CBT News Magazine, November 2015 by CBTNews

CAR BIZ TODAY

Early Bird Registration Now Open For Feb. 9-11 CBT Conference & Expo

CHECK OUT OUR DAILY NEWSCAST ON CBTnews.com

The Official News Source of The Retail Automotive Industry

November 2015

Volume 2, Issue 8

LEVERAGE YOUR POWER BASE

OF PERSONAL ACQUAINTANCES TO CLOSE MORE SALES GRANT CARDONE … see PAGE 24

RESOURCES IN

GOOGLE ANALYTICS

THAT REALLY HELP DEALERS AMY FARLEY … see PAGE 22

DEALERSHIP GROUP’S BURST OF EXPANSION Miami-based Brickell Motors took a decade to get sales at its first two stores where it wanted, but today it is building and buying dealerships at an aggressive pace. ... see PAGE 6

President and CEO Mario Murgado (left), with partners Rick Barraza and Alex Andreus

HOW TO INCREASE YOUR USED

VEHICLE TURN RATE

EDUCATING CUSTOMERS ON TECH FEATURES

DALE POLLAK ... see PAGE 28

THE REALITIES OF A

DEALERSHIP REIMAGING PROJECT

In-car technology can help close a sale, but not if customers’ eyes glaze over. Here’s how to walk them through the features.

CHIP WALKER … see PAGE 16

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

... see PAGE 20

ENERGIZING OUTBOUND PHONE SALES Smart dealerships will manage to the right metric, which is live phone conversations initiated and not the number of outbound sales calls placed.

CBT NEWS 5 Concourse Parkway Suite 100 Atlanta, GA 30328

... see PAGE 12

AMAZING MARKET INTELLIGENCE

Are you DOMINATING your Market or is it DOMINATING you?

Learn more at MyPowerDealer.com

Insights From Conference Speakers Lencioni, Dorsey: Pgs. 8, 9

DON’T MISS THE BIGGEST AUTOMOTIVE EVENT OF 2016 FEBRUARY 9-11, 2016 | OMNI HOTEL AT CNN CENTER | ATLANTA

Patrick Lencioni

Nick Saban

NY Times Best-Selling Author, Leadership Guru

Jason Dorsey

Marcus Lemonis

Head Coach Alabama Crimson Tide

Millennial Expert, Best-Selling Author

Star of CNBC’s “The Proﬁt”

OVER 70 DYNAMIC GENERAL AND BREAKOUT SESSIONS. REGISTER TODAY AND SAVE $200

JOE VERDE

JEREMY ANSPACH

CLINT BURNS

JEFF COWAN

MIKE ESPOSITO

JOHN FITZPATRICK

JIM FLINT

JOHN FRANCO

LEE HARKINS

DAVID KAIN

CHIP KING

TIM KINTZ

DAVID LEWIS

PETE MACINNIS

KIRK MANZO

ERIC MERCADO

CORY MOSLEY

GARY TUCKER

GLENN PASCH

SCOTT PECHSTEIN

AARON WIRTZ

ALAN RAM

DON REED

JENN REID

JASEN RICE

TOM STUKER

PHIL SURA

MARK TEWART

JONATHAN THOMPSON

CODY TOMCZYK

For more information and to register, go to CBTConferenceandExpo.com

CAR BIZ TODAY M

Letter from the editor Dear readers, Momentum is building fast and furious for our CBT Automotive Conference & Expo to be held Feb. 9-11 in Atlanta. To give you a better feel for the strategies you’ll hear at the conference for ramping up every department and critical activity in your dealership, this edition we bring you writings from two of our keynote speakers: business leadership guru Patrick Lencioni and millennials expert Jason Dorsey. Speaking of keynoters, Marcus Lemonis, star of the CNBC reality show “The Profit” about saving small businesses, has signed as a speaker. Early bird registration is under way, and just log on at www.cbtconferenceandexpo.com to sign up. This edition, we also offer considerable guidance that your salespeople should find helpful. Look for insights on ramping up results from outbound phone sales calls from Managing Editor Mike Haeg of Century Interactive, explaining new car technology features in a way your customers can grasp from Matt Rodeghero of AutoLoop, and leveraging your “power base” of friends and acquaintances from entrepreneur and commentator Grant Cardone.

JON MCKENNA

Creative Director Randall Veugeler Art Director Erica Abrams Production Manager Laura Payne Designers Shay Harbaugh Brian Hassinger April Miller Christina Zavlanos

Happy reading.

Marketing Associate Roxanne Luhr

Miami dealership has designs on stores in more Florida urban markets

Insights from CBT Conference keynoters Patrick Lencioni, Jason Dorsey

20 How and when to explain

Following proper metrics leads to success in outbound sales calls

Push for more coverage from a manufacturer’s coop advertising program

between departments at your store get out of hand

By Jon McKenna

car technology features to your buyers By Matt Rodeghero, AutoLoop

By Mark Tewart, Tewart Enterprises

Funneling vendor presentations to same days each month improves dealers’ lives By David Lewis, David Lewis & Associates

various website traffic reports in Google Analytics

By Grant Cardone, Entrepreneur, Writer and Commentator

34 Steps to clearly and legally explain a sales contract to car buyers By Tony Dupaquier, Service Group

36 Women buyers offer

dealers a chance to expand pickup truck sales and their profits By Anne Fleming, Women-Drivers.com

26 Ask The Pros What to expect when signing on with your OEM’s reimaging program By Chip Walker, Custom Facilities Inc.

CBTNews.com

28 Franchised dealerships must police their rate of used car turns By Dale Pollak, vAuto Inc.

CAR BIZ TODAY NOVEMBER 2015

3 start-ups could really shake up the traditional dealership model By Zach Klempf, Selly Automotive

By Amy Farley, Force Marketing

Car salespeople should call on all of their acquaintances first

Subscription Manager Emily Wiggins

30 Don’t let competition

22 Dealers can leverage

By Mike Haeg, Century Interactive

Managing Editor Jon McKenna

Director of Marketing & Events Alex Branam

10 Industry News

Vice President/COO Bridget Fitzpatrick

Given how many franchised dealerships also sell used vehicles, we wanted to bring you guidance on managing that business line. Dale Pollak of vAuto Inc. has advice about increasing your used vehicle turn rate, and Zack Klempf of Selly Automotive points to three Silicon Valley-backed start-ups he thinks could really make waves in this arena.

By Jon McKenna

President And Publisher Jim Fitzpatrick

Creative Director - Digital Jeff Pearson

By Jon McKenna

Email newsroom@cbtnews.com Phone 678.221.2955

And, we bring our dealer readers a lot of content on how to get a better handle on their routine administrative challenges. Consultant/trainers Mark Tewart and David Lewis weigh in, respectively, on how to keep healthy interdepartmental competition from getting out of hand and how to prevent vendor presentations from grabbing too much of your schedule. Chip Walker of Custom Facilities Inc. writes about the practical realities of OEMs’ dealership reimaging programs, and don’t miss our article on getting more from a manufacturer’s co-op advertising.

In this Issue 6

CAR BIZ TODAY MAGAZINE

Photos from the Zurich-CBT customer buying experience symposium

ADVERTISING Director of Sales Erin Cianciolo ecianciolo@cbtnews.com d 678.221.2964 c 770.490.2637

CUSTOMER SERVICE info@cbtnews.com

SUBSCRIPTIONS To subscribe electronically, log on to cbtnews.com and click the subscribe link on the side bar. Alternately, forward your company name, your name, address, phone number and email address to info@cbtnews.com or CBT News, 5 Concourse Parkway, Atlanta, GA 30328. Please send address changes to the above email or mailing address. Permission to reprint or quote excerpts granted only upon written request. Advertising rates are provided upon request.

DEALERSHIP PROