August 2014 Issue Car Biz Today

CHECK OUT OUR DAILY NEWSCAST ON CBTNEWS.COM

CAR BIZ TODAY

The Official News Source of The Retail Automotive Industry

AUGUST 2014

CBTNews.com

ISSUE 6

Entire contents ©2014 Car Biz Today. All Rights Reserved.

BETTER REVIEWS DRIVE

EXCLUSIVE INTERVIEW

MORE TRAFFIC

MIKE JACKSON

ON CBTNEWS.COM

Your reputation can make or break your business. Those five-star ratings will boost your online reputation and help bring more customers to the showroom. But what happens when you have a disgruntled customer?

Chip Grueter and Gary Tucker of DealerRater explain reputation management, and why the success of your business depends on it.

CBT News Founder and President Jim Fitzpatrick interviewed Mike Jackson of AutoNation about the company’s future and what it is doing to keep the momentum going. “What’s so great is we’re entering our most exciting phase,” s a i d Jackson. “…we’ve put foundational components in place that are going to allow us to do things in automotive retail that no one else has ever done.”

To see the interview in it’s entirety, visit CBTNews.com and click on our “View from the Top” page.

...see PAGE 14

2015 NADA KEYNOTE SPEAKERS ANNOUNCED

TAKE ADVANTAGE OF CURRENT TRENDS TO BOOST BUSINESS GRANT CARDONE ...see PAGE 30

SWITCH CUSTOMERS AND EARN MORE JOE VERDE

PRSRT STD US POSTAGE PAID Permit No. 915 Woodstock, IL

...see PAGE 33

Jay Leno Comedian and car enthusiast Jeb Bush Former Florida governor

Chris Baughman Co-owner of Sunset Honda

SUNSET HONDA A CULTURE OF SUCCESS

There is a changing of the guards at Sunset Honda in San Luis Obispo, Calif., with new owners Chris Baughman and George Peterson taking the helm of the 37-year-old dealership. Bringing good old-fashioned customer service and today’s trends together keeps the dealership ahead of its competitors. ...see PAGE 20

Forrest McConnell 2014 NADA chairman Beck Weathers Inspirational speaker and author Bill Fox NADA vice chairman

Jay Leno

THE RETURN OF ONE-PRICE SELLING The one-price, no-haggle sales process is making its way back to some dealerships across the country.

Some in the industry doubt it will become a standard in retail automotive, arguing that a set price for vehicles will drive profits down even further than they are. Besides, many dealerships tried the approach 20 years ago and it didn’t work. Then there was Saturn. But proponents disagree siting studies that show customers are overwhelmingly

in favor of a haggle-free shopping experience – and one that doesn’t take four hours to complete. Sonic Automotive will begin rolling out its One Sonic-One Price strategy this month in its North Carolina stores.

We spoke with several other sources who insist one-price selling is the way of the future and will benefit, not only the consumers, but also the dealers.

Jim Olmstead, Andrea Baker and Garrett Liming of First Texas Honda, Austin, Texas ...see PAGE 10

CBT NEWS 5 Concourse Parkway Suite 100 Atlanta, GA 30328

Gary Tucker CEO of DealerRater

With Protective Asset Protection, you protect your best asset your reputation.

Learn more at protectiveassetprotection.com or call 888.326.2545

Since the recession, we’ve doubled our business and gone from 9 locations to18. We switched to Zurich’s F&I products in 2008 at the beginning of the recession, which was a pretty smart move. Our business has seen a huge increase in revenue. We’re selling thousands more cars every year and our PVR is up by more than $350 per unit.

A lot of that is a result of the consistency and predictability of Zurich’s process.

When we’re looking at buying a store, we can plug in the numbers and see the potential. I’ve never bought a store that was making money. But with Zurich’s F&I, I’ve never had a store that wasn’t turning a profit within three months.

Aaron Zeigler President, Zeigler Automotive Group

Read Aaron’s full story at www.zurichna.com/PowerOfZ

The power of

zurichna.com/automotive Insurance coverages and services are available to qualified customers through the companies of Zurich in North America, including Universal Underwriters Service Corporation. This is intended as a description of one customer’s experiences with Zurich’s products and services. Zurich does not guarantee a particular outcome, reduction in costs, or improvement in administration or profitability and further assumes no liability in connection with the providing of these services. ©2014 Zurich American Insurance Company.

Learn how to certify your Other Makes & Models.

motortrendcertified.com/cart

MOTOR TREND® is a registered trademark of SOURCE INTERLINK, LLC. ©2014. All Rights Reserved. ©2014 Automobile Protection Corporation - APCO. EasyCare® is a registered trademark of APCO. All Rights Reserved.

CAR BIZ TODAY M

A

G

A

Z

I

N

E

Letter from the editor

Email

newsroom@cbtnews.com Phone

678.221.2955 President and Publisher Jim Fitzpatrick Vice President / COO Bridget Everett

Eyebrows were raised nationwide when Sonic announced that it would be moving all of its stores to a one-price, nohaggle sales process. Critics of the practice argue that it will never work because deep down, customers still want a deal and negotiating will benefit both the customer and the dealer. Besides, many dealerships attempted it in the ‘90s, following in the footsteps of used auto giant CarMax, and fell flat.

Managing Editor Carol White Associate Editor Russell Brown

Proponents, however, think it’s time to bring the car-buying experience into the 21st Century – do away with the threeto four-hour back-and-forth game of negotiating. On page 10 we explore how a one-price platform would work, and speak with dealers who are already seeing their sales climb after switching to the no-haggle selling experience.

Assistant Editor Amy Ottman

What are your thoughts on the issue? Email me at cwhite@cbtnews.com and let us know.

Creative Director Jay Roebuck

Have the best August ever!

Art / Web Design Andrew Goodman

Carol White | Managing Editor cwhite@cbtnews.com

Carol White

Advertising Jane Howard jhoward@cbtnews.com d 678.221.2964 c 404.452.9551

Contributors Grant Cardone

Glenn Pasch

Pete MacInnis

Grant, a national speaker and motivator, is a respected, highly-regarded master salesperson whose passion is to teach people how to sell themselves, their products and services regardless of economic climate. His books, audio packages and seminars provide people of all professional backgrounds with the practical tools necessary to achieve high levels of success. Follow him on Twitter at @grantcardone

Glenn is a trainer at heart. He is a highly sought-after speaker, writer, coach and operations strategist, as well as a customer service fanatic. He has spoken throughout the U.S. and Canada, educating audiences on a variety of topics including business leadership, change management, digital marketing and the impact of this new technology on culture, business and society. Visit the website pcgdigitalmarketing.com or connect on Twitter @Glennpasch.

With 34 years of leadership experience, Pete’s mission is to marry his vast auto finance experience to advanced, new online technology platforms in order to provide a better sales and finance experience for consumers and a more efficient process for the entire automotive industry. Before founding eLend Solutions (formerly DealerCentric Solutions) in 2003, he spent 14 years with WFS Financial and later co-founded the auto finance company Onyx Acceptance in 1993.

Amy Farley

Jeff Cowan

Joe Verde

Amy is a skilled writer and editor with a keen interest in digital trends and topics in the automotive industry. She utilizes her knowledge of what is new in retail automotive marketing to help Force, an automotive digital, direct mail and email marketing firm based in Atlanta, Ga., evolve the dealer-to-customer shopping experience. Visit the website at Forcemktg. com.

Jeff, in his 28th year of training, is recognized as the creator of the modern-day walk around and selling processes for service departments. Currently partnered with NADA, EasyCare, NCM, MPi and other vendors and manufacturers, Jeff is the nation’s authority when it comes to training service advisors and service support staff. Visit his website at AutomotiveServiceTraining.com

Rich Holland

Dennis Galbraith

Dave Anderson

As a frequent speaker on the future of automotive dealership service, Rich believes in an “adapt-or-die” theory of innovation. With more than 30 years of diverse experience, he is a recognized expert in information technologies and creating customer loyalty through digital excellence. Visit the website at Autopoint.com.

Dennis is the author of “Sales Integration” and “Online Automotive Merchandising,” and is widely known for his expertise in automotive marketing. Prior to joining Dealer E-Process, he owned two successful startup companies, was Vice President of Advertising Products and Training for Cars.com, and led the automotive internet division of J.D. Power and Associates. Visit the website at www. dealereprocess.com

Dave is president of Dave Anderson’s Learn To Lead, an international sales and leadership training and consulting company. Prior to beginning Learn To Lead, Dave enjoyed an extensive and successful career in the automotive retail industry. He has presented more than a thousand workshops and speeches over the past decade on sales and leadership development and has spoken in 15 countries. Visit his website at learntolead.com.

Sally Whitesell

Mike Haeg

David Lewis

Prior to founding her company, Sally was a service manager for an import dealer in Florida. Today she performs service advisor training in hundreds of drives across the country at both an individual and corporate level. She has been coaching, critiquing and training advisors and managers for 19 years. She is the author of “Words That Sell Service” available on her website at swservicesolutions.com.

As director of business development, Mike is dedicated to helping dealerships “Own the Phone.” He is passionate about fusing technology, people and process to improve the bottom line. Outside the office, don’t be surprised to see Mike at a local live music venue, jotting down his crazy ideas or knee deep in a good book. Visit the website at centuryinteractive.com

Entrepreneur and New York Times best-selling author

Senior Copywriter at Force Marketing

Managing Director of AutoPoint

President of Sally Whitesell’s Service Solutions

CEO of PCG Digital Marketing

President of Jeff Cowan’s Pro Talk Inc.

CMO at Dealer E-Process

Director of Business Development for Century Interactive

Mark Rikess

President of The Rikess Group

Mark is a highly regarded expert on progressive retail practices, providing management-consultant services to dealers, suppliers and manufacturers. As a second-generation automotive dealer, he began with an early focus on performance improvement and implementation of results management processes in the dealership-operating environment. Mark founded TRG in 1989, and has consulted more than 150 dealerships. Visit the website at therikessgroup.com

4

CAR BIZ TODAY MAGAZINE

CBTNews.com

CAR BIZ TODAY August

Founder and CEO of E-Lend Solutions

President of Joe Verde Sales & Management Training Inc. (JVSMT)

Joe has been in the car business since 1973.

He’s been the “eight-car guy” and the 38car sales professional, a manager and dealer principal. In 1985, he founded JVSMT and is the leader in dealer, management and sales training worldwide. The books mentioned in this article are free and available at JoeVerde.com/store. Joe can be reached at jverde@joeverde.com.

President of Learn to Lead

President of David Lewis & Associates

Since 1986 David has been training dealers, general managers, sales managers, F&I managers and salespeople on the “Art of Inspirational Selling.” His unique ideas have helped thousands of dealerships nationwide achieve their sales and management goals. David is the author of “The secrets of Inspirational Selling,” “The Leadership Factor,” “Understanding Your Customer” and “The Common Mistakes Automobile Salespeople Make.” Visit his website at www.davidlewis.com

JJ Quest jjquest@cbtnews.com d 678.221.2962 c 678.296.4729 Customer Service info@cbtnews.com Subscriptions To subscribe electronically, log on to cbtnews.com and click the subscribe link on the side bar. Alternately, forward your company name, your name, address, phone number and email address to info@cbtnews.com or CBT News, 5 Concourse Parkway, Atlanta, GA 30328.

Please send address changes to the above email or mailing address.

Permission to reprint or quote excerpts granted only upon written request. Advertising rates are provided upon request.

GO TO CBTNEWS.COM

SIGN UP FOR YOUR

FREE NEWSLETTER

RECEIVE DAILY NEWSCASTS, FEATURED STORIES, INTERVIEWS AND MORE...

News From

A GOOD DEAL

FOR EVERYONE

By Forrest McConnell, III NADA Chairman

P

rice competition. Public safety. Greater convenience for American consumers – you and I know the value new-car dealers provide, but now we’re showing everyone why franchised dealers are vital to the economy and to our local communities.

NADA has launched a major “Get the Facts”campaign. Aimed at the media, opinion leaders and policymakers, the initiative promotes the benefits of franchised auto dealers and provides key facts about our businesses.

NADA has rolled out a variety of multimedia resources and an informative new webpage, www.nada.org/GetTheFacts.

The centerpiece is a must-see animated video, “A Good Deal for Everyone,” that details the value of franchised dealers in the car-buying process, including the significance of performing warranty and safety recall work.

We’re also highlighting the economic engine that is the dealer franchise network.

There are 17,700 new-car dealerships with nearly 32,000 domestic and international franchises across the country, and we employ more than 1 million people.

The Franchise System Works Best for Consumers But there’s much more to our story. According to “Consumer Benefits of the Dealer Franchise System,” a new report from well-known industry consultant Maryann Keller, factory-direct sales of new cars sold online or through factory-owned and operated retail outlets have not resulted in lower prices for car buyers or increased market share for manufacturers.

“The franchised dealer network benefits consumers and manufacturers alike by providing fierce price competition among dealers and an extremely efficient distribution network that is acutely sensitive to local markets,” Keller said in the report. “The newcar dealer franchise network is the most efficient way to distribute and sell new cars as well as provide convenient access to service over the life of every vehicle.” She continued, “Past experiments by factories, such as Ford Motor Co. and General Motors, to sell directly have proven unsuccessful, and the results have only reinforced the need and value of having a network of franchised new-car dealerships.”

Key findings of the study, “Auto Retailing: Why the Franchise System Works Best,” include: • The average dealership today requires an investment of $11.3 million, including physical facilities, land, inventory and working capital.

• Nationwide, dealers have invested nearly $200 billion in dealership facilities.

• Annual operating costs totaled $81.5 billion in 2013, an average of $4.6 million per dealership. These costs include personnel, utilities, advertising and regulatory compliance.

• The vast majority — 95.6 percent — of individual franchised retail automotive outlets are locally and privately owned. They generate billions of dollars in state and local taxes annually and provide significant employment opportunities that help build goodwill in the community.

• Manufacturers benefit from the high return on capital invested in manufacturing vehicles, as opposed to the low margin of retailing them.

• Dealers bear the cost and risks of these investments — at virtually no cost to the manufacturers — and provide a vast distribution channel that benefits the consumer.

The Franchise System is a Good Deal for Everyone I urge you to visit the “Get the Facts” web page. All of the materials, including the video are available for dealers to download and post on their own websites.

There have been many misconceptions about the retail auto business. NADA’s “Get the Facts” initiative sets the record straight about who we are and what we do. We’re making sure that the car-buying public — along with everyone else — understands that what we do is “A Good Deal for Everyone.” CBT

The report also excoriated critics who call new-car dealers “costly middlemen” – demonstrating that as long as cars are retailed, there will inevitably be costs of retailing, and that local competitive dealers are the best way to lower those costs. “Proponents of a factory-direct system have also failed to identify the system-wide savings for car buyers if manufacturers were to provide the same services that dealers do to satisfy the needs of each customer,” she said.

The Franchise System Works Best for OEMs Also part of the “Get the Facts” initiative is a new NADA study highlighting why the dealer franchise system is the most efficient and effective way for auto manufacturers to distribute and sell automobiles nationwide.

“Franchised dealers invest millions of dollars of private capital in their retail outlets to provide top sales and service experiences, allowing auto manufacturers to concentrate their capital in their core areas of designing, building and marketing vehicles,” the study says.

Forrest McConnell, III McConnell is president of McConnell Honda/Acura in Montgomery, Ala.

To see more from Forrest McConnell, III go to CBTNews.com

6

CBTNews.com

CAR BIZ TODAY August

News From

CFPB Issues Continue Concerns persist regarding anti-discriminatory auto financing guidance issued by the Consumer Financial Protection Bureau (CFPB) in March 2013. Most recently, Rep. Marlin Stutzman, R-Ind., introduced legislation (H.R. 4811) requiring increased transparency and accountability from the CFPB when it issues such guidance. It focuses on the need to reform the bureau’s closed process for issuing guidance, giving businesses and consumers a voice. It also seeks to roll back the auto financing guidance issued by the CFPB, although it would allow the agency to reissue it with greater transparency and public review.

AIADA believes there is no place for discriminatory practices in the auto business, and strongly opposes any form of prejudice in auto lending. AIADA’s fellow association, the National Automobile Dealers Association (NADA), launched an optional program, titled The Fair Credit Compliance Policy and Program, designed to strengthen a dealer’s ability to comply with fair credit laws while preserving the competitive benefits of dealer-assisted financing. AIADA and the National Association of Minority Automobile Dealers joined with NADA in their announcement of the plan and continue to support NADA’s efforts on this program.

For more information, visit AIADA’s website.

Congress Focuses on Funding, Trade In recent weeks, members of Congress have focused on appropriations legislation with the goal of moving bills through both chambers and into conference committee. Congressional members who are not directly involved in the appropriations process have worked to raise support for key agenda items, including trade.

AIADA remains dedicated to promoting free and open trade, which has enabled the international nameplate auto industry to grow and thrive in the U.S. Today, international brands produce more than 5 million vehicles in the U.S. and provide hundreds of thousands of American jobs at facilities and dealerships across the U.S. The Obama administration and congressional leaders continue to seek a path forward for trade promotion authority (TPA). This authority would allow the president to negotiate pending trade agreements and then submit them to Congress for an up-or-down vote. It would also allow two key trade agreements –the Transatlantic Trade and Investment Partnership (TTIP) and the Trans Pacific Partnership (TPP)—to conclude and move toward a congressional vote.

8

CBTNews.com

CAR BIZ TODAY August

During a speech to the Council on Foreign Relations in New York, U.S. Trade Representative (USTR) Michael Froman reiterated the importance of trade to America’s competitiveness. “In a world where market forces displace as much weight as military might, trade is a force multiplier, an investment in American power, both hard and soft,” he said. “The reality is this: Trade agreements are how we deal with globalization, by leveling the playing field for American workers and American firms. It’s how we deal with technology, by taking advantage of its development to promote openness, innovation and competitiveness. Trade, done right, is part of the solution, not the problem.”

Froman has actively worked both on and off of Capitol Hill to promote President Obama’s trade agenda.

House Ways and Means Committee Chairman Dave Camp, R-Mich., has also continued to support TPA. Pressure appears to be mounting, and AIADA will soon call on dealers to help push TPA and trade issues to the forefront of Washington’s policy agenda.

Primary Season Full of Surprises In addition to focusing on policy issues like the CFPB and trade, AIADA is also focusing on helping dealers remain engaged with candidates in their districts during this year’s mid-term election, which has geared up over the summer primary season. In past years, primary elections were fairly predictable and less confrontational.

However, this year, incumbents are facing their biggest challenges during these primaries.

Republicans appear to face tougher primary races this year than their Democrat counterparts. One of the biggest shockers of the season came in early June when sitting House Republican majority leader, Eric Cantor, Va., lost his primary race to a local college professor, David Brat. In a move that added credence to the saying that “elections have consequences,” Cantor announced that he would step down from his leadership post. This move set off a week-long scramble for House Republican leadership positions. In the end, Kevin McCarthy (Calif.) was promoted from Republican whip to majority leader. Taking Rep. McCarthy’s post as Republican whip is a newcomer to the leadership table, Steve Scalise, La. Although Rep. Cantor’s primary defeat was the main primary headline, this long, hot summer still includes a few other races to watch. Each will lay the foundation for what is expected to be a very interesting November election that will impact the congressional balance of power. For example, the Senate’s balance is the most volatile in recent years. The majority of political analysts predict the House will remain under Republican control. However, anything could happen as political analysts failed to predict Rep. Cantor’s primary defeat.

Get Involved in the Dealer Visit Program With issues like trade hanging in the balance and the looming midterm elections, now is the time for dealers to connect with their members of Congress. Consider participating in AIADA’s Dealer Visit Program. It allows dealers to host their members of Congress at their dealership for a one-hour meeting that includes a question and answer session with employees and concludes with a store tour.

To host a dealer visit, simply contact AIADA. Staff will then connect you with your member of Congress, issue an invite on your behalf, and find a time for the visit that works for each of you. AIADA also provides dealers with talking points and other materials to ensure the visit is productive. Visit AIADA.org to learn more and sign up to host your own dealer visit. CBT

Gross Profits Under Pressure?

“Our gross profit per car is up over $700 with MAX Digital Showroom.”

Find out how:

MAXDigital.com or (888) 841-0884.

MAXDigital.com | (888) 841-0884 | Sales@MAXDigital.com

Jim Brennan General Manager Mike Anderson Auto Group

+67% with MAX Per Car Gross profit with MAX

LE FUL

L

C

IR

L

F

C

U

L

L

RC I C

LE

E

LL FU

LL CIRCL

CIRC

FU

THE RETURN OF L

E

E

U

C

F L

L

CI

RCL

E FU

LL

C

IR

L

ike the railroad industry a century ago and Hollywood a few decades later, auto dealers are at a crossroads, being forced to decide if they are in the car-selling business or the negotiation business. While many railroad people dug in their heals around the turn of the century, insisting they were in the train business and not the transportation business, they got left behind. Similarly, when television came on the scene, many Hollywood moguls lost sight of the fact they were in the entertainment industry, and not simply the film-making business.

By Barry Courter

Times and consumer habits do change and today the majority of car buyers are firm in their dislike for negotiating, or haggling over price, and hundreds of dealers across the country are switching to a fixed-price, no-haggling, transparent way of doing business. It is not only the future, they say, it is the present.

“If you ask dealers today to define their biggest challenge,” says consultant Mark Rikess of The Rikess Group, “they will say finding good sales people, especially in the Gen Y and female groups. With the fixedprice model, we take the No. 1 problem a dealer has off the table.”

He adds that even in the traditional model of old, there is very little negotiation actually taking place today because of the things a computer and social media can do for the consumer.

“If you are pricing to get leads to drive traffic, you can’t really negotiate anyway, and with used car dealers, most good dealers are already one price. On new cars, because of so much information online, everybody already knows what the price point should be.”

Simply put, the Generation Y (those born between the early ‘80s and the early 2000s) and female buyers, two groups that make up a little more than 60 percent of buyers who actually register cars today, according to Rikess, say they do not want to haggle – or as many women who participated in a recent survey call it, arguing. Lucia Hale enjoyed her fixed-priced, no-haggle shopping experience at First Texas Honda in Austin, Texas, so much, she bought a second new Accord there.

everything. The Internet has provided consumers with information, not only about the cars themselves but their values, and they give consumers the ability to write reviews of dealers, something today’s shopper relies on a great deal.

There are several apps for smartphones that consumers can use. TrueCar, for example lets buyers compare deals in their area, and AutoTrader uses the car’s VIN to find comparable vehicle options. Kelly Blue Book also has an app, as does Edmunds, which help buyers learn a car’s value.

“On average, the average consumer who buys a car spends about nine hours doing research before selecting the dealership. If you get less than four stars, people aren’t going to shop at your dealership, no matter how you price things,” said Rikess.

Consider the way Gen Y’ers and females, and really most consumers, shop today. A good example would be to look at electronics buyers, and even more specifically, Mac store shoppers. Today’s shoppers will go online and research an item in which they are interested. They will compare brands, shop for the best prices, and read all of the reviews they can find. They might visit a retail outlet to actually hold the product in their hands before buying it online, but they have a pretty good idea of not only what they want, but from whom they will buy before ever speaking to a salesperson.

When they do enter a store, they expect the salesperson to be “a genius,” according to Rikess, and offer some new, usable information. They do not expect nor do they want to haggle over price or be sold something they do not want.

They bring that same attitude to car buying.

“It was actually enjoyable. It was much easier,” she says. “I knew all of the parameters. It was painless and it was much quicker.”

Jim Olmstead, Andrea Baker and Garrett Liming of First Texas Honda

10

CBTNews.com

CAR BIZ TODAY August

Fixed-pricing is not a new idea to auto dealers. There was a push towards it two decades ago, but that was before the personal computer and smartphones changed

“Consumers have said over and over, ‘Let us buy a car the way we want to,’” says John Iacona, co-president of BRAM Auto Group in Manhattan.

Iacona has overseen the transition from the traditional sales model to fixed-pricing at nine dealerships since May of 2013. The switch “was not as complicated as one might think. It’s more about changing a culture, especially with older sales staff and managers accustomed to the old way.”

“It is the way of the future,”

The most difficult part of the switch was losing about 30 to 40 percent of the managers who could not or would not make the transition, he says. Rikess says those numbers are average at other dealerships, as well.

Today, the sales staff, now called “presenters,” is almost entirely comprised of people with no car-selling experience prior. They don’t have habits to unlearn, Iacona says. They are paid a salary at first, and future pay is based on volume rather than the traditional commission under the new model.

John Iacona, Co-President of BRAM Auto Group in Manhattan

“You do lose the ability to hit that home run, but if you have more consistent pricing, people don’t mind you making a little money, but they don’t want to be that customer where everybody is high fiving when you leave,” says Jim Olmstead, president of First Texas Honda.

Rikess says transitioning to the fixed-price model takes about three to four months, and costs on average around $30,000. Most of that is spent on new branding materials, marketing and staff training. Managers, who are no longer spending their time negotiating, learn to become trainers and the sales staff learns to walk buyers through the entire process. Because everything is fixed and transparent ahead of time, the actual sale is no more difficult than buying a dishwasher or new smartphone for the consumer.

involved at every step. “Everything is transparent,” Olmstead says. “We ask their opinions and advice.”

“It is the way of the future,” Iacona says.

It also made things more profitable for First Texas. It went from ranking around the 400s in the 1,000-dealership system nationally each month to Top 50 and it ranked as high as No. 4 at one point.

The presenters stay in constant contact with the potential buyer throughout the process, which now takes around an hour, as opposed to the two and a half hours it took on average under the old way. They are able to not only answer questions about the vehicle, but also give payment estimations at any time and offer trade-in value on the spot. All of this happens because of training, technology and because everything is transparent and figured out ahead of time, according to Rikess.

Sonic Automotive Executive VP of Operations Jeff Dyke says in a recent interview with CBT News Founder and CEO Jim Fitzpatrick that Sonic spent more than $250 million over the last few years developing technologies to improve the experience for the customer. “When the guests come into our store and they experience the technologies, they experience a sales associate who can deliver the entire process from the trade appraisal to the F&I process, the whole nine yards, all on an iPad and they can get in and out of there signing with their finger on a screen, that is going to make a huge difference.”

At First Texas Honda, at the regular staff meetings, which they call family meetings, customers are invited.

During such meetings, staff members are asked for their opinions on how to improve the process and any new cars that have come in are discussed, with customers

Olmstead has 47 years in the auto business and convinced the owners of First Texas to make the transition three years ago. He calls the traditional way of selling cars antiquated and says, “trying to find that one person who doesn’t go to the Internet or know what their trade-in is worth takes its toll on salespeople and managers. This makes everybody’s life easier.”

Iacona says the nine dealerships in the Manhattan chain, selling Chrysler Jeep, Hyundai, Kia, Nissan and Honda, average between 1,000 new car sales a year to 4,000. They didn’t see their sales figures climb as dramatically as First Texas, “but we didn’t see any drop off either. We’ve only recently made the transition, so no movement is good.”

“It strengthens their core, and customers have fun with it. That is the kind of atmosphere we’ve created. Instead of feeling like they have to come to work, they like being there.”

Olmstead says he has had to reevaluate his own thinking in some areas. “In the old days, if someone got a tattoo I would have gone ballistic, but you have to think about this being Austin and where you live. It depends on the market you are in. Do something to make you different.” On Aug. 21, staff members will perform a live concert on the stage that has been erected on the lot.

He says making the switch was a “leap of faith, but all of our prices are on our website and that is the price it will sell for. We are selling more cars than I’ve ever sold doing business the right way.” CBT

They did not make the switch at all nine stores at the same time, and learned lessons with each one. The biggest lesson, Iacona says, is “don’t move forward thinking with your heart. Move forward thinking with your head.

You know going in who will survive and who won’t.

Taking a month too long hoping someone will come around is a month wasted.”

Olmstead says the keys to success with one-price selling is to be fully committed to it, treat customers as if they were guests in your home and create a fun environment for staff and customers. At First Texas, for example, planking contests are held every hour on the hour.

August CAR BIZ TODAY

CBTNews.com

11

TOP 10

REASONS FOR SWITCHING TO

By Mark Rikess

1. Give Women What They Want

6. Sales Cycle Efficiency

Women purchase about half the vehicles sold and strongly influence another 20 percent. Women see negotiating as a waste of time – and upsetting – as they have done their homework and know what they should be paying for an automobile. Research has shown women define the traditional negotiating process as “arguing” and are turned off by this tactic.

Research has shown that 70 percent of auto sales take more than four hours.

The time it takes to sell a vehicle is the No.1 complaint from most customers.

A one-price process typically takes two hours or less. By decreasing the sales-cycle time, you increase the productivity of your top salespeople as they get to see more prospects due to a time efficient sales process – and you get happier customers – part of that outstanding sales experience.

2. Gen Y Sees Negotiating as a Waste of Time Gen Y makes up 40 percent of today’s shoppers. They are professional shoppers who highly value transparency and see no value in the negotiating process. In fact, they see it as an attempt to “con them” as they have never negotiated for any other purchase.

3. Recruiting is Easy By definition, traditional dealers need to populate their showroom floors with something our society doesn’t produce – good negotiators. Most dealers’ biggest complaint is their inability to recruit high caliber salespeople. That will continue to be a huge challenge until a totally transparent sales process is installed.

The biggest competitive advantage a one-price store has is its ability to attract high-quality salespeople that normally wouldn’t consider a career in auto sales under a conventional sales process.

4. Grosses Go Up Most dealers think one-price has to be the lowest price. Not so. When you add value to a transaction, you can charge more. Most customers want a process that is fast, simple and transparent – delivered by an empowered sales associate who has outstanding product knowledge. The vast majority of customers have proven to be more than happy to pay a small premium for an outstanding sales experience.

7. Pricing to Market When your inventory is priced to accepted market values, it turns faster, resulting in higher floor-plan credits and less wholesale losses.

8. SSI Improvements A faster, fairer sales process where the customer feels in control, results in higher sales satisfaction scores.

9. Social Media Once a shopper has decided on a brand, their next step is to select a dealership.

They start this process by looking up the local dealership’s online reputation.

Inventory, pricing and location will not help dealers that have less than a fourstar rating. The one-price sales results in better, and often glowing, four-plus star reviews.

10. It’s Inevitable You can’t defeat the internet. It’s here to stay. Today’s highly-informed consumer has already done their homework to determine what they should pay for the commodity you sell. Those dealers that become one-price stores will have a competitive advantage over those who are trying to improve the traditional process for a shrinking owner base. CBT

5. Transaction Costs Go Down Most stores have one manager (including F&I and BDC) for every 2.5 sales consultants. One-price stores are 1to 4 ratio or better. Also, traditional stores must pay a premium for managers with outstanding negotiating skills. One-price sales managers’ primary goals are to develop people and manage a well-defined sales process. Traditional stores have “deal managers” not “people developers.”

12

CBTNews.com

CAR BIZ TODAY August

Mark Rikess President of The Rikess Group

CONSUMER

DEALER

“I want to get all the facts on the vehicle I’m considering before I agree to buy. I’m not buying from a dealer that can’t give me all the information about the car they’re trying to sell me.”

- Heather Young Today’s Demanding Consumer

“I want to increase my used car gross profit by getting top market value for the vehicles we have in our inventory.

With today’s knowledgeable car shopper, it’s essential to provide them with all the facts about the vehicle you’re selling.”

- John Thomas Today’s Demanding Dealer

WITH CAR-BIO IT’S A WIN-WIN FOR BOTH THE DEALER AND THE CUSTOMER

Now your salespeople can provide their prospects with all the facts about every pre-owned vehicle in your inventory

We’ll deliver the facts ...you deliver the units.

Call today and speak with a Car-Bio representative and learn how easy it is to have happier customers and bigger gross profits!

VISIT US TODAY AT CAR-BIO.NET

CALL 888-877-8148

VENDOR PROFILE

HELPING DEALERS MANAGE THEIR

ONLINE REPUT TION and

SELL MORE CARS

By Carol White

W

hoever said, “Sticks and stones may break my bones, but words will never hurt me,” never faced a string of negative reviews. As a dealer, you know that words can hurt your business and have a significant impact on your bottom line.

Managing your business’ reputation is one of the most important things you can do to stay ahead of the competition.

”

successful companies, it was born out of necessity. A one-star experience in 2001 with a less-than-ethical salesperson left Chip Grueter, founder of the company, with a bad taste in his mouth. His desire to have the problem solved was his objective, so after weeks of haggling and getting nowhere with the salesperson, Grueter went to the general manager. In 20 minutes, the problem was resolved.

”

“I sat on that experience for over a year and wanted to find some way to communicate it with other people,” said Grueter, whose background is in computer science and marketing. That led him to thinking that maybe there was a way to create a communication channel for dealers and consumers to interact with each other. “With a little more transparency, and if the right people at the dealership are listening, the issues would get solved immediately.”

Your reputation is determined by the experience you deliver, said Gary Tucker CEO of DealerRater.

And, in the showroom, with all of the things that can go wrong, that’s hard work.

Managing your reputation is all about leveraging that hard work.

With more than 1.5 million reviews to date, the Waltham, Mass., company is the pioneer in the retail automotive online review business. And like all

CBTNews.com

During a dealer’s enrollment process, they receive coaching through online training and customer support to help them effectively navigate any situation in which they might find themselves. “We work closely with the dealership during the enrollment process to make sure they understand how our reputation management and content marketing tools work,” said Tucker. “And then we have a series of best practices that we share with them on how to respond to a positive review and how to respond to a negative review.”

Obviously, dealers can leverage those five-star reviews to bring more people to their store and ultimately sell more cars. But what about the one-star ratings? Part of the CDP is a negative-review reconciliation period, which involves the bad review going into a queue for two weeks. The two-week period gives the dealer an incentive to take corrective measures. “Our motivation in offering that, and Chip’s design of that process, is to drive action,” said Tucker. But not every situation can be addressed to the customer’s satisfaction.

Gary Tucker, CEO 14

So in 2002, Grueter launched DealerRater with the primary goal of ensuring that consumers have great experiences. But when things do turn south for the customer, DealerRater’s program is designed to deliver action and provide the best opportunity for buyers to have their concerns addressed – not just to express their dissatisfaction. “We believe, and the data strongly supports, that consumers are very receptive to having their opinion changed about the experience when things are addressed and corrected,” said Tucker. And that serves those dealers who are enrolled in the company’s Certified Dealer Program (CDP) well.

CAR BIZ TODAY August

So at the end of the two-week period, if not resolved, the customer’s original review is posted and stays on DealerRater’s site. “We think that’s very important to emphasize for the integrity of our product and the trust that we’re developing with consumers. If someone does express concern or writes a negative review, then that’s going to show up on our site.”

DealerRater recently rolled out its Certified Employee Program, which adds another layer to the consumer’s dealership-selection process. It targets specific employees at the dealership and allows potential customers to choose their salesperson or service advisor before ever stepping foot in the dealership. “They’re using that third-party review information, not only to choose the dealership, but to choose which dealer employee they want to work with,” said Tucker. “I would think that the transparency that our program creates provides yet another set of data to see who’s doing a great job and who isn’t. That transparency also creates some very healthy competition within the dealership. It ensures that dealer employees continually deliver a great experience. And they get their customers to tell other people about it through the review process.”

Each review that is submitted goes through a proprietary four-step automated screening process that has taken years to develop. The goal is to ensure that a review is an actual review from a real person about a real experience. Then a content moderation specialist reads every review in order to detect fake reviews.

According to Grueter, that review process has been somewhat of a “cat and mouse game” over the years. Weeding out the fraudulent reviews of dealerships is an ever-changing process. One of the most frequent types of fraudulent review was the ones written in all caps. “For the first few years, I had no idea why people were shouting, even in the positive reviews,” said Grueter, who served as the company’s sole review reader for many years. What I finally uncovered was that certain DMS systems required you to input all vehicle information in Chip Grueter, Founder and Chief Technology Architect

From left: Chip Grueter, founder and chief technology architect; Gary Tucker, CEO; Jamie Oldershaw, senior vice president of operations and planning; and Larry Cochran, senior vice president of products and services.

all caps. So that salesperson would spend all day entering info in all caps then move over to our site and write a review about themselves. So that became one of our very first fraud filters.”

Those unscrupulous review-writers were sneaky, often going from writing five-star reviews about themselves to writing damning reviews about their competitors and then to writing glowing reviews about their competitors. Wait. What? “It was an effort to try and get the competitors in trouble with us,” explained Grueter.

“By and large, dealers operate above board, but there are a minority of folks out there who try to get around the system,” said Tucker. “DealerRater has the industry-leading combination of technology fraud detection and the human involvement of actually reading each and every review. That provides an added layer of validity and integrity to the reviews that go on our site. Our platform needs to be transparent and at a level of integrity that creates the kind of trust that the consumer and dealer will benefit from. ” Tucker came to DealerRater with more than 30 years in the automotive business, including 10 years in retail at a BMW dealership in New Jersey. He most recently was with J.D. Power serving in various roles in data

and information for both auto and non-auto businesses. Partnerships with J.D. Power and Kelly Blue Book bring even more value to the table for both dealers and consumers, according to Tucker. “We’re very proud of both of those partnerships. We are consistently on the lookout for ways to create value for our dealers and offer consumers more opportunities to see and benefit from the content of our reviews. And when you look at Kelly Blue Book and J.D. Power, they are both world-class brands that help us achieve both of those objectives.”

Meeting and exceeding those objectives are what has landed DealerRater on the DrivingSales “Top Rated” for Reputation Management list for two years straight.

The company has about 70 employees, 5,200 certified dealers and over 35,000 dealers in its database. And those numbers are climbing every day. There is already a growing presence in Canada and the possibility of global expansion in the future.

So what came about as the result of a sales snafu back in 2001, will continue to guide consumers to the best dealers, and in turn, help those dealers sell more cars and book more service business. CBT

DealerRater, the world’s first dealer review website, is headquartered in Waltham, Mass.

August CAR BIZ TODAY

CBTNews.com

15

Perception EQUALS

Reality

By David Lewis

I

f you are familiar with my philosophy of sales, you know that I believe every

salesperson can be successful if they distinguish themselves from the competition by being unique, different and inspiring.

This concept is constantly reinforced when I hear testimony after testimony from salespeople who have seen their careers flourish since they started practicing these three principles.

The fact is we are all different and unique from others, and once we learn how valuable that is for ourselves, we can inspire those around us and those who come to us looking to purchase a new car. It isn’t enough to simply recognize that you are unique and different from others. How you practice your techniques in light of this understanding is what determines how the customer will perceive you as a salesperson. Unless customers recognize that you are unique and different, you will fight an uphill battle trying to convince them that you are the right person with whom to do business.

If you were to spend a day visiting car dealerships masquerading as a potential customer, you would soon see why this is so important for you as a professional salesperson. In most places you would hear the same pitch and be given the same type of presentation by someone who sounded and acted just like every other one you met that day.

Why? Because that is the way we have been trained and that’s the way we have always done it. I cannot think of a worse reason for continuing to do something.

B e i n g unique and inspiring

starts with recognizing the things you do which make you act and sound like every other car salesperson.

Have you ever taken the time to examine what you do in your normal routine when dealing with customers?

How do you greet them when you speak to them for the first time? Do you sound excited about having the opportunity to help them or does your approach seem to make them apprehensive and defensive? If your customer perceives from the start that you are only interested in doing whatever it takes to sell a car today, the perception will be that you are just like every other salesperson. Once that is established in their mind it is very difficult to reverse.

Let’s first look at a common conception that most car salespeople would consider very logical, which is, “the better the presentation, the higher the gross.” That makes perfect sense, but it begs to ask: “What is it that establishes what a customer is willing to pay for a vehicle? How do I, as a salesperson, create value in the vehicle with the customer?” That, of course, brings us to the second logical question: “What actually creates value in a good presentation.”

The first thing you must establish is the value you bring to the table. Does what you say and how you treat your customers make them feel comfortable and at ease with you? Do they perceive that you are really trying to help them reach their goal or solve their transportation needs? This is a very valuable commodity in a business where most customers feel threatened and pressured by salespeople.

When it comes to your presentation, how do you present the unique features and benefits of your product?

Do you give the standard walk around like everyone else or do you find specific points of interest and explain how each item and feature will make your customers feel safer, more luxurious or more excited about owning and driving this particular car? Do you take the time to find out what is important to them so you can show them how this vehicle will fulfill the desires and expectations they have for the car they want to buy?

Everything you do in your sales presentation either establishes value with the customers or gives the perception that yours is just like every other car out there, and you are like every other salesperson. When you make your presentation exciting and informative, customers will feel excited and informed. If you are enthusiastic about what the vehicle has to offer and demonstrate why you feel that way, they will also perceive the value of what you are saying and presenting to them. It may be that the very things you are demonstrating are common to most modern vehicles. But if you present features and benefits that another salesperson did not take the time to do, the customer is likely to perceive that these have added value that they will not get from the other vehicles they are considering.

A good example of what I am saying would be the safety-tempered laminated glass that comes in all vehicles made today. Years ago the government mandated this as a requirement in all new vehicles manufactured and sold in the U.S. The benefit is to minimize the possibility of injury in the event of an accident. If during an accident, the

16

CBTNews.com

CAR BIZ TODAY August

occupants’ heads were to hit the windshield, this type of glass is designed to not shatter and to cushion the blow.

It has also been developed to stay within the frame of the car upon impact to keep the occupant safe and secure, and to eliminate the possibility of being ejected from the automobile.

By presenting a feature that all cars have, but no other salesperson has presented to the customer, you are indirectly implying that your vehicle is safer and, in turn, has greater value for the customer. Of course, you don’t need to explain to them that every car today has this feature; you have created the essence of sales which is creating perceptions in the customer’s mind.

If this were not an essential part of the sales process, people would just look at a list of features they wanted and buy the first car that offered those at a price they could afford.

By making your presentation more thorough and personal, you create the idea of greater value in the customer’s mind. What they perceive as more valuable will become a reality to them. Perception is reality, and what a great salesperson does is present the perception of their product and their process as unique and different from what others are offering. When they do this, the customer will establish the value in their mind and therefore, “the better the presentation the higher the gross.”

No matter how well the manufacturer promotes products or how methodical someone does the research online before coming to a dealership, what the salesperson says and does will make the difference that either earns their business or sends them somewhere else to shop.

Information can only give someone pictures, technical data or a general idea of which vehicles have the features for which they are looking. How the customer perceives the product, the salesperson and the dealership is what will be the deciding factor in where they buy a car.

If you want to win the lion’s share of the business that comes your way, and earn higher grosses in the process, make your sales presentation one that establishes you, your product and your dealership as different and unique from the competition. By picking out features and benefits that others are not likely to focus on in their presentation, you will inspire the customers and create more value in their minds for what you have to offer.

By making a special effort to emphasize the values and benefits of the things that others tend to overlook, you will earn higher grosses and find that you do so with far less effort. And best of all, you will create satisfied customers that will return to you when they or someone else they know needs to purchase a new vehicle. CBT

David Lewis

President of David Lewis & Associates

To see more from David Lewis go to CBTNews.com

U

WAYS TO MEASURE MANAGERS

By Dave Anderson

ltimately, we all are measured by results. However, results alone can be a misleading indicator for how effective a manager is in his or her role. For instance, while speaking recently in the U.K., I cautioned that because they have the fastest growing economy in the western world, and are having their best automotive retail sales year since 2005, it is very possibly disguising the stench of mediocre management within aspects of their operations. Hot economies, popular products and favorable incentives make the terrible appear tolerable, the subpar look good and the good appear great.

To gain a more objective view of your manager’s actual effectiveness you must dig deeper and examine four key areas that serve as an acute and telling report card of their true abilities and impact.

1

Culture. A leader is the chief architect and primary influencer of his or her culture. They can either shape it productively, or have it destructively shaped by outside forces like indifference and entitlement.

Culture is palpable; you feel it before you see it. In high-performing cultures, the following traits are common fare: • • • • • • • • • • •

Clear, high, standards in writing for daily, weekly and monthly expectations Very little gray area Very little entitlement Very little, if any, dead weight Swift and firm accountability Strong team work Strong peer pressure to perform High integrity Great customer experience resulting in outstanding CSI A “second-mile-is-standard” work ethic Leadership acts as a catalyst and is engaged in the trenches daily

Weak cultures, on the other hand, are the result of complacent leaders who lead from their office chair and ride market momentum — going through the motions — rather than maintain a daily killer instinct intent on running up the score. Traits common within such cultures may be any of the following: • •

Unclear standards and expectations Lots of gray area, confusion over what’s expected and poor communication overall

• • • • • • • • •

Entitled employees who believe tenure, experience and credentials should substitute for results today Deadweight, producing standards unworthy of the organization is routinely tolerated Little accountability An “every-man-for-themselves” outlook Peer pressure to conform Sloppy ethics Also-ran customer experiences resulting in average or below CSI A “just-enough-to-get-by-and-get-paid” attitude Disengaged leadership – aloof, inaccessible, unavailable and indifferent

At the end of the day, culture makes up a significant portion of a leader’s report card because it directly reflects the image of the person responsible for it. Strong products, robust consumer demand and aggressive incentives can disguise not only the cultural infections like those listed, but also the deficient leader creating or enabling them.

2

The quality of people they’ve attracted and developed. Without question, the quality of culture a leader creates helps determine the quality of people they’re able to attract and retain.

Thus, evaluation points one and two in this piece are cousins. Here are some checkpoints to evaluate this key leadership responsibility.

• •

• • •

Team member growth – consistently improve skills, habits and attitude under leader’s watch Intolerance for a team member’s negative, selfish, divisive cultural cancers, regardless of their high production Low turnover Increased responsibility and/or promotions for team members Consistent training, coaching and mentoring. The effective leader has installed these disciplines within the culture and views them as non-negotiable and not something to get around to after “all the important stuff is done.”

In my free book, “Up Your Business: Seven Steps to Fix, Build or Stretch Your Organization,” I explain the business law of attraction which states that leaders don’t attract who they want, but who they are. In other words a “six” leader is not going to attract eights, nines or 10s; nor can he develop someone to those levels. Thus, you can greatly judge the quality of your leaders by objectively evaluating the quality of the people they’ve attracted and developed. As with culture, they are in his or her image.

3

How they’re getting results. Most dealers are so delighted when a manager gets results they fail to look closely at how those results are obtained.

That can blind a dealer to future problems with this manager because the “how” shows where the manager is headed. For example: •

If he gets results because he has built a great team that excels when he’s away, or off work, that’s a big plus. However, if he gets results because he works bell to bell every day, never takes a day off, and has made his people so dependent on him they’re useless when he is gone, he’s headed for trouble.

•

If she gets results because she has set clear expectations, has trained people to reach them, and holds them accountable for getting the job done, you’ve got a winner. If, on the other hand, she gets results because she micromanages, threatens, bullies and berates people into performing well, a train wreck awaits.

•

If he gets results because he’s got a hot product and strong incentives, you may be vastly overestimating his true abilities. If, however, he is getting results because he maximizes each opportunity and has learned to play a poor hand well, you have someone special.

I know in our fast-paced world we like to glance at results, see that they’re good, declare that we’ve got a racehorse manager, and move on to what’s next. But to accurately evaluate your manager’s abilities, you’ve got to dig deeper into the how. It forecasts the manager’s future.

4

Their performance versus market. If Audi sales are up by 23 percent nationally, and my Audi manager’s department was up by 18 percent, I may have a problem. When Nissan sales are down 8 percent, but my Nissan manager’s department is flat, I may have an eagle. Obviously, you can’t look only at market conditions, but they must be weighed into the four-part equation.

There are always “exceptions,” “we’re unique because…,” and other “yeah-buts” that can excuse, explain or acclaim performance. This is why, to get a true picture of your manager’s worth, you must evaluate all four of these factors: culture, people, the how and market performance. While there are a host of other helpful criteria, these four are simple, easy-to-measure, and will go a long way in telling your manager’s real story. CBT

Dave Anderson President of Learn to Lead

To see more from Dave Anderson visit CBTNews.com August CAR BIZ TODAY

CBTNews.com

17

REASONS DEALERS SHOULD

EMBRACE NLINE VIDEO

How dealers can utilize videos on YouTube and their websites to connect with today’s web-savvy car shopper

By Amy Farley

W

hether viral and the hilariously funny, educational and informational or emotionally-compelling, online videos have consumers under their spell. In fact, more than six billion hours of video content is viewed on YouTube every month.

The more compelling the video, the better it is. When you create attention-grabbing video content for your dealership website or YouTube channel – through humor, informative content or an emotional connection – your customers are much more likely to share it with their friends and followers.

A Google study found that 84 percent of video researchers planned to view auto videos the next time they were in the market for a vehicle. If your dealership isn’t utilizing online video, then those consumers may simply turn to your competitor, who is only a few clicks away.

In 2013, Google found that online video ads topped all other ad formats when it came to driving brand consideration, besting print ads, TV ads and even narrowly edging out direct mail (37 percent compared to 35 percent). Internet users are consuming more video content and video advertisements than ever before, and those numbers are on the rise.

9Online video is immediate

marketing strategy fresh

It’s clear that video content is king, but most dealers still aren’t taking advantage of it. Here are five reasons to rethink that strategy.

Car shoppers have 24/7 access to the entire internet at their fingertips, with many of them researching cars and trucks on their mobile devices. A 2013 Google study found that 35 percent of purchasers used a mobile device, such as a smartphone or tablet, to find information about vehicles. That’s an increase of a whopping 460 percent since 2011.

9Videos boost engagement Getting an auto shopper to your website is only part of the battle. Keeping them there so they can find out more about your dealership and what you have to offer is crucial. How do you do that? Engagement.

It’s been proven that viewers spend 100 percent more time on pages that have videos on them, and a comScore study found that visitors who view videos tend to stay on a website an average of two minutes longer than users who do not. An interesting and informative video can keep a consumer’s attention for longer than copy or even images can.

And video doesn’t just keep customers on the page – it encourages them to take action. Videos embedded on landing pages have been shown to increase conversions by 86 percent. The same goes for emails – the clickthrough rate of an email marketing message rose by 200 to 300 percent when a video was included, according to a Forrester Marketing Group survey. Videos don’t just capture customer attention – they call customers to action.

Unlike with some ad formats, such as television or print, shoppers who use video to research vehicles can take action right away. YouTube enables you to link to your website directly from a video using an overlay, so a consumer can go right from learning about a given model to that model’s page on your site. Video makes car shopping streamlined and integrated.

9Video sharing is the new

9Video gives consumers

Word-of-mouth advertising has always been an integral element of your dealership’s reputation and marketing strategy. The only difference today is that the location has changed. While word-of-mouth marketing used to take place around the water cooler, it now takes place online.

Today’s consumer doesn’t just want to watch video online. Today’s consumer expects to. A Forbes Insights poll found that 60 percent of business respondents reported that they were likely to watch a video embedded on a given website before reading any of the copy on the page at all.

More than 700 YouTube videos are shared on Twitter every minute, and that number is only going up. One study found that 92 percent of mobile video viewers will share videos with others. Your customers are still talking to one another – that conversation is just taking the form of highly sharable, clickable, watchable online videos.

While this doesn’t mean that the other elements of your website are unimportant, it does mean that it is becoming more and more necessary for dealers to take advantage of online video. When consumers expect to use video to research their purchases, you’ve got to give the people what they want.

word-of-mouth marketing

18

Since almost 40 percent of YouTube’s global watch time is made up by mobile, some of those auto shoppers are certainly watching your videos on their devices while on the go. That means when you provide them with videos, whether they’re on your own branded YouTube channel or embedded on your website, you’re reaching customers where they’re spending much of their time.

CBTNews.com

CAR BIZ TODAY August

what they want and expect

9Video keeps your

While many dealers are already implementing video into their marketing efforts, it’s not even on the radar of many others. This means that dealers who post regular, quality video content stand out among the competition.

By staying ahead of the curve, your dealership can benefit from all the advantages that video marketing has to offer and reach today’s car shoppers, for whom watching videos online is second nature.

Online video is the next big thing when it comes to automotive marketing, and it’s clearly worth the effort.

The advantage for dealers is that there are no boundaries when it comes to this video content. Unlike TV advertisements, they don’t have to be limited to a 15- or 30-second spot, and the types of videos you can create are limitless.

So make a video highlighting your top-selling pickup truck, or a testimonial given by your most satisfied customer. Create video content that showcases an addition to your service center, or features a member of your staff explaining special financing.

Whether you are posting weekly videos to your branded YouTube channel, implementing pre-roll ads before other YouTube videos, or simply embedding informative video content on your website, the dealer who embraces online video content is investing in a marketing strategy that’s fresh, current and best of all – effective.

CBT

TIPS FOR EFFECTIVE ONLINE VIDEOS: 1. Be compelling, engaging, entertaining.

2. Produce video content regularly.

3. Include a call-to-action on each video.

4. Share with followers on social media.

Amy Farley

Senior Copywriter on the digital marketing team at Force Marketing

To see more from Amy Farley go to CBTNews.com

DEALER PROFILE

SUNSET HONDA

W

By Carol White

hen Archie Woodward decided it was time to retire, he turned to two of his long-term employees to take ownership of his San Luis Obispo dealership, Sunset Honda.

Chris Baughman, along with his partner George Peterson, is committed to carrying on the 37-year tradition of providing customers with the highest level of service in the area.

Chris Baughman Co-owner

20

CBTNews.com

CAR BIZ TODAY August

Baughman made his way to California and joined the Sunset team in 1999 after working in dealerships in Iowa and Colorado, while Peterson started with the dealership in 1992. In addition to purchasing the Honda dealership, Baughman manages the operations of Woodward’s other dealership, Gold Coast Acura in Ventura, Calif.

Located midway between Los Angeles and San Francisco, the Honda dealership was opened back in 1977 by Woodward and his wife, Sandra, offering buyers the Civic CVCC and the Accord. “It was an interesting time in U.S. history with the combination of the energy crisis, as well as more strict emissions standards,” said Baughman. “The Civic CVCC topped the EPA’s mileage charts exceeding 50 mpg. The demand for fuel efficient cars was extremely high and the supply could not keep up, so we quickly adopted the mentality of holding gross, and it continues today,” said Baughman.

That strategy, along with a keen focus on three key features – product, personnel and process – is what has kept the dealership ahead of its competition. “Honda and Acura have made it really easy for the stores to be successful from a product standpoint, so it has been my goal to make sure that we have the absolute best employees, and that they are guided by a strong set of processes,” explained Baughman.

Communication and transparency are the keys to providing an exceptional purchase or service experience for the customer. That meant stepping back from a more automated process, and bringing the human touch back to the dealership.

In an era when phone systems require you to push “one” for this or “two” for that, Baughman wanted to take the frustration out of the picture. So whenever a customer calls the store or requests information on the internet, they are assured to speak with a real person.

The personnel at Sunset Honda and Gold Coast Acura make up the third part of the success equation. As any dealer will tell you – regardless of market size – finding quality staff members is always a challenge. While there is never a shortage of people looking for jobs, the goal for Baughman has been to find those people who truly want careers in the auto industry. Luckily, turnover at the dealerships has been relatively low, allowing management to concentrate more on developing its employees, rather than continually having to train new ones. “We have some long, long-term employees who have been here since day one,” he said. “Our senior staff and our sales staff have all been here for a long time.”

