Car Biz Today Magazine October 2015

CAR BIZ TODAY

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The Official News Source of The Retail Automotive Industry

October 2015

Volume 2, Issue 7

Entire contents ©2015 Car Biz Today. All Rights Reserved.

GIVE INBOUND PHONE LEADS SOME LOVE

DAVID GREENE … see PAGE 8

USE YOUR CRM TO GAUGE A CAR’S AFFORDABILITY

SELLING CARS WITH

CUSTOMER SENSITIVITY

NICK SABAN KEYNOTES

CBT CONFERENCE & EXPO

Five common questions posed by salespeople often lead to conflict and defensiveness, so why ask them? ... see PAGE 14

Saban

TO THE BUYER

JOHN GIAMALVO … see PAGE 12

HOW TO MAKE

A YOUTUBE PAGE REALLY PAY OFF

Dorsey Lencioni

LAURA MADISON … see PAGE 20

FACEBOOK REVIEWS

Top football coach, business leadership expert Patrick Lencioni and millennials marketing authority Jason Dorsey lead agenda for February automotive conference.

NEED SPECIAL ATTENTION DAVID KAIN

... see PAGE 5

PRSRT STD US POSTAGE PAID Permit No. 1459 Pewaukee, WI

... see PAGE 22

A DIFFERENT APPROACH WITH SALES REPS Bobby Jorgensen’s every instinct tells him his Ohio store’s use of salaried product specialists was the right move for customers.

CBT NEWS 5 Concourse Parkway Suite 100 Atlanta, GA 30328

... see PAGE 6

AMAZING MARKET INTELLIGENCE

Are you DOMINATING your Market or is it DOMINATING you?

Learn more at MyPowerDealer.com

Our leads kick… well… you know.

Autobytel leads have a cost per sale of around $275.

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Autobytel leads sell cars. LOTS of cars. In fact, in our history we’ve delivered over 50 million leads to dealer partners just like you, helping to sell millions and millions of vehicles. And with a cost per sale of around $275, Autobytel consumer connections are a great value.

Plus, Autobytel is your true dealer partner. We’re all about your success. That’s why we never get between you and your customer. We never dictate your price. And we never put our brand above yours.

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Data Sources: Sales number from IHS Automotive/Autobytel Collaborative Study based on consumers that submitted a lead through the Autobytel network. IHS Automotive is part of IHS Inc. IHS acquired R.L. Polk in 2013. “Over 50 million” leads number from Autobytel internal lead totals from 1997 – 2014. “$275 cost per sale” number based on $22 lead price and estimated average 8% conversion rate. © 2015 Autobytel Inc. All rights reserved.

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Letter from the editor Dear readers, I want to first bring your attention to the CBT Automotive Conference & Expo next Feb. 9-11 in Atlanta, for which early registration is now open. Our roster of keynote, panel discussion and breakout session speakers continues to expand, with successful executives and thought leaders including preeminent college football coach Nick Saban, business leadership guru Patrick Lencioni, millennials expert Jason Dorsey, Jared Rowe and Dale Pollak of Cox Automotive, Asbury Automotive’s Stuart Bailey and EasyCare chief Larry Dorfman. Anyone working in an auto dealership will reap huge benefits from the discussion and peer interaction at our event, so you’ll want to make plans now to attend.

CSI surveys. Seemingly everyone at a dealership secretly (sometimes openly) loathes them, but a number of automakers continue to hold their dealers’ feet to the fire to keep the scores high and constantly on the upswing.

However, there are people in the industry who publicly worry if the CSI emperor is fully clothed, so you’ll want to read our story on Auto/Mate CEO Michael Esposito’s call for dealers to find another way to measure customers’ long-term loyalty.

Speaking of dealers’ relationship with OEMs, don’t miss our interview with Richard Sox, an attorney who specializes in dealership clients. He has some great advice on how to voice your concerns about the manufacturer’s territory assignment and sales performance formula, and get results.

Market intelligence. In the age of digital marketing, good data is worth its weight in gold to a dealer. This month, we bring you insights from Equifax’s John Giamalvo about how to add new data to your CRM and then assess whether someone can really afford a particular car, rather than just whether they want it. Plus, Amy JON MCKENNA Farley of Force Marketing has some great advice about Managing Editor segmenting target lists to leverage the most from your e-mail marketing.

678.221.2955 President And Publisher Jim Fitzpatrick Vice President/COO Bridget Fitzpatrick Managing Editor Jon McKenna Creative Director Randall Veugeler Art Director Erica Abrams Production Manager Laura Payne Designers Shay Harbaugh Brian Hassinger April Miller Christina Zavlanos Creative Director - Digital Jeff Pearson Director of Marketing & Events Alex Branam

Happy reading.

Marketing Associate Roxanne Luhr

In this Issue 6 Ohio dealership moves

180 degrees from commissioned salespeople

By Jon McKenna

8 In a digital marketing age,

don’t take your eye off the inbound phone lead ball

By David Greene, CallSource Automotive

10 Industry exec says dealers

need a customer loyalty survey to augment the CSI

By Jon McKenna

11 Industry News 12 Your CRM can give answers about whether buyers can afford the car they covet

By John Giamalvo, Equifax

14 Five changes that help

18 Segmenting your list is one of the ways to make e-mail marketing more efficient

16

How to constructively object to OEM’s territory assignment, sales formula

By Jon McKenna

4

CBTNews.com

30

By Amy Farley, Force Marketing

20 Dealers must keep YouTube

By Laura Madison, Alan Ram’s Proactive Training Solutions

32 Take steps to protect

customers’ identities and loan apps against theft

22 Extra care is needed to

manage a dealership’s reputation on Facebook

By David Kain, Kain Automotive

make it very tough on dealers to find TV ad time

By Kevin Gianatiempo, SpotX

28 ‘Micro moments’ can make

or break the success of your pre-roll video

By Phil Sura, UnityWorks Media

CAR BIZ TODAY OCTOBER 2015

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

Customer Service info@cbtnews.com

By Erik Nachbar, Helion Technologies

34 Dealers cannot sell to

women by marketing cars like they were power tools

24 Association News 25 Ask The Pros 26 2016 elections will

Successful auto salespeople never treat a customer’s rejection as defeat

By Grant Cardone, Entrepreneur, writer and commentator

channel stocked with variety of fresh videos

avoid conflict between salespeople and customers

By David Lewis, David Lewis & Associates

Subscription Manager Emily Wiggins

By Anne Fleming, Women-Drivers.com

36

Recall vehicles represent chance to recruit your lifetime service customer

By Chris Miller Recall Masters

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.

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Head Football Coach The University of Alabama

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VP of Marketing & Pre-Owned Vehicles Asbury Automotive

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EVP, Cox Automotive Founder, vAuto

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SALES

Instinct And Observing Other Businesses

LEAD DEALER TO FLIP TO SALARIED SALES STAFF Kistler Ford wants its product specialists answering questions, not chasing commissions. BY JON MCKENNA

T

he ranks of dealers experimenting with salaried salespeople are gradually growing.

It’s doubtful that any of them other than Bobby Jorgensen can trace their decision to a trip to Las Vegas.

Jorgensen, the president of Kistler Ford Sales Inc., in Toledo, Ohio; his wife and another couple decided to take a side trip to the corporate headquarters of Zappos.com, an online seller of shoes, handbags and clothing that is owned by Amazon. com. A one-hour tour turned into a six-hour visit, as Jorgensen peppered Zappos execs with questions about their approach to customer service, corporate culture and staff training. Back at the hotel, he feverishly scribbled notes.

That eventually led to his cloistering himself in his office last year with white boards, sketching out how he thought car buyers really want to be treated by dealerships. In turn, that led to something of a repurposing of Kistler Ford last November as a “customer experience center” (to use Jorgensen’s words) staffed by “product specialists,” not commissioned salespeople.

Ironically, he shook things up at his store during a terrific year. Kistler Ford would finish 2014 with a 20 percent jump in new car sales (for context, YTD new car volume through August under the new approach was up 8 percent). Profitability was excellent, CSI scores were consistently solid.

“I just felt … call it an intervention from God, if you will. I felt things dealers were doing were just wrong,” Jorgensen recalled. “I believe the way consumers have been purchasing vehicles is broken.

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There’s a better way to do it, and we’re going to make more money without money being the main reason we’re here.”

Lessons Learned From Retailers Even among converts to salaried salespeople, Jorgensen is a different kind of guy. He draws his business inspiration from Zappos, Starbucks and Chipotle Mexican Grill, not from uber-successful car dealerships. He’s into meditation. He let his 8-yearold son create his store’s “Fast, Fun and Fair” slogan.

He bought Kistler Ford in 2004. It sits on an auto row in Toledo, which is the major business and population center in northwest Ohio; and Jorgensen competes with three other Ford stores in his region.

Before last November, the dealership had 10 sales representatives on its payroll, all working on standard commission. Now, it does business with six product specialists who draw annual salaries of either $45,000 or $55,000, depending on whether they are willing to work more evenings and Saturdays. Under a point system, they could eventually bolster their salaries by another $5,000 to $10,000, he said.

“If you want 100 grand a year, we really don’t want you working here, because your only motivation is money.”

Who Fits This Dealership’s Job Instead, Jorgensen believes the job description (which he thinks is something of a misnomer, since nobody specializes in a particular make or model;

someday it may be called “consumer advocate”) appeals to former teachers, healthcare workers and non-profit outreach specialists – people familiar with working for a higher purpose.

So far, Kistler Ford has been able to fill vacancies without posting a job ad, relying on its Facebook page and employee and customer referrals.

During a newcomer’s first two weeks with the store, he or she is trained on how to treat customers and taken for tours of local outlets for companies whose corporate cultures Jorgensen admires (like Chick-Fil-A and Chipotle). During the next two weeks, Jorgensen and his managers lead discussions about what they believe is going through the mind of a visitor to the lot.

Emphasizing A Customer’s Experience Once on the job, a product specialist spends a lot of time roaming the dealership toting an iPad, because Jorgensen wants him or her answering lots of questions – not just about Ford models but also about other vehicles that might be a better fit with a customer’s lifestyle and budget, and about how the loan application and trade-in processes work. A customer might be advised to check out a competing dealership, and if so the Kistler representative will brief them on how the various facets of the car buying experience probably work at that store.

“At that point, a customer often will say, ‘Stop, I just want to buy a car from you.’ Or, they might go to the other dealership but like the way we treated them so much that they come back to us for a car,” according to Jorgensen.

Kistler Ford’s product specialists spend a lot of time researching customers’ questions online.

Jorgensen: Dealers can learn from service-oriented retailers “Our main goal every day is not sales but the experience. That’s a definite difference in our store. We don’t come in every day focused on how many cars will be sold; it’s about what kind of experience will you deliver today? The car sales will come. That’s the by-product.”

How Product Specialists Are Evaluated Under the points system, product specialists are encouraged to spend as much of their slower time as possible back on the phone setting appointments or in the service department, chatting with customers and even giving them rides home. If they enter a customer contact into the CRM, and that person eventually buys a car from Kistler, the product specialist earns points even if a colleague closes the sale.

“The points are all tied to customer interaction,” he said.

Long Term Will Tell The Tale It would be a mistake to compare year-to-year new car sales and conclude the non-commissioned sales approach is not working at Kistler Ford, Jorgensen stresses. First, September and October were big sales months in 2014 and will probably improve the numbers this year, he said. Second, the economy has been a bit tough in Toledo, and two of the other Ford dealers in the region have suffered sales drops.

“As the owner, you’ve got to be able to look down the road. I am focused five years ahead, thinking about what the store will look like in 2020. If you’re only concerned with today, you’re on a scary slope.

“I don’t know how to put it in words, but I know this is the right way.”

KISTLER FORD AT A GLANCE Total dealership revenue: $42.1 million New vehicle sales revenue: $20.3 million Used vehicle sales revenue: $14.5 million Parts revenue: $4.3 million Service revenue: $1.5 million Body shop revenue: $1.5 million F&I revenue: $1.1 million New vehicle sales: 670 Used vehicle sales: 1,122 (including 353 wholesale) Source: Kistler Ford. All numbers are for 2014. Revenue numbers may not add up due to rounding.

The dealership is carefully monitoring and managing the product specialist ranks to keep their salary costs below 18 percent of gross revenue. So far, Jorgensen would give the team an A grade for customer service, based on unsolicited reviews from car buyers on social media. He awards a B for knowledge about the customers; “we’re still learning what they want.”

At any rate, while he concedes with a laugh that “I could be totally wrong,” Jorgensen refuses to make conclusions based on less than a year of sales numbers.

On his drawing board for next year is phasing out the F&I office and letting his product specialists guide customers through the loan process, although that will require special web pages.

Jorgensen bought his own dealership in 2004 after partnering with his father on a store in Detroit.

OCTOBER 2015

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SALES

Amid The Shift To DIGITAL MARKETING, Don’t Lose Sight Of

PHONE LEADS This remains a critical sales channel, and dealers must still measure and manage it aggressively.

phone leads is, they lack performance metrics. While almost everything is tracked and measured in digital sales, and walk-ins can be counted and recorded with traditional showroom sales, phone leads are the only major sales channel that have gone largely unmeasured.

BY DAVID GREENE

L

ast year, OEMs and franchised dealers spent a whopping $6 billion combined on digital marketing. Your dealership likely contributed a significant amount to that total. According to eMarketer, 60 percent of the ad spend was for direct response tactics, with the remainder focused on brand-building. Interestingly, 35 percent (more than $2 billion) targeted shoppers who use mobile devices, a reflection of the dramatic increase in the use of smartphones during the car shopping process.

Why Dealers Aren’t Taking Phone Leads Seriously Based on conversations my company has had with hundreds of dealers, there appear to be two primary reasons they ignore this sales channel:

1

More interesting developments: There was a huge drop in submissions of traditional sales lead forms and an increase in inbound sales calls.

According to ADP, call leads are outstripping e-mail leads at dealerships by 4 to 1.

However, in the past dealerships enjoyed an advantage in that the consumer was much less informed. While connectivity has changed all that, unfortunately the call management process at most dealerships has stayed the same.

In fact, that study (by CallSource, in conjunction with IHS Automotive) of participating dealerships’ call management data found 84 percent of consumers who bought a car within 90 days of phoning a dealer end up buying from a different dealership than the one originally called! To me, this indicates a large number of sales opportunities are being mismanaged and lost.

The late 1990s brought huge disruptions to virtually every retail experience and a dramatic shift in power from buyer to seller. This was a completely new reality for the retail automotive industry.

Although many dealers initially ignored online car shopping, a few embraced the alternative experience as a gamechanger. Of course, online shopping today is mainstream, and any dealer who is not familiar with key digital marketing stats like live site visits, time spent on-site, vehicle detail page views, etc. should be pretty embarrassed.

Additional research shows the average dealership (across all brands and markets) is converting fewer than eight of every 100 inbound sales calls into showroom appointments. Basic math shows that a dealership is losing $30,000 to $60,000 of gross revenue, depending on that dealership’s size.

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Contentment with the status quo.

Dealers often tell us, “Well, we’ve always been bad on the phone.” Of course, you wouldn’t catch these same dealers admitting, “Well, we’ve always been bad at selling cars.”

Accepting poor call management practices as “normal” is likely attributable to the simple reality that phones have always been in dealerships. Way before the Internet and the fax machine, when sales managers were calculating payments on 10-key calculators, phones were a fixture. They always seemed to be ringing with calls from prospective buyers looking for information.

This fundamental shift in car shopping behavior rewards those dealerships that effectively manage the growing number of sales leads originating from shoppers who use the “click-to-call” function.

Alarmingly, however, a recent study of more than 540 dealerships showed that most aren’t doing this.

Those dealerships that have prioritized call management are able to literally “see” their inbound phone lead opportunities, because the tools they’ve put in place measure both quantity and quality of leads. More importantly, these dealers are measuring the outcomes of all those one-to-one communications.

Ask almost any sales manager about the objective of an inbound sales call, and he will reply, “To set an appointment.”

However, if a dealer had the performance reports to know how many sales opportunities were coming in via inbound calls each month and how few were converted into showroom appointments, he likely would find that performance unacceptable.

2

Lack of measurement. The second reason dealers tend not to focus on their inbound

Improving Call-To-Appointment Ratios Consistently securing at least 20 appointments for every inbound calls doesn’t start with some magic phone script. Rather, in assessing my dealership clients, five key activities and traits stand out:

A

Making call management a priority.

Dealers who refuse to accept the “reality” that their people have always been bad on the phone, and treat inbound phone leads as the last and most critical step in a very expensive marketing process, will succeed. They recognize that call management excellence drives significant improvements in net productivity and advertising ROI, not to mention create

“The average dealership (across all brands and markets) is converting

Converting this inbound phone lead to an appointment should be a top priority.

fewer than eight of every 100 inbound sales calls into showroom appointments.

Basic math shows that a dealership is losing $30,000 to $60,000 of gross revenue.” a competitive advantage that supports brand-building.

B

Using a structured call process.

Whether inbound phone leads flow through a BDC, the sales floor or via another process, top-performing dealers have a process in place addressing the call’s opening moments, building a value proposition during that call and successful completion of the call. Of course, they also

will operate with measurable goals and benchmarks.

C

Measuring phone leads.

It’s critical to have transparency into how many phone leads are received, what type of lead each was (for sales, service or parts), who managed the opportunity, and of course, the result. A dealership needs to use tools that provide objective measures of each type of lead and the outcome, based on analysis of each call.

D

Insisting on accountability.

In a typical dealership, it is difficult to assign responsibility for a phone lead to a specific sales team member. Most dealerships don’t have a call handler-identification system in place and don’t use any management oversight other than the occasional spot check of a recorded inbound sales call. Given the volume of phone leads the average dealership receives, the responsibility to “inspect what you expect” quickly gets lost and becomes difficult to effectively manage.

E

Operating with consistency.

Finally, almost all salespeople have the capacity to be highly effective with phone leads. Occasionally, they are just that.

However, without structure and support to reinforce good call management behaviors, it’s easy for them to drift into simply answering the phone.

To achieve consistency, a dealership needs to determine the conversational strategy it believes will produce the best experience for the caller and the best outcome for the business. For some dealerships, this may be a tightly scripted conversation; at others, it may be an unscripted flow with broader objectives like “provide a positive greeting” and “engage with the caller’s interests.” Either way, without an agreed-upon strategy, a salesperson will often slide into reactive mode and simply answer the caller’s questions without proactively trying to influence his or her perception of the dealership, and without motivating the caller to come meet in person.

Is My Point Made?

So … back to that $6 billion your industry is spending just on digital marketing to persuade consumers to buy cars. A big chunk of that investment goes to mobile marketing. Isn’t it time to take your inbound phone leads more seriously?

Your dealership should have a plan for how the BDC handles the beginning, middle and end of the call.

DAVID GREENE

EVP of Sales at CallSource Automotive David’s company consults with dealers on leveraging inbound calls. Before coming to CallSource, he worked in sales with Autoweb.com and eBay Motors.

TO SEE MORE FROM DAVID GREENE GO TO CBTNEWS.COM

OCTOBER 2015

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CUSTOMER RELATIONS

Expand Your Customer Surveys

BEYOND THE CSI DMS exec: That CSI won’t reveal if your customer is loyal for the long haul.

BY JON MCKENNA

I

n recent years, skeptics have raised a litany of questions with or complaints about automakerdriven customer satisfaction index (CSI) surveys. Too many OEMs, they insist, continue to overemphasize CSI scores in allocating vehicles or scoring incentive programs. The survey forms are too long. Salespeople and service advisors know how to game the system, none-too-subtly encouraging customers to complete a favorable CSI survey. Customers know how to game the system, bargaining for better deals in exchange for their promise of high ratings.

Michael Esposito, president and CEO of Albany, N.Y.-based DMS provider Auto/Mate and a former dealership GM, doesn’t want to eliminate CSI surveys. However, he does argue, publicly and avidly, that scores are being overused and misinterpreted – and that dealers, not manufacturers, must drive reforms.

Given the questions they pose and when they are given to customers (right after a car purchase or service appointment), CSI surveys effectively measure a customer’s satisfaction with a transaction, Esposito said. They don’t provide reliable insights into whether that customer will be loyal to the dealership over the long term and even recommend it to friends and colleagues, although many dealers mistakenly believe so.

Satisfaction Vs. Loyalty “Customer satisfaction is different than customer loyalty. I can be a very loyal customer but not satisfied” with how the last visit to the dealership went, “or I can be a very satisfied customer but not particularly loyal,” he said. “There is a relationship between the two, but they are still separate.”

Auto/Mate “has no horse in this race” as it does not sell software to measure customer loyalty. But the company is a devotee of the net promoter score (NPS) approach, and Esposito is beating the drum

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CAR BIZ TODAY OCTOBER 2015

Many dealers and OEMs have too high an opinion of what a CSI can do for them.

at industry conferences for dealers to utilize the instrument.

NPS was originated in the early 2000s by several prominent business authors, consulting firms and academics. It has gradually been gaining toeholds in several U.S. industries. Most NPS surveys work this way: ➜ They ask only one question: “How likely are you to recommend this company to a friend or colleague?” Customers respond on a scale of 0 (no way) to 10 (absolutely). ➜ Ratings categorize customers as “promoters” (score of 9 to 10, people who are enthusiastically loyal and will keep buying), “passives” (score of 7 to 8, people who are satisfied but not terribly enthusiastic and could be drawn to a competitor’s offer), or “detractors” (score of 6 or below, dissatisfied people who could hurt the business’ reputation by word of mouth). ➜ Subtract the percentage of detractors from the percentage of promoters, to get the NPS score. In other words, passives are discarded.

When To Use Loyalty Survey While some companies ask customers to give an NPS rating right after a recent transaction, Esposito believes dealerships probably should wait for a couple of months given the “emotional” nature of car ownership. At that point, he recommends

conducting them with both sales and service customers quarterly. They can be benchmarked against NPS performance for similar industries by doing some basic online research, he said, and businesses should shoot for consistent improvement in scores.

“If I was a dealer, I would start doing this tomorrow, just to get a sense of what is going on with my customers,” he added. “The cost is next-to-nothing to use SurveyMonkey or a half-dozen other survey providers. You don’t have to hire an outside consultant, you can do it all internally.”

So, how many dealers has he seen measuring customer loyalty? “I’ll be honest, I haven’t come across one yet. Dealers are so focused on selling cars that a lot of the time, they lose sight of the big picture.”

Esposito: Use both

Dealerships “abso- CSI, loyalty surveys lutely need to use both” CSI and NPS scores. A CSI survey should show whether a particular process tied to car sales or vehicle service needs to be fixed, “but it doesn’t tell you whether the guy is going to come back next time he’s ready to buy a car.”

Esposito does not want to see auto manufacturers start insisting that franchised dealers meet standards for loyalty scores. At that point, the system is subject to the same gaming that has undermined CIS surveys, he said.

“If I was a dealer, I

would start doing this tomorrow, just to get a sense of what is going on with my customers.”

- Michael Esposito, talking about customer loyalty surveys.

News INDUSTRY

AutoNation Refuses To Sell Cars That Have Been Recalled

A

utoNation Inc. has stopped selling new or used vehicles that are under an open safety recall, to either retail or wholesale customers.

Mike Jackson, CEO of the Fort Lauderdale, Fla.-based company that is the nation’s biggest seller of new cars, elicited gasps from the industry when he announced AutoNation stopped selling recall vehicles a few weeks ago.

However, he said the millions of vehicles recalled each year by manufacturers or under a federal government order were “a black eye” for his industry.

Jackson said that 5 percent to 10 percent of AutoNation’s total inventory at any given time would be affected by the new policy. He declined to project additional cost for the public company but said AutoNation would buy an additional 10,000 vehicles over the next few months to replace inventory taken out of circulation.

Meanwhile, all recall vehicles at the company’s 237 stores are having “Not For Sale” signs and key tags placed on them.

Lawmakers Prod Fined Fiat To Back Their Recall Bill

A

lso on the recall front, a pair of Democratic lawmakers from California is pressuring Fiat Chrysler – which was fined $105 million by the federal government for failing to properly notify owners of about 11 million recalled vehicles – to support a bill banning rental companies from leasing cars and trucks under recall.

“Support for this bill should be an easy decision by your company,” wrote bill authors Sen. Barbara Boxer and Rep. Lois Capps in a letter to Fiat Chrysler CEO Sergio Marchionne.

“It would at least provide assurance that your large fleet of rental vehicles are safe for consumers to drive … One would think you would want to do everything you can to prevent consumers from operating these vehicles” under recall.

The Boxer-Capps bill would forbid rentals or sales of cars that are subject to a safety recall, and authorize the National Highway Traffic Safety Administration to oversee rental companies’ procedures regarding recalled vehicles.

Meanwhile, they are pressuring auto companies to comply with the bill’s terms voluntarily. Fiat Chrysler negotiated a settlement including the fine with federal regulators.

Customers Start To Rebel Over All The New Car Technology

D

ealership salespeople often fret about their ability to teach customers about all the technological bells and whistles that manufacturers are installing in new cars. Maybe they worry unnecessarily.

J.D. Power’s “2015 Driver Interactive Vehicle Experience (DrIVE) Report” said 20 percent of the 4,200 owners and lessees of new vehicles reported after 90 days of ownership that they had not used 16 of 33 technology features.

In fact, one in five of the respondents said there were 23 features they don’t want at all in their next new car, and another 20 percent complained at least 14 pieces of technology were useless to them.

The least popular technology features were related to entertainment and connectivity, such as Apple CarPlay and Google Android Auto. However, owners did say they want their cars equipped with technology that improves safety and performance.

Tesla’s Birddogging Bonus Draws California Assn.’s Wrath

L

oyal customers who refer their friends are every dealer’s dream. So, should incenting the practice be illegal in California?

In late August, the California New Car Dealers Association wrote to the state Department of Motor Vehicles asking the agency to intervene with a new referral program from Tesla Motors Inc. Through the end of October, a customer who buys a new Model S online by clicking on a link that a current Tesla owner provided qualifies for a $1,000 discount. Meanwhile, the owner gets $1,000 credited toward future purchases of another Tesla, service or accessories.

However, the association insists a 1968 state law prohibits compensating persons who arrange sales of motor vehicles without a California license. Tesla says the law in its home state was enacted to rein in unscrupulous salespeople, not enthusiastic customers making referrals.

Monthly Payment Gap Between New and Used Cars Has Never Been Wider

D

ealers take note: The cost differentials between new and used vehicles have never been wider, and that gap eventually will influence customer decisions in a significant way – if it isn’t already.

According to Schaumburg, Ill.-based Experian Automotive, the average monthly payment for a new vehicle in this country was $483 in this country for the second quarter, vs. an average $361 for a used vehicle. That $122 gap was the widest since Experian started publicly reporting auto finance data in 2008.

The chasm in total loan amounts also continues to expand, Experian says: $28,524 for a new vehicle vs. $18,671 in the second quarter, a difference of $9,853. Experian Senior Director of Automotive Finance Melinda Zabritski said her research team already is seeing buyers experience sticker shock and look for alternatives to cut their car payments.

Study: Digitizing F&I Approval Process Boosts Customer Satisfaction

W

hile only 37 percent of dealership customers surveyed in a new study were satisfied with their experience in the F&I department, digitizing the five-ply signed forms required seemed to help make them happier.

Forty-nine percent of the participants who had at least one form or other element of the F&I approval process digitized said they were completely satisfied, according to the study released by MakeMyDeal and F&I Express. That number dropped to 34 percent of people who were offered no electronic versions.

Moreover, customers who experienced at least some digital F&I application or approval processes were more likely to recommend the dealership to a friend or colleague, the study authors reported.

Lexus Dealerships Will Know When Customer’s Warning Lights Come On

L

exus began offering an opt-in service for customers to authorize dealerships to remotely check their vehicles’ instrument panel warning lights and odometer readings.

Customers who sign up for Lexus’ Enform Safety Connect system (at a cost of $139 per year after the first year) also can ask for the free Service Connect system. Dealerships will use remote connectivity to alert buyers electronically about a warning light or when a mileage milestone has been met.

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MARKETING

LEVERAGING YOUR CRM To Identify People With The Means To Buy As Well As The Motivation

By adding additional data, you can optimize the CRM to identify high-potential shoppers already in the database.

W

e live in the age of “big data,” and nowhere is this more apparent than in the wealth of information that auto manufacturers and dealerships hold in their CRM databases.

CRM systems are chock-full of valuable data – from demographics to contact information – about current and potential customers.

While most marketers in the industry already are leveraging their CRM data to good use, they often have difficulty distinguishing consumers who want to buy the car of their dreams from those who can comfortably afford it. It demonstrates the ultimate caveat of working with big data: There’s so much of it that it can be difficult to drill down and find granular insights.

While using a CRM gives a big-picture perspective about which consumers in a dealer’s market area might be interested in buying a vehicle, that does NOT identify those with the necessary financial capacity. This can lead to some very inefficient marketing, with money spent to reach consumers who might not be able to afford the particular brand or models on your lot and in your showroom.

The last thing your staff wants to do is tell someone who came to your store that he or she CAN’T qualify for the offer that enticed them.

To improve the efficiency of marketing campaigns, your marketing team can access third-party data, such as estimated consumer financial information, to build a profile of your ideal customer.

That profile then can be incorporated into your

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Smart use of a CRM can help you targetmarket toward buyers who are motivated and able to buy this car …

CRM system to facilitate more targeted marketing and optimized sales efforts.

Following is a quick overview of how to utilize your CRM in this way.

First, Obtain Necessary Data Your CRM system already contains the basic demographics about consumers in your territory who are interested in buying one of your vehicles.

Now, you need to merge in the insights you don’t have – regarding who may actually have the means to make a purchase. This level of information is available from third-party data providers that can enhance your CRM system with measures such as:

➜ Estimated financial capacity and buying power (i.e., an estimate of a household’s income and discretionary spending).

➜ Buying propensities (i.e., the likelihood your target customers are interested in various vehicle types, such as luxury models or green cars).

➜ Attitudes and behaviors (i.e., what vehi-

cle characteristics, such as technology or fuel efficiency, your target customers likely prefer).

➜

➜

BY JOHN GIAMALVO

Natursports / Shutterstock.com

Financing needs (i.e., how likely it is that an individual will respond to an auto finance offer).

By working this data into your CRM system, your marketers can start narrowing the field to identify high-value targets for campaigns.

Next, Profile High-Value Customers Now that you have the additional data, your next step is to build a profile that identifies the potential financial standing, car-buying attitudes and purchase preferences of your existing customers.

These customer profiles can be combined based on qualifying for a specific brand, model or vehicle type. At that point, a dealership then can use them to identify similar individuals from your prospect list.

Here’s what a possible profile could resemble, based on financial measures we’ve developed at Equifax:

✪

“Income360” – This measure identifies a customer’s estimated total income, including wages and income from assets.

For example, crunching and combining the data may show that your best customers have a total estimated income above $150,000.

➜

“While using a CRM gives a big-picture perspective about which consumers in a dealer’s market

area might be interested in buying a vehicle, that does NOT identify those with the necessary financial capacity.”

Finally, Market And Sell To Target Prospects Step four is for your marketing team to direct their campaigns to the targeted prospect list you’ve complied in the CRM system. This is not to say you should be limited to an either/or approach in your marketing. But, you now can make better, more informed decisions. Your online and TV ads should be aimed at, and your direct-mail pieces sent to, those consumers who are likeliest to respond to your promotions.

In addition to more efficient marketing spend, there are several other benefits from this approach.

For example, the financial profiles can help improve the way your dealership prioritizes leads. Whether leads come in by phone, e-mail, text or otherwise, your sales team can use the CRM to quickly determine whether that person should be prioritized as a high-potential shopper. They can even use tablets to review profiles directly from the showroom floor; imagine how that would help quickly and accurately match a customer with an affordable vehicle.

Meanwhile, salespeople could encourage certain customers toward a certified pre-owned vehicle by praising the program’s benefits.

Darren Brode / Shutterstock.com

… and also toward prospects who are a better fit for this car. ✪

✪

“Discretionary spending dollars” – Here, we go one step further and identify customers’ estimated discretionary spending capacity. For example, this measure could indicate your best customers have more than $40,000 of discretionary spending capacity.

“Economic cohorts cluster” – This measure segments your customers based on certain financial attributes, such as estimated income and credit, as well as general demographics, such as lifestyles and behaviors. For example, the data may reveal that your best customers seem to be suburbanites who prefer driving convertibles or sports cars.

Customer profiles such as these could even be constructed for an upcoming new model launch.

Your dealership can be covered no matter what type of vehicle you’re trying to sell.

Then, Apply Profile To Your CRM Once you’ve profiled your ideal customer, you can apply those attributes to your CRM system to identify consumers who are similar in terms of estimated financial standing and other characteristics.

This will narrow down your pool of prospects to those high-value targets who are interested in buying and seem to have the financial capacity to do so.

Let’s say, for example, you have 500,000 consumers in your CRM database. By narrowing that number down to people who fit the demographic and financial profile you’ve built, you could market to as few as 5,000 highly qualified prospects. It all depends on how granular you want to go.

JOHN GIAMALVO

VP of Dealer Services at Equifax In his position, John oversees collaboration among national dealership groups and enterprise alliances regarding efficient consumer transactions. Before coming to Equifax, he was director of dealer initiatives at Edmunds.com and held leadership positions at the BarNone division of CoreLogic and at Star Auto Group.

TO SEE MORE FROM JOHN GIAMALVO GO TO CBTNEWS.COM

This deeper understanding also can help your F&I office. For example, if someone is categorized as both a “buyer” and “service” customer, these insights can help the F&I team evaluate his or her ability to afford the incremental cost of pre-paid maintenance and extended warranty offers.

“The financial profiles can help improve the

way your dealership prioritizes leads.

Whether leads come in by phone, e-mail, text or otherwise, your sales team can use the CRM to quickly determine whether that person should be prioritized as a high-potential shopper.”

Parsing Your Current Customer List In sum, this process is not about finding new marketing targets or changing your strategy, it’s about identifying the best consumers who already reside within your current CRM systems. All you need is some additional financial data to help filter the “lookers” from the “buyers,” depending on your marketing plan.

I like to compare this methodology to my most pleasurable experiences booking vacations, where providers seek me out by name, offer practical and affordable destinations, suggest restaurants and activities – all based on my previous buying behavior. That’s what keeps ME coming back, so why would you treat your valued customers any differently?

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13

SALES question comes off as disrespectful, presumptuous and potentially humiliating to the customer.

“What Is Your Budget?”

Interactions That Can Lead To

CONFLICT AND DEFENSIVENESS With Customers Dropping these five questions and statements from your sales approach is a great start.

BY DAVID LEWIS

T

o some in the retail automotive industry, customers with full access to information once considered trade secrets and who want more control over the vehicle purchase process may represent the end of a golden age. For others who understand the need for change, those customers represent an opportunity to rebuild our business from the ground up and leave behind negative sales methods that created an unflattering public perception.

One of the drivers of these changes is awareness that negative pressure-selling tactics have led to defensive customers who would rather face a root canal than step into a dealership. I want to present five questions and statements that have been part of the car sales playbook for far too long.

“Are You Buying A Car Today?”

This question not only is presumptive on the salesperson’s part, it also validates the stereotype held by most car shoppers that the salesperson is only interested in selling a car today, no matter what it takes. The question puts pressure on the customer and usually has him or her respond with an obstacle or by becoming uncooperative, as a protection mechanism. It reinforces the customer’s fears about coming to a dealership.

Of course the salesperson wants to sell a car today. However, asking that question before you have earned the right to do so is almost a guarantee of offending the customer. That customer is thinking, “If I am not buying today, this salesperson does not want to waste his time with me.” The stage is now set for a combative experience, and if a sale is 14

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A salesperson may view this question as perfectly reasonable, but you are setting yourself up for an answer you don’t really want to hear. You are breaking one of my cardinal rules for selling: Never ask customers a question that may cause them to tell a lie.

What makes you think the customer will answer this question truthfully? You are setting yourself up to receive a lowball figure and to spend a lot of time showing that customer vehicles priced below what they are willing to consider. If you continue down this path and try to fit vehicles into the stated price range, you most likely will keep dropping price meet the customer’s “budget” and sell for a rock-bottom deal.

Generally, people buy what makes them feel good. If they need to stretch financially to get what they want, you can be sure they will find a way to do it. Put yourself in the customer’s shoes and then ask yourself: “If somebody asked me that question, would I tell him what I am capable of spending or what I would like to spend?”

If you are honest with yourself about the answer, you will realize the perils of ask about a customer’s budget.

“Park The Car In The ‘Sold’ Line” eventually made, it most likely will be based on the lowest price alone.

“Who Else Is Involved In The Buying Decision?”

Before you have any idea what this customer is looking for or trying to accomplish, you have probably insulted him or her. This is a question salespeople often ask when a female or young person come to the dealership alone, and they don’t want to waste time on someone presumed not to control the purse strings.

This can be a big mistake on your part. Women now make the decisions in nearly 80 percent of the car purchases in America, whether the vehicle is for her individually or her family. You can risk insulting someone just to avoid wasting your time, but you may end up losing a promising buyer in the process. Regardless of your motivation, this

Salespeople often utter these words upon returning from a demonstration drive. It is a time-honored trial close. It has been taught for decades as a way to get the customer to make a decision that is based upon fear of loss.

The salesperson usually explains that he or she just wants to make sure another salesperson doesn’t sell the car before the customer gets a chance to close the purchase. This is a highly audacious maneuver and is calculated to put pressure on the customer and take away his or her control of

“Of course the salesperson

wants to sell a car today.

However, asking that question before you have earned the right to do so is almost a guarantee of

offending the customer.”

the buying decision. The salesperson doesn’t even know if that customer has taken mental ownership of the vehicle, yet he or she is rushing to a close with a fear tactic.

Obviously, this approach works on occasion or it would have been abandoned long ago. However, it raises the customer’s defensiveness and negates any trust the salesperson might have built up until now. A customer who responds to this tactic probably would have bought the car anyway, but why take the risk?

“If We Can Agree On Terms, Are You Ready To Buy Today?”

Of all the trial closes used over the years, this one is probably the most popular with high-pressure salespeople. As with the previous question, it can reverse any positive connection and persuade customers from backing away from a commitment, even if they already have decided they like the vehicle.

Asking this question reveals the salesperson’s own fear of loss and shows no real confidence in his or her abilities and presentation or in the value of what the dealership has to offer the customer. If salespeople have done their part in helping customers find a vehicle that is a good match, they do not need to pressure those customers to make a decision before they are ready. In fact, if those salespeople have done their job correctly, customers will let them know unsolicited whether they are ready to buy the car.

By using the phrase “come together on terms and numbers,” the salesperson sets himself up for negotiations that can only reduce price in the customer’s favor. The idea of “coming together on numbers” is a precursor to a back-and-forth negotiation, which always lowers price and reduces sales commission. Even worse, the customer might get down to the lowest price possible and then decide to compare with other dealerships before making a final decision.

In Conclusion Hopefully, you can see the potential conflicts that these questions and statements create and avoid them altogether. If your only goal is to sell a car today at all costs, you had better be prepared to find new customers every day. You certainly won’t build a solid base of loyal buyers who return to you and refer others.

If you build your business on, and conduct yourself with, integrity, honesty and trust, then you will spend most of your time taking care of regular customers. Let others scour the lot looking for the next shopper to pressure.

“What makes you think the customer will answer this question truthfully?

You are setting yourself up to receive a lowball figure

and to spend a lot of time showing that customer vehicles priced below what they are willing to consider.”

DAVID LEWIS

President of David Lewis & Associates David’s firm is a national training and consulting business that specializes in the retail automotive industry. He also is the author of four industry-related books, “The Secrets of Inspirational Selling,” “The Leadership Factor,” “Understanding Your Customer” and “The Common Mistakes Automotive Salespeople Make.” Visit his website at www.DavidLewis.com.

Using the usual trial closes can weaken this salesman's position with his customer.

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MANAGEMENT

DEALERS CAN CONSTRUCTIVELY

Is your nameplate manufacturer’s sales performance measurement formula fair to your dealership?

OBJECT TO OEM FORMULAS Explain your issues in writing and get them in your file. BY JON MCKENNA

S

uppose your nameplate manufacturer is calculating your dealership’s average market share, grading its sales performance or setting its territory in ways that penalize your business. What does a dealer do then?

Too many dealers sit back and stew, which is a big mistake, said Richard Sox, a Tallahassee, Fla.based partner with the Bass Sox Mercer law firm who specializes in dealership clients.

“The days of playing golf and buying dinner for your factor reps and working out any issues over dinner on the back of a napkin are gone,” Sox said.

“The manufacturers do not operate that way anymore. They are very attorney driven. The dealer has to adjust by being very formal in his requests” to change a formula.

When OEMs Rile Dealers

Most often, he sees dealers have a problem with manufacturers that: ❱ Insist that a dealership meet an “average market share” standard. As a practical mathematical reality, some members of a group must always perform below the average, Sox noted. ❱ Draw up a dealership’s territory based on air miles and ignoring physical features and road access. People in a dealer’s assigned Census tract or ZIP code will drive farther to a competitor if the highway access is better, or they don’t have to divert to a river bridge or go over a mountain, he said.

“This is an example of one of several dealer-specific circumstances that impact the sales performance measurement

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calculation, because the dealer in fact is not the most convenient and its market share will go down disproportionately,” Sox explained. ❱ Fail to consider the local market’s tastes and buying habits, when allocating vehicles during periods of short supply.

Say, for example, buyer demand is intense for the latest Ford F-150 pickup truck. If people in your dealership’s area of primary responsibility (APR) are avid pickup drivers, you may not look that great in the manufacturer’s sales performance measurement formula (which compares against competing dealers) and get shortchanged on F-150s. ❱ Don’t take into account unique competitors, with that sales performance formula.

What if a nearby competitor is also the manufacturer’s distributor for that region?

Your dealership’s market share certainly will suffer by comparison to a store in a far-off city. ❱ Ignore unique psychographics in a dealer’s APR. Residents in a Rust Belt city may, for example, be biased against imports. Conversely, people in a Sun Belt community that also hosts a foreign manufacturer’s assembly plant may be predisposed to buy that company’s cars out of civic pride.

Explain Objections In Writing

Suppose a dealer is feeling penalized by the nameplate manufacturer in one or more of these areas.

Sox recommends first carefully reviewing the store’s APR, and then committing the objections in

writing and submitting that report to the manufacturer’s regional dealership operations office.

“Without question, it should be put into writing.

This is because, No. 1, the manufacturer is much more likely to take action on at least reviewing a written request. Secondly, if the manufacturer doesn’t agree with the dealer’s objections, at least the letter goes in the dealer’s file and is a record of that dealer pointing out circumstances that are beyond his control.

“That is important down the road if the manufacturer decides to start pressuring dealers over sales performance measurement and/or sending a notice of default with the dealer agreement. The dealership would have been on record for some time that, ‘It’s your formula that is the problem, not us.’”

Present Your Solution, Too

The attorney also believes it is sound practice for the dealer to a) recommend a change or solution, and not simply complain about a formula in the letter; b) follow up and recommend a meeting or conference call with representatives of the manufacturer; and c) consider hiring an attorney or one of the specialty consulting firms that conduct refined marketplace analyses based on vehicle registrations, demographics, etc.

In his experience, manufacturers have proved most willing to compromise with dealers over territory assignments, “because those are more easily quantifiable in terms of how you adjust and correct them.” Sox has noticed OEMs bend on adjusting their sales performance measurements to consider biases toward a particular make and model, but not biases toward domestic cars vs. imports or vice versa.

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MARKETING

Make Your Dealership’s

E-Mail Marketing Effective And Efficient

Emphasizing quality over quantity in your subscriber database, and creating targeted messages can produce real results.

BY AMY FARLEY

I

n a world of data-driven marketing, it’s easy to get bogged down with comparative statistics. While it is important to stay aware of your competitors’ marketing efforts and performances, it’s equally critical for you to create a marketing strategy that makes the most sense for your own dealership.

For example, your e-mail marketing program should work in tandem with your other marketing channels to drive sales and service business.

To ensure that e-mail is working most efficiently and effectively, dealers and their marketing team should focus on several core activities.

Those activities are:

Create And Maintain A Strong Subscriber Database Keeping your database of current and prospective customers accurate and growing is crucial to your e-mail marketing success. This means making sure you’re consistently adding new customers and refining your existing list.

Building up your list can’t be your only priority.

Trimming it is important, too. While that might seem counterintuitive, part of a productive subscriber database is allowing those who simply aren’t interested to unsubscribe. Be sure you’re giving people that option within your e-mails. Culling disinterested customers from your e-mail list supports improved deliverability rates and helps ensure you are sending your marketing messages only to people who are active and engaged.

Cultivate A Strong E-Mail Reputation Your dealership’s e-mail marketing should be regular and consistent, so that you stay top-of-mind in

your market. However, a solid e-mail strategy isn’t about quantity over quality.

Letting disinterested people unsubscribe is wise, but it’s still a good idea to try to keep the numbers of current and prospective customers who unsubscribe low. What’s more, your focus should be on avoiding the worst-case scenario – having someone so disengaged that he or she reports your e-mail as spam.

How is this done? One approach is to strive for quality. If your e-mail messages are informative and useful, with high-quality and highly engaging content, then chances are good readers will actively want to open them. If the messages are boring, bland or repetitive, then your subscribers will be much more likely to delete, ask to be removed from your list or report your message as spam.

The best way to ensure that content is engaging is to make sure you’re giving a customer the right message at the right time. A “thank you for your business” e-mail might be most relevant to a customer who just drove off the lot, while an oil change reminder might benefit that same person a couple of months later. When that customer is farther along in the relationship lifecycle, you can target him or her with a more sales-based message because at that point, information about new vehicles might be most relevant.

Once you’ve mastered quality content, there are other tactics to reduce your unsubscribe rate and avoid spam reports. Segmenting your e-mail list (that is, targeting different groups of customers with different messages) will ensure that your messages are relevant, leading to a higher level of engagement. You can target segments of customers based on the type of vehicle they currently drive and its value, for example, so that you’re not showcasing entry level vehicles to those who already own luxury cars.

A test drive is the kind of productive action you want your dealership’s e-mails to trigger.

When someone buys a vehicle or has it serviced at your dealership, your staff should be gathering the most correct and up-to-date information. If he or she is a brand new customer, start by adding an e-mail address to your subscriber list. If this is a returning customer, that doesn’t mean you’re off the hook; contact information may need to be updated, so ask him or her to verify that the details in your system are correct.

You can also grow your database using online resources. Landing pages on your website can feature forms that encourage customers to give contact and other information in exchange for receiving coupons, the dealership newsletter or more information about your services. Once these new customers sign up, you’ll be able to reach out to them with other messaging.

“When someone buys a vehicle or has it serviced at your dealership, your staff

should be gathering the most correct and up-to-date information.”

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You also can choose to segment based on geography. You might advertise eco-friendly vehicles to city dwellers, for instance, and promote bigger, family friendly models to suburbanites.

Another option is to try to limit unsubscribes by allowing customers to choose their own e-mail frequency. Maybe they will opt for weekly e-mails, or perhaps monthly. Often when given the choice between unsubscribing and simply adjusting their preferences to receive fewer e-mails, consumers will choose the latter.

Personalized Content Makes It Compelling Staying top-of-mind with your lists means providing relevant content that gives people a reason to open and read your e-mails not just every once in awhile, but every time you send them one. You want to persuade, even compel, people to visit your store.

Keep in mind that research shows recipients are 26 percent more likely to open e-mails with personalized subject lines. Personalizing the message also goes a long way to keep subscribers engaged.

If you’re reaching out to your database, you already have certain information, such as the make and model of the customer’s care. Use those details to your advantage.

Exclusivity can keep consumers interested and attentive, as well. Including a special offer just for e-mail subscribers – even if it’s just a coupon for $5 off an oil change – will encourage a subscriber to keep opening your e-mails each time they arrive.

Remember that someone may not take an action the first time you reach out, or even the second or third times. However, if that person is at least opening and reading your e-mails, that’s a good sign that he or she will think of your dealership once the time comes to buy a car or get service.

Track Which Actions Your E-Mails Drive Ultimately, the goals of your e-mail marketing campaign aren’t merely opens and clicks. You want

TO SEE MORE FROM AMY FARLEY GO TO CBTNEWS.COM

Ultimately, the business e-mail marketing process comes down to the right message at the right time to the right list segment. a subscriber to actually visit your dealership for a test drive or to set up a service appointment. It’s important that your dealership measures the percentage of e-mail recipients who actually go on to take action. This will determine the effectiveness of your campaign and let you adjust your strategy accordingly.

Tracking campaigns also involves looking at specific “touch points” that led a subscriber to visit your dealership. How many e-mail messages did it take before he or she acted? What type of call to action resulted in a click-through to your website?

The answers can help you hone your strategy to yield better and better results.

Making the most of your e-mail marketing strategy is possible through careful planning.

When you send the right content to the right customer at the right time, your dealership will start seeing results.

“Staying top-of-mind with your lists means

providing relevant content that gives people a reason to open and read your e-mails not just

every once in awhile, but every time you send them one.”

AMY FARLEY

Media and Communications Manager at Force Marketing 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 – with its evolution of the dealer-to-customer shopping experience. Visit the website at Forcemktg.com.

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MARKETING

Make Sure Your Dealership’s

YouTube Page Offers A Variety Of Videos And Updates Them

Don’t be stale and predictable; make sure to post product, value, salesperson and testimonial videos.

redesigned model, showcase a new color or highlight a popular feature. Product videos don’t need to last for long; in fact, they are most effective when they focus on one simple, digestible topic.

BY LAURA MADISON

T

he digital movement has transformed automotive marketing. A shift in how customers research and shop for vehicles demands a strong digital dealership presence.

However, one of the strongest digital marketing platforms – YouTube – has largely been ignored by the automotive industry.

Despite all of the discussion in the industry about effective videos, the average dealership’s YouTube channel actually is pretty pathetic, barren, more desolate than the Arizona desert. For most dealerships, this channel isn’t converting, from a marketing standpoint. It’s collecting dust in a corner of the Internet. On a test, it would receive an F. Enough of the analogies. A failing YouTube page is a truly a tragedy, because dealers enjoy incredible opportunity for visibility and conversion. YouTube has more than 1 billion users — almost one-third of all people on the Internet — and every day hundreds of millions of hours of video and billions of views are watched.

Perhaps even more impressively, YouTube reaches more people ages 18 to 34 than any cable network in the U.S. Training these millennial eyeballs on your showroom floor by uploading simple videos to YouTube is a powerful way to leverage digital and sell more cars.

In this article, I want to give a basic framework for what I consider to be an effective YouTube page for a dealership.

Variety, Freshness In Content Here’s my grading system for YouTube:

20

A

A channel that includes variety in videos and is clearly and consistently updated.

B

A channel that offers some variety in videos uploaded and shows some recent activity.

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C

A channel that is populated mostly by dealership commercials.

D F

A channel that is empty or abandoned, and does not convert.

The higher the grade and the stronger presence your dealership commands on YouTube, the better conversion you should enjoy from this channel. As you can see, a high-grade YouTube channel is characterized by two key elements: variety in videos and consistency of uploads. Under these standards, I feel most dealerships would presently receive a D or F. The strength in YouTube’s ability to convert customers from watching videos to standing in your showroom lies in its organic search engine favoritism. YouTube is owned by Google, and YouTube videos are favored for first-page Google results.

Thus, video is a great opportunity for your dealership to become visible to shoppers who are in the early stages of looking for a vehicle. YouTube makes it easy for people who are researching online to find your videos, which hopefully motivate them to visit your dealership Dealerships that earn an A for their YouTube efforts are consistent with their uploads. Your dealership must determine how frequently it will update its YouTube channel, whether that frequency is twice a week or twice a month. Whatever frequency you choose should be manageable and not difficult to sustain, and your dealership should adhere to it strictly.

The Kinds Of Video You Need

The other key component to an A grade is variety in your videos. Here are the categories of video that should populate your dealership’s YouTube channel, in order of importance:

1

2

Product videos. These focus exclusively on vehicles. The videos can announce a

Value videos. These are almost as important to a YouTube channel as product videos. They can cover any topic that may be valuable to clients during their car shopping process – how-tos, tips, advice, competitive comparisons.

Such videos often pop up as a choice when a consumer is using a search engine to find the answer to a car-related question. In other words, if dealerships create videos that anticipate and answer questions for shoppers, your dealership becomes more visible to them.

3

Salesperson videos. Next, a healthy YouTube channel should show off a few relevant faces. Leveraging employees to boost your dealership’s YouTube presence is an excellent way to introduce a human element and let would-be customers begin to connect with your employees.

These videos can be quick personal introductions – maybe 45 seconds long – in which a salesperson simply introduces himself or herself, includes a personal detail or two, and encourages viewers to ask for him or her when they come to the dealership. As a bonus, these videos can also be placed in the signature lines of e-mails, to let customers become more familiar and more comfortable with their salesperson.

4

Customer testimonials. Lastly, a strong YouTube channel will feature some customer testimonial videos. A short video of an excited customer who compliments the dealership and his or her new vehicle can give a powerful boost of confidence to prospective buyers.

How Many Videos, How Often

But, don’t overdo it. Upload one or two customer testimonials for every four or five of the other video TO SEE MORE FROM LAURA MADISON GO TO CBTNEWS.COM

Are you leaving money on the table?

70% of used car options are misdescribed on the internet. categories. Product, value and salesperson videos should account for the majority of your YouTube channel.

That said, the number of videos in each category will depend very much on your dealership’s timetable. For dealerships just getting involved with YouTube, it may take a few months to build up a library. An early channel might show five product videos, four value videos, a varying number of salesperson videos and two customer testimonials.

In each category, video content should be updated regularly, at the time interval you’ve decided to follow, and in the order of importance. For example, if your dealership uploads one video every two weeks, perhaps you should begin by producing one video for each category and uploading them over eight weeks. For the following month, you can focus on adding to the product and value video categories. Salesperson spots should be posted or removed as new people join or leave your team.

Get Started Now

If your YouTube channel has not yet earned a passing grade, don’t fret.

Again, the automotive industry generally lags in video marketing, so simply getting started can gives your dealership a huge advantage. Keep in mind that an A grade doesn’t necessarily go to the dealership with the most videos; it’s earned for variety of videos and consistency over time.

Once you’ve begun uploading them, be sure to let all videos linger on your channel. As you build your dealership’s video library over time, your newer videos will naturally be the most visible to visitors, so there’s really no need to ever delete an old spot. A video of a 2015 redesigned model will be as valuable to a used car shopper three years from now as it is to the new car shopper today. Your goal is to build an impressive library of videos over time by regularly adding new, relevant content.

MonroneyLabels.com is a data service application designed to help you appraise, value and describe used vehicles more accurately by providing you with:

a Monroney label a Total list price of the vehicle when new a Details of factory fitted options

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MonroneyLabels.com puts accurate sticker data at your fingertips Without MonroneyLabels.com, almost $5,000 worth of factory fitted options could be overlooked. = specs d r a d n Sta $

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Something important to note about execution with video is that equipment does not need to be expensive or professional. YouTube viewers typically love simple and authentic video, so a simple segment filmed with a smartphone is a great way to get content onto this platform. My YouTube channel garnered more than half a million views on videos filmed from my iPhone.

LAURA MADISON

National Director of Sales for Alan Ram’s Proactive Training Solutions

Appraise • Accurately • Instantly Find out more...call 843.837.3700.

Laura is a former auto salesperson and now specializes in use of social media and personal branding by dealership clients. She has developed a “social selling” training course on how salespeople can effectively use social media and a personal brand to win more business. She has been featured in Automotive News and Advertising Age and on Edmunds.com.

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MARKETING

Take Extra Care To Manage Your Dealership’s

CUSTOMER REPUTATION ON Facebook The friends-and-family aspect of that platform means you want the domino effect to be positive, if possible.

BY DAVID KAIN

W

e’ve all heard the phrase, “It’s all fun and games until someone gets their eye poked out.” I think the auto industry’s current relationship with social media is like that.

Right now, it’s mostly fun and games as dealers get their feet wet with social media, but just wait until an angry customer trashes their store in the digital world.

Dealerships need to be particularly sensitive about negative reviews on Facebook. People have come to expect businesses to get panned as often as they are praised on sites like Yelp, but a bad experience stands out more on Facebook, where the overall atmosphere is positive and community centric. Also, that community aspect means an irritated customer may well try to draw friends and family into discussing this particular business, which is another different aspect of Facebook.

All of us are tempted from time to time to respond with strong emotion, even in a business situation.

Dealership managers don’t have that luxury, but our customers don’t have to live by the same rules.

At my family’s dealership, we used to say that guests who don’t buy cars don’t fill out surveys.

