last year by 17,500 dealerships, which means the average dealership sold about 60 new vehicles a month. There were also 8.7 million used vehicles retailed by new car franchised dealerships, or about 40 sold each month. Let’s assume you sell 60 new vehicles a month. Using these calculations, your ad budget would be about 60 x $505 = $30,300 per month, and your adjusted PNVR would be $303. Again, this is a national average and doesn’t take into consideration the media costs in your market. You can get a better sense of where your PNVR should be through your ADA or simply by having discussions with dealers in your local OEM Ad group. Now, we need to allocate the $30,000 to various media. According to NADA, dealers spent about 25 percent of their marketing budgets on digital advertising, leaving 75 percent for traditional advertising. However, Borrell & Associates, an industry leader in tracking local digital ad spending, estimates digital spending to be much higher. In their 2012 Automotive Advertising Outlook, they estimate dealers will spend about 44 percent on digital in 2012 and as much as 56 percent in 2016. I usually find 50 percent traditional and 50 percent digital is a good starting point and then, based on market conditions and media costs, I adjust about 10 percent either way. When allocating media expenditures, it is important to resist the urge to spread your budget too thin. You need to design a plan that is impactful; which means you need to reach enough people, enough times, to cause an action. Honestly, over the years, I’ve seen almost any type of media strategy work, as long as it created impact and was done on a consistent basis. Reach, frequency and consistency are
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the cornerstones of any good media plan. Take, for example, “Radio Guy.” You know this guy — he runs nothing but radio. Runs a ton of it. He’s on all the time — and he’s successful. Or look at “Newspaper Guy.” While everyone else is pulling out, he’s buying “double truck” four-color ads every day, consistently — and he’s successful. There is usually only one dealer in the market dominating a media to that extent, but to prove my point, as long as you reach enough people, enough times, consistently, it will work. One of the best explanations I’ve ever heard, regarding not spreading your budget too thin was by media consultant Jim Doyle. During one of his presentations I heard him say, “Imagine you have 10 glasses in front of you. Many dealers will try an put a little bit of water in each glass, rather than filling one glass and then moving on to the next.” So let’s spend some money, shall we? We’ll start with digital. Here is my initial recommendation: $1,500 – Website $2,500 – AutoTrader or Cars.com $4,000 – SEM/mobile search $2,000 – Two vendor’s third-party leads ($20 x 50 x 2) $2,000 – 25,000 conquest e-blasts (in addition to the free ones you’ll send out of your DMS) $1,000 – Social media/reputation management $13,000 - Total digital (43 percent of budget) These are pretty much essential budget items — and can certainly be shifted around a bit — but this serves as a strong digital foundation. Now, let’s look at traditional media and remember let’s fill one glass at a time. I would start with cable TV. I just did a buy for a mid-market, mid-sized dealer using $10,000 over a three-week period for Q1 2013. It generated 900 spots and 625 target rating points A25-64 with a 68 percent reach and a 9.2 frequency (see last month’s article in AutoSuccess for an explanation of marketing via television). I tried the same thing with broadcast TV and it generated 126 spots and 345 target rating points with a 90 percent reach and a 3.8 frequency. I like the reach but not the frequency of the broadcast TV buy, and I would need about $22,000 to create the same frequency, so I went with the cable buy. I also added 10,000 pieces of targeted Mail2Web for $7,000. This is direct mail that drives traffic to a micro-site that gathers critical sales information for dealership follow up; sort of direct mail on steroids. I’m done; we filled up two glasses. $10,000 - Cable TV $7,000 - Mail2Web $17,000 – Total traditional (57 percent of budget) I would substitute a radio blitz or holiday full-page newspaper ad for the Mail2Web program occasionally on a tactical basis, but I would not spread this much further. I would also be sure to have a few generic used car spots available for the beginning of the month while you’re waiting for the newest factory program to be announced. If you need to cut budget for whatever reason (you are out of cars, you’re buried in snow, etc.), I would cut the third-party leads, e-mail blasts and the direct mail. That’s $11,000, and more than a third of the budget. Just as important, I would try and increase the budget during peak selling seasons (most dealer’s biggest advertising months are May, June, July and August, according to Borrell & Associates) to see if you can “buy” some business and detect a correlation between ad spend and sales. Regardless of how you put your marketing and media plans together, reach, frequency and consistency for both digital and traditional advertising are the keys to success. Paul Accinno is the president and CEO of WorldDealer Advertising. He can be contacted at 866.319.6284, or by e-mail at paccinno@autosuccessonline.com.