Baughman attributes the longevity of the employees to the company’s family-like culture. That same atmosphere is also what keeps the buyers coming. “Customers have mentioned to us that it’s very welcoming here. Everybody’s very happy and smiling and ready to be of assistance,” he said.

“Honda and Acura have made it really easy for the stores to be successful from a product standpoint, so it has been my goal to make sure that we have the absolute best employees, and that they are guided by a strong set of processes,”

One of his favorite Steve Jobs’ quotes is, “Innovation distinguishes between a leader and a follower,” and for Baughman, leading the pack is his main objective. “I feel it is important that everyone be fluid enough to adapt to new technologies, new market trends. I am an extremely competitive person, and when I am presented with a challenge, I look at it as an opportunity to excel.

“I think the biggest issue in our industry is that new car dealers are traditionally slow to adapt to changing trends. This isn’t the same marketplace we had back in 1977. We all joke about it, but in those days customers would literally follow the transport truck to the store and say, ‘I want that one.’ Today it’s different. The customers are informed, and empowered with information and technology that makes the ‘old school’ car business obsolete.”

A quick review of the many video testimonials on the company’s website and on YouTube supports that claim. One customer drove 350 miles to buy a car from Sunset Honda. Mrs. Honda (yes, that is her name) purchased her first Honda from Sunset 19 years ago, while another customer raves about how the service department has kept her car running smoothly even with an odometer reading of almost 300,000 miles.

“It’s easy to get your customers to do video testimonials as long as you make it easy for them,” said Baughman. “They are typically happy to do it. We have a few employees who are very into video – I think it sets us apart from other stores and it puts customers at ease knowing their shopping experience is going to be a pleasant one.”

The store also incorporates videos into the sales process with salespeople sending personalized video greetings to potential customers. This not only allows them to put a smiling face with a name, but also gives them the opportunity to share additional information about the dealership and the vehicles that the customer is considering.

“Again, the key to a successful process is transparency,” said Baughman. “You have to be able to justify price by providing exceptional value. We have all paid more for good service, and been happy to do so. This is no different in our industry.” CBT

BY THE NUMBERS • • • • •

Dealerships: Sunset Honda and Gold Coast Acura Employees: about 100 Brands Represented: Honda, Acura Sales Volume: 1,750 new; 1,150 used units annually, $60 million gross sales Inventory: 350

August CAR BIZ TODAY

CBTNews.com

21

DEALERS CAN BENEFIT FROM

FLAT-FEE

LENDING A GLIMPSE INTO WHAT A POST-RESERVE PROCESS MIGHT LOOK LIKE, AND WHY IT COULD MAKE LENDERS AND DEALERS MUCH MORE EFFICIENT AND PROFITABLE

By Pete MacInnis

T

Changes in a Post-Reserve World

he Consumer Financial Protection Bureau is pressuring to eliminate dealer finance participation, and wants lenders to move to flat-fee payments to prevent potential discriminatory lending. Hardly a newsflash. But over this last year of very loud saber rattling on both sides, all of the focus has been on how this will impact dealers’ wallets. Almost no attention has been paid to what the end of the dealer-reserve model would logically mean for the current sales and financing process – on both the dealer and lender side.

Now look at key ways that the dealer financing process would be forced to change if the CFPB acts.

1. The Financing Piece Has to Move Up In a post-reserve world, one major change would be the way that dealers currently negotiate finance terms, monthly payments and interest rates. Negotiations without lender involvement would no longer be possible. The lender interest “buy rate” would have to become the same as the consumer contract interest rate/ APR. Dealers would need to nail down the lender and final approval terms before contracting with the consumer. If they didn’t, they would be hit with an impossible storm of purchase contract rewrites, unwinds and reduced profit.

I want to offer a little clear-headed “thinking through” – shut out all the noise, and rationally consider what nixing dealer reserve would mean, at the most basic levels, for the current sales process. We need to perform these thought experiments to be prepared if the CFPB does act – and also to consider how financing could be improved even if they don’t.

The Current Dealer-ReserveFocused Financing Model Everyone knows that consumers are forced to trudge through time-consuming stages of the sales process – from test-drive, to negotiation, to the final stop – F&I. And when they hit F&I, because of the dealer-reserve model, this is the drill: managers set finance terms and annual percentage rates (APRs) based on educated guesswork. They look at the customer’s credit history, and then whip through their pile of lender rate sheets, and set terms without any involvement on the part of lenders. And without true knowledge of lenders’ real, precise terms and credit policies – which are so complex that no human could master the ins-and-outs of them all. Then, given the entrenched loan aggregator model, they spray and pray these terms to lenders, sitting back and waiting for lenders’ “black boxes” – where real pricing and credit policies are locked up – to return terms that deliver the most profitable “buy rate.” The profits, of course, lie in the gap between the lender’s approved interest rate and the APR at which the finance manager wrote the purchase.

That means that the financing component would have to move right up to the point of sale, whether online with credit application platforms that return real loan terms and approvals, or at the start of the process in the dealership. It would mean goodbye to the traditional system of interest rate guesswork and all the loan application back-and-forth now happening at the end of the sales process. For a dealer to structure a profitable finance deal, lender-approval terms must be known, done, locked up and transparent at the get-go.

•

A significant percentage of deals either unwind or have to be completely rewritten.

•

According to a field study by The Rikess Group and reported in “Automotive News,” the back-and-forth in F&I is a key contributor to the average four-hour sales and financing process at dealerships.

•

The Cost of ‘Now’ Because “that’s the way it’s done,” dealers don’t really consider what this back-and-forth, shot-gunning of guesswork-based loans really costs them – and their customers and lender partners.

22

CBTNews.com

CAR BIZ TODAY August

•

Lenders are forced to process all applications, when only a percentage match their loan programs and are funded.

Upfront transparency into approval and funding decisions is virtually impossible, so investigations into discrimination always remain a threat.

Dealerships, of course, provide very, very important services – for consumers and lenders – in auto financing, and in a post-reserve world they will still profit. If new regulations happen, we might see profits on loans getting front-loaded for dealers – but based on amount financed, not the customer’s credit qualifications.

2. The End of the Four-Hour Process Top dealer consultants like Grant Cardone have recently argued that the amount of time being wasted on a car sale has to be tackled, because people don’t even want to come into the showroom anymore.

Well, if the CFPB eliminated dealer reserve, and final loan terms have to be in place at the point of sale, the sales and financing process would naturally shorten.

The process would be rationalized, and sales and financing would be more integrated, shaving hours off the current process. That would make consumers very happy – and dealers far more efficient.

3. New Technologies Needed If the CFPB acts, dealers and lenders will need new technologies and processes, if they want to be able to execute on bringing final, approved loan terms up front – and if they want to be able to show transparently and easily that each funding decision was discrimination-free.

We will need new ideas such as industry-neutral loan decision “engines” that can bring real, final financing decisions and terms to the front of the sales process, either online or at a dealer kiosk. This can only happen if such a technology platform allowed all lenders to input their exact credit programs and loan rules terms into the engine. Such an engine could then match all the lender data to the consumer’s credit file, selected vehicle and vehicle price to generate real, final terms of approval, displayed to the dealer or consumer instantly.

And it would be able to provide complete transparency into funding decisions, because it could program loan underwriting guidelines for each lender consistently.

That means dealers and lenders would be able to show the CFPB a clear audit trail on every decision – always and easily. That would get the compliance and discrimination-charge monkey off their backs for good.

A digital platform like this – with lender program integration at its core – could transform auto financing. It could take the whole sales and financing process to under an hour. Costly loan rewrites and unwinds would be eliminated. Lenders would only incur costs for credit applications they’re likely to fund. And it would provide the only logical, manageable compliance protection, if new regulations hit.

4. Transparency Finally Swings in Dealers’ Favor There’s much talk about how online car buying has brought a new era of “transparency.” But all of that transparency is now in the consumer’s favor. Stealth online car shoppers get to know everything about the vehicle, the price and the dealer, but they hide behind a virtual cloak of anonymity. If they fill out a lead form, dealers have to endlessly follow up to find out whether they actually want to buy a car, or if they can afford to, at all. But in a world where financing has to move up to the starting gate, transparency is going to swing wildly in the dealer’s favor. Dealers will know everything they need know about that shopper early in the process: who’s worth the effort – to which people they can actually sell. That’s powerful.

This exercise in “thinking through” how the current sales and financing process works – and how it would necessarily change if the CFPB acted – shines some light on what would be needed in a post-reserve world. But it also illuminates how irrational the current process is. And how, at some very fundamental level, a post-reserve model would ultimately benefit dealers.

We need more honest discussions of where we really are with dealer financing. Not only where the CFPB could make us go, but what processes and technologies could make lenders and dealers much more efficient and profitable, no matter what the CFPB says. CBT

Pete Maclnnis

Founder and CEO of E-Lend Solutions

To see more from Pete MacInnis visit CBTNews.com

August CAR BIZ TODAY

CBTNews.com

23

WHY THE RIGHT

AUTOMOTIVE DIGITAL MARKETING EDUCATION

IS NEEDED TODAY

By Glenn Pasch

Fact: 80 to 90 percent of shoppers go online before contacting a dealership.

Fact: A dealership’s online presence is now the most important marketing initiative.

Fact: Digital marketing spending is now increasing as a portion of total marketing budgets.

Fact: Dealer principals and GMs dread conversations about digital marketing.

SEO, SEM, video pre-roll, AdWords analytics, optimization, rich snippets – the names go on and on.

Digital marketing terms send a chill down the spines of many dealerships’ upper management. To many it is like taking medicine. You know you have to take it, that it will help you in the long run but you are sure it is going to taste bad.

What I have found is that the fear manifests itself into a few situations. One is there is no investment in training staff on digital marketing. They assign the job to someone – even if they may not be the most qualified – and hope that their efforts drive results. And two, there is an investment in training for their team but the leaders themselves do not participate.

Why would owners be willing to spend money on something they do not understand or fully control? My finding is that to many, the fear of engaging with digital marketing makes owners feel that they have to change the way they have run their business in the past and that, in turn, makes them feel obsolete.

There have been educational initiatives in the automotive digital marketing industry to help alleviate

this problem but many times the education does more to compound the fear. The presentations leaders sit through are not thought out to show how to bridge past experience to today. Instead, the presenter may throw around the catch phrases or an abbreviation listed above, as if everyone is at their level of comfort with the topic.

HOW TO MAKE DIGITAL MARKETING EDUCATION MORE EFFECTIVE

1

Dealership leaders must engage with someone who is willing to help make sense of this new advertising medium. This person or company must have the ability to bridge the gap of past knowledge to today’s tools.I have put together some examples in this graphic (below). What this graphic shows is how tools and strategies that were used in the past have a counterpart in today’s online medium. For example, in the past, a company may have advertised in the Yellow Pages. Today they would use Google My Business. Who is helping dealers bridge this gap?

Let me share a story. My company was teaching an automotive digital marketing workshop to a group of dealers. We were discussing video pre-roll, which are the short video advertisements that are seen before you watch videos online. An older gentleman who is a very successful dealer pulled me aside to ask me more about video pre-roll. I took the time to ask him if he used cable TV to run ads. He said, “Yes because people watch cable.” I said to him, “Video pre-roll is the way to run your ads to the people who watch their TV or video online. Could you see how this could be effective?”

He smiled and within minutes was telling everyone he was going to do video pre-roll because I was the first person to make him understand what it was in terms

he understood. That, to me, is what digital marketing education should do for the attendees: Bridge the gap from past to present, not intimidate or confuse.

2

Find a curriculum or set of classes that have a unified digital vision. This is important because if an owner goes to an automotive digital marketing conference, they may run across workshops with differing viewpoints. For example, one presenter may love Facebook advertising and another tells the audience it is a waste of time. What is the dealer or GM to believe?

My advice is to look for specific educational workshops that are designed for the automotive industry, if possible. I would investigate their worth the same way an owner does their due diligence about hiring a new vendor. Check reviews, ask others you respect and then make sure you ask specific questions about how the educators will help you implement the training.

Teaching something is one thing but not many help you implement the training.

WHY IS THIS IMPORTANT? Online marketing is not going away. Dealers need to understand how to maximize their marketing dollars in this new medium. More importantly they have to understand the metrics they will be reviewing, as well as how to manage the marketing roles and responsibilities of others in their company.

Finding the right educational courses and trainers can make the difference between long-term success for a company, or losing market share to competitors. There are a few options out there for this type of training in the automotive industry. Do your due diligence so you can invest in the right automotive digital marketing education for your team and then receive the help to use it correctly. CBT

UNDERSTANDING THE DIGITAL PARALLELS Television = Youtube, Hulu Or Netflix Valpak Coupons = Groupon Sears Catalog = Amazon TV Ads = Online Video Pre-Roll Ads Six O’clock News = Twitter Life Magazine = Pinterest Radio Station = Pandora Hanging Out With Friends = Facebook Encyclopedia = Wikipedia

International Calling Card = Skype Rolodex = Linkedin Billboard Advertising = Display Advertising Yellow Pages = Google My Business Storefront = Website Business Card Organizers = CRM Beepers = Text Messaging Consumer Reports Magazine = Online Peer Reviews Postcards = Instagram

Glenn Pasch CEO of PCG Digital Marketing

To see more from Glenn Pasch visit CBTNews.com 24

CBTNews.com

CAR BIZ TODAY August

Thinking of

MAKING A CHANGE? POST. SEARCH. CONNECT. SUCCEED. Whether you’re a dealer looking for a new General Manager to run your store or a General Manager looking for a new store to run for a dealer, CBTCARJOBS.com has the most comprehensive listing of available positions and candidates in the retail automotive industry.

We have thousands of positions in all areas of the dealership including General Manager, General Sales Manager, Fixed Ops Manager, Service Manager, Parts Manager, Counter Personnel, Salespeople, F & I Managers, BDC Managers, Internet Managers, Comptrollers, Tag and Title Specialists, and much more.