But that was bad advice then and it’s really bad advice now. All day long, your showroom and service department visitors are posting “live updates” about their experiences on dealership social media platforms. In this article, I will discuss how the mother of one of my client’s customers took the 22

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dealership to task about how her daughter and sonin-law were treated – in real time, on the store’s Facebook page. In one day, this established dealership with a pristine reputation online and offline went from hero to zero (almost literally the case, considering how many one-star reviews resulted), all because a mother felt her child was treated poorly.

Controlling Bad Reviews Is Difficult

Most dealerships have a strategy in place to recruit online reviews from happy guests, and that approach works well to build a four- or five-star reputation on Google, Cars.com, Yelp, DealerRater, etc. This was a lot more difficult in the early days of review sites, but with practice dealers have become proficient and acknowledge their team members for a job well done in encouraging satisfied customers to praise the store online.

Unfortunately, they are not as adept in controlling the situation when a dissatisfied customer takes them to task on social media. Bad reviews on search engines like Google and review sites like Yelp tend only to be noticed by active shoppers for vehicles,

car repairs, and other products and services. So, those online environments are somewhat static. However, Facebook is a dynamic environment in that someone doesn’t need to be shopping at all to be waylaid by someone else’s negative review. With users checking Facebook multiple times each day, the review probably will appear on their feed without their seeking it out.

Early Intervention Is Needed

My dealership client now recognizes it could have averted a big headache if it would have launched the same rapid escalation process it uses to tackle major business emergencies. The problem escalated here because an after-market vendor performed an upgrade and did some minor damage to the new vehicle in the process. A dealership employee went outside of his own body shop to save money, but the repair didn’t meet the customer’s expectations and after three weeks, the GM was playing catch-up.

Before that GM could handle the problem, the customer’s mother posted a one-star review (only

“A bad experience stands out more on Facebook, where the overall atmosphere is positive and community centric.”

Once customers log on to enter a review on your dealership’s Facebook page, remember that they will be trying to draw others to their opinion.

His acknowledgement of the customer’s side of the story and immediate use of the word “sorry” rather than the typical “I apologize if this offended …” seemed to work well. Customers who were pleased with the dealership’s work were inspired to come to the dealer’s defense and gave positive reviews, which slowed the tide of criticism even though it seemed to motivate the mother to recruit more anti-viewpoints.

says, a dealership should politely mention that it would appreciate the customer amending his or her online complaint.

It also is imperative for dealerships to foster a culture of vigilant customer awareness at all times, he says, and insist on its team talking professionally and courteously in every interaction.

TO CONCLUDE, HERE IS MY CHECKLIST FOR PRESERVING A POSITIVE REPUTATION ON SOCIAL MEDIA: Sustain a 24/7/365 satisfaction culture

Orient your team to the impact of social media reviews with live digital “field trips,” like gathering around a computer running Facebook

Ironically, the dealership discovered (on Facebook) that its body shop manager’s daughter knew the customer.

Management used this connection to calm the situation and finally was able to arrange a resolution that satisfied the customer. The mother ended up posting that the dealership had handled the situation, and the social storm ended.

Encourage happy customers to review your dealership on your social media sites (Facebook in particular) Teach employees how to recognize the signs of customer dissatisfaction, and to involve managers quickly

However, a painful lesson was learned: Any customer who feels mistreated by a dealership employee can and probably will complain about the experience online, and if that customer uses Facebook, the ramifications can be serious.

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Lessons For All Dealerships

I bet you can guess how this played out. Family, friends and then casual observers quickly sided with the customer. Post after post slammed the dealership, and then several one-star reviews were written on the dealership’s Facebook page. Within 48 hours, the original poster had created a hash tag and a community site to collect reviews on the dealership as well as on any other local businesses that were not performing up to expectations.

If the complaint does end up on social media, Gallant recommends an immediate “We’re sorry” be posted to that platform to express empathy, and an invitation to the customer to a phone or in-person conversation to settle the problem. He has found this approach works well because irritated customers tend to behave better in person than behind a computer screen, and more inclined to work things out.

It was crowd-sourcing at it most organic level. I would imagine that Angie’s List was started under similar circumstances.

Once the problem has been resolved, Gallant

Meanwhile, the dealer was blindsided and quickly gathered his leadership team to work toward a solution. He posted on the dealership’s Facebook page saying how sorry he was, that he understood why the customer was upset and that he would work diligently to resolve the problem to the customer’s satisfaction.

TO SEE MORE FROM DAVID KAIN GO TO CBTNEWS.COM

Teach every department manager how to effectively resolve customer concerns quickly

“It is not an overreaction to suggest that every dealership should receive ongoing social media sensitivity training.”

because zero wasn’t available) and insisted her daughter and son-in-law had been wronged. She commented that the dealership didn’t seem to understand the power of social media and recruited hundreds of online friends to take aim at the business. Believe me, they did.

The Effectiveness Of ‘We’re Sorry’

customer

It is not an overreaction to suggest that every dealership should receive ongoing social media sensitivity training. Mitch Gallant, the assistant GM for the Capital Auto Group in Regina, Saskatchewan, Canada, recommends quick engagement before a social blow-up can occur. He teaches his team to alert management immediately if a customer expresses a concern to them personally.

Never forget the impact of reviews on Facebook.

DAVID KAIN

President of Kain Automotive David has a unique background that includes automotive retail, OEM executive leadership and digital sales training and consulting. His 20 years in retail included various positions in sales and service at Jack Kain Ford, where he remains a partner today. He also was the COO and co-founder of FordDirect.com, the Internet lead provider to Ford and Lincoln dealers. In 2003, he developed Kain Automotive. Visit his website at www.KainAutomotive.com.

OCTOBER 2015

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News ASSOCIATION

CFPB PRODDED TO CLEAN UP COMPLAINT DATA BEFORE MASSAGING IT

For proof of how unpopular the Consumer Financial Protection Bureau has become in auto industry circles, look no farther than the CFPB’s recent attempt for industry feedback on its consumer complaint database.

The CFPB asked for best practices about how to “normalize” its raw complaint data in such a way as to make the data easier for the public to use and understand. Sounds almost like an olive branch, doesn’t it?

However, the Washington-based American Financial Services Association delivered a comment letter to the Board authored by EVP Bill Himpler complaining that “data normalization is only worth the effort if the data is reliable.”

Since the CFPB database has problems with inaccuracies, “normalizing the incorrect data … will further misinform consumers.”

AFSA wasn’t the only trade group to issue formal complaints with the CFPB’s approach. The Washington-based Consumer Bankers Association submitted its own formal letter, which argued the Board should first address the accuracy of its data before trying to normalize it, if the goal is to educate consumers.

Under the pact’s general terms, closer ties will be forged between minority owned dealerships at their local or closes black chamber of commerce, those chambers will be urged to promote the dealerships, and the dealerships will be added to USBC’s online black business database.

The association says that the ranks of black-owned dealerships in the U.S. took a particularly heavy toll during the industry downturn a few years ago, with the number only 252 at the end of 2014 vs. a peak of 795 in 2015.

NINE INDUSTRY EXECS JOIN AFSA’S BOARD

AFSA also elected nine industry executives to serve three-year terms on its board effective Oct. 6.

The nine newcomers are Jody Anderson of Regional Management Corp., Robert Bloom of Southern Management Corp., Daniel Chait of World Omni Financial Corp., Ginger Herring of 1st Franklin Financial Corp., Dale Jones of Ford Motor Credit Co., Shawn Krause of Quicken Loans, Dawn Martin Harp of Wells Fargo & Co., Horst Meima of VW Credit Inc. and Ross Williams of Hyundai Capital America.

NADA PUBLICLY QUESTIONS AUTONATION’S MOVE ON RECALL VEHICLES

The National Automobile Dealers Association reiterated its position (also see “Association News,” September 2015 edition) that blanket groundings of vehicles under an open recall are a bad idea.

PLAN DESIGNED TO ENCOURAGE BLACK CUSTOMERS TO PATRONIZE MINORITY OWNED DEALERSHIPS

After the nation’s largest dealership chain, Fort Lauderdale, Fla.-based AutoNation Inc., announced it would not sell or lease any new or used vehicle that has an open safety recall, the McLean, Va.-based trade association issued its own statement essentially saying it couldn’t back AutoNation’s position.

At a recent news conference, the Largo, Md.-headquartered trade group announced its MOU with the Washington-based U.S. Black Chambers Inc. business umbrella association.

“There is no evidence that a blanket grounding of all used vehicles with open recalls will make the roads or consumers any safer,” NADA’s statement argued.

“Unduly restricting the delivery of all used vehicles subject to safety recalls will, however, immediately and severely depress the value of consumer trades with unremedied safety recalls, especially when the dealer considering the value of the trade-in is unauthorized or unable to perform the recall remedy.”

The National Association of Minority Automobile Dealers signed a memorandum of understanding it hopes will steer more buyers to black-owned U.S. auto dealerships.

Brian Pasch is on CBT Automotive Network!

Brian Pasch, CEO of PCG Consulting, author of “Mastering Automotive Digital Marketing,” and one of the foremost authorities in automotive marketing, examines the latest topics and best practices that are changing the way auto retailers do business today. Brian interviews some of the industry’s brightest minds in the retail automotive business.

View the latest show at cbtnews.com

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ASK THE ?

PROS

A

t CBT News, we are fortunate to partner with the best trainers in the industry.

Whether it’s information on sales,

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.

Q

WHAT IS AN EFFECTIVE WAY TO EVALUATE A PROSPECTIVE EMPLOYEE ABOUT HOW GOOD HE OR SHE IS WITH INBOUND CALLS? – Carla, Defiance, OH

A

Mike Haeg, director of automotive, Century Interactive: This is a terrific question because it indicates a dedication to phone excellence at your dealership. Bravo!

The first step is to understand and communicate your own standards for success on the phone. If you are like most dealerships, the single-mostimportant outcome of an inbound call is setting a firm appointment. Don’t be afraid to clarify that with the prospective employee in your interview process. Ask how they feel about the appointment as a metric for success and what their experience setting appointments in previous positions was like.

Next, have the prospective employee actually handle a mock phone-up placed by the sales manager. Make sure to give tough objections and questions that can be expected during a routine sales call. Note how the prospective employee greets the shopper, if they steer the conversation toward an appointment, if they offer two appointment times, and if they set a firm appointment.

Use your call-tracking technology to actually review the phone call with your prospective employee. This should be a normal training routine at the dealership anyway. Ask about their thoughts on the call, where they could have improved, and what they would have done different to better handle the opportunity.

But, isn’t this a lot of work? Maybe, but if you’re serious about improving phone performance and capitalizing on these expensive hot leads, then a little hard work will go a long way.

Q

I READ SOMETHING IN YOUR LATEST MAGAZINE ABOUT A SURVEY SHOWING SERVICE MANAGERS WERE SAYING A BIG ISSUE WAS THE PERCEPTION AMONG CUSTOMERS THAT THE INDEPENDENTS ARE CHEAPER. I CAN VOUCH FOR THAT, I SEE IT ALL THE TIME, AND IT IS SO UNTRUE ON MOST ROS. HOW CAN WE AS DEALERSHIPS COMBAT THAT MISCHARACTERIZATION? YOU CAN’T DO IT JUST WITH COUPONS. – Sam, Bellingham, WA

A

Jeff Cowan, president of Jeff Cowan’s PRO Talk Inc.: Having worked in several independents and after-market stores, I can guarantee that this myth is just that, a myth. Three approaches that can help you quickly dispel this misconception are as follows: 1) Never stop selling who and what you are.

Always identify your staff as “factory trained,” for starters. Emphasize that all of your advisors, managers and technicians are factory trained and that you only sell factory designed and engineered parts.

2) Price-match, if possible. When customers ask you to price-match, show them a statement for both the service and repair, with and without factory parts. The secret to making this work is “matching” apples to apples. Communicate that your service department does price-match, so that you eliminate the need to discuss this further with your customers. Price-matching implies that you are less expensive.

3) Make sure your staff communicates expertise.

Your people must become masterful at explaining the difference between you and the after-market.

They must be competent in identifying all the things you offer that the after-market does not, like shuttle busses, on-site car rentals, loaner cars, free inspections performed by factory trained experts, etc.

I have found that price is usually the last reason customers leave a dealership’s service department.

If price was the main concern, you would not have people lined up outside the door every morning waiting to come in before you open, and the traffic you have throughout the day. In my experience, most customers leave because we fail to take control, uncover their expectations and manage those expectations. If the price question keeps arising, it is usually a sign that your advisors do not know how to accurately sell whom and what you are and what you offer.

Q

WHAT COMMONALITIES ARE YOU SEEING IN HOW DEALERS EVALUATE THE JOB PERFORMANCE OF THEIR SERVICE MANAGERS? WHAT METRICS OR KPIS ARE THE SMART DEALERS UTILIZING? – Carson, Metairie, LA

A

Brenda Stang, chief shifter at Shifting Gears Training: Dealers are taking a threepronged approach to measuring the performance of their service personnel: sales skills of the advisors, productivity of the technicians, and relationships with customers and staff. The key is to make sure that the performance is measurable.

Whatever you measure can either be celebrated or improved upon.

A couple of key service advisor metrics are customer hours per repair order (CP/RO) and effective labor rate (ELR). CP/RO measures sales skills and shows whether your advisors are ordertakers or salespeople. ELR compares the listed door rate with what was actually billed. It shows if your advisors are collecting your full rate or if they are discounting.

The technician metrics are productivity (average hours per tech per day), efficiency (hours clocked on jobs/hours in attendance) and proficiency (hours produced/hours clocked). These metrics tell the whole story of your shop. Do you need to hire more techs or reduce their numbers? How skilled and fast is your technical staff?

In the area of customer satisfaction, customer retention and CSI scores are key. How many customers are returning to service for maintenances and oil changes? 76 percent of customers purchase vehicles from where they service their vehicle.

Factory CSI scores will always be key for two reasons: They truly are a snapshot of your service, and the manufacturers factor in your scores when you are buying or opening new stores.

The key metric with internal relations is staff retention. Every business experiences staff turnover, but excessive turnover is costly and affects the quality of service to the customer.

Depending on the position and the person’s productivity, the average cost of turnover in service is between $25,000 and 70,000.

The key to evaluating performance is frequency.

The advisor and technician KPIs should be discussed at every payroll cutoff, and the customer and employee satisfaction reviewed monthly.

