The Puget Sound Dealer 2012 #4 by Blue Water Publishers, LLC

The Puget Sound Dealer

A Message from the Editor

Official Publication of the Puget Sound Automobile Dealers Association 16101 Greenwood Avenue N Bldg 2100 Seattle WA 98133 You’re Never Fully Dressed Without A Smile Phone: 206 542-3551 Fax: 206 542-7561 In the 1980s Martin Charmin wrote the lyrics to a wonderful song Email: jim@psada.com about truth and honesty for the runaway Broadway hit “Annie” based www.psada.com

on “Little Orphan Annie,” whose story took place during the Great Depression. Over the radio the orphans in the orphanage listen to, then sing along with, a song being performed by Peter Marshall entitled “You’re Never Fully Dressed Without A Smile.” The song is a good reminder for the holiday season and, every day, that the greatest gift we can give anyone is our smile. The song goes on to say,

BOARD OF DIRECTORS 2012 President Jim Morino Acura of Lynnwood 1st Vice President Sara Carter Carter Subaru, Shoreline

Hey, hobo man! Hey, Dapper Dan! You’ve both got your style, but brother, you’re never fully dressed without a smile!

2nd Vice President Steve Klein Klein Honda, Everett 3rd Vice President Jim Walen Ford-Hyundai of Kirkland

Your clothes may be Beau Brummelly, they stand out a mile -But brother, you’re never fully dressed without a smile!

Trustee Position #1 Dan Wilder, Jr. Wilder Auto Center, Port Angeles

I was taught by my mother that the most important things in life are faith, hope and charity. I was taught to give from myself. This didn’t mean money or material goods. She meant to give from myself, my heart. Nothing more shows the condition of a heart than a smile. A smile comes from the soul. We should be careful when we recount our blessings. The song goes on to say:

Trustee Position #2 Marc Ikegami Doug’s Lynnwood Mazda, Doug’s Lynnwood Hyundai, Doug’s Northwest Cadillac Immediate Past President Jason Courter Honda Auto Center of Bellevue

Who cares what they’re wearing, from Main Street to Saville Row. It’s what you wear from ear to ear and not from head to toe (that matters) So, Senator! So, Janitor! So long for a while -remember, you’re never fully dressed, though you might wear the best. You’re never fully dressed without a smile!

PSADA STAFF James R. Hammond Executive Director

Give your employees, your friends, and your family the greatest gift God gave us to share – your smile. A tender heart is seen in a smile. Your smile adds one brighter light into the world we all live in.

Linda Halverson Executive Assistant Susan Leonhardi Programs and Data Base Manager

Share the spirit of the season. Wear it on your face! Smile! James Hammond Executive Director

Michele Foley Office Assistant

Inside this Issue

For information on advertising in this publication contact Jim Aitkins Blue Water Publishers, LLC 360.805.6474

Cover photo by Adam Buchanan 4

Disability Accommodation - A Practical Approach

Steps Washington’s Legislature is Taking to Stop Schools From Failing Your Business

How Schools Nationally Have Been Failing Business

Way Scarff - Along the Way Scarff Way

Dealership Sales Environment and Current Valuations

Setting Goals and Objectives to Increase Productivity

Keeping Romance Alive - Creating Intrigue with New Imaginative Lighting

Making Your Internet Work With Precise Exposure

You Talk. We Listen. At Ryan Swanson, we connect with people on a human level. Thatâ&#x20AC;&#x2122;s why our approach to helping clients reach their goals is practical, straightforward and cost effective. Itâ&#x20AC;&#x2122;s our no-nonsense way of doing business that puts people first, like Brad Brotherton of Brotherton Cadillac.

Humanese Over Legalese.

206.464.4224 | www.ryanswansonlaw.com

Disability Accommodation: A

Practical Approach

By Rick Lentini Ryan, Swanson & Cleveland, PLLC

State and federal laws against discrimination generally prohibit treating an individual differently because they are in a protected class (age, race, sex, religion, disability, etc.). However, when dealing with an employee with a disability, the law actually requires employers to show them a preference – to provide them with an accommodation that may not be available to other employees without the same disability. Moreover, when and what sort of accommodation is required can be very tricky questions not easily answered. Every case is different, and the law requires an individualized approach for each employee. The following are some explanations of the applicable laws and some guidelines for reasonably accommodating employees with disabilities. What is a Disability? The Federal Americans with Disabilities Act defines an individual with a disability as one who: • Has a physical or mental impairment that substantially limits one or more major life activities (caring for self, walking, seeing, hearing, speaking, working, etc.) • Has a record of such an impairment; or • Is regarded as having such an impairment There are exclusions, which include homosexuality, bisexuality, gender identity disorders, sexual behavior disorders, compulsive gamblers, kleptomaniacs, pyromaniacs, and those currently engaged in the use of illegal drugs. Those who are participating or have participated in a supervised drug rehabilitation program (or have otherwise been successfully rehabilitated) are protected. Washington Law Against Discrimination The Washington Law Against Discrimination states that a disability is the presence of a sensory, mental or physical condition which is: • Medically cognizable • Exists as a record or history; or • Is perceived to exist, whether or not it exists in fact

When Does an Employer Have to Accommodate? The circumstances where employers are required to accommodate qualified disabilities include: • When the employer is aware of a disability (abnormal condition) • The employee needs accommodation to perform the essential functions of the job • The employer is obligated to take the initiative to address the issue of accommodation • Employee need not make a formal or written request for accommodation • Before hiring – may not refuse to hire because of a disability which requires accommodation Employers might ask underperforming employees if they are having any problems performing their job that you should know about. Engage in a conversation with your employees and find a solution that benefits all sides. How Does an Employer Decide How to Accommodate? Employers may also seek an interactive exchange with their employee. The interactive exchange process will inquire to determine the nature and extent of the disability and its impact on job duties: • Involves employer, employee, and physician • Open exchange of information relating to disability, job duties and functions, and accommodations • Employer may require a reasonable documentation and/or a medical examination, if insufficient information is provided • Employer may not seek information not pertinent to the condition or accommodation What is the Scope of the Duty? Employers should take reasonable steps to accommodate the employee’s limitations to enable them to perform the essential functions of the job. A good faith effort to provide reasonable accommodation is at least a defense to punitive and certain compensatory damages. What is Reasonable Accommodation? Any accommodation that does not impose an “undue hardship” on the conduct of the employer’s business is considered reasonable accommodation. An accommodation imposes undue hardship if it presents a significant difficulty or expense. Considerations include: • The nature and cost • Employer’s financial resources • Number of persons employed • Impact upon operations • Size of employer’s business • Number, type and location of facilities • Type of operation, including the composition, structure and functions of workforce • Geographic, administrative and fiscal considerations 8