VISIT US TODAY

GRANT CARDONE

JOE VERDE

CBTCARJOBS.COM

MARK TEWART

JEFF COWAN

ACCESS OVER 1,000 AUTOMOTIVE JOBS

Tune in every Saturday morning Saturday Morning Sales Meeting airs every Saturday featuring the biggest names in automotive sales training. There is no better way to start your Saturday Sales Meeting! Gather your sales team and tune in each Saturday for a great start to your weekend and have the best Saturday ever!

ANDERSON

DAVE

DAVID LEWIS

JEFF HAVENS

JACK DALY

DAVID KAIN

CORY MOSLEY

ROB ‘WALDO’ WALDMAN

RICHARD KEENEY

with

VIDEO TESTIMONIALS

By Dennis Galbraith

I

n the quest to earn consumer trust, video testimonials on the dealer’s website provide a significant boost. Within the U.S., the use of testimonials in marketing dates back more than 150 years. The Internet provides new, more cost-effective methods of delivering testimonials to shoppers at an opportune time. Better yet, video provides a superior method for delivering testimonials and earning shopper trust.

Some may view the use of testimonials in marketing promotions as having a bit of a black eye. This view is easily excused, due to infamous abuse over the years.

Nonetheless, the practice can still work when implemented properly. Knowing others have abused the use of testimonials is forewarning enough; marketers must be clear and transparent when using testimonials. Several methods with more than a century of success can still work for auto

dealers today. Many buyers don’t provide testimonials simply because they have difficulty stringing together even a few sentences that would benefit future shoppers.

Fortunately, video testimonials often originate in the dealership, giving the dealer an opportunity to suggest an angle for the customer.

The Before and After The use of before and after testimonies remains as effective today as it was for strongmen and bodybuilders, such as Charles Atlas, a hundred years ago. Testimonials often established both credibility and emotional appeal by telling the story of a rapid transition. Pictures often help tell the story especially when delivering before and after testimonials.

Today, dealerships can help families show how they used to fit in the vehicle they are trading in and how they fit now in their new vehicle. Individuals and couples can show the transition in their lifestyle or appearance. This is especially effective when the customer is changing vehicle styles – from a sedan to a convertible or from a utilitarian vehicle to a sports car or luxury vehicle. Parents often shop without their children, leaving an opportunity for them to demonstrate the new vehicle advantage to their children and other family members in the video. Viewers quickly pick up on the benefit of being perceived as a better parent. Suggesting angles like these can encourage buyers to go on video and feel confident they will not come across as merely a tool with flowery words.

26

CBTNews.com

CAR BIZ TODAY August

The Experience The before and after angle is no good for loyal shoppers buying a newer version of the same vehicle they trade in. However, these situations make the buyers something of an expert. “This is my third Camry” or “I’ve driven F-150s for 20 years” make the buyer an instant expert passing their knowledge on to the next group of shoppers. Owners merely need to say what it is that keeps them coming back.

Some shoppers develop affection toward their vehicle.

Many people will find it easy to talk about the wonderful experiences they had in their old vehicle that is simply too old to continue providing that kind of joy.

The closing line is how much they are looking forward to getting back to those old joys and developing the next ones in their new vehicle from your dealership.

photos and images, that may be the most comforting part of the process for the customer. Talking about their worries about getting ripped off, then the relief of getting full transparency about the problem can be a wonderful angle.

Don’t try to talk the shopper into taking more than one angle in their testimonial. A single point has value, and searching for that one great testimonial that pushes every shopper’s buy button is pointless. In most cases, lots of short testimonials from various people deliver more credibility than any one person can.

enhancement to conversion rates. One test noted on MarketingExperiments.com showed a 25-percent increase in conversion using text testimonials and a comparable 201-percent increase using video testimonials.

The Placement Placement of the testimonial turns out to be a key factor in its ability to impact conversion. Placing testimonials where they can alleviate anxiety is a technique that works. Sure, some shoppers will seek out testimonials, and they should be accessible from the home page. However, the increasing use of long-tail searches increases the incidence of vehicle details pages (VDP) being the first page seen by the shopper. This is also where the customer’s anxiety is elevated. Generally, the VDP is where the transition between anonymously shopping online and making that first human contact with someone at the store is made. Placing both video and text testimonials on the VDPs is not new.

“Some shoppers develop It may seem curious that all of these suggestions have been about the vehicle and how it will enhance the lives of the new owners. None of affection toward their these testimonials has been about the deal or the service level of the dealership. If that’s something your customer wants to talk vehicle. Many people will find about or add, then that is fine. However, the car is the star. There may be people it easy to talk about the wonderful who go into Nordstrom more to be pampered than to obtain the benefits of a new pair of shoes. Frankly, that is generally experiences they had in their old not the case with $30,000 automobiles. vehicle that is simply too old Your great customer service is implied and is seen in the smiles to continue providing that on your customers’ faces as they talk about how much better their life is kind of joy.”

In summary, get more video testimonials from your customers and show them in key places, like the VDP. If customers are hesitant, suggest a topic about the vehicle that would be right for them, like before and after or previous experience with the brand or model. Don’t pressure them to talk about the deal or the friendliness.

The objective is to build trust. If it’s not natural for the buyer, future shoppers will see it, hear it and swear they can even smell it from the other side of their phone, tablet or monitor. CBT

Dennis Galbraith CMO at Dealer E-Process

going to be in their new vehicle.

The Service

Service testimonials follow a somewhat different approach. Customers can talk about how much better the vehicle sounds, looks or rides. However, service is usually a negative eliminator rather than a positive provider. They can talk about how much less the service cost compared to what they thought it was going to cost. If the store is using a mobile app that allows car dealerships to visually explain car repairs with

The Text There is still room for text testimonials. Some customers are far more comfortable communicating in this way, and some shoppers prefer to read text or are not in a location where they can expose the audio. However, every piece of research I’ve found comparing text and video testimonials online show video to be a greater

To see more from Dennis Galbraith visit CBTNews.com

TIPS FOR VIDEO TAPING CUSTOMER TESTIMONIALS • Find a location where you can control light and sound, minimizing any glare or background noise.

• Have a background that presents the store well but does not camouflage the customer– They are the subject.

• Use the vehicle if it fits well with the testimonial. The customer may be in front of the vehicle, inside it, or whatever fits best with what they are going to talk about.

• Include as much of the family as possible, especially if the testimonial is about enhancing quality of life for the family.

• Don’t be afraid to use motion if it can be seen well and adds to the message. Keep motion limited to the people and the doors, seats and features of the vehicle relevant to the message. For safety reasons, don’t have the vehicle moving.

• Videos can be done from a mobile phone. The quality won’t be fantastic, but it can be better than text.

August CAR BIZ TODAY

CBTNews.com

27

CELL PHONES

, BRAIN TUMORS

and Rudeness

By Jeff Cowan

E

very once in a while the old, tired debate of whether cell phones cause brain tumors or not arises. It usually ends with two sides split; one saying they have proof that they do while the other says they have proof that they don’t. Personally, I can tell you I do not know who is right or wrong in this case. But one thing I do know is that cell phones do cause severe cases of rudeness.

I cannot believe how many people will stop in the middle of a sale, presentation, meeting or general conversation and either answer a cell phone call, read a text or respond to one.

In my mind, few things, if any, are ruder then when a person I am in a conversation with stops the conversation to look at their cell phone, let alone answer a call, read a text or respond to it. I am not alone in my feelings either. The next time you happen to be in public, take a look at anyone who is being ignored when the person they are with pays any attention to their cell phone. You will quickly see what I mean and be even more surprised at how easy these people are to find since ignoring those in front of us to respond to our cell phones has become an epidemic it would seem. And it should be easy to identify with these people since, chances are, you have felt the same way when someone did it to you.

I talk about this here because I am alarmed at how many times we witness this scenario playing out during our side-by-side training. It is something we see literally everyday all across the country. And few in the work place seem to be concerned about it.

If you are working with a customer and during that time you answer your cell phone, text or even look at your cell phone to see who is contacting you, here is the very least your customer will be thinking:

28

•

This salesperson is rude.

•

This salesperson is not interested in me.

•

This salesperson does not care about my concerns.

•

This person is too busy for my business.

CBTNews.com

CAR BIZ TODAY August

•

This salesperson is not organized.

•

This sales person or business is understaffed.

•

If I do not have their full attention when they are trying to sell me their product, how much of their attention will I have after they do?

•

I am in the wrong place.

•

If you want my business, I want your attention.

And you know what? I think they are justified in thinking this on all accounts. Because it is exactly how I feel when it happens to me.

As a matter of fact, when it happens to me these days, regardless of the level of meeting or conversation I am in, I simply exit the situation.

While having the best technology has to offer can be important, having and using it does not ,and never will, give us a license to be rude.

Besides, whenever you are working with a customer and you take your attention away from them, you are now allowing the customer to take control of the sell.

If you are not giving them your full attention, they will continue to examine your product and make decisions based on information they do not have because you were not there to give it to them.

And most of the time, their decision will be to not buy what you presented, but instead only to buy what they originally asked for if anything at all. Any time you take your attention away from the customer for any reason and allow them to consider your product without you there to guide them, your closing percentage will drop

off by 95 percent. Work the deal, customer or situation you have in front of you and you will experience infinitely more success. The person on the phone is a possibility – the one in front of you is reality.

I believe every business and salesperson should implement the following rule in regard to cell phones and cell phone usage: No cell phones allowed in any area that a customer might see you using it.

This is how far I have personally taken this. When going to a presentation, my phone is shut off and is in my briefcase until the end of the meeting and I am out of my customer’s sight. It has even carried over to my home. No cell phones at the dinner table or during other family events.

The bottom line is it’s time to stop being rude to the people that mean the most to us – family, friends and customers – and start appreciating and taking care of what is right in front of us. After all, isn’t that where most of the things we seek are? Right in front of us? CBT

Jeff Cowan

President of Jeff Cowan’s Pro Talk Inc.

To see more from Jeff Cowan visit CBTNews.com

JOE VERDE

The #1 Training Company In The Car Business in Real life...

Who’s Your Competition?

JVTN – ONliNE TRaiNiNg ®

W

Your Best Tool For In-Dealership Sales Training

hat is JVTN®? It’s simply the most powerful virtual automotive sales training in the world!

What would Joe Verde teach our salespeople?

The complete sales process...

How to sell a car today. No salesperson will be left behind, not knowing what to say or do when they get a customer.

Word for word – we’ll show them what to say from the greeting to the delivery!

How to close the sale, overcome objections and bypass price on the lot. We teach your salespeople the words and processes to handle every objection, including price, that comes up during the sale, closing and the negotiation.

How to build your business by phone / internet. Phones ring and leads come in daily, so we teach salespeople the complete processes of taking calls and leads and making outgoing contacts, to turn more lost sales into be-backs and more contacts into appointments that show.

How to follow up, prospect and retain your customers forever.

Again, word for word on everything they need to say and do to build your future business. JVTN® even includes a powerful, easy to use mini-CRM built just for salespeople.

JVTN® – The Easy Way To Grow Sales

How much time do NFL, NHL & NBA teams practice before games?

The players are in the top .001% in their profession, and yet don’t those multimillion dollar pros still spend most of their careers practicing? Without daily practice would the pros...

How would JVTN benefit your dealership?

That’s easy ... you’ll make more sales & more money! ®

n More floor traffic at no extra expense n Put more internet & phone leads on the lot n Sell more units every month

❑ Win more games?

– or – ❑ Lose more games?

n Definitely improve your gross per unit n Lower your turnover in sales

JVTN® is the only Automotive Online Sales Training with...

Your competition is not the dealership down the street!

Your competition is the selling team at the dealership down the street, led by the coaching staff at that dealership.

Just like pro athletes, you’re only competing with the skills of the salespeople and managers your customers will run into – their professionalism, presentation and selling skills, their ability to close the sale, overcome objections and their follow up and prospecting skills.

In real life you’re competing with the management team, their training, coaching and their daily sales management skills at that other dealership – not the dealership, their pricing or selection.

Want to win more often?

Then just tune up your hiring, training, tracking, motivating, leadership, coaching and daily sales ‘activity’ management skills. You’re competing with those other dealership management teams every day.

n Role Play Games and Timed Practice Sessions n Dedicated staff of Certified JV Training Coaches to help your team develop their skills n Training & Performance based Certification to turn your training videos into skills n Mini-CRM built just for JVTN® Subscribers – Joe's Virtual Sales Assistant® (VSA® )

Call now for a free JVTN® tour • 1-888-712-6647

The game is on and...

The Best Managers will win!

Want The Keys To Success?

Get Joe’s 3 Books – FREE! Are You Looking For A Job Or A Profession?

Selling cars offers more potential income and satisfaction than almost any other profession – if you do it right.

Are You Ready To Earn Over $100,000 A Year?

1. Is selling right for you?

•

Do you like cars? How about talking to people about cars?

•

Would you rather be outside more than being in an office all day?

•

Would you enjoy helping people make big decisions – like buying a car?

•

Are you willing to continually learn more, so you can improve in sales?

•

Would you like to create your own income level – with no limits?

•

Is financial security important to you and your family?

•

Would you like to be able to find a good job in any community, anytime?

2. Are you ready to develop a career in sales?

Selling cars can be one of the most satisfying and most rewarding careers you could ever choose. As a profession, sales offers a truly unlimited income, and automobile sales offers you unlimited opportunity. Why? Because everybody has a vehicle, and all of us will be buying even more of them throughout our lives.

3. Are you ready to join the top 5% of the population who earn over $100,000 a year?

Lead your team and grow your dealership with JVTN® in 2014!

That’s right, you can earn over $100,000 a year selling cars and I’ll show you how in this book. Is it easy? It’s very easy when you have the right training and a workable plan. Follow my directions and you’ll develop the selling skills and the success skills to earn the kind of money you’re looking for.

If you’re serious about becoming a pro in sales, read this book and get ready to earn over $100,000 selling cars – your very first year.