Marketing your service staff as factory trained is a smart tactic.

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25

MARKETING

COMPETITION TO DEALERS FOR

TVAD TIME

It will be hard to outmaneuver and outspend political campaigns for TV affiliate ad time.

WILL BE INTENSE IN NEXT YEAR’S ELECTIONS. In this perfect storm of demand for conventional media, pre-roll video looks increasingly appealing.

BY KEVIN GIANATIEMPO

S

ebastian Junger’s 1997 book “The Perfect Storm” describes a confluence of meteorological factors producing a storm with never-before-seen fury. We’re looking another rare confluence of factors leading into the November 2016 elections, only this time a political storm could leave non-candidate TV advertisers (like auto dealerships) in its wake.

For the first time in 20 years, there is no clear frontrunner for the presidential candidate from either major party, resulting in heavily contested primaries. But it’s not just the national campaigns that are chewing up local TV advertising inventory; three-quarters of the expected $4.4 billion political ad spend during this election cycle (up 20 percent from a healthy year in 2012) will be for local spots.

Another significant factor: This is the first election cycle to encounter the full impact of the U.S. Supreme Court’s Citizens United decision. That ruling allows individual citizens, corporations and trade unions to contribute unprecedented and

unlimited amounts to political action committees for their favored candidates.

Factor in polarizing ballot initiatives and competitive state and local races, and Federal Communications Commission regulations requiring TV affiliates to meet even last-minute requests by lawful candidates, and it’s a perfect storm punishing dealerships and other non-political advertisers hoping to share the limelight this fall.

It seems inevitable that ad space will be carved out for political campaigns by displacing existing advertisers like the auto industry.

Competition For Best Programming

Here’s another worry for dealers: Highly rated and watched live programming is getting rarer thanks to DVRs and continued viewer fragmentation across platforms and devices. TV inventory is already a finite commodity, and viewership habits continue to shift towards alternative delivery methods like

“It seems inevitable that ad space will be carved out for political campaigns by displacing existing advertisers like the auto industry.”

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video on demand and connected TVs. As we know, when supply goes down, prices go up, especially if demand remains high. With political campaigns crowding into the marketplace and paying premiums, dealerships can expect to pay very high prices for TV spots – if they can get inventory at all.

Wise dealership marketing chiefs or their outside agencies should be seeking alternative media for at least a portion of their ad budgets. Targeted pre-roll video looks like an increasingly helpful channel this fall.

Pre-roll video, i.e. the ad that runs just before desired content is shown on a website’s media player, already complements TV ad campaigns for many dealerships. Its popularity isn’t solely due to targetability; prospective customers are becoming tougher to reach through traditional channels.

Here’s a shocking statistic: Fewer than half of adults ages 18 to 58 now watch live broadcast TV in a given monthly. I’m talking about Gen Xers and young boomers as well as millennials.

Other Factors In Pre-Roll’s Favor

Viewership shifts aren’t the only reason that dealers should take targeted online video seriously.

Major ad agencies are redefining TV budgets to

account for pre-roll by including it under bigger categories such as “total video.” Further, as of July 2015, advertisers had migrated $1.5 million from TV to digital, year over year.

Online video combines the effectiveness of TV’s sight, sound, motion and emotion with the targetability and efficiency of a digital campaign. It’s trackable, measurable and actionable. Auto manufacturers clearly understand pre-roll’s value because they offer co-op reimbursement, just as they do for TV advertising.

“While pre-roll may not have overtaken TV, it serves as an excellent complement. This election

cycle is the perfect time to get serious about it, if your dealership hasn’t already.”

You’ve heard about “big data.” The average consumer spends three months shopping for a vehicle, with most research performed online. Think about all that data and online identifiers that an auto shopper leaves along the path to purchase. Unwittingly, they leave anonymous cookie crumbs along the way that data companies collect, store and sell to digital advertisers like you. This is known as “behavior targeting,” a digital perk that traditional media can’t replicate.

Traditional cable and broadcast TV still offer a highly valuable platform to reach a dealership’s primary market area. While pre-roll may not have overtaken TV, it serves as an excellent complement.

This election cycle is the perfect time to get serious about it, if your dealership hasn’t already. If your ad campaigns might be displaced, you need to line up another outlet to reach car buyers.

Specific Tactics With Pre-Roll

As you begin planning to ramp up usage of pre-roll video: Don’t be afraid to start small. Choose a small share of voice (you don’t have to buy all available ad inventory for that locale) in just a handful of ZIP codes. Grow both the number of ZIP codes and the percentage of ad inventory you secure, as you determine best practices.

Build relationships with potential vendors.

Most aggregated pre-roll video supply originates from a few sources; buy direct from the source, or opt for one of the tech companies that can tailor pre-roll to your desires. Establish an account and become familiar with the vendor’s processes and procedures.

Try desktop and mobile/tablet/connected TV. Determine what works best for you.

Begin optimizing your campaigns. A critical difference between targeted video and traditional TV is optimization. The digital campaigns learn as they go. For instance, my company’s teams shift impressions toward the sites that perform best and away from those that do not. As campaigns mature, they become more efficient.

Place re-targeting pixels on your websites to begin building a cookie pool. Studies suggest re-targeting could be one of the most productive marketing tactics available.

Be sure your vendor is combatting fraud.

Video has become a high-value target for fraudsters, and even the most premium sites have been hit hard, with the industry struggling with more than one fraudulent impression for every four legitimate ones.

digital video and traditional TV advertising is the ability for a dealer to dial back digital ad spend during a down month, or ramp it up in a healthy sales month. Either way, there is no penalty for reallocating or revising media buys.

Create more reasons to visit your website.

One idea: Encourage the completion of a buyer’s paperwork in advance, to reduce the time needed to complete the sale process. Place a page on your site and promote that feature.

Customize your ad creative for the Web. Many experienced marketers have invested in creative content exclusively for pre-roll, with specific calls to action and graphics to encourage the user interactivity the medium allows.

Graduate to an interactive ad. Interactive overlays, aka VPAID, allow users to interact with or click different portions of the video ad based on their interests and to search inventory, request a quote or learn more about an offer, without having to go to a destination page.

If you follow the 10 steps I’ve described here, when the political storm hits this fall, you’ll have a dependable lifeboat with pre-roll video.

Allocate and revise media spend on the fly.

One of the refreshing differences between

Pre-roll video seen online may be a dealership’s best advertising option during the political campaigns.

KEVIN GIANATIEMPO

VP of local & regional at SpotX Kevin has worked in media for more than 20 years and currently manages a team of sellers working with local and regional advertisers on online video for desktop, mobile and connected platforms. Before coming to SpotX, he was SVP of sales at TubeMogul and head of sales at VoloMedia.

TO SEE MORE FROM KEVIN GIANATIEMPO GO TO CBTNEWS.COM

OCTOBER 2015

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27

MARKETING

IDENTIFY

‘MICRO MOMENTS’ That Will Make Or Break Your Pre-Roll Video Ad settings to which car consumers can really relate decide whether prospects will keep watching or opt out.

BY PHIL SURA

utterstock Bloomua / Sh

D

ealers and their marketing directors need to get familiar with the concept of “micro moments,” as they are becoming a core focus of all types of retailers and their ad agencies.

Micro moments have the potential to make pre-roll video an even more powerful marketing tool, but dealers could miss that opportunity by relying on traditional messaging with roots in the 1950s.

What exactly is a “micro moment”? The practitioner’s definition is for “a mobile moment that requires only a glance to identify and delivers quick information that you can either consume, or act on immediately.” In layman’s terms, examples of an advertising micro moment could include a driver who has suffered a flat tire on a busy highway and is searching for a repair shop. The subject’s need is immediate, and he or she will decide to act within a moment while using a mobile device.

People have such micro moments every day, addressing issues with vehicles (“What is the towing capacity of a new Jeep?” “How can I help my daughter who is having car problems in a different town?”) and with other aspects of their lives (“Where is the closest Starbucks? What are the best books to buy for my 7-year-old?”). Many of us turn to our smart phones for help in answering these questions, and Google suggests identifying such moments and settings to create an effective marketing message.

Dealers need to remember that a micro moment’s impact goes beyond immediate needs for minor purchases. At their core, Google VP of Marketing Lisa Gevelber wrote in an article, micro moments focus on these key desires: I want to know, I want to go, I want to do and I want to buy.

In a separate and recent article, Kim Larson, global director of Google BrandLab, suggested that retailers identify micro moments for their pre-roll

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advertising spots. Pre-roll advertising is typically a 15- or 30-second spot that viewers in most cases can skip after the first five seconds, because the key message has been delivered. Pre-roll video can be tremendously effective in increasing brand recognition in a geo-targeted area, and Larson believes the spot should be viewed as a tool for story making (as opposed to storytelling) in which targeted consumers take part.

Balancing An OEM’s Brand-Heavy Message Dealers can develop the “sweet spot” intersection between the brand and consumer by working outside the box with a 30-second video ad. While the manufacturer may emphasize toughness of an F-150 truck, your dealership audience may need to have it shown in a variety of ways. Here are some other ways I’ve seen dealerships develop their own brands in micro moment ads: ➤ We have been serving the community for 20 years and have the largest selection of certified Toyotas in the city.

➤

.com

We are a best-price dealership, meaning we offer all customers the best terms up front so that you avoid negotiations.

A potential story making moment could have customers discussing how the lack of negotiations comforted them, or how the wide selection of certified vehicles made the entire process easier.

First Five Seconds Must Be Memorable The first five seconds of any pre-roll spot are critical, since the viewer can opt out immediately afterward. Impactful and memorable micro moments can be leveraged to keep a prospective customer engaged beyond those five seconds. If a dealership is serving ads to the right audience (prospects looking at automotive content) and has a memorable message, it has an opportunity to drive those prospects to its website after the preroll is viewed (post-view clicks).

“Dealers can develop the ‘sweet spot’ intersection between the brand and consumer by working outside the box with a 30-second video ad.” ➤ We will not let you make a mistake in buying a pre-owned car, because we let you return it within two days. ➤ We provide free oil changes for life for every new and pre-owned vehicle we sell.

Data suggest that to keep the audience engaged after the first five seconds of a pre-roll spot, it is important not to overemphasize the brand name from the outset. Those data also suggest that humor helps drive higher completed view percentages.

Prospects do not like a hard sell when it comes to pre-roll.

Make sure the first five seconds of any YouTube video are truly entertaining.

Here are some metrics and guidelines in determining the effectiveness of your pre-roll advertising:

“The first five seconds of any pre-roll spot are critical, since the viewer can opt out immediately afterward.

Impactful and memorable micro moments

➤ Completed views: 15 percent to 25 percent (are you serving the right audience, and is the message compelling?). If you are tracking 10 percent, you have a problem.

can be leveraged to keep a prospective customer engaged beyond those five seconds.”

➤ Click-throughs to your website: 0.5 percent to 1.5 percent (effectiveness of your ad). Please note that the click-throughs are lower if you are using TrueView rather than DoubleClick.

Let’s examine a hypothetical example. Say that Any Town Ford is running a traditional spot promoting an F-150. That dealership might include in its script for the first five seconds of the ad: “0 percent financing for 72 months, plus $1,000 off any new 2015 F-150. Only at Any Town Motors!” The problem is that many prospects will opt out after five seconds, and the offer alone won’t be enough to keep them engaged afterward. A micro moment is needed to keep the automotive intender’s attention.

So, an option for the pre-roll spot could showcase the F-150 in micro moment situations – say, for example, the truck pulling a boat out of a lake.

The pre-roll could direct attention to the dealership’s name with a shot of a dealer license plate, as opposed to flashing a banner of the dealer’s name.

As dealers build their pre-roll spots, they need to consider how the music, scene, graphics, color, voice-over and message fit together to create a memorable ad for the prospect.

➤ Cost per click: $3.00 to $4.00 (the goal isn’t a low CPC). Cost per view: 10 cents to 12 cents. ➤ CPM (cost per 1,000 impressions): $15 to $25. The goal isn’t just a low CPM. The CPM for a Porsche spot will be higher that of a Chevrolet operation in the same city, if you are properly delivering the ads to the right audience. ➤ Track post-click and post-view traffic: Post-click means the prospect watched the video and was impressed enough with its message to come back to the website sometime during the next 60 days. Post-view indicates that the prospect viewed the video but didn’t click on the link to get redirected to the website, but did click on that link within some period of time.

way at least momentarily. If the ad is boring, your opportunity is lost.

Be Creative In Seeking Ideas Usage of pre-roll video is expected to grow aggressively. Your dealership’s success in leveraging the medium depends on your willingness to adapt and avoid using the same types of spots as on the traditional marketing side.

Demand that your outside marketing agency showcases how it will reach the desired percentage of auto intenders who avoid traditional media.

Be willing to conduct focus group sessions at your dealership to determine what attracts prospects’ attention, looking for clues about what keeps them engaged beyond the ad’s first five seconds and how you can develop micro moments.

Pre-Roll Cannot Be Boring

PHIL SURA

You need to remember that pre-roll video interrupts something else your prospect wants to do, like watching a video of his favorite football team on ESPN. Even if your audience is researching a car purchase online, your pre-roll is getting in the

Phil has worked in that role for 11 years at UnityWorks, which creates video for ads, SEO messages and websites for the automotive industry. He also speaks at dealer conferences and writes for automotive trade magazines around the country. Before coming to UnityWorks, he spent four years as a dealership GM and 13 years with a dealership consulting group.

VP of Sales at UnityWorks Media

An effective pre-roll micro moment can feature a vehicle being used for leisuretime.

TO SEE MORE FROM PHIL SURA GO TO CBTNEWS.COM

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29

HEARING ‘NO’ FROM A CUSTOMER

SALES

Should Never Be Taken As The End Of The Negotiation

Auto salespeople should adopt six techniques to keep rejection in a proper, and healthy, context. BY GRANT CARDONE If a customer rejects your deal, find out what factors are driving that answer.

R

ejection is commonly defined as dismissing or refusing a proposal, idea, etc. It has destroyed the careers of more automotive salespeople than any other single influence.

Look, no one likes rejection in their professional or personal lives. Yet, the reality is that it’s everywhere. A guy once told me he could never be a salesman because “I hate the rejection.” I thought to myself, “Life is gonna be tough for this guy.”