Duty is limited to accommodations necessary to enable the employee to perform the essential functions of the job. An employer may choose among reasonable accommodation options, as long as it is effective. An employee who refuses an offer of effective reasonable accommodation is no longer a qualified person with a disability and thus not entitled to further accommodation. How does an Employer Accommodate? Employers can provide modifications that enable the employee to perform their regular job, such as: • Modifying the facility • Restructuring the job • Modifying the work schedule or other conditions • Modifying or acquiring equipment or devices • Adjusting or modifying applications, examinations, training materials, or policies • Providing readers or interpreters Employers might also accommodate employees by reassigning them to other jobs. In such circumstances: • Take initiative in finding another job • Notify employee of openings • Assist with application • Provide capabilities testing and training Modifications should allow an employee to enjoy equal benefits and privileges of employment. Informing the employee of openings for which they are qualified is also important after discharge. What is NOT a Reasonable Accommodation? While there are many considerations for accommodating qualified employees, employers do not need to: • Eliminate essential functions • Lower performance standards • Offer the precise accommodation requested • Displace another worker • Create a new job • Prefer employee with disability over a more qualified applicant • Provide accommodation that is not medically necessary (employee’s perception) If you have questions about whether or how to reasonably accommodate an employee’s physical or mental condition, our employment lawyers at Ryan Swanson are here to help. Richard P. Lentini is the chair of Ryan, Swanson & Cleveland, PLLC’s Employment Rights, Benefits & Labor Group. For more information, please contact him at (206) 654-2231 or lentini@ ryanlaw.com.

Steps Washingtonâ&#x20AC;&#x2122;s Legislature is Taking To Stop Schools From Failing Your Business

By Jim Hammond Executive Director Puget Sound Automobile Dealers Association

Approved State House Bill 1710 Requires Equal Presence for Work Skills in the Classroom The passage by the Washington legislature of HB 1710, called Creating a Strategic Plan for Career and Technical Education, is a gigantic step for Washington State towards restoring its secondary school system back to a viable, relevant system aligned with sustainable-wage careers of the 21st Century. PSADA applauds the legislature for this progressive and proactive stance the members have taken to address the pending skills gap crisis. The legislature’s action validates years of hard work and program development that PSADA has implemented in the secondary and post-secondary school system to stimulate growth in the skill trades industries. Now the State is taking a vigorous and aggressive step to reduce our state’s alarming skills gap problem by requiring teachers and counselors to give equal emphasis to high paying, sustainable-wage skills trade careers as well as traditional four-year academic careers. This is an important step that the legislature has taken because it recognized that the greater number of jobs available in Washington State are in the skills trades such as computer sciences, health sciences, energy, aerospace, bio-tech, automotive/transportation, mobile technologies and office technology. The state legislature has opened the door to a whole new category of working citizens. They are not blue collar nor are they white collar. They are Tech Collar and their average income is in the mid-50s….or more!

Our State Education System is “NOT BROKEN” Some people say our Washington State education system is broken. It is not broken. It has been abandoned for years. Our teachers and educational leaders have been crying out for years for help and support and for funds to keep our system and our teachers current. It is unfortunate that it has taken a crippling skills gap to get the attention of our leaders to tend to education before it collapses. We have good teachers that know how to teach. We have industries that need core teaching values and specific industry skills taught to future employees. Industry needs to support our teachers. We need to share with education what we need so they can provide it. We know this is possible because we did it at Shoreline Community College with the Professional Automotive Training Center (PATC). We are providing eight major manufacturers with critical training for five states at the PATC. Industry told education what it needed, helped education and government meet the needs and, as a result, has provided thousands of sustainable-wage jobs for thousands of young people over the past three decades. It can be done! Our future depends on our ability to succeed! This is everyone’s problem and we all have to be part of the solution. This is All Good News to PSADA What the legislature is creating is all good news to PSADA. PSADA has taken a national leadership role with the National Coalition of Certifying Centers (nc3) which is a partnership between automotive-transportation, aerospace and energy and dozens of certifying colleges in America. Regionally, PSADA has built a strong working partnership with the Auburn School District, which

has joined hands with nc3 and Shoreline Community College to help develop a stronger Washington State K-12 System across all school districts. With the new state laws, the capable assistance of our hundreds of qualified school teachers, and industry, the task of overhauling our state’s education system is very doable. PSADA has actively been involved encouraging and helping schools to implement the following practices: • Partner with parents o Educate parents on the value of technical skills careers as high-paying, sustainablewage jobs. o Explain to parents the importance of technical skills to Washington State’s economy. o Involve parents in the process of rebuilding of the secondary school system. • Partner with business o Create partnerships with industries, industry associations, industry foundations and other assembled business groups. Encourage individual school districts to do the same. o Ask industry leaders to support the national common core standards and career readiness standards approved by Washington State. o Implement a reciprocal accountability with business –  Ask business what they need.  Education tells business what they need to meet business’ expectations. • Partner with instructors so they can learn the new cross- credit requirements to articulate both academic and technical skills. o Set up funding to help instructors learn to cross-credit and articulate both academic and technical skills within common core standards. o Examine obstacles that are preventing instructors from engaging with the new initiative. Teach instructors what they need to do to help students be more successful. PSADA has also been proactive locally and nationally, encouraging the federal and state governments to tell the public that 4-year academics and career and technical education are equally important and that preparation and training for both has to be rigorous. PSADA and its critical industry partners, which include Auburn High School, Snap-on Tool, Shoreline Community College and NC3, have offered to be: • a resource in the development of strong skills trades programs • a resource in helping our state schools align with college and career readiness standards that are relevant to today’s business world, • a resource and partner in the development of skills technology awareness and skills technology imple12

•

mentation in secondary schools in Washington State, a resource in helping our state develop beneficial relationships with multiple skills industries, regionally and nationally, and to assist our state schools with resources to help educate parents about the value of skills technology as a high-pay, sustainable-wage career choice.

Why Is This So Important to You as a Car Dealer? The State legislature’s passage of HB 1710 protects your business. What happens in the secondary school system impacts your dealership greatly, whether you know it or not. The skills gap and industry’s inability to find qualified, trained people can totally undermine your business. You are impacted two ways: you have trouble getting qualified people to run your business, and the shortage of employees by local industries impacts your car sales. Thankfully, our state legislature recognized this when they passed legislation that will help bring a more equal emphasis on skills trades as a career track as well as academics as a four-year academic job track. PSADA and its educational partners are ready to help the State implement these new, critically important changes. Remember the familiar saying, “If you can read, thank a teacher.” There is nothing old fashioned about that saying. It is time for us to invest in our teachers and invest in the curriculum, technology, equipment, and facilities they need to provide the employees you need in the near future. And, the near future is very near. Try six years. In six years the shortage of skilled workers will escalate immeasurably. We are short in the tens of thousands of workers, and that doesn’t count all the tens of thousands that are going to retire in the next six years. We are a re-emerging manufacturing and technological society. Your future depends on it. Support education. Support teachers. Get involved. It starts at the local level with your local school. New car dealers are known for their local involvement. If you aren’t involved with your local school districts, get involved now. Car dealers ALWAYS make a difference.

Understanding the Problem

How Schools Nationally Have Been Failing Business and Skills Technology

As early as November 2008, the Education Trust reported in Measures that Matter that the stakes concerning the national skills gap is real. They state, “We are sending too many of our young people into the world after high school underprepared. It is taking a real toll on them, and on our economy and society as a whole. High schools need to change, but they will not change without a substantially different policy framework guiding the way.” Skills trades has to be part of the new policy framework. In May, 2012, Terry Howerton, managing partner of TechNexus, a top business incubator and partner of the Illinois Technology Association, concluded, “The long-term scarcity

[of skilled jobs] springs from a deficient educational system. There’s been a lack of emphasis at U.S. high schools on tech education and career paths for some time.” Lee Lambert, Chair of the National Coalition of Certification Centers (nc3), a member of the Education Council of the Manufacturing Institute, a Board member of the American Association of Community Colleges, and President of Shoreline Community College in Washington State, noted in August, 2012, “An aspect of America’s employment challenge is directly tied to a skills gap problem. If we want to put Americans back to work, America needs to invest in job training programs tied to portable and stackable industry recognized certifications aligned with high wage fields such as advanced manufacturing, transportation, aerospace and energy.” Shortages severely impact America’s ability to compete viably in the world. According to a May, 2012, report by Mark Koba, Senior Editor of CNBC, “Currently some 200,000 foreign workers with science, technology, engineering, and mathematics degrees are allowed into the U.S. each year through the work visa program.” These are lost jobs for American citizens because of our nation’s serious skills gap. Our emerging workforce from high schools and colleges is not job-ready. In many cases, students have not been made aware of high-pay, sustainable-wage jobs available in the skilled tech sector. Jonas Prising, ManpowerGroup’s president of the Americas, recently commented, “The skills mismatch has major ramifications on employment and business success in the U.S and around the globe. Wise corporate leaders are doing something about it, and we 13

increasingly see that they’re developing workforce strategies and partnerships with local educational institutions to train their next generation of workers.” Jeff Owens, president of ATS, a large manufacturing consulting service firm, points out in an October, 2011, article in Reuters, “What we have been saying for quite a while is that even though there is a high unemployment rate, it’s very difficult to find skilled people. Most of the jobs hard to fill are for skilled trades, Internet technology, engineers, sales representatives and machine operators. Yet, American colleges are producing fewer math and science graduates.” Manufacturing Institute States Skilled Workers Are Industry’s #1 Concern In their 2011 report, The Manufacturing Institute said: “When asked to look ahead three to five years, respondents indicate that access to a highly skilled, flexible workforce is the most important factor in their effectiveness, ranked above factors such as new product innovation and increased market share by a margin of 20 percentage points. The hardest jobs to fill are those that have the biggest impact on performance. Shortages in skilled production jobs – machinists, operators, craft workers, distributors, technicians, and more – are taking their toll on manufacturers’ ability to expand operations, drive innovation, and improve productivity. Seventy-four percent of respondents indicated that workforce shortages or skills deficiencies in skilled production roles are having a significant impact on their ability to expand operations or improve productivity. Unfortunately, these jobs require the most training, and are traditionally among the hardest manufacturing jobs to find existing talent to fill.” NADA Says 32,000 Technician Jobs Open Annually In November, 2011, Mike Verespei wrote in Plastics News, that as many as 600,000 manufacturing jobs remain unfilled

-- particularly for skilled machinists, machine operators, crafts workers and technicians. Paul Taylor, Chief Economist for the National Automobile Dealers Association, agrees. Taylor states, “There are currently about 32,000 technician job openings each year. Projections call for an additional 6,000 positions a year over the next five years, bringing demand to 38,000 annually.” Taylor continues with even more poignant statistics. “The Bureau of Labor Statistics projects that by 2012 annual demand for technicians will rise to 101,184, representing growth of 12.4%. The numbers alone are daunting. But even more worrisome are the demographic trends that underlie the

“There are currently about 32,000 technician job openings each year. Projections call for an additional 6,000 positions a year over the next five years, bringing demand to 38,000 annually.” Paul Taylor, NADA Chief Economist surge in demand: the retirement of baby boomers, coupled with dwindling interest in the vehicle technician as a career path by the much smaller replacement generation, or Gen-Xers.” Educators Fighting Misconception of Auto Repair In August, 2012, Chris Woodyard reported in USA Today, that “Educators say they are fighting misconception about auto-repair work, noting that the job requires technical skills. It doesn’t help, as well, that more high school districts have whacked budgets for auto repair programs, a key source of recruits. Supporting the programs has become more expensive because of the test equipment now involved.” In May, 2012, ManpowerGroup released the results of its seventh-annual Talent Shortage Survey, revealing 49 percent of U.S. employers are experiencing difficulty filling mission-critical positions within their organizations. ManpowerGroups says, “A significant percentage of total U.S. employers continue to face hiring challenges despite continued high unemployment. U.S.

employers are struggling to find available talent more than their global counterparts, where 34 percent of employers worldwide are having difficulty filling positions. According to the more than 1,300 U.S. employers surveyed, the positions that are most difficult to fill include skilled trades, engineers and IT staff, all of which have appeared on the U.S. list multiple times since the survey began in 2006. The survey also highlights the most common reasons employers say they are having trouble filling jobs, including lack of available applicants, applicants looking for more pay, and lack of experience.” Aerospace Braces Trying to Navigate Worker Shortages Aerospace, which is a significant segment of our national economic health, is struggling with crisis-level shortages of qualified skilled workers. In September, 2008, The Defense Industry Daily reported that “U.S. 4th-graders score well against international competition in math and science, but fall to the bottom by 12th grade.” The article goes on to state: “The U.S. Department of Education also reported in the same year that a disquieting proportion of U.S. middle school students (grades 7-9, a critical inflection point) are taught by educators who had no major or certification in mathematics (68.5%) or science (57.2%).” These trends alarm the American Aerospace Industries Association. In 2012, Jim Albaugh, president of Boeing Commercial Airplanes, considered the wave of retirements as “the intellectual disarmament” of this country. “We don’t have enough young people getting interested in math and science,” he said. “Ultimately, what drives an economy is a skilled work force.”