JOEVERDE.COM 1-800-445-6217 $19.95 USA ISBN#: 978-1-4507-5568-9

SC – 12351

Joe Verde Workshops Sales Workshops

Management Workshops

n How To Sell A Car & Close The Sale “Let’s see if they work out first.”

Really! Train to stop losing sales & $

n Team Leadership This is the critical class managers never got on “Sales Management”

n How To Close The Sale, Overcome Objections & Negotiate Advanced Closing – Objection Handling – Advanced Negotiation

n Negotiating & Desking Develop a ‘1 Price’ mentality today: STICKER ... (it’s easier than you think)

n Business Development Phone is ringing & email arrived; learn to turn ‘em into deliveries

n Train The Trainer You train to improve & grow. If you don’t train, you don’t & you don’t

“My units and gross improved 60%!”

“I went from 14 to 25 units!”

“After selling cars for 5 years, I went to Joe’s 2-Day Sales Course and realized I had been doing so many things wrong that I was lucky to have the business I did have. After the workshop, I focused on building value and following each step of the sale. My units and gross per deal quickly improved by 60%.

I’ve since been promoted to Sales Manager, I’m training my staff on JVTN® each day and my superiors couldn’t be more pleased with our performance. Thanks Joe!” – Craig Runshe, Sales Manager, Hubbard GM, Monticello, IN

JOE VERDE

Earn Over $100,000 Selling Cars – Every Year

Did your previous career go south? Are you getting out of the service and ready for a new career? Are you already in sales, but not earning as much as you wish you could?

For Automotive Sales Professionals

Earn Over

$100,000 $100 000 Earn Over

Selling Cars Every Year

JOE VERDE

Make Your Good Times Great!

For Salespeople: Read this book and understand your potential in sales

Get Ready For A Record Year!

For Salespeople: Follow my directions to achieve your goals and your potential

Guarantee Your Growth!

For Dealers: Read this and understand your dealership’s true potential

Make This A Record Year!

Call Us 1-888-712-6647

TAKE ADVANTAGE

OF CURRENT TRENDS TO

BOOST BUSINESS

By Grant Cardone

C

ar buyers seem to be doing whatever it takes to buy a car or truck these days.

While other industries remain stagnant, the automobile industry is on fire. The estimate for new-car purchases is approximately 16 million over the curb. While the American consumer is still tight on electronics, appliances, furnishing and remodeling, they are buying cars and even more are leasing them.

Some trends are happening at dealerships that auto dealers, sales people, managers and finance people need to know to maximize every opportunity.

Loan Terms Loan terms reached record highs of 66 months for the first time with loan terms of 73–84 months growing by 27.6 percent. Is your finance manager offering longer-term options? When he gets an objection to term is he mentioning this trend? If no to either of these questions, they are missing opportunities.

30

CBTNews.com

CAR BIZ TODAY August

Experian Automotive has been reporting on automotive consumer activity since 2006 and you should be using that data in sales meetings. Another example that can help you is the knowledge that loan terms in the first quarter of 2014 reached the highest level since the company began publicly reporting. Almost a full 25 percent of all new vehicle loans in the first quarter were 73-84 months.

While term lengthened, the average amount financed increased on a new vehicle loan to an all-time high of $27,612, up almost $1,000 from the previous year.

This put more stress on an already weary budget with average monthly payments reaching their highest point on record to $474 up almost a full $20. Used-car payments were $353 up about $4.Do your people have the facts in order to get those extra deals? And do they know how to use information? If not, you might want to consider using an interactive web-based platform that provides your sales manager material to educate your sales team and inspire them to be more effective with your customers.

Leasing Consumers are aggressively embracing leasing as an alternative to owning. You don’t need to sell a lease anymore; you just need to show the option. Thirty percent of all vehicles were leased, and I believe you should set your target at 50 percent of all delivered.

The trend in America is to use products – not own them – and this includes cars. Seventy-five million millennials have less interest in ownership than any other generation to date. Talk to a 25-year-old about residual values and their eyes will glaze over.

Payments vs. Price Any dealership that avoids talking about price is not paying attention to the tea leaves. Price does not matter – payments do. If your sales team is still having difficulty with price or trade objections, they are clearly not taking advantage of the indisputable evidence that “the American consumer is more focused on payments and terms than on price.” There is no reason to move to one-price scenarios because the buyer isn’t buying the car – they are making installments.

Your buyer is on a fast track to transitioning to longer term, higher payments, higher interest rates and has almost a complete transformation with how they view leasing versus owning.

Whether the buyer comes through your website, your phones or in person, you should be able to control the process with every buyer, every time. By utilizing the right technology, you can revolutionize the customer experience by shortening the sales process, improving conversions on mobile and from your website while increasing closing ratios and gross profits.

Provide your people with the information and technology so they can better handle your customer and take advantage of the boom and the changing trends in the automotive business. CBT

Grant Cardone

Entrepreneur and New York Times best-selling author

Mobile Technology Research shows that consumers are shopping on their mobile phones but are unable to close there. In fact, only 1 percent of mobile shoppers actually close on their mobile devices (See graph below).

To see more from Grant Cardone visit CBTNews.com

Credit Scores Despite a drop in the average credit score – 714 down from 722 last year – credit is still granted. Someone wants these cars on the road even if it means a little more risk for the people putting the money out. This held true for leasing as well, with average credit score of 721 down a full ten points from the first quarter of 2013.

CURRENT TRENDS Average Term 66 Months

Average Payment $474

Loan Amount $27,612

73-84 Months 25% of All Loans

Leased 30.2%

August CAR BIZ TODAY

CBTNews.com

31

CREATE

Right

the

By Rich Holland

I

n business, the customer experience can be the difference between failure, success and outright fanaticism.

Countless articles have been written about things that leading companies, such as Disney, Apple and Nordstrom, do on a daily basis to ensure that customers return. Disney, in fact, reports that a theme-park guest who has a bad experience solved on the spot, is more likely to return than a guest who has a great experience. Considering they already enjoy a phenomenal 70-percent retention rate, that is an incredible feat.

Customers patronize companies such as Apple and Disney with the full expectation of receiving a great customer experience. However, the majority of car shoppers don’t enter car dealerships with this expectation. The good news is this presents an excellent opportunity for dealerships to turn those customers into loyal advocates. But many times, dealership managers feel that achieving anything close to this type of experience and loyalty just isn’t possible.

While most want their customers to have a great experience, they, sadly, might lack the right policies in place to cultivate it.

Every dealership already has a certain type of customer experience, which is dictated daily by every customer interaction. It is customer perception and experience that determine how customers feel about doing business with you, whether they return, and how likely they are to share that experience with family and friends. Just like any business, there are employees who go above and beyond for customers.

Then there are those employees whose goal is to simply punch a time clock. The road to creating a great customer experience relies on consistency among all employees. Customer experiences can be wildly different – not just for each individual customer, but also for the same customer during different visits. And that is completely dependent upon your employees.

Commit to Customer Retention Service and sales revenue growth are dependent on customer retention. There is far more profit potential with existing customers than in customer acquisition. By focusing on creating an excellent customer experience, retention rates tend to increase and complement new customer acquisition efforts. This decrease in customer churn allows businesses to grow without constantly having to focus on finding new customers to replace lost ones.

32

CBTNews.com

CAR BIZ TODAY August

Customer Experience

Create Customer-Service Policies Create and implement customer-service policies for every employee of the dealership. Address how management expects employees to interact with customers and what they are empowered to do when confronted with a customer issue. Stress that it is mandatory to bring in a manager whenever an employee is unable to resolve the issue quickly for the customer. Communicate these expectations clearly to employees and make sure that they are strictly enforced. Additionally, when employees demonstrate exceptional service, positive reinforcement and recognition should be delivered. This serves to encourage positive future behavior and to set an example for other employees.

Focus on Attitude When Hiring Engaged employees begin with positive attitudes.

When hiring and recruiting new team members, look for a positive attitude. It’s all too common to see different companies focus on opposite attributes when hiring. There are dealers who like to hire experienced veterans, thinking that they will provide instant production with little training. Then there are dealers who like to hire employees with no automotive experience, believing that any built-in bad habits will be avoided. Either way, successful companies find that the most important attribute in a new employee is a positive attitude.

Provide the Infrastructure for Employee Success Technology has transformed the world in which we live. Updating your dealership’s capabilities and providing employees with the technology needed to communicate with and quickly provide service and information to your customers are imperative.

Technology makes processes more efficient and assists your employees in providing a better experience.

Communication is key. This includes communication not only between dealership and customer, but also interdepartmental. Don’t make it a chore for sales to figure out the status of an item on a due bill or for a service advisor to report the status of a vehicle repair. Adopt processes and technology that allow instant access to information, and make it available for employees in a way that doesn’t require any wandering around the dealership looking for an answer. In this way, a lot of frustration can be avoided for both the employee and the customer.

Make Emotional Connections with Customers The easiest way to accomplish this is through an emphasis on personalization. People like to spend money at places where there is a respectful and cheerful greeting – where they are greeted by name. Employee engagement and retention will go a long way towards

making customers feel special and welcomed. As there are so many customers in the dealership on a daily basis, it won’t always be possible to accomplish.

However, the more often you are able to do this, the more emotionally-invested and loyal your customers will become.

Each and every business has its own personality and is in a unique position to differentiate itself from the competition. Knowing how your customers perceive you is half the battle. Once you decide how you want to be perceived, you can take steps to implement strategies and policies designed to retake ownership of your customer experience and create the one you want your customers to have. CBT

Rich Holland Managing Director of AutoPoint

To see more from Rich Holland visit CBTNews.com

SWITCH CUSTOMERS

&

By Joe Verde

N

o matter what area of the dealership you look at – marketing, advertising, selling (closing ratios), gross profit, service revenue or customer satisfaction – repeat customers trump walk-ins, leads you buy, web leads and incoming calls.

Repeat customer traffic closes at 70 percent or more and pays 40 percent more than any new customer.

It gets even better because you have almost no expense in generating these extra sales and higher gross profit. They pay more because they already know, like and trust that you’re a good dealership from which to purchase, and your expense drops from $500 per sale in advertising, etc., to $25 to $50 per unit, with a continuous retention process by your salespeople.

That means you sell more units with higher gross and with no added expense. To see that in numbers – look at the typical 100-unit dealership with $2,500 gross front and back that spends $40,000 a month on advertising – or more in today’s market.

The typical breakdown of sales is 70 percent from high-expense, low-gross, tough-toclose walk-ins and only 30 percent from low-expense, high-gross, easy-to-close repeat, referral and dealership customers (service - parts - and employees).

Now: 100 units x $2,500 = $250,000 in gross profit.

If this is your 100-unit dealership, you end up with a $2,500 average per unit because 70 percent of new sales come in lower at $2,232 and 30 repeat and referral come in 40 percent higher at $3,125.

$156,250 (70 percent) from walk-ins (low-gross) + $ 93,750 (30 percent) from high-gross customers = $250,000 ÷ 100 units = $2,500 average If you had been focusing on building your repeat business over the years instead of just advertising and were selling 100 units with 70 percent of your sales from highgross customers and only 30 percent from walk-ins, the numbers would look like this instead:

70 rep/ref units @ $3,125 = $218,750 30 walk-in units @ $2,232 = $ 66,964 Total Gross = $285,714 BENEFIT #1

With no extra expense to generate the extra $35,714 in gross, 60 percent of the extra, $21,428 per month, would become net profit. That’s $257,136 more net profit per year.

BENEFIT #2

Your cost per sale drops from $400 or $500 per unit in ads, etc., to generate new sales, to plus or minus $50 per unit to retain those customers. You save $450 per unit on 40 more repeat sales. That’s another $18,000 per month and $216,000 per year, all of which is 100-percent bottom-line savings – pure profit.

BENEFIT #3

Gross improvement + savings ...$644,568 ... per year.

Annual benefit ...$473,136 ...in extra net profit per year.

Added Benefit: You can count on repeat customers to keep buying even in a poor economy or if buying cycles lengthen. Why? Because someone in your repeat customer base is paying too much in maintenance and needs a car, has kids who are about to go to school and need a car, just wrecked their vehicle yesterday and needs a car, has a lease expiring this month and has to trade, or just wants a vehicle for no particular reason and they’ll be getting one just because they can.

Even if you sell 100 now and didn’t increase volume, you’d still be netting an extra $473,136 per year, with way less effort.

Just switch your thinking and your direction from trying to buy a new customer to keeping the ones you already have. If you focus 95 percent of your attention on training, coaching and managing your salespeople to learn to sell and build your repeat business, instead of 95 percent of your effort and money on advertising, you’ll not only pick up the extra money on the 100 units now, you’ll grow exponentially every single year.

We cheat. We do exactly what I’m talking about. In fact, we just had our 2014 kickoff meeting to celebrate the beginning of our 30th year in business, and our 27th record year. Our new average growth rate per year since day one is 51.3 percent per year – and we sure didn’t pull it off through advertising. We keep having record years because we’re the very best at everything we do and we retain our customers.

Over 90 percent of our business is with repeat and referral customers.

Most dealerships reading this don’t focus on the right customer because management doesn’t track where their business really comes from now. To plan growth, you have to accurately breakdown your total floor traffic (opportunities) by type of customer (walk-in, repeat, referral, be-back, service, phone and internet). Why? Because step No. 1 is seeing for yourself that the numbers I’m using are correct in your dealership.

Not even counting the repeat customer benefits discussed in this article, there’s a gold mine in your sales department just waiting to be tapped. By improving salespeople’s skills in the five areas which I write about in “Dealer’s Guide To Recovery & Growth,” units go up, gross goes up, you’ll bring in four times as many be-backs as you are now, and they’ll bring in dozens of extra sales through phone and internet appointments, prospecting and retention.

About 40 percent of the dealers and managers across the U.S. and Canada have read my book and are using it to help them solidly build their business today. If you didn’t get it or have it but didn’t read it – just know you’re competing with the dealerships in your market who have read it and are implementing what they’ve learned and are stealing your deals left and right.