podcast interviewee
So you want to develop a marketing and media budget for 2013 but you don’t know where to start. One benchmark I find useful is advertising costs per new vehicle retailed (PNVR). According to NADA data, that number was $628 in 2011 for the average dealer. NADA studies found that number can vary by 88 percent, from a low of $418 PNVR for larger dealers, to a high of $788 PNVR for smaller dealers. Obviously, larger dealers have an advantage when it comes to advertising and creating economies of scale.
An Easier Way To Get Customers ’ Perspective On Marketing in the Modern World A Dealer’s
W
hy does marketing to get customers seem so difficult and daunting? Why do so many dealers fail in their attempts to drive a consistent flow of traffic? With all the new tools and tricks available in the Internet age, you’d think it would be easier than ever to get customers to come to your dealership. But that’s not the case. Finding the right customers, and enough of them, seems harder than ever. To get the latest on real-time marketing trends, we caught up with Tom Ring, from Brown Daub Kia, part of a dealership group that’s been around since 1936. Brown Daub Kia is well known for having nearly quadrupled sales in the last few years.
’ Brown Daub Kia So what’s doing differently than other dealerships? Our growth has largely been driven by improved marketing. But marketing today is a strange paradox: with all this new technology we’re able to be more connected with our customers than ever, through email, social media, video, chat, etc.—yet we’re also more disconnected from our customers than ever. The trend is for customers to view dealerships as “all the same” and make decisions solely on price. And why not? With all this new technology, communication is faster, but there’s less of a relationship. You can’t build a genuine relationship with a customer through text or email only. Having been in business for decades, we place a lot of value on customer relationships. We truly believe our dealership is the best choice for our customers, regardless of price. So our focus is on giving our customers unique reasons to visit us, face to face, so we have a chance to build a relationship with them and truly help solve their problems. That’s proven to be the best way to attract and convert customers and maximize our gross and net profit. Jimmy Vee & Travis Miller at Gravitational Marketing have helped us develop the marketing strategy that puts a priority on relationships and solutions over prices.
It drives you nuts when it doesn’t work! Nobody likes wasting money, and so many of the marketing “ideas” aren’t much different than gambling. The other frustrating part is when you find something that works once or twice, then it stops working. The start and stop breaks your heart and demotivates your staff. Ultimately, we have worked hard to create a winning strategy that works consistently and improves over time. The secret to that is focusing on something other than low price because it’s always easy for another dealership to out-price you. Instead, with the help of Gravitational Marketing, we talk about the value we provide and the problems we solve.
Why do customers choose Brown Daub Kia when there are so many other options?
In the end, consistency of results is what matters most. Jim and Travis helped us apply Gravitational Marketing to our store and we got results immediately and have continued to see results, consistently, for four years now. They have a complete plan, not just one or two quick fixes. It takes effort, hard work and commitment, but that’s how we knew it was the real deal. There’s really no “easy button” in life. They call their group of dealers “Rich Dealers” for good reason—when traffic increases, money increases, and the business gets better all around. It’s enriching in more ways than one.
Any advice for dealers who just can’ t seem to get any traction in their market? Move! Or hire Gravitational Marketing! Seriously—stop thinking that you have to come across like every other car dealer. Start focusing on what makes you unique, on the true value you offer your customers. I think most dealerships don’t place a high enough value on the service they provide. When you shift your perspective from low price to high value you unlock a lot of new opportunities.
People hire specialists like financial advisors and personal trainers to help them get ahead in life. So we chose to position Can other dealers ourselves as specialists. We specialize in helping duplicate your success? people drive the car of their dreams. When a customer needs an “expert” to help them with a As long as they’re willing to commit to the new or used car, they choose us. Jim and Travis process and apply the effort. I know of are always saying “Same is lame,” which helped about a hundred dealers in the country who use us realize that if we look and act like other a similar approach and have similar results. It’s dealerships, then customers won’t have any not for everybody, but it may be for you. reason to choose us unless we offer the lowest price. So rather than price ourselves out of business we went in the opposite direction and Get in touch with became the first choice for our customers.
You mentioned Jim and ’ the biggest Travis and Gravitational What’s frustration dealers have with Marketing. What makes them any different than other marketing these days? marketing companies?
Gravitational Marketing
at 407-641-0248 or RichDealers.com/tomring to see if you can become a “Rich Dealer.” That’s the advice I give most dealers who ask about our success.
RussellGrant
marketing solution
the big deal about big data
Do Better Things or Do Things Better?
Often, dealerships are focused on figuring out what is the latest and greatest, but the truth is, they often don’t need to do new things. They need to keep doing the same things better. GMs can use big data to ensure that the decisions they’re making are being driven by metrics instead of emotions and gut feelings. The key is to use big data to become more streamlined and effective, to incorporate it into everyday decisions, into every decision.
Biggest Data
A dealer’s No. 1 source of big data is their DMS — and it’s also the most valuable. It can be used to identify: • Inactive service customers • Customers with service-into-sales opportunities • Customers who can lower their payments • Customers coming off warranties • Customers coming off leases
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But identifying customers and opportunities isn’t enough. Dealerships need to use big data to create big opportunities — or work with vendors who can help them do so. The data should serve as the foundation for a dealership’s strategic plan, driving all marketing decisions and directing future courses of action, as well. Dealing with Big Data
What data do you need? When do you need it? How do you get it? These are some of the questions you want to pose to you and your staff — or the vendors you work with. Just remember: Data in a vacuum is meaningless. Simply gathering it is not an effective use of your time and money. Data needs to inform your decisions. It should be applied and integrated into your processes, procedures and plans, and especially into your marketing. Once it has been implemented, data should continue to be collected and studied so that it can be used to help determine what’s working and what isn’t; who it’s working with and who it’s not working with; and when it’s working and when it’s not working. Data has the potential to serve as a guide for continuous improvement.
A Measure of Success
When it comes to tracking the performance of your marketing efforts, there are many methods, including Google analytics and partnering with vendors that offer robust data analytic programs. Keep in mind that data won’t tell you whether you should or should not be marketing — that’s a given. It will tell you how to be more effective by providing the information you need to answer critical questions, such as: • Do you need to beef up your SEM strategy? • Do you need to increase your direct marketing campaigns? • Do you need to work on your online presence and reputation? • Do you need to take a multi-channel approach when communicating with your customers? In the end, big data can save money and sell more cars — as long as you let it do the driving.
Russell Grant is the vice president of sales for J&L Marketing. He can be contacted at 866.503.8397, or by e-mail at rgrant@autosuccessonline.com.
podcast interviewee
From the keynote speaker at DrivingSales Executive Summit to automotive manufacturers in trade publications to vendor product advertisements online, everyone is talking about how big data is changing the future of marketing in our industry. But most of the GMs I talk to aren’t nearly as concerned with the marketplace and the direction it’s taking as they are with their business and where it’s going. They want to know two things: how can big data save them money and how can it sell more cars.
JimmyVee & TravisMiller
leadership solution
how to supercharge sales and profits during a build-out
Regrettably, the last thing most dealers or managers are thinking about during this stressful time is increasing sales and profitability. Just completing the project with minimal causalities is the primary objective. Many dealers think that, at the completion of the build out, there will be a flood of traffic and new business. Frankly, traffic often decreases during the construction phase due to the dust, clutter and commotion, but dealers are still optimistic that afterward the people will come rushing in to the beautiful new space. Unfortunately, the reality is quite the opposite. The movie mantra, “If you build it they will come” does not apply to car dealerships. Things may seem stressful during a build out, but many dealers we talk to are even more stressed afterward. Often, it seems the traffic volume after the renovation doesn’t live up to their expectations. And now, with a larger nut to crack every month in overhead, profitability begins to suffer. So, while conventional wisdom suggests you shouldn’t try anything new,
shouldn’t do much marketing or pile on more changes during a build out, the opposite advice is more likely to deliver the end result dealers are hoping for when they begin a build out project. Here are a few helpful hints on “making it rain” while you’re buried in a build out. Implement Change When Change is Already Cccurring: There is no better time to do something new than when change is already occurring and justified by something as significant as a build out. The entire store is in flux during the renovations and, at the end of the process, everyone realizes that they will need to adjust to the new surroundings and make changes to their daily activities. This is the time when employees will be most receptive to new ideas and implementing new strategies. Taking advantage of this period of unrest by instituting new processes, marketing strategies and even introducing a new vision and culture into the store is a smart play and can be worth a fortune to a dealership in the long run. Create Internal Excitement: Most dealers believe that a build out should be used to create excitement externally. But the reality is that the majority of people in the community rarely care about the size or condition of your facility unless they are there to shop. The people who do care are your employees and past customers. It is with these people that creating and leveraging excitement can give you a boost in sales and profitability. Boost Traffic: A herculean effort should be made to increase traffic to the dealership during a build out in order to keep the sales level and staff morale up. Sales can easily drop during this time and be excused away by the current conditions. This is dangerous because it allows employees to get sloppy and start to accept lesser results; profits then start to drop off even further. Increasing traffic keeps everyone on their toes. It keeps skills honed, focus sharp and morale high. Then, when the build out is complete, the new traffic strategies you’ve implemented when the building was under construction will work double duty at your bright and shiny new facility. Jimmy Vee and Travis Miller are founders of The Rich Dealers Institute and the authors of Gravitational Marketing: The Science of Attracting Customers and Invasion of the Profit Snatchers. They can be contacted at 866.867.9618, or by e-mail at jt@autosuccessonline.com.
THE
DEALER PANEL
podcast interviewee
Exciting. Hectic. Stressful. These are just a few of the things many of you feel during the emotional roller coaster ride of a build out. It’s natural to feel these things; renovating a dealership is a big job, with lots of moving pieces and parts. But the light at the end of the tunnel is so bright it makes it all worth it in the end — or does it?
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successful solutions from successful dealers
AutoSuccess & DealerELITE are both designed to keep the view from the sales floor front and center in everything we do, and we've come up with an exciting new way to accomplish this.
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Our new Dealer Panel gives voice to dealers, GMs and sales professionals to share their experiences — sales techniques, new technologies and ways to motivate staff — giving our readers the benefit of their experiences.
We're always looking for new voices, as well. If you've got something to share with the rest of the industry, drop us a line at thepanel@autosuccessonline.com.
MarkTewart
leadership solution
Bridging the Sales Gap In the Internet Process
Every one of those those new software programs and gadgets may be fantastic in their own right, but it’s how people use them in an effective process that makes the difference. More money has been wasted in the auto business on whizbang shiny new bullets than could ever be imagined. Magic bullet fixes leave big fat holes. You can pour big buckets of money into those holes and never sell one more car. Don’t blame the gadgets or the vendors who sold them to you when they do not work. Go back to the basics of business, which are always the 4 P’s: People, Process, Product (inventory) and Positioning (advertising and marketing). Without the right mix of all of those 4 P’s, the best magic bullets will never work. The reason is that there is no such thing as a magic bullet. When you are getting excited about magic bullets, ask yourself if you have the people and processes to make them work. I remember the professor in the first computer programming class I had taken saying always think manually
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first. Here was a professor with a doctorate from one of the most advanced universities in the world telling his students that a computer program does not necessarily improve or make better a strong manual system. Huh? His teaching points were, first of all, to not forget that it is always “garbage in and garbage out.” Secondly, always think through the program manually first and see what you are trying to accomplish. Hands down, those simple points were some of the best learning moments from my college days. Always think through the manual application of any new program first and how the people applying the program will do so. Answer the “who, what, when, where and why” questions. In other words, do not get so emotional about new gadgets that you lose track of what you are trying to accomplish. In the car business, there is currently a huge disconnect between the new gadgets and the overall sales process. Always create visual flow charts that show all processes, connections and details from A to Z. New school without old school equals stupid. Don’t waste your money and buy shiny new objects that promise the moon without going over the complete integration of the tool. The traditional road to the sale is forever changed. It’s way past time for every dealer to revisit and rework that road to the sale so that it is tailored for and fits his or her dealership. Do you have a routing process for everything and everyone in your dealership? Do you have black and white procedures? Black and white procedures are just that; they are black or white, but they are never grey. You do not ever deviate from these policies, procedures and functions. No exceptions and no excuses. There are a ton of dealerships that have become a hodgepodge of programs and shiny objects, combined with no written or communicated procedures or expectations for those who are to use them, oversee them and why. The results always are always the same: The dealership experiences expense creep while the staff becomes disillusioned and eventually works around all the shiny objects and toys. All the while, the dealer wonders what happened to the new magic bullet and his sure-fire increase in sales and profits. To receive my free special report “Bridging the Sales Gap,” e-mail me at address below. Mark Tewart is the president of Tewart Enterprises, and the author of the best seller, How To Be A Sales Superstar. He can be contacted at 866.429.6844, or by e-mail at mtewart@autosuccessonline.com.
podcast interviewee
It seems like every week there is a new digital or Internet conference. Information is flowing and being digested at a pace never seen before in history. To go along with all the new information, there seems to be matching software, programs and gadgets that are supposed to streamline, make sense of and monetize all the information and change. Unfortunately, none of those programs or gadgets is the real answer to making money in today’s marketplace.
March 19, 20 and 21st 2013 “As the Publisher of AutoSuccess, I am invited to, and support many events in our industry. After attending the last Internet Sales 20 Group in Chicago, I was blown away with the information, discussions and knowledge that was packed into one room. It truly was a 20 Group packed with the highly skilled industry leaders who enlightened us with cutting edge information. The next one is scheduled! If you have not signed up, do so now before seats fill up. You can get an incredible discount by using the code below. If you have questions about the event, please contact me personally. My email is sgivens1@autosuccessonline.com�
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Success Story
Rick Case Honda of Davie Rick Case Honda of Davie Doubles Sales Opportunities and Increases Gross Profits by $200K a Month without Spending a Single Extra Dollar in Advertising Converting calls into customers is the common goal of every dealership in the country. However, after spending hundreds of thousands of dollars each year to make the phones ring, the average dealership connects less than 50 percent of its incoming calls with the intended agent, and more often than not fails to obtain enough customer contact information to conduct worthwhile follow up or future marketing campaigns.
“This strategy took a huge problem and turned it into a huge competitive advantage,” said Richard Bustillo, General Manager of Rick Case Honda of Davie. “We now have the ability to take action in areas where our competition is completely blind. This has nearly doubled the value of our marketing dollars and, more importantly, has helped us convert frustrated customers into raving fans.”
Rick Case Honda of Davie, the No.1 Honda dealership in the Southeast and the No.1 gross-profit Honda store in the country, set out to conquer this industry-wide problem by implementing an intelligent call-management strategy that enables the dealership to put missed opportunities back in play, fill-in missing contact information and accurately load incoming sales opportunities into their CRM where people and processes can increase the number of sales each marketing dollar generates.
Just 12 months ago, over 40 percent of Rick Case Honda’s incoming calls were lost or terminated by the customer before they reached the desired location. This included customers who terminated the call after being left on hold, customers who were transferred to the wrong department, as well as a variety of other undesireable scenarios.
Å CONTINUED INSIDE
Success Story Ä CONTINUED FROM THE COVER
“This may sound strange to some, but when I realized what was happening, I got pumped up,” said Bustillo. “For the first time, we not only had a way to see where we were disappointing our customers but we also had a way to reconnect with these customers before we damaged these relationships.” The comprehensive strategy that Bustillo and his team use focuses on three critical profit leaks that were undermining the effectiveness of their advertising budget. As a result, the same number of incoming calls now puts twice as many sales opportunities into their CRM while adding more than $200,000 in gross profits to their bottom line. To illustrate the significance of this new strategy, the following breakdown highlights Rick Case Honda of Davie’s three part callmanagement strategy and how it has significantly affected their numbers. PART 1: INCREASE THE NUMBER OF CUSTOMERS THAT CONNECT WITH THE DEALERSHIP In September of 2012, Rick Case Honda of Davie received approximately 3,500 calls from their tracking numbers. Fifteen percent (550) of these calls terminated before connecting with a human being. Forty percent (1,400) of the remaining 2,950 were mishandled and/or terminated without getting the customer’s contact information. This meant that only 45 percent (1,575) of the total incoming calls were actually connecting with the proper person in the proper department. In many dealerships these calls would have been lost, but because Rick Case Honda uses an intuitive call-management system that monitors all calls, not just connected calls, the dealership receives
alerts in real-time when calls are missed or mishandled. These real-time alerts go directly to dedicated staff members who quickly re-engage the customers before they become lost opportunities and make it possible for Rick Case Honda of Davie to recapture 65 percent (1,251) of their missed and mishandled opportunities – effectively connecting them with a staggering 81 percent of their customers.
Before implementing their new callmanagement strategy, Rick Case Honda of Davie entered approximately 60 percent of incoming calls into their CRM system. Although they were performing much higher than the industry average, this was costing the dealership over 200 follow up opportunities each month. To overcome this challenge, their call-management partner uses a revolutionary, proprietary technology
Since sales calls make up 25 percent of all incoming calls at Rick Case Honda of Davie, this translates to approximately 707 sales opportunities, 313 more than their previous process. Eleven percent (78) of the customers who spoke to a sales person actually purchased a vehicle. Thus, 629 sales opportunities remain in need of follow up. PART 2: INCREASE THE NUMBER OF SALES OPPORTUNITIES WITH ACCURATE NAME AND CONTACT INFORMATION Of the remaining 629 sales opportunities that did not purchase a vehicle, 40 percent (283) had missing or incomplete customer information. To avoid losing these opportunities, Rick Case Honda’s call-management system uses a proprietary technology that matches incomplete customer records against national cell phone directories and NCOA databases before loading leads into their CRM. On average, this process completes 60 percent of their incomplete customer records. In September, this unique, proprietary technology delivered an additional 170 confirmed prospects. “This is incredibly important,” said Bustillo. “Seventy percent of customers call our dealership from their cell phones so most reverse lookup systems would completely miss this.” PART 3: INCREASE THE NUMBER OF OPPORTUNITIES INCLUDED IN FOLLOW UP PROCESSES
“This strategy took a hu into a huge comp
-RICHAR
GENERAL MANAGER OF R
Rick Case Honda of Davie that accurately loads over 85 percent (309) of incoming sales calls into their CRM. The sum total of these incremental increases has doubled their active sales opportunities on a monthly basis with game-changing results. “This system operates at a completely different level,” said Bustillo. “It automatically assigns incoming calls to
uge problem and turned it petitive advantage.”
RD BUSTILLO
RICK CASE HONDA OF DAVIE
the sales person named in the call. It automatically cross-references every call with our existing opportunities and ad sources to avoid duplicate entries, and it automatically inserts call summaries, alerts and links to the recordings into our CRM in a way that’s easy to read – and it’s all done in real-time.” These automated processes are all part of the comprehensive, intuitive callmanagement platform that has helped to dramatically improve the dealership’s internal processes. Brian Kane, BDC Manager for Rick Case Honda of Davie, shares Bustillo’s enthusiasm for their call-management strategy and points out that this new call-management technology has had a significant impact on the efficiency of their call center, “I used to spend 25 percent of my day de-duping our CRM,” said Kane. “This cuts out a lot of that busy work so I can focus on selling cars.” When one looks at the effectiveness and results generated by this three-part callmanagement strategy, it is easy to see how any one of these efforts would provide a noticeable boost in most dealerships. However, the combined benefits of all three parts seamlessly working together from a single technology platform are nothing less than extraordinary, as they have produced measurable growth in every profit center at Rick Casa Honda of Davie. When asked about the impact this new call-management strategy has had on his business, Bustillo answers in very black and white terms. “It’s simple. Before we implemented this strategy I connected with 45 percent of my incoming calls and generated approximately $266,000 in gross profit. Now, I connect with 81 percent of my incoming calls and generate over $475,000 in gross profit from the same 3,500 calls – all without spending a single extra dollar in advertising. That’s $2.5 million a year
“I used to spend 25 percent of my day de-duping our CRM.This cuts out a lot of the busy work so I can focus on selling cars.” BRIAN KANE BDC Manager
RICK CASE HONDA OF DAVIE
that I would have otherwise left on the table.” “It’s hard to argue with the math. Capitalizing on missed and mishandled phone calls is a huge opportunity,” said Chip King, Managing Partner of www. CallRevu.com, the call-management partner that Rick Case Honda of Davie uses. “Bustillo and his team aggressively stepped up to an industry-wide problem that plagues auto dealers and knocked it out of the park – to the tune of a couple ‘extra’ million dollars annually.” The average dealership misses or mishandles over 50 percent of their incoming calls. Rick Case Honda of Davie solved this problem by implementing a comprehensive call-management strategy that allows them to connect, convert and keep significantly more of their opportunities. This three-part strategy has increased monthly gross profits by over $200,000 by increasing the number of customers that connect with their dealership, improving the quality of their customer data and increasing the number of opportunities that are accurately entered into their CRM.