(EHR), health information exchanges (HIE) and other HIT tools. Evidence of an HIT workforce shortage is coming from at least two sources. • A 2008 Bureau of Labor Statistics (BLS) report projected the need for an additional 35,000 HIT workers by 2018. • A 2008 analysis of the HIMSS Analytics database estimated that U.S. hospitals will need an additional 40,000 HIT workers to meet HIMSS EMR Adoption Model Stage 4. The ONC estimates that hospitals and physician practices need an additional 50,000 HIT workers during the next five years to satisfy EHR “Meaningful Use” criteria. The College of Healthcare Information Management Executives is quoted by ONC as saying “the lack of skills among existing staff to implement advanced clinical systems is looming as a headache for top IT executives.” In October, 2011, technology giant Siemens Corporation reported to Reuters that they have 3,000 jobs open across the U.S. and that more than half require science, technology, engineering and math-related skills. The above examples of skills gap generated workforce shortages in the aerospace, automotive/transportation, and health sciences industries are widespread among most

Health Industry Short Thousands of Caregivers and Data Processors The Office of the National Coordinator for Health Information Technology (ONC) is on record reporting that the U.S. health care industry is facing two emerging workforce challenges as it prepares to meet demands both from more patients for more care, and from consumers and regulators for cost, quality and other reforms. The first is the widely documented shortage of caregivers. The other is a growing shortage of health information technology (HIT) workers that is becoming significant as the industry continues expanding its use of electronic health records 15

industries in America that are dependent on skilled laborers and qualified technicians. The US Chamber of Commerce comments in their article Across the Great Divide, published in March, 2011, “A great divide has emerged in the United States between the education and skills of the American workforce and the needs of the nation’s employers. Many of those looking for work do not have the skills required by companies looking to hire—resulting in high unemployment even as businesses desperately seek new talent. If our nation fails to bridge this gap, we will risk our ability to compete effectively on the global stage. Americans have long valued providing more access to higher education, but today the realities of global competition have put a new premium on college degrees and credentials. To assemble the workforce the nation needs to thrive, policymakers, educators, and businesses will need to collaborate to build more paths for students to climb the ladder to success.” Technology has changed the face of what we know as viable and relevant jobs for Americans. The nature of sustainablewage jobs and careers is not the same as past generations, even as recent as the 1990s. A new skills paradigm has emerged

It is urgently critical that our secondary school system rigorously address relevant job-readiness in K-12. As America’s manufacturing sector continues to grow, more and more focus will be placed on skilled workers and technicians by employers. – it’s a hybrid between traditional blue collar and traditional white collar called Tech Collar. Because of the use of sophisticated technical systems and equipment in all sectors of our economy, Tech Collar represents the core of the new sustainable-wage jobs in the future. It is urgently critical that our secondary school system rigorously address relevant job-readiness in K-12. As America’s manufacturing sector continues to grow, more and more focus will be placed on skilled workers and technicians by employers. Technical Skills Jobs Will Increase up to 63% in the Next Decade Georgetown University’s 2010 study, Projection of Jobs and Education Requirements through 2018, states: “Between 1973 and 2008, the share of jobs in the U.S. economy which required postsecondary education increased from 28 percent to 59 percent. According to our projections, the future promises more of the same. The share of postsecondary jobs will increase from 59 to 63 percent over the next decade. High school graduates and dropouts will find themselves largely left behind in the coming decade as employer demand for workers with postsecondary 16

degrees continues to surge.” In addition, the study recognized that as the economy evolved, postsecondary education gradually became the threshold requirement for access to middle class status and earnings. The study continues, saying, “The share of people in the middle class with some college education and no degree or less, over the past 40+ years, has declined dramatically. Workers with postsecondary education and training are moving into the upper class. That is, the educational composition of the upper class also favors workers with some college or better.” The emphasis on postsecondary preparation for new hires means that workers will tend to be attached more to the occupations they will be filling than to the specialized industries in which they work. We need to invest in education and training to get people prepared to fill these high-skilled, high-wage jobs of the future,” said Eric Spiegel, president and CEO of Siemens Corp. Out of Every 100 High School Graduates Only 18 Finish College within 6 Years The League of Education Voters Foundation “Citizen’s Report Card” on Washington State Education for 2011 reported that of 100 9th graders, 69 graduate from high school on time, 35 enter a community college or university, 25 return for their sophomore year, and only 18 graduate within 6 years. Those who do graduate from college incur heavy debts in the thousands of dollars, and, because two-thirds of today’s jobs are in the trade skills industries, many of these 4-year graduates can’t find jobs. The League’s report documented that two-thirds of all new living-wage jobs require some sort of post-secondary credentials and that’s just to get a foot in the door. In Washington, not enough young adults are continuing on to 2- and 4-year colleges, and, of the ones that do, more than one-third arrive unprepared for college-level courses. The League emphatically states that we can and must do more to get students into and through post-secondary programs, without taking on a crippling amount of debt.” The League gave Washington State a D+ in this portion of their report. Washington State is 6th Nationally with Available Jobs But 46th in College Readiness The report goes on to say that “37% of students attending a 2- or 4-year college in Washington enrolled in remedial courses within a year after high school graduation. Washington ranks 46th in the nation in the chance for college by age 19 with 34.8% in 2008.” They League says, “Two-thirds of all new jobs will require education after high school.” According to the League, “Washington ranks 6th in the nation in the percentage of new jobs that will require post-secondary training in 2018. This makes the skills gap crisis in Washington even more horrific, if not ironic, because two of the largest employers in the nation, aerospace and the computer software industry, are located in Puget Sound.” Few of the thousands of jobs open in the skills sector are

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low-wage positions. Workers at the very low levels can earn as much as $30 an hour, with annual salaries for engineers ranging from $75,000 to $100,000. At Siemens, the average potential salary offered for its open positions is $89,000 a year. Average income for auto technicians in Washington State is $56,000 and that is just the center of the bell curve. Industry needs students emerging out of high school and college who can speak English, read, cipher, communicate and write â&#x20AC;&#x201C; in other words, understand what they are reading with the ability to communicate what they read orally and in writing. And, these skills need to be job specific, including basic common core standards developed by the National Governors Association Center for Best Practices (NGA Center) and the Council of Chief State School Officers (CCSSO). Standards and job readiness should be clear to every student, parent and teacher in every school. And standards must be relevant to the workplace. Industry and education need to build lasting partnerships where education listens to industryâ&#x20AC;&#x2122;s needs. Then education can prepare its students with rigorous curriculum so they will be job-ready when they graduate. The secondary school system has to assure industry that graduating students meet industry recognized career readiness standards. Students Need Cognitive Thinking Skills and Ability to Apply What They Learn Dr. David T. Conley, PhD, in his article A Complete Definition of College and Career Readiness, published in association with the Educational Policy Improvement Center (EPIC), outlines a formula for college and career readiness that would prepare students for the future and help close the skills gap in Washing-

ton State. Conley says that a student who is ready for college and career must qualify for and succeed in entry-level, creditbearing college courses leading to a baccalaureate or certificate, or career pathway-oriented training programs without the need for remedial or developmental coursework. Secondary level instruction should be designed to equip all students with sufficient knowledge and skills including cognitive thinking; content knowledge that enables the student to gain insight into and retain what he/she is learning; learning skills which include goal setting, persistence, self-awareness, motivation, progress monitoring, help seeking, and self-efficacy; specific learning techniques such as time management, study skills, strategic reading, memorization techniques, collaborative learning, technology skills, and self-monitoring.; and transitional knowledge â&#x20AC;&#x201C; knowing which courses to take in high school in order to be admitted to an appropriate postsecondary program, understanding financial aid options and procedures, being focused on a career pathway or major, understanding college-level and workforce norms and expectations, and knowing how to be a self-advocate within the institutional framework of postsecondary programs. It serves little useful purpose to separate students into two distinct groups in high school (one bound for college, the other for work). More and more jobs require some amount of posthigh school training, and, in any event, all workers are going to need to be adaptive learners throughout their careers to cope with changes to their jobs and the way they work. According to EPIC, this means that secondary schools can prepare all students in a common core of foundational academic knowledge and skill while also acknowledging the strengths of students who have passions and interests in particular career pathway areas.

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By Craig Chastain

Way Scarff

Along The Way Scarff Way

A visitor walking through the welcoming doors of Scarff Ford will encounter a striking display of everything new from Ford. The carmaker, after all, has a lot of exciting products these days. What immediately grabs the attention, however, is something not so shiny but very special -- A 1923 Ford Model T. “My grandfather sold that car new to a lady here in Auburn in 1924,” says Way Scarff. “She drove it until she was well in her eighties, and then she graciously willed it to me.” Way’s grandfather was Wayland Scarff, an inventor, businessman and entrepreneur who opened the Scarff dealership in 1922 and launched a legacy that is more vibrant than ever after 90 years. “The Scarff name has been tied to the car business for a long time,” says Way. “My dad Bob took over Wayland’s business when he came back from World War II. His brothers Bowen and Cal have been in the auto business for many years. Today my two sons Chase and Charlie are working here and my cousins Mike and Mark each have stores just down the road.” Way credits the longevity and success of Scarff Ford to some fundamental business maxims collectively dubbed The Way Scarff Way. Among them are (1) giving back to the community, (2) providing the best possible buying experience for the customer, and (3) taking extraordinary care of employees.

“We’ve always said we’re not in the car business – we’re in the people business,” he says. “Car buyers have lots of options these days, so when we take good care of our people we see it reflected in the way they take care of our customers.” The return on investment in people is reflected in the ongoing loyalty of both customers and staff. A recent accounting showed that the current Scarff team has 814 collective years under one roof. The average length of employment is 11 years with the core management team averaging 20 years together. Driven by the goal of building a world-class team, Scarff was one of the first dealerships to join Ford’s Consumer Experience Movement. The program places an emphasis on employee skill-building that will enhance their interactions with customers. With ongoing training and counsel from professional coaches, the team learns to work together more effectively and to build lasting relationships with customers. Enhanced with regular “Plan to Win” meetings, they come to know and implement empowerment and accountability. “The recent bumps in the economy have impacted our business along with everyone else,” says Way. “But you can’t retreat into success. It’s not a destination – it’s an ongoing journey where you grow your business through your people.” The evidence of customer loyalty has emerged in many ways. A recurring designation by the Auburn Reporter as the city’s “Best Auto Dealership.” The 2011 21

President’s Award from Ford. A referral program that has expanded their satisfied customer base while contributing more than 170,000 pounds of fresh produce to local food banks. “My grandfather put great importance on community service – on giving back to the place where we do business,” says Way.”We’ve tried to continue and build on that tradition through programs fighting hunger like Rotary’s First Harvest, as well as scholarships and support of local children’s charities, the YMCA, and the White River Valley Museum.” In the age of the Internet, creating a satisfying customer experience has brought some new dynamics. The typical car buyer is much more knowledgeable and focused on the car or truck he or she desires. They want the buying transaction to be as quick and hassle-free as possible. The sales team has to know about all the new technology, and the service and parts teams must be trained and equipped to service a whole new world under the hood and behind the dash. “Complacency is a menace to longevity,” he says. “We can never slow down and rest on our past success. With all the new interactive features in today’s cars, it sometimes takes us

Photo by Adam Buchanan

longer to hand over the keys and deliver the car than it took to complete the sale, which means the training never stops.” All this commitment to learning and growth does not, Way emphasizes, preclude the opportunities for fun. Whether it’s a festive holiday party or feeding hungry youngsters at Auburn’s Teen Feed, the Scarff team knows how to have a good time together. For Way, a lifelong skier, 50 days a year on the slopes is an ongoing personal goal. Birthed in 1922, the Scarff dealership on Auburn Way has been through a lot of history in the past 90 years. That they have endured and prospered is a testament to the legacy of founder Wayland, his son Bob, and Bob’s son Way. It’s a legacy based on building a “people business” that happens to sell a lot of cars and trucks, from a 1923 Model T to a 2013 C-Max Hybrid. “I feel incredibly fortunate,” says Way. “I have good health, I have a lovely and supportive wife in Lisa, I work with great people who are passionate about doing meaningful work, we sell quality products, and we manage to have some fun doing it.” Sounds like the Way Scarff Way.

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Peterson Sullivanâ&#x20AC;&#x2122;s Take On -

Dealership Sales Environment and Current Valuations

As CPAs and business advisors to more than 100 automobile dealerships, most of which are located here in Western Washington, we often get questions from dealers who are wondering what is happening with dealership transactions these days. And, of course, there is always another question that follows -- what does it mean for the value of their store? Not only can this be a difficult question to answer in any market, the answer often is significantly different depending on what the value is going to be used for. Are you looking to potentially sell your dealership, buy another one, or take steps in your estate or succession plan by gifting or selling a portion of your ownership interest to the next generation? Whatever your goals, there are certain factors that drive value. Here’s our take on the current state of the market and some things for you to consider in approaching the question of what your dealership is worth. Location, Location, Location The three most important words in real estate also hold true in the dealership arena. Location is an important value driver in a number of ways. What may come to mind first and foremost when you think of location in a buy-sell is the real estate portion of the deal. Everybody knows that the state-of-the-art facility that’s highly visible and easy to reach will cost a pretty penny relative to the old, vacant shell of a store. Location can have a significant impact on the blue sky associated with your operations, as well. A dealership in or near a major metropolitan area will usually be priced higher than a comparable franchise that may serve a broader, but less densely populated area. This only makes sense. A smaller population leads to fewer vehicle sales, and once on the road, a customer who has come a longer way to buy a vehicle may be more inclined to look closer to home for service. In addition, we’ve all seen the news stories about lagging unemployment in outlying areas.