I can’t imagine why anyone would put off reading a free book on how to improve sales and profits 20 percent to 30 percent overnight. It’s especially hard to imagine when your personal income is directly tied to that improvement. CBT

Repeat customers become service customers.

BENEFIT #4

Repeat customers are so much more fun to work with every day than price-shopping walk-ins and leads.

Joe Verde

President of Joe Verde Sales & Management Training, Inc. (JVSMT)

To see more from Joe Verde visit CBTNews.com August CAR BIZ TODAY

CBTNews.com

33

CAN YOU REALLY AFFORD A

W

REAL QUICK WRITE-UP

By Sally Whitesell e all think we know what clients want but do we really? Recently a good friend and client shared some interesting research regarding our service customers’ opinions. I find this research invaluable because it was conducted by Google instead of someone in the industry.

Between 200 and 2,000 people ages 18 to 44 were surveyed on many critical topics. The quotes and statistics completely contradict the perceptions of many advisors and illustrate the difference in today’s research-driven client.

Slow Down In working with advisors online and in stores, it is a challenge to get them to understand that their clients appreciate their taking a few minutes at the write-up to listen, reassure, perform a walk-around and go over preventative maintenance needs.

The advisors’ argument is,

“They are in a hurry,” or “they don’t want to hear anything until their car is fixed.”

We are basically telling our clients we are too busy to spend time with them. Then instead of taking the time to look at clients and practice active listening, advisors often multitask through the entire write-up. Does this sound familiar? Do you see it happening in your store?

CAR BIZ TODAY August

Clients will only buy from someone they like, trust and respect. None of these attributes can be built “real quick.” Therefore, it is imperative that you slow down and take the time needed to fully explain what is going on and why it needs to be addressed.

Some clients may actually be in a hurry to get somewhere but they are the minority. What are they in a hurry to do? Go wait for a shuttle, a loaner or, better yet, to sit in your waiting room? If your clients think your check-in process is to drop the keys and run out the door, it is usually because that is what we have trained them to do.

Quality Trumps Low Price

will be done right and is needed is even more important! If they can’t convince me, I will research it before I buy.”

Imagine yourself entering a business where everyone seems to be hurrying around and greets you with, “Someone will be with you in a second,” as they rush right past you. You may notice a few cars waiting in line for attention, and then when someone finally approaches, they use phrases such as, “I’ll get you taken care of real quick” or “This will only take a second.”

When we role-play or monitor advisors doing a walkaround, “real quick” is used approximately three to six times per customer. You may not have been in a hurry at all but you soon will be with this type of atmosphere spinning around you.

CBTNews.com

“I’d like it if they spent more time explaining things to me. I know they are busy but it would make me trust them more.”

not only wants proof – it is demanding it.

The study showed that 81 percent of drivers agreed that quality of service and a great customer experience are more important than a low price or a good deal. Setting the pace for “I want proof! I would like them to show me your check-in process is critical to your bottom line and starts when the client calls items needed and parts that need to be reto schedule it. It is time to make every cliplaced. A video or picture would also be helpent aware that they are valued and you are going to give them the time and attention ful. Promotions are huge but knowing the job they deserve every time they come in.

While I understand these concerns, they are misconceptions that are costing you a lot of money and customer satisfaction.

34

Two quotes from the research leave no doubt as to what our clients really want.

These statements alone validate how critical it is to perform a walk-around with the client beside you during the check-in. They want to see worn tires, dirty fluids, worn wiper blades, burned-out light bulbs etc., before they approve the work. It is not enough to tell customers they need to do something or it is time to do a service; instead, you need to have proof or direct their research so they are not going to the wrong places and getting bad information.

For example, when we teach advisors to sell tire maintenance we direct them to share with their clients that they can see all of the rotate, balance and alignment recommendations on their tire manufacturer’s website.

This statement lets clients know we are being honest and thorough in recommending the right services for their vehicle. Visual aids are a vital piece of the puzzle, too. Maintenance videos in the waiting area are very helpful but should be mixed in with regular programming so as not to bore them to death. This generation

They’re All The Same

Another critical piece of information from the research revealed “there is little differentiation among service brands” and “they are all basically the same. No one stands out as being good or bad.” Drivers tend to stay with one shop due to lack of differentiation among service providers rather than high satisfaction.

Those last statements really say it all – if the service in your store is fast yet not exceptional, then there really is no difference. They already know you can service their car, but will you do it with the right processes and strong communication skills that will wow your clients?

It’s time to give clients what they want; not just quick service but an exceptional experience. CBT

Sally Whitesell President of Sally Whitesell’s Service Solutions

To see more from Sally Whitesell go to CBTNews.com

CBTNEWS.COM IS THE ONLY DAILY NEWSCAST FOR THE RETAIL AUTOMOTIVE INDUSTRY. DELIVERING NEWS, INFORMATION, FEATURED STORIES, INTERVIEWS WITH TOP AUTO EXECUTIVES, SALES AND MANAGEMENT TRAINING, MARKETING IDEAS, AND MUCH MORE. GET CONNECTED, STAY INFORMED.

Joe Verde

Jeff Cowan

Grant Cardone

Jeff Dyke

John Elway

David Lewis

Mike Jackson

Joe Hinrichs

Mark Tewart

Mark Fields

Mary Barra

David Kain

Ali Amirrezvani

Mike Maroone

Phil Sura

Alan Mulally

Kirk Manzo

Scott Keogh

Cory Mosley

Dave Anderson

Scott Painter

Paul Potratz

‘IT’S THE APPOINTMENT,

STUPID’

Few presidential campaign slogans are as well remembered as James Carville’s “It’s the economy, stupid.” The phrase is still chopped up and used in a variety of contexts all these years later.

Political preferences aside, Carville was a cunning campaign manager. Part of his genius lay in a simplistic campaign vision for a then future President Clinton. To Carville, the election could be won with a narrow focus. He hung just three phrases in their campaign headquarters as an everyday reminder for the internal campaign workers. The “secret” got out and “It’s the economy, stupid” became the de facto slogan for the Clinton campaign, and thus, ingrained in the minds of the American people.

For dealers, it’s time to replace the word “ECONOMY” with “APPOINTMENT.”

What’s Your Economy?

Dealership leaders can learn a lot from Carville. Take a moment, look around, and ask, what is your dealership’s “economy”? What single area can you focus on to go from good to great? When it comes to the phone, the answer is simple: It’s the appointment.

Authors note: I have removed the word “stupid” as it does not accurately reflect how I feel about the audience.

The goal of every inbound sales call should be to sell the appointment – plain and simple. You do not sell cars over the phone. You sell appointments.

It Starts At The Top You’ve heard it before and you’ll hear it again. Building any sort of culture at the dealership starts at the top.

This cannot be stressed enough when it comes to creating a healthy phone-appointment culture. It’s not enough for management to just buy into the value of the appointment. There must be a near-religious fervor for reviewing and improving phone performance.

For example, a large Ford dealership in Dallas lives and breathes by the phone appointment. Every morning, the general manager reviews and prints out their previous days’ appointment efforts. He then shares it with each sales manager. They discuss the metrics and what can be done to get a little bit better that day. The managers then have a similar conversation with the sales teams. They talk about how to get better, who needs improvement, and why the appointment is so important. The numbers speak for themselves and the expectations are clear. This happens every single day.

Ask and You Shall Receive The lowest hanging fruit in the road to setting more appointments is simply asking. Obvious, right? Maybe, but dealers have a lot of work to do.

36

CBTNews.com

CAR BIZ TODAY August

In a review of just under two million inbound sales calls across 342 dealerships, an appointment was requested only 22 percent of the time.

Those are hard-earned and expensive sales opportunities who are likely calling your competitor next. The great news is that simply improving your appointment request percentage is an immediate catalyst for selling cars. Imagine bumping your number from 22 percent to 50 percent. On a hundred sales calls, that’s 28 more prospects actually invited to visit your store.

The Time Is Now Improving phone performance is urgent. Your marketing budget and sales performance depend on it. You better believe your closest competitor will be happy to offer that hot phone lead an appointment. Never before has the inbound sales call been so important to your success. CBT

The Good News Asking for the appointment works. When offered an appointment, only about 12 percent of callers decline outright. The other 88 percent confirm with either a hard date / time, or at least soft acceptance to visit the dealership. The appointment request is a numbers game and the best dealerships are capitalizing on this big opportunity. The real question is, why not ask for the appointment?

You’re Better Than You Think You Are I speak with dealers constantly about their phone skills and processes. Sometimes, it feels like an industry tradition for managers to accept and even laugh at their team’s “poor” phone skills. Sure, there are some call recordings out there that might make you cringe, but the reality is these are outliers. Instead, the real opportunity rests in taking a good sales team and making them great on the phone.

Taking a team that usually knows what they should do on a call, but needs consistent training and feedback, would go further in getting those prospective buyers in the dealership.

REMEMBER

It’s the APPOINTMENT!

Mike Haeg

Director of Business Development for Century Interactive

To see more from Mike Haeg visit CBTNews.com

ASK THE PROS

At CBT News, we are fortunate to work with some of the best trainers in the industry.

Whether it’s information on sales, service, F&I, marketing, management or fixed ops, our contributors are the go-to professionals for reliable, relevant advice for dealership personnel.

You have access to the foremost authorities in the retail automotive industry. Need a new closing technique? Wondering what’s the best way to increase sales in the service lane?

Send us your questions at AskThePros@cbtnews.com We’ll forward your inquiries to our

ensemble of experts.

Should my approach with Millennials who come into the dealership be different from that of other age groups?

Luis S., St. Louis, Mo.

The Millennials are very skeptical, have done a ton of homework and have very short attention spans. So some tips for working with them: •Overview the sales process and give them a time estimate - this will make them much more comfortable for the remainder of the sales process •They have expectations of having “geniuses” working for you on your sales staff. Ideally, your best people at product knowledge should take this guest.

•If at all possible, pair a Gen Y prospect with a Gen Y salesperson. The first rule of selling is, “find common ground.” This group is very different so it is less likely they will easily buy from a different generation.

•Limit or eliminate negotiations - they have done their homework and are skeptical. Starting the deal at $500 more than they expect to pay will cause them to leave or “showroom” (shop other dealers from their

MARK RIKESS

smartphones).

•If they donʼt buy, follow up by texting them…they donʼt answer their phones.

PRESIDENT OF THE RIKESS GROUP

When is the best time for me to contact a customer to try and sell to other drivers in their home?

Marcus B., Orlando, Fla. Same day. Donʼt wait. Do it now. Time is not on your side. Adding time is just a sign of procrastination and lack of confidence.

•Get the referrals while the customer is still in the store taking delivery.

•Take photos with them and ask for permission to send to them.

•Get cell phone of the lead and send referral customer of photo with you in the photo.

•Tell them, “I want to sell you your next car.”

GRANT CARDONE

Youʼve earned the business, now replace the customer with another customer.

ENTREPRENEUR AND NEW YORK TIMES BEST-SELLING AUTHOR

What are the top three things a new salesperson should focus on?

Sandy R., Corpus Christi, Texas SHAC … The Secret To Success In Sales. Iʼve been a low achiever and high achiever and Iʼve learned there are four keys to success and growth … we call them SHAC.

JOE VERDE

• Skills … Continually develop your skills so you can continually improve.

• Habits … Go to work to work and use your skills.

• Attitude … Stay away from negative people and focus on your success.

• Choice of Customers … To guarantee your growth, prospect and retain your sold customers to build a loyal base instead of waiting for your dealer to buy you more hard-to-close, price-shopping walk-in traffic.

PRESIDENT OF JOE VERDE SALES AND MANAGEMENT TRAINING INC. (JVSMT)

I’m averaging 1.6 hours per R.O. What is a realistic goal to shoot for with regards to hours per R.O.?

Andrew F., Nashville, Tenn.

JEFF COWAN PRESIDENT OF JEFF COWAN’S PRO TALK INC.

I have yet to step on a service drive anywhere that cannot produce at least 2.5 hours per CPRO including oil changes. Getting to 1.8 CPRO hours is having the ability to get out of your chair, in front of your desk, meet your customer at their vehicle, extend your hand and greet them. Getting 1.9 to 2.1 hours is having a sales process in place that guarantees every customer is handled exactly the same way every time. Going from 2.1 to the 2.5 range will be determined by how well you can execute the processes you have in place.

And going above 2.5 to 3.0 plus gets down to how bad do you want it. Do you have the desire to be the best you can be, to study your craft to go the extra mile? Not all brands can get to 3.0, but all can get to 2.5 with a solid selling process and a staff full of desire.

THE OFFICIAL NEWS SOURCE OF THE RETAIL AUTOMOTIVE INDUSTRY

GO TO CBTNEWS.COM

SIGN UP FOR YOUR

FREE NEWSLETTER

RECEIVE DAILY NEWSCASTS, FEATURED STORIES, INTERVIEWS AND MORE...

A staple of Internet marketing, landing pages drive visitors to do what you wan them to do. When used in tandem with Facebook ads, Facebook landing pages give you an opportunity to create more value and carry visitors further down th sales funnel.

August CAR BIZ TODAY

CBTNews.com

39

A more productive dealership team is at your fingertips.

Now there’s an easy way to provide everyone in your dealership training that translates into better productivity and higher profits. And for just $399 a month, why wouldn’t you invest in a more productive and profitable team? With NCM ® OnDemand Virtual Training, you get:

• Top-quality training from industry pros • A wide variety of topics

• Robust reporting & accountability

• Available 24/7 from most Web-enabled devices

See for yourself. Take a free test drive and try out all the content.

Then take advantage of complimentary activation* — a $599 value!

To learn more, call 844.639.8741 or visit ncm20.com/DRIVE * For free activation, use promo code CBTAUG. Offer expires 9/30/14.

“The variety of training, the variety of topics – and the ability to access those topics quickly has just been phenomenal.”

– Jason Reeves, Sales Training Manager, Mercedes-Benz of Buckhead