Success Story
Success Story
Rick Case Honda of Davie
“This has nearly doubled the value of our marketing dollars...” NOW
BEFORE
“Before we implemented this strategy, I connected with 45 percent of my incoming calls and generated approximately $266,000 in gross profit. Now, I connect with 81 percent of my incoming calls and generate approximately $478,000 in gross profit from the same 3,500 calls – all without spending a single extra dollar in advertising. That’s $2.5 million a year that I would have otherwise left on the table.” -RICHARD BUSTILLO | GENERAL MANAGER OF RICK CASE HONDA
IN A NUTSHELL Rick Case Honda of Davie Doubles Sales Opportunities and Increases Gross Profits by $200K a Month without Spending a Single Extra Dollar in Advertising • Increased the number of calls connecting with their customers by using an intelligent callmanagement strategy that enables them to quickly re-engage lost, dropped or misdirected calls before they become lost opportunities. • Improve the quality of sales opportunities by using a proprietary technology that detects incomplete customer records and automatically appends missing data before submitting leads into their CRM. • Increased the number of customers included in follow up activities by using an intuitive system that automatically cross-references every call with existing opportunities and ad sources and accurately posts incoming calls into their CRM. • Partnered with a call-management expert, www.CallRevu.com, to implement a phone strategy that has effectively doubled their sales opportunities and increased gross profits by $200K a month, without spending a single extra dollar in advertising.
Å READ FULL STORY
The Secret to West County Honda’s
Success An inside look at the owner marketing strategy that drove average sales from 65 units to 290 units per month in just a year.
Integrated and Aggressive
Owner Marketing Strategy Owner and General Manager Bill Cafarella, West County Honda, took a bold “no customer left behind” approach when working with his team to develop a highly integrated owner marketing strategy for his St. Louis, Missouri dealership. And it’s definitely paid off, increasing average sales from 65 to 290 units per month in just one year. West County’s success shows what can happen when a visionary dealership employs innovative solutions to achieve its business objectives.
THE GOAL: Grow Dealership There are only three ways to grow a dealership—increase the customer base, profit per transaction and frequency of sales. Cafarella’s strategy encompassed three powerful solutions that each accomplished all three of these goals.
More customers
More frequent sales
More profit per transaction
THE SOLUTIONS: Sales events
(previous and conquest)
bLinked
(continuous leads)
Service Clinics (inactive and at-risk)
Q1
Q2
Q3
Q4
bLinked®
Customer Pay Service Clinic Sales Event(s)
Customer Pay Service Clinic Sales Event(s)
Sales Event(s)
Sales Event(s)
Strategy Spans Entire Year Cafarella decided on a growth strategy that could not only help him achieve his goals—increase the dealership’s customer base, profit per transaction and frequency of sales—but also effectively target previous, conquest, at-risk and lost customers. His plan called for a diverse yet highly integrated set of solutions, an aggressive strategy that was sustainable and spanned the entire year. *The number of sales events is determined by data analytics.
For a continuous stream of high quality leads, West County Honda selected bLinked®, named runner-up for the Most Innovative Dealership Solution of 2012 at the DrivingSales Executive Summit. This equity data mining and lead generation product identifies customers who are in the best position to buy and targets them before they shop the Internet, when a dealership is most likely to lose their business. With bLinked, we get a steady flow of leads,” said Cafarella, “leads that are bringing in higher grosses and better trades. We’re turning service into sales and we’re taking in a trade on almost every deal. bLinked puts customers in a mindset to buy before they normally would, by letting them know they can lower their payment and get a new car with no money down. We’re doing an extra 20 units per month. We’re selling to customers sooner, which means more frequent sales. We’re retaining them, which means more customers. And we’re grossing two-and-a-half times more than the dealership’s average, which means more profit per transaction.”