By Brian Kennett Partner, Peterson Sullivan LLP

That doesn’t bode well for current or future performance. Not only does it put a damper on current sales, it feeds an outlook of lower population growth and maybe even a shrinking market, increasing the risk associated with the store’s future. Some dealerships in small cities and towns have traded hands for no goodwill (blue sky) at all. In our region, this scenario quickly changes the closer you get to larger metropolitan areas. This definitely holds true along the portion of the I-5 corridor that includes the Seattle and Bellevue markets, extending north to Everett and south to Tacoma. Employment growth is expected to be strong in this area relative to other pockets in Western Washington, drawing job-seekers from the rest of the state (and country), and spurring population growth and additional economic opportunity. The prospect of a solid customer base with good future growth makes a dealership in a growing metropolitan area more desirable, which translates into more blue sky when it comes time to sell. Franchise, Franchise, Franchise If location is the number one consideration in dealership value, then the franchise is a hair-splittingly close second. Toyota, Honda, Mercedes-Benz, BMW, and Lexus (in no particular order) have held the top five spots on the list of the most soughtafter franchises for several years running. In the Pacific Northwest, I would add a couple more that could be expected to garner an above-average value: Audi and Subaru. Audi’s product line and styling have improved in recent years to become more competitive with other luxury brands. This broadened appeal has led to enviable sales growth in the local market. A long-time mainstay in this market, Subaru’s redesigns of its most popular models have only added to its following. What makes these franchises so special? The answer is simple. They offer popular vehicles that consistently translate 25

into superior profits for the dealer. Buyers will pay more for these franchises because, at the end of the day, they expect to have more cash in their pockets. And because of the reputation and history of the various brands, the risk that this will not happen is perceived as being very low. The Buy-Sell Environment: It’s a Seller’s Market The forces of supply and demand play a major role in the pricing of any good or service offered on the open market. Dealerships are no different, and from what we’ve seen, the demand is there. Dealership investments are more attractive today than they have been for a long time. Vehicle sales are rebounding from the devastating lows of a just a few years ago, and are forecast to do even better in the near future. Established dealers and experienced managers looking to set out on their own are ready to buy now. Despite the number of potential buyers, not many dealerships in Western Washington have changed hands over the past year, and not many are being actively offered for sale. This should start putting some upward pressure on dealership valuations, making transactions more attractive to sellers -especially those who have been considering a sale for awhile, but have been waiting for blue sky to return to a more palatable level. These conditions should grease the wheels of the buy-sell market, and it should continue to improve, fueled by increased vehicle sales across the industry as the economic recovery progresses and manufacturers improve their offerings. Stronger profits and a clearer upside will reduce the perceived risk of dealership investments, which in turn means two things. First, more of those buyers and sellers who have been sitting on the fence with a “wait and see” attitude for the past few years will be willing to jump into the game. Second, the better outlook for profitability increases the likelihood that buyers will generate the profits needed to make those higher transaction prices demanded by the seller pencil out. Are sellers likely to be able to command the kind of blue sky they were getting ten years ago? Maybe not. But the way market conditions are aligned, more sellers should start seeing the transaction prices they need, and the local buy-sell market should start moving again. Estate and Gift Tax Planning: A Different Set of Rules The factors discussed above are drivers of value for virtually all valuation purposes. Since valuation can be expected to rise going forward, if you are considering making gifts of “minority” or “noncontrolling” interests in your dealership, this could be an optimal time to do so. Be aware, however, that valuations for this purpose apply a set of parameters that differ from those used in negotiating a transaction price for the entire business. A valuation for estate and gift tax purposes applies a standard called “fair market value.” Under this standard, the transaction in the specific block of stock being valued is 26

understood to occur between a typically motivated, hypothetical buyer and seller, both of whom are informed about all the relevant facts. Compare this to a buy-sell negotiation for the entire business, where motivations specific to the buyer and seller, and special skills and knowledge of one party or the other, may play a significant role in the outcome. In addition, under the fair market value standard, valuation discounts apply. These discounts -- typically for lack of control (minority interest) and lack of marketability -- are considered desirable in the estate and gift context. However, if you are trying to use the results presented under the fair market standard to back into an estimate of what your dealership is worth on the whole, the application of discounts can cause some confusion, even for savvy dealers who know that the discounts are being taken into account in the end results. The take-away here? Since market conditions are improving, you may be able to transfer more stock to the next generation at a lower tax cost by making gifts now. But don’t expect the valuation report prepared to value those gifts to do double-duty. Depending on your business operations and the potential buyers in your market, the “fair market value” of your dealership and the value you could expect to receive in an outright sale could be two very different numbers. Our Take: Summing It Up Dealerships are much more valuable in today’s environment than they have been in the recent past. An improved economic environment and resurgence in the industry have everything to do with that. It all boils down to risk and return: returns are increasing and risk is decreasing. Profitability is back, and as we get further away from those really bad years, the chance that the bottom will drop out of the market again seems further and further away. This translates into higher valuations for the industry as a whole. Risk and return are really the bottom line in the pricing of your specific dealership, too. A good location and desirable franchise translate into an expectation that your dealership will generate superior cash flows in the future, and at a relatively low level of risk. That is what makes those features important considerations in gauging value. If your dealership has a track record of strong profitability, it can command a high value regardless of brand or location. Our discussion here is in broad terms, and every dealership is different. The valuation equation always takes time, thought, analysis, and judgment. Your purpose for the valuation makes a significant difference, as well. I am happy to discuss my thoughts on your dealership and answer any questions you have at any time. For more information, Brian can be contacted at 206-382-7777.

a Winning team Get a CPA firm with a winning record on your team.

Peterson Sullivan LLP, one of the nation’s most successful specialists in auto dealership accounting, serves more than one hundred dealers in the Pacific Northwest. We are one of only a few CPA firms approved to perform audits for GM Motor’s Holding Division. And we are the only Washington State member of the exclusive AutoCPA Group. Following are only a few of the many areas where we are trusted advisors to our automotive industry clients: • Cash controls • Internal controls • Cost segregation • IRS reporting requirements • Dealership valuation • Sales and B&O tax consulting • Estate and succession planning • Tax planning • Financial statement analysis We believe strongly in building long-term relationships with our clients. We aim to understand your business so well that our advice becomes indispensable. Please contact Kevin Allison to see how we may assist your business needs at (206) 382-7777 or by email at kevina@pscpa.com. Peterson Sullivan. Driving your success.