In automotive sales, you’re dealing with customers on the phone, in person, and over the Internet all day. If you want to rise to the top at your store, you must learn how to manage the effects of rejection and understand that it is not a selling issue, any more than it is a special condition in the BDC or service drive.

How you handle rejection is the key. Try to avoid it and you are doomed, because you will withdraw. If you start to think less of your product or offer after being told “No,” then you are being shaped by someone else’s agenda and ideas. You will only experience rejection as a negative sensation if you are not taking full responsibility for the situation and its outcome.

Let me offer six techniques I use to get through the rejection cycle:

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1) Be rational about rejection When I am told “No,” I interpret the reply as “not yet” – meaning, the buyer just is not ready to close right now. But, don’t give up! Most buyers will say “No” a number of times before they say “Yes.” Be rational. The buyer isn’t rejecting you, just what you are presenting to him or her. In a recent mystery shop campaign my firm performed for a major OEM, more than half the time we found the customer was being asked about the wrong product. Your customers will seldom say “Yes” to a product they do not feel will solve their problems.

Ask your customers good questions to help ensure you present them with options they find agreeable.

2) Figure out what the rejection is really about Think about this: How many deals have you closed in which the buyer at some point insisted, “We are not buying anything today” or “We need to think about it” or “I need to talk with my spouse”?

Buyers typically say “No” reflexively when they don’t know what else to say, or when don’t want to tell you the real reason they can’t say “Yes.” A true professional salesperson knows that under behind every “No” is a “Yes” and tries to find out the rationale.

The next time a customer tells you he or she needs to talk to a spouse, try replying, “I understand. Let me ask you: What would you do if your spouse says ‘No’?” If that customer would not buy the car in that situation, then you should inquire about exactly what the spouse would say “No” to – the color? The model? The monthly and down payments? Nine times out of 10, your buyer will eventually divulge the REAL reason for talking with the spouse.

3) Have your pipeline so full that rejection actually becomes a relief Think back on one of your dead days with no ups, no appointments, no phone calls. Then, the 4:30 appointment you’d been looking forward to all day cancels. BOOM, rejection shows its ugly face.

You feel let down, defeated and likely hate the car business.

Now imagine that it’s noon, you have two deals on the board and four appointments back-to-back from 1 p.m. through 5 p.m. And, oh yeah, you are double-booked at 4 p.m. When one of your 4 p.m. appointments no-shows, will you feel a sense of loss or relief?

See how this differs from the first example?

Rejection is felt only by those who rely too much on too few opportunities.

“Rejection is felt only by those who rely too much on too few opportunities.”

4) Don’t become discouraged by or emotional over rejection Riding an emotional rollercoaster will kill a salesperson’s productivity. One trick I used was assigning a dollar value to every customer interaction. For example, let’s say you talk to 150 people in a month when you sell 20 cars and make $10,000.

Divide the commissions by the number of customers you spoke with, and in this month each interaction, regardless of outcome, was worth $67 to you.

Now that you know you get $67 for every person you speak with, how many people will you talk to today? See what I’m saying?

5) Reap benefits from strong customer personalities The stronger the buyer’s personality, the more you want that person as a customer. I am being serious here. The toughest buyers tend to become the most loyal, once convinced.

Bone up for the challenge from an aggressive customer. Remind yourself about the great opportunity to show you are a truly exceptional professional who is different from everyone else in the market.

You will not cower to the customer’s bravado, feel rejected or run scared.

Stick it out, maintain your composure and positive attitude, and be persistent until the customer does the right thing – do business with you. Trust me, that customer will respect you more.

“You must learn how to manage the effects of rejection and understand that it is not a selling issue, any more than it is a special condition in the BDC or service drive.”

6) Strive to become a master closer Above all, the best way to handle rejection is to become a master closer. Nothing gives me more confidence in a deal than knowing I am prepared to handle ANY objection or curveball thrown at me.

Think about how different your perspective would be if you knew, and I mean 100 percent certain here, that you can handle EVERY objection a buyer could possible raise. You would feel unstoppable. Your confidence would be through the roof.

People would label you as cocky and arrogant because you think you can close anyone … except you actually can.

A master closer does not feel rejection because he or she knows how to handle it. Bottom line,

show me a salesperson who cannot deal with rejection and I will show you an amateur who spends little to no time training, preparing or refining his or her craft and too much time complaining and making excuses.

Start keeping an objections log. Every time you hear a customer’s objection, write it down in your book. At the end of the day, think about possible closes in response to every objection you’ve logged.

I have done just that on a daily basis – logged objections, videoed myself in negotiations and role-played.

In my career, I have negotiated more than $500 million worth of deals with some of the most shrewd and savvy businessmen you will ever meet.

The reason I never feel rejection is because I apply the principles in this article every single day.

GRANT CARDONE

Entrepreneur, Writer and Commentator 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 @grantcardone.

Developing strong closing skills go a long way toward allaying nervousness about a customer saying “No.” TO SEE MORE FROM GRANT CARDONE GO TO CBTNEWS.COM

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31

F&I

Protect Your

Customers’ Identities And Information Against Theft

Take steps to deter both hackers and burglars, and prepare an incident plan in case of a breach.

BY ERIK NACHBAR

A

uto dealerships are inviting to data thieves, given the consumer identities, financials and credit card data they store. The predator might be a sophisticated hacker or a burglar who gains access to the server room or file drawers.

Many dealerships have been slow to adopt the security technology and best practices to thwart hackers. Plus, many dealerships still use Windows XP, which is no longer supported with security updates from Microsoft.

So, experts in cybercrime believe it’s not a matter of if, but rather when, your dealership will be hacked. The consequences could be especially costly for a dealership -- not only in money but also in loss of consumer trust and confidence.

One of the biggest potential expenses is in the need to contact all customers about a security breach, then monitor their credit for months to make sure they are not victimized. Typically, the cost can run around $3 million per 100,000 customers. Even if the CRM is outsourced was outsourced and the cloud provider handles customer contact, the blame still will come back to the dealership.

Will customers likely do business going forward with a dealership that’s been hacked?

Or, suppose an employee unintentionally downloads malware the dealership’s antivirus software does not recognize (this happens frequently, as new malware is continually being deployed). The malware pulls the credit of several hundred customers before it is discovered and stopped. An insurance claim must be filed, and a security company is brought in to investigate. The dealership is shut down from pulling credit for several weeks, which ends up costing it close to $50,000.

Protective Shields You Need

To protect itself, it is critical that your dealership have in place: ➤ Sufficient cyber liability insurance ➤ Excellent business practices 32

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➤ Technology to prevent or at least deter hacking

Physical Access Is Another Issue

Cyber liability coverage is an emerging insurance category in which coverage types and levels may be difficult to determine. However, given the monetary and time costs of a mitigating a security breach, it is becoming a business imperative.

Next, the physical security of both the dealership’s accounting offices and all the customer jackets within them, and of computer rooms must be made a priority. Some dealerships are going so far as to restrict physical access to sensitive facilities with security guards, access cards and even biometric devices. It is a good idea to deploy CCTV cameras not just on the lots but also in the accounting offices and computer rooms, and to store that security video for 90 days or more.

Next, your dealership must establish a security policy and best practices that not only thwart hacking but also ensure that if you are hacked, any claims you make against insurance coverage are valid and substantiated. Your well-documented and scrupulously implemented security policies should be:

Your security policy also must address employees’ use of physical media such as USB thumb drives, DVDs and back-up tapes that are used to store or transfer computer files. Employees should not be allowed to copy customer data onto physical media.

• Approved by senior management

As for access to the network, employees and vendors should be given only unique login IDs and prohibited from sharing them. A strong password policy is another critical cornerstone, and it should include:

➤ Plans/programs for recovery/ remediation after a breach

• Published or otherwise communicated to both current and new employees, who must agree to abide by them • Readily available for reference and use • Assigned to a manager who is responsible for adding updates • Complete with provisions for disciplinary actions for non-compliance.

• Reviewed annually

3 A prohibition against sharing passwords 3 A requirement that passwords be changed at the initial log-on 3 An insistence on periodic password revisions Another important component for ensuring a strong security system is a periodic, comprehensive vulnerability assessment. While time-consuming, it

“It is a good idea to deploy CCTV

Security Technology You May Need Now that I’ve discussed best practices, let’s look at security technology:

1

A regularly updated firewall is an essential component of an Internet security system.

2

All external network connections should be monitored by an intrusion prevention system (IPS) or other network-monitoring tool that sends alerts when a security breach is detected.

An IPS looks for malware such as CryptoLocker, which can lock up your files, make them unreadable and hold your dealership for ransom to access your own files. Audi, for example, is requiring that its dealers install IPSes. General Motors is pushing IPSes, and I expect other OEMS to follow suit.

Customers entrust dealerships with a lot of sensitive financial information, and dealerships can take steps to more effectively shield the security of that data.

3

“Logging” is another essential component of any security system. Logging creates a record of events that allows for a comprehensive replay of network and server threats. So, it helps IT specialists and law enforcement track down hackers by following their digital trails.

is important in that it identifies possible exposures.

It should be performed by a qualified, independent security auditor who knows how dealerships operate and can recommend practical measures.

The cost to a dealership group for an audit can run from $30,000 to $50,000, which is no small sum. However, considering the far higher cost of a security breach – which IS a high probability if you do nothing – then it is a prudent investment for the long term.

4

“Patching” is a core technology component of a security system. All network devices, computers and servers should be patched regularly to close known security holes.

ERIK NACHBAR

cameras not just on the lots but also in the accounting offices and computer rooms, and to store that security video for 90 days

or more.”

5

Finally, antivirus software is another recommended tool to protect against hackers.

When All These Efforts Fail …

However, even if your dealership is making smart use of insurance, best practices and technology, it’s quite likely it will be hacked someday. So, you need a plan and resources to respond to hacking after the fact.

It is good practice to assign a hacking incident response team with clearly defined roles – including notifying key legal, insurance and IT contacts about a security breach – and who can work effectively with law enforcement.

Finally, every dealership should have a privacy policy that covers its responsibilities to customers, including the confidentiality and protection of their non-public personal information. I recommend consulting with legal counsel to write a sound privacy policy. If taking on all of my recommendations seems like a tall order, consider bringing in an outside security consultant who understands the dealership space.

I know this is a LOT of risk and information to absorb. However, while cyber security may sound technical in nature, at its core it is a business issue.

Your dealership’s competitive position and financial health may be at stake. It’s therefore important for your management team to address what customer and business information is most sensitive.

Your brand, customer trust and strategic positioning may be at risk.

President and CEO of Helion Technologies Erik’s company, which he founded in 1997, provides IT strategies to auto dealerships. He individually works as chief information officer for clients with a combined billions of dollars in annual revenue. See the website at www.heliontechnologies.com.

Hackers will be drawn to a dealership’s digital files of customer ID information, credit card numbers and loan applications.

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33

MARKETING

AD MESSAGES THAT RESONATE WITH WOMEN BUYERS, And Avoiding The Mistake Of Marketing Cars Like Power Tools Let dealership reputation and trust, not price, drive the value proposition when targeting these customers.

BY ANNE FLEMING

Don’t market this like this.

B

ased on how they approach the car buying process, women buyers tend to identify multiple choices of a dealership and choose from whom they will purchase based on different reasons than men use.

Understanding the nuances of women’s buying habits can mean the difference between your making the sale or losing it to a nearby dealership.

It is easy to operate on the assumption that price is the top priority for your women customers Price does matter, but they weight it along with other more emotion-based priorities such as trust and respect. In fact, when women car buyers are asked their reasons for purchasing (or not purchasing) at a particular dealership, price tends to be the No. 2 factor. Most often, their top reason is a positive perception of the sale associate or the dealership’s level of service.

Now, think about the newspaper car ads you see. They almost always focus on price. Compare that ad copy with the advertising for power tools sold by the local home improvement store. Again, price is the prominent focus. The value of cars and power tools may be perceived the same by men, but women usually see more nuance in the car deal.

2

3

4

Why is this? Let’s explore some reasons.

5 Factors With Women Buyers 1 Planning on a future business

relationship. The fact that women car buyers value customer service above price is a good indicator that they seek a relationship with the dealership for the life of the car and beyond. They want to be assured they can bring the car in for service at that dealership and receive quality work from folks they can trust.

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5

The dealership’s reputation. Prior to purchasing her car, a woman buyer likely will have done her homework about dealerships in the area. In surveys that ask about the websites women buyers researched, the dealership’s site usually ranks first, and one in three also visited the dealership’s Facebook page.

While women customers will often check out other resources including the manufacturer’s, AutoTrader’s and Kelley Blue Book’s websites, the dealership sites seem to be their perfect place to compare the competition.

Multiple dealership choices. On average, women visit 30 percent more dealerships than men do before buying. And, six out of 10 women do not purchase at the dealership closest to home. The bottom line: Women customers usually are willing to spend more time looking for what they want and to drive a little farther to land a better deal.

Confidence issues. Despite their careful research, women customers tend to approach the vehicle purchase with less confidence than men do. When reporting the emotions they felt when buying, nervousness usually ranks right behind excitement. Remember, more than half of women customers bring a companion.

There may be lots of underlying reasons for these emotions and behaviors, but it is clear that women really want to know they are making the right decision about a car.

Trusting the sales advisor. Women rank trust and respect as the top two reasons for purchasing from a particular

salesperson, and the price and/or perceived value of the vehicle only sixth. These priorities may arise from confidence issues and the desire to avoid buyer’s remorse.

What’s Exceptional About Your Dealership?

It is important for your salespeople to take all of these factors into consideration when their customer is a woman. At the end of the day, price will certainly matter, but other dealers can match price.

Other factors like establishing trust, dealership reputation and bolstering the customer’s confidence about the deal become even more important during the sales approach.

Here are four suggestions for ensuring your dealership’s sales approach doesn’t fall into the “power tool sales” category.

1

Sell more than just cars in your advertising. Women look at car ads, read dealer reviews and use social media in researching a car. Do your ads (through whatever medium) only talk about price?

If so, consider changing your ad copy to convey your dealership’s reputation for excellent service and trustworthy sales practices. You want to establish yours as the dealership that attracts women buyers because they can get a great deal from a trusted, respectful sales advisor AND great service for the next five to eight years.

Also, show that your customers matter before, during and after the deal. Include reviews by women customers on your website and social media. Make a point of demonstrating to women visitors that your service center is professional,

A woman buyer will emphasize feelings of trust and respect with a sales advisor.

“Expect many questions and have truthful, knowledgeable answers ready. If you don’t, the dealership down the road will.” fast and trustworthy; and provides amenities women tend to value such as a comfortable waiting area, favorable service hours extra services.

2

3

4

Understand and respect a woman’s emotional approach to buying. Be sure your sales advisors understand that women are not just price shopping.

Train your salespeople and service personnel about the importance of trust and respect factors. Teach them how to read a customer’s body language (e.g., folded arms, stiff body and curt responses probably mean the customer is not engaged and the conversation is not going well). Let your sales associates know that listening is the most important activity during a sale to a woman customer.

Be ready to answer tough questions.

For women, a car is much more than a way to get from point A to point B. They will have done extensive research before visiting your store, so expect many questions and have truthful, knowledgeable answers ready. If you don’t, the dealership down the road will.

Sell your dealership as well as a car.

When a woman customer signs on the dotted line and drives away in her new car, everyone at your dealership should

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perceive this as the start of a relationship.

Provide follow-up communications to be sure she is happy with her purchase. In addition to the standard CSI survey, give her a call to be sure everything is okay.

Make sure she has the GSM’s contact information and let her know you really want to hear any comments or questions.

The work doesn’t end there, however, or with a service reminder postcard. Offer special deals to your women customers and their friends. Discounts on oil changes accompanied by a gift, gift card or two-for-one offer for a friend are great ways to cement your dealership’s value and recruit new business from friends and family. When women customers return for service, think about ways to create a convenient experience through a loaner car, expanded service hours and a quiet

waiting area where she can relax, exercise or conduct business.

Key Factors For Women Buyers Will Change

At the end of the day, the most important thing to remember when selling cars to women is: Assume nothing. Change is constant. Nearly 40 percent of women out-earn their husbands. Women now buy more than half the cars in this country themselves and are directly involved in more than two-thirds of deals. When a car is scheduled for service, it is most likely a woman who is setting the appointment.

Understanding the criteria women tend to use in deciding about a vehicle purchase is critical to keeping up with the pace of change with this important market segment.

ANNE FLEMING

President of Women-Drivers.com Prior to her involvement in the retail automotive industry, Anne spent 20 years in brand and strategic product development for several international consumer product companies. Her leadership training led to the founding of Women-Drivers.com, which has been featured in the Wall Street Journal, ABC News, USA Today, Working Mother, Smart Money and other national media. Visit her website at Women-drivers.com and follow her on Twitter @Womendrivers.

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FIXED OPS

Today’s Owner Of A Recalled Vehicle Can Be Tomorrow’s

HAPPY SERVICE OR SALES CUSTOMER

Develop plans now to research and identify these recall prospects, and to effectively interact with them. BY CHRIS MILLER

U

.S. Defense Secretary Donald Rumsfeld, you may recall, felt there were three categories of knowledge:

“... There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say, we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know.”

Now, once your brain stops hurting trying to figure out what he was saying, I think you’ll agree that in auto dealerships, this same principle can be applied to define categories of customers:

1 The known knowns. These are vehicle

owners whom you know about, including customers you have sold to and serviced.

Their information is stored in your DMS.

2 The known unknowns. You know these

vehicle owners exist, but you don’t know anything else about them. These are potential customers who live outside your marketing area, customers whom your competitors have sold to and serviced, or prospects on lists who have not responded to previous marketing efforts.

3 The unknown unknowns. These are vehicle

owners you logically assume (but don’t know for a fact) exist, but about whom you don’t know anything. This group can include secondary vehicle owners who live near your dealership.

The Unknowns Are An Opportunity Vehicle owners in the latter two categories -“known unknowns” and “unknown unknowns” – easily could become your dealership’s biggest source of revenue. All you must do is find them and convert them into service or sales customers, or both.

Easier said than done, I know. However, leveraging recalls offers one promising approach. Recalls provide a unique opportunity to reach and engage with new customers, because your dealership is not trying to sell anything yet. Rather, it is offering to help with a problem. Many times, these customers don’t even know there is a recallable problem with their vehicle, or they realize but have shoved the issue to the bottom of their priority list.

Recalls provide your dealership with a natural competitive advantage. Unlike independent repair shops, your dealership is authorized to perform 36

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Your goal is to convert this owner of a vehicle these repairs, which won’t cost the cusunder recall into a service customer. tomer a dime. Safety recalls also present Convert Owners To Service Customers a huge source of potential service revenue from Owners of recalled vehicles tend to be differmanufacturers. So, how can your dealership claim ent than your typical service customers. The fact its share (and then some, hopefully) of this recall they’ve been tracked down and notified of a recall revenue pie? Try following Simply follow this comoften comes as a surprise and inconvenience, so munications strategy: they react with frustration or even anger.

Find “Known Unknowns” And “Unknown Unknowns”

You can start with your manufacturers’ lists of original owners. However, these lists are limited because they don’t provide information on secondary owners, a group that represents two to three times the number of potential customers.

To find these secondary owners, you’ll need check into your state’s rules. In some states, dealers can buy registration data directly from the Department of Motor Vehicles or insurance companies. In others, your OEM may need to get involved.

Finding the best sources of lists, however, requires some creativity and digging deep. Independent service and oil change centers, “smog shops” and roadside assistance companies all deal with vehicle owners and VINs on a daily basis, and may be happy to sell lists of current vehicle owner addresses.

Check VINs For Recall Information Many recalls are publicized weeks or even months before manufacturers are able to accurately identify specific vehicles needing to be recalled, and then customer notifications can take several more seeks.

Dealers also can have their own staffs look up recalls for current customers. The best way to do this is to enter their VINs through the secure communications portal provided by our OEM, then create a list of customers with recalls in your CRM or CMS. That list should be prioritized, with recalls that pose the highest safety risk first and those that are most profitable to repair second.

When an owner arrives at your store or phones, it is important that you are prepared with a response.

Ideally, your dealership should truly “own” the recall problem and apologize to the customer. One greeting we recommend is: “Thank you so much for contacting us. On behalf of [OEM] and [dealership name], we apologize for any inconvenience caused by this recall. Your safety is our top priority, and we want to make it right by repairing your vehicle at no cost to you.”

From there, your staffer should transition into a counseling process and explain the recall description, risks posed, remedy available, length of time to make the repair, and parts availability. Plus, the customer must be notified your dealership has certified technicians standing by to make these repairs.

Convert Owners To Sales Customers If the safety risk posed by a recall is high, and parts are not readily available, then the vehicle owner becomes a prime sales candidate. For example, the recent Takata airbag and GM ignition switch recalls generated so much frustration that many owners decided to trade in their cars; GM stated that in 2014, it sold 6,600 cars to customers with defective ignition switches.

If your service department doesn’t have the parts in stock to do a recall repair, don’t just write off the customer as a lost opportunity. Turn him or her over to the sales team, which needs to have devised a strategy. A special incentive should be provided or an offer made, to make up for your service department’s inability to perform the recall repair in a timely manner. Again, the goal is to position yours as the dealership that cares.

CHRIS MILLER

President of Recall Masters His company is a leading provider of automotive recall news, data, training and communications. Chris has more than 17 years of experience building software to automate marketing communications. He has worked with leading brands such as HSBC/Household Automotive, Mercedes-Benz USA and Costco Automotive Group. Visit the website at www.recallmasters.com.

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“About a year ago while on vacation, I brought Joe’s book, ‘A Dealer’s Guide to Recovery & Growth’, and I couldn’t wait to learn more about Joe’s training.

We have since attended Joe’s 2-Day Manager Workshop and we’ve implemented JVTN®.

Our dealership has completely turned around. We now have a sales process everyone follows, we track everything we do, we set goals religiously, and have weekly training meetings with our salespeople.

We were selling around 50 units a month, and in March we had an all-time record month and sold 184!

Joe, thank you for getting us on track and pointing out that there is no secret to success, it’s working smarter, not harder like we were doing.”

– Marvin Potter, GM, Matthews Auto Group, Vestal, NY

Train On JVTN® Today – Improve Sales Today What Is JVTN® Joe Verde Sales & Management Training, Inc. is known worldwide, as the go-to source for Retail Sales Management and Salesperson training & processes in our workshops and online.

We’re the only training source that covers all of the skills & processes for selling cars, training, coaching & managing salespeople, and tying F&I and Service into the retention process.

I initially developed JVTN® for our dealers who get their initial training in our sales and management workshops, so they can continue to develop their skills back in the dealership.

JVTN® mirrors our classes, and on JVTN® we cover...

• The sales process from the greeting to heading inside to work the deal, handling price, closing & handling objections, plus advanced courses on closing, objections & negotiation.

• Working the deal at the desk to deliver more at max gross.

• Transitioning to Finance, then to Service before delivery.

• ‘Targeted’ delivery and initial sold customer follow up.

• A continuous retention process, to turn sales today into added no cost / high profit sales in the future with each customer.

Then we have Follow Up, Prospecting, Internet & Phone Leads – and another dozen courses on critical skills and processes, plus Service and F&I courses on “Selling” & “Retaining” customers to guarantee more long-term retention.

JVTN® Makes In-Dealership Training Easy JVTN® makes it easy for managers to hold great training... n Your full subscription includes training for 2 of your managers in our live workshop so they understand the goal & process. n Each course has a complete Leader’s Guide on what to do before, and what to discuss or practice after, each chapter. n Teach & Verify ... Each chapter has a quiz and each course has Certification so managers know salespeople not only take each chapter, but also retain what they learn. n We have your back, with a dedicated staff of Certified JV Training Coaches to help your managers stay on track and help your sales team develop their skills.

JVTN® makes it easy for salespeople to develop their skills... n Every course & chapter includes a complete workbook filled with the processes / scripts / techniques covered. n Each salesperson (and managers) can track their activities to identify what training to ‘target’ so they continually improve. n And dozens of other features & 1,000s of chapters on skills, habits & attitude they can ‘like’ to review again and again.

With JVTN® you will sell more units at higher gross PVR, stop your salesperson turnover, and retain customers for life.

If higher sales, gross & net profit are your goals...

Call Now • 888-712-6647

RDE SAL VE ES E

EXCELLENCE

JO

“Our dealership has completely turned “I went from 14 to 25 units!” around and we’re up 127 units a month!”

YEARS OF 1985–2015

198 5 – 2015

C.

JVTN® – #1 AGAIN & AGAIN

30

AINING,I TR N

The #1 Training Company In The Car Business

AG MAN EMEN T

JOE VERDE

&

From 36 to 348,000!

To change what you earn change what you say!

In the early 1950s, there was a drugstore chain and each had a counter for sodas, malts and sandwiches. In a meeting on profits, management realized their highest profit margin item was an egg.

Back then, eggs cost 10¢ a dozen. They sold each egg for 5¢, 60¢ a dozen, and made 50¢ gross profit. The problem; they couldn’t figure out how to sell more eggs.

They’d tried to sell more, but they had only increased total egg sales by about three dozen (36) extra eggs per week.

They met with a sales trainer, Elmer Wheeler, and said they wanted to sell more eggs, and asked him to create a “presentation” for their counter people.

He said, “Sure,” and on the spot, he wrote a 4-word presentation on the back of his business card and told them to send his checks to the address on the front.

His simple 4-word presentation took their egg sales from just 36 extra eggs a week, to 348,000 extra eggs a week.

His 4-word presentation?

People often added a fresh egg to a malt or milkshake, so when a customer ordered one, instead of asking, “Did you want an egg in your malt?”, they held an egg in each hand and asked, “1 egg or 2?”

Whether you’re selling eggs or cars…

Sales are missed by a few words, and not by a few dollars.

Get my book, “Top 7 Revenue & Profit Sources” (free, below) and I’ll show you exactly where to look to immediately increase sales with no new expenses.

Then get to class and turn on JVTN®.

If you do, you’ll double or triple your sales, net and income like Marv (see the gray box) and so many others.

Double Your Net & Double Your Income!

Get Joe’s Book FREE Go To: JoeVerde.com/CBT

JOE VERDE SALES & MANAGEMENT TRAINING WORKSHOPS Sales Workshops

Management Workshops

n How To Sell A Car, Stay Off Price & Close

n Managing For Growth & Profit Our ‘Team Leadership’ workshop is the critical class managers never got on “Managing Salespeople & Profits”. Attend this workshop first.

The Sale Today Want a 20%-50% boost in sales and gross overnight?

Sign up now or take the course on JVTN®. n How To Close, Overcome Objections & Negotiate Tired of missing deals that should have become deliveries? Live & Online...Call today. n Internet & Phone Leads Dealerships miss 8 out of 9 deliveries from these lead sources. We fix that, live in this workshop and online at JVTN®.

n Working Deals (aka: Negotiation) Improve your sales, gross & CSI with this easy 20-minute, customer friendly, 3-Step Process on every deal you work.

Don’t Miss Out – Seats Are Limited!

Call Now • 888-712-6647

n Hold Effective Training Meetings

Your salespeople are individual gold mines, and they just need your help to produce more. Attend this workshop and turn ‘sales meetings’ into “Training Sessions”.

ATTENTION DEALER PRINCIPALS Zurich North America and CBT Automotive Network invite you to join New York Times Best-Selling Author and Leadership coach

JOHN C. MAXWELL and industry leaders to discuss:

THE FUTURE OF THE CUSTOMER BUYING EXPERIENCE

John C. Maxwell New York Times Best-Selling Author and Leadership Coach

OCTOBER 15, 2015

8:00a.m.-12:30p.m.

Four Seasons Hotel Chicago | 120 E. Delaware Place | Grand Ballroom | Chicago, IL

Morning following the 2015 Best Dealerships to Work For Gala

A panel discussion with some of the top industry leaders led by Jim Fitzpatrick, Founder and CEO of CBT News will precede Mr. Maxwell’s presentation.

Jim Fitzpatrick Founder and CEO of CBT Automotive Network

Jared Rowe President, Cox Automotive Media Division

Raj Sundaram Co-President of Dealertrack Technologies

Rachel Richards CMO, Sonic Automotive Group

Collin Sewell President of Sewell Family of Companies

To register for this exclusive dealer principal event, go to: http://pages.email.zurichna.com/evt?event=a1b34000001ZUuX Questions? Contact Tricia Wiese 402-963-5289

David Putz Head of Direct Markets, Zurich North America

IF YOU DON’T ALREADY KNOW ABOUT US...

YOU SHOULD.

ForceMarketing.com | Atlanta • New York | 800-610-8905

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