Targeted and Data-Driven
Sales Events
Cafarella was intent on increasing Internet, showroom, walkin and phone traffic, but he was also determined that West County Honda wouldn’t make the all-too-common mistake of bombarding customers and conquests with an endless stream of irrelevant offers. To ensure the dealership targeted the right customers at the right time with the right offers, Cafarella partnered with the highest rated vendor in owner marketing by DrivingSales—J&L Marketing—an automotive direct marketing company respected for its advanced data analytics. Using predictive models based on customer profiles and data insights, J&L determined precisely who, what, when, where and how to market to customers—and then created custom communications designed to motivate those individuals.
Letter Microsite Email
Personalized Multi-Channel Campaigns West County Honda marketed its sales events to previous customers and conquests via personalized multi-channel campaigns that included emails, direct mail and personalized websites. Sales events were scheduled throughout the year, with data analytics being used to determine the most strategic times to hold events.
Too often dealerships flood customers with communications and then the customers just end up becoming immune to marketing” said Cafarella. “With these data analytics, I’m able to target the customers for my sales events who are the most motivated to buy, at the most advantageous time for them to buy. My communications are less frequent, but they’re more effective. It’s costing me less money, but resulting in more sales.”
Retaining Customers and Increasing Driveway Share bLinked combines customer data, monthly manufacturer incentives, current inventory and desired profit levels to distinguish which customers are able to upgrade their vehicle with no money down—and quite often lower their monthly payments as well.
Customer Data
Current Inventory
Monthly Incentives
Desired Profit Levels
Multi-Channel Campaign
$0 CASH DOWN
MONTHLY PAYMENTS
When a customer comes in and buys a car, I’m already thinking about their next vehicle,” said Cafarella. “I want to make sure West County Honda gets to them before they get to the Internet and shop us out. That’s one of the best things about bLinked. It identifies customers who can improve their situation—lower their payment and get a new car with no money down—before most of them are even considering replacing a vehicle. bLinked is a great way to hold on to our customers and build driveway share.”
High-Performance
customer pay SERVICE CLINICS Dealerships lose customers to competing stores and independent repair shops all the time, but Cafarella already had an action plan in place to win back customers and prevent at-risk customers from defecting. Customer Pay Service Clinics. West County Honda’s semi-annual service clinics provided free vehicle checkups and gave the dealership an opportunity to showcase the knowledge and expertise of its certified technicians. These complimentary inspections appealed to many customers, including some who hadn’t been motivated by sales events in the past. J&L Marketing’s data analytics were able to predict which customers where most likely to respond. So not only did the clinics generate service revenue, they also re-activated customers who couldn’t be engaged through other promotions.
89.3%
lead to show ratio
BDC: Maximize Leads and Appointments West County Honda’s service clinic vendor provided a proven, turnkey direct marketing program, complete with a BDC that logged and handled phone leads, contacted web leads, scheduled appointments, confirmed appointments and rescheduled appointments when necessary—for an impressive 89.3% lead to show ratio. Customers also received follow up communications from representatives.
It’s a given that the service clinics generate revenue and trigger future service appointments,” said Cafarella. “But they also help prevent defection. We’re able to re-activate customers and save many who are atrisk—and that’s critical, because active service customers are much more likely to buy a car from us than non-active service customers. Which means not only do we end up selling vehicles on the day of a service clinic, we sell vehicles to the customers who attend our clinics for months, even years, afterwards.”
Service Into Sales bLinked matches qualifying customers with service appointments to vehicles in inventory they can upgrade to—at lower monthly payments and with no money down. The result is more sales and better trades, because the dealership often knows the vehicles traded and has their service histories.
When a customer comes in for a service appointment and bLinked has matched them up with vehicles in inventory, we—and they—are in a great position. They can upgrade their vehicle with no money down and probably at a lower monthly payment. We can get a trade that we’ve got the service records on and we can get it at a price that’s much better than auction. It’s a win-win situation.”
Ready to take your owner marketing strategy to the next level?
A Strategy of Success Bill Cafarella and his team continue to work with J&L Marketing to refine their aggressive owner marketing strategy, consistently increasing the dealership’s customer base, profit per transaction and frequency of customer purchases. In fact, they’re looking forward to 2013 and anticipating one of the best years ever in the dealership’s history. To learn more about the integrated solutions and advanced data analytics that drive West County Honda’s strategic marketing plan—bLinked, sales events and customer pay service clinics—contact Russell Grant, VP of Sales at J&L Marketing, at 407.616.6898 or rgrant@jandlmarketing.com.
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