Peterson sullivan llP

Setting Goals & Objectives to

Increase Productivity 28

Managing Key Aspects of Your Business

A Short Assessment

Time for another in the series designed to help you look at how you manage key aspects of your business. This one, like the earlier ones I’ve shared, will offer some insight, some suggestions and a short assessment of the area. This one covers Setting Goals & Objectives. One of the most effective ways to increase productivity is to have employees set goals and objectives, then monitor their progress and provide feedback to them. It is critical to success that the employees set their own goals and objectives (with appropriate coaching from management). The key is to teach employees how to set realistic goals and objectives, help them establish measurements of their performance, then coach them as they work towards achievement. Too often goals and objectives are set at the top and passed down through the organization. Each level sets goals and objectives for the level below it. This approach fails to capitalize on the inherent self-motivation that comes from setting goals and objectives yourself (we’re only really committed to goals and objectives we set for ourselves). •

•

Goals – are long term, usually more global in nature, and may never be achieved. Through our goals we “reach for the sky” (e.g. Goal: To be number one. Everyone can’t be number one; everyone can set a goal to be number one.) Goals can be set on the individual, group, department, dealership, organization level. It is generally not necessary that these be tied together (e.g., the achievement of goals on one level leads to achievement of similar goals on another level). Objectives – are more day-to-day, more realistic, and should be achievable. While the goal may be to be number one, the objective is to improve x% – the achievement of which will lead towards being number one. The best performance objectives are set using both data and relevant market information. For example, to set individual sales goals requires that sales consultants have some history of

By John Strom

past performance and know something about inventory availability, advertising and promotional plans, number of days they’ll work, etc. •

Measurement and Communication – Progress towards objectives must be measured and frequently communicated to effectively influence productivity. It is best when each individual tracks their own progress. And generally, publicly displaying progress towards objectives also positively influences achievement.

Setting lofty goals and realistic objectives from the bottom up, then measuring and communicating progress towards achievement, results in the greatest productivity gains. The Bottom Line Using an effective goals and objectives setting process will … … result in increases in self-motivated personal achievement and … … higher productivity across the board, leading to … … greater profits and higher levels of employee and client satisfaction! Use the Goals & Objectives Checklist on the next page to inventory your current status. It is recommended that each manager complete a checklist for their area of responsibility. Check the appropriate boxes indicating the current status of setting goals and objectives in the organization/your department. John Strom has been helping retail automotive managers improve their performance for over 25 years. He has held a number of management positions in both single-point and multiple franchise operations, including General Manager. His company, Strom & Associates, is a member of the Performance Development Group. To learn more about their services, visit www.perdevgrp.com. 29

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Keeping the Romance Alive!

Creating Intrigue With Your Brand Through Imaginative Lighting

By Neal Golden-Lekwa, Industry Consultant

Every romance that ever happened that culminated with tying a knot at the end began with a series of contacts. Think back to when you made that first romantic overture – that first invitation you offered a date to go out or to dance. That’s what we call ‘the first hand-shake’; that was followed by follow-on overtures which we called ‘touch-points’ – the phone calls, the scribbled love notes, today the emails. But, the height of expectation was driving up to her door – orchid on the extended front seat of your Chevy. That is what we call the ‘closing overture’ – the results of which become either success at the end of the night, or a ‘no-show’ ending. Everything in car sales involves Romance and Romancing. It doesn’t matter if you are male or female. We all relate. The same principles and dynamics of winning the girl or guy, or winning the sale in the case of auto sales, requires keeping a tight or taught line between first handshake and close. In my early days as a student in Norway, I sold English encyclopedias to the Laplanders. After the stag rutting season and fattening of new deer season, the herd was sold and Laplander chiefs were flush with money. So, we arrived North of the Arctic Circle, encyclopedias in hand to see if we could sell the chieftain. While awaiting the Laplander chief’s appearance from his ‘yurt,’ my sales companion turned to me and said, “Do you know what sales is about?” I waited, as he extended his hands. “Sales is the art of transferring a bead of water from one hand into the other - back and forth, like this,” he said.

And, he demonstrated the process with his hands. It was an important message I’ve not forgotten. Car manufacturers have always understood this since the first day cars have been sold. A car sale starts as a concept in someone’s mind that needs to be transferred to another mind. That is why manufacturers create concept cars and introduce them with great fanfare as “fashion events.” It is the beginning of a romance between the manufacturer brand and the future buyer. All sales have elements of this fanfare and romance. All sales are truly “concept sales.” The suitor keeps his beloved target interested in him by his display of ‘pretty dance.’ After the manufacturer constructs its initial romantic handshake, perhaps in a double-page, glossy magazine ad, or a scintillating and provocative TV ad, the rest is up to the final sales suitor, the auto dealer, and his team, to woo, win and sign the suited one. It is not a game. It is a well thought out, carefully implemented romance. But nothing happens until that single bead of water transfers from one hand to another, and the intended buyer grasps the romance of the suitor’s offer. Is Romance Dead? Over the years I have noted a sharp fall-off in attentiveness to the romanticizing process. Once that delicate line has been spun, that strong spider thread over which the beloved one must walk, it has to remain strong and flexible. If it weakens, drop off occurs. Drop-off usually occurs during the customer’s initial 33

interaction with the dealership. It is then when expectations of the brand are at its highest. It is the responsibility of the dealership and staff to fulfill all the fantasies in the customer’s brain that were put there by the manufacturer. What do customers generally see when they approach the dealership car lot? Frequently, the customer encounters a proudly displayed car lot with cars lined up in a regiment pointed in their faces. They see shiny, washed and polished new models, more often than not with helium balloons attached to their aerials. This seems to be in keeping with the Romancing Process 101. Or not? Remember, the auto manufacturer invested millions of ad dollars on state-of-the-art brand photography – usually showing the target market customer profiled in foreign or exotic surroundings they would like to imagine themselves in or in some other form of romantic escape. Right in the center of it all is your brand, your auto model – exquisitely lit and immaculately displayed. Your manufacturer is on to something. What better way is there to brand your product to your customer at your store than transferring to your customer the feeling of intrigue and romance that they can experience cruising down a romantic far-off road or careening around a curve at top speed in one of your cars? This speaks much louder than balloons on an aerial. Capture Your Customer’s Imaginations with LUMis My consulting pitch to auto dealers and owners for years has been to utilize their un-utilized or under-utilized ‘top-lite’ window space(s) in their dealership box to portray the auto manufacturer’s best branding images of current auto model offerings. This is not very hard to do and it doesn’t cost a fortune either. You can carry the intrigue of your auto maker’s ads right into your dealership showroom. Resplendent backlit LUMis, as they are called, is marquee lighting that is easily mounted and attached inside ‘top-lites’ glass. The track-light structure of the lighting redirects the light towards the LUMis which creates, outward to the street, a lighted display equivalent to the “theatre marquee” you see in theatre light-boxes. Instantly, your brand is showcased like in the manufacturer’s advertising. LUMis work during the daytime also because they backlit with daylight back into your stores. Most high-end ‘romance-niche’ vendors – such as Hermes, Gucci, Louis Vuitton, et al, and top branded beauty product vendors, all require, in their facility leases the ability to use jumbo-sized backlit graphics in these façade displays. Why? To “romantically” attract a particular customer from way down the street. Auto dealers, by and large, have not made this connection – or taken this leap of faith. For a pittance of what is spent by auto dealers on local magazine, newspaper, and especially TV advertising– or on rented billboards lit at the rate of $8-12K per month – LUMis install easily and inexpensively on window space already paid for. Because LUMis mount inside the glass, not outside, the use of LUMis generally shifts from being considered ‘signage’ to 34

being ‘temporary graphics.’ Plenty of precedent is set today for the full-window usage of interior window space as ‘temporary graphics.” According to the Chamber of Commerce study on Advertising ROI’s: ‘On-premise signage,’ which includes ‘temporary jumbo graphics’ like LUMis mounted to the interior glass, outperform all other forms of advertising, combined. According to the study, this includes ‘newspapers, yellow pages, radio, TV and even word-of-mouth.’ When the customer does arrive at your dealership, be they a single office worker, a mom, or the whole family, they want to see more than helium balloons. They would like to see the fantasy the car manufacturer planted in their brains through TV ads and other imagination-building advertising. Keeping the Romance Alive Keeping the romance alive is the duty and challenge of every auto dealer and auto manager. Exploring the use of LUMis, and the possibility of completing the loop in what LUMi manufacturers call, ‘Last Mile Merchandising,’ makes perfect dollars and sense. Just when car sales are regaining the attention of the American populace, the LUMi jumbo graphics option gives auto dealers a new and exciting way to recapture the attention of tens of thousands potential customers who are visiting your store or just passing by. It isn’t very hard. A jumbo LUMi graphic kit backlits by daylight for jumbo interior backgrounds including sales desks and showroom, and backlits at night by tracklighting. And there is another benefit to LUMi lighting. The dramatic new presentation of product does more than romance customers and passers-by. It also helps romance staff and sales crew. After all, who doesn’t want to work in an environment that showcases what they sell well? Everyone should keep romance alive. This is perhaps why LUMi’s manufacturer tag says, “Love Your LUMis,” with a big red 3-D. Neal Golden-Lekwa has been cited as one of the top national pioneers and conceptual sales gurus for taking basic products and re-positioning and re-inventing them as “high-end” experiences, Lekwa participated with Seattle’s Best Coffee owner (’68) to offer ‘Coffees of the World,’ as gourmet roasted coffees to Sunset magazine readers. Leaving coffees to introduce ‘European goose-down comforter ensembles’ via ‘Worldwide Bedding Shop’ and ‘Scandia Down Shops,’ co-owned by Pacific Coast Feather’s owner and Pizza Hut’s founder, Lekwa pioneered two billion-dollar niches in America, earning him the nickname ‘Golden,’ with the ‘Midas touch.’ Today, along with consulting, Lekwa has pioneered LUMis with the manufacturing and marketing firm, Calbert Group. He works primarily with multi-dealership owners and groups, devising optimal on-premise displays and dealership lighting strategies.

By Scott Dreisbach

MAKING YOUR INTERNET WORK…. WITH PRECISE EXPOSURE •

• •

The customer of today is among the most computer savvy of all Internet-specific used vehicle searches are at an all-time high and climbing Most dealers agree that “paying for performance” is the only way to go

I have written and had published numerous articles in the past extolling the virtues of precise vehicle inventory management. The benefits dealerships enjoy when inventory management becomes a reality in the store are self-evident and too numerous to mention again here. Suffice it to say, if a little inventory management is good, then more is better. We all want more sales, more gross, more customers, more accountability and more return on our investment. The question many of you wrestle with is, specifically, how do we accomplish these noble goals? How Precise Exposure Helps One of the answers is more precise exposure. Clearly the Internet is here to stay and more and more shoppers are using it to narrow their search for exactly what they are looking for. I submit to you that it is time to embrace the Internet with more of everything – more enthusiasm, more knowledge, more confidence and more precise answers to your prospects’ specific searches. In other words – more specific exposure! Imagine a prospect (in your market area) is sitting at his/her computer and they Google (or MSN, Yahoo, etc.) the specific used vehicle they are interested in (example: 2008 BMW 325). Now, also imagine your store owns the very vehicle that the customer is searching for and your vehicle pops up on their screen in one of the first three ad positions. This specific scenario happens thousands of times every day. Because the customer initiated the search with a specific set of search string criteria, when that search is answered, the likelihood of that vehicle being clicked on is very high. Additionally, if, when that vehicle is clicked on, the customer is taken to a landing page for that very vehicle where an offer is displayed that is not offered anywhere else; this offer now carries a significant call to action and corresponding value. The beginnings of a sale are now in progress. Now imagine that the entire process is automated, meaning there is nothing on your end that needs to be done to make all of this happen. This may sound too good to be true, but it is true. Now imagine that a person in your area is shopping for something that is car- or truck-related, such as tires, specialized services, bedliners, exhaust work, insurance or literally anything related to the automotive industry. With the automated display network portion

of the system that comes with what I am talking about, your vehicle will be displayed. All advertisers are continually struggling to prove to dealers that their particular form of advertising is measureable and effective. When you put into place the above described method with customized offers on specific vehicle landing pages together with a specific tracking telephone number, the proof will jump off the page at you. How iTurn Will Help Your Precise Marketing This is exactly what our newest tool, iTurn, will do for you. You only pay per click on vehicles that are actually clicked on by prospects in your area. You are not paying to list your vehicles on some vehicle listing service where they’ll get “lost” and have little or no accountability. You simply select a monthly budget and we do the rest. Why continue to pay for listing services and not know for sure how they are performing for you? iTurn is a brand new marketing vehicle search tool that increases your exposure. iTurn is a revolutionary, automated Internet pay-per-click strategy, optimized for maximum ROI using Google, Yahoo, MSN, etc. iTurn is designed to drive potential customers from search engines directly to the vehicle on your website at the exact moment they are looking for a vehicle that is in your inventory. iTurn generates at least 3 search ads per vehicle in your inventory and generates deep keyword search terms for each ad group. The ads will only be shown to potential customers within a selected geographic area who are requesting information on the makes and models that your dealership has available. No wasted clicks on people out of your area. Here is what one of our clients says about iTurn: “We set back to back records in the used vehicle department in June and July in our first two months of using iTurn. We now know, without a doubt, which used vehicles are getting the most action,” says Jim Behar, General Manager, Phil Smith Acura. If you would like to talk about iTurn, or any of our new, used or F&I tools, drop me an email or give me a call. For more information about this great new product visit www.valuinsight. com/services-iturn.php and all of our inventory management tools can be seen by visiting www.valuinsight.com. Remember, if a little is good, more is better. The more information you have and use, will help generate more sales and more gross. All of this is only a click or call away. Scott Dreisbach is vice president of Valuinsight, Inc. sdrize@valuinsight.com 561-368-7810 X 108 Direct www.valuinsight.com

SO SHOULD YOU.

Independent dealers, franchise dealers—we don’t play favorites. Only Cars.com offers inventory listings based entirely on what shoppers search for, not how many dollars you spend. That’s how we show you results. More importantly, that’s how we earn your trust. To learn more about partnering with Cars.com, contact JIM JOLY. Call 206.448.3174 or email JJOLY@KING5.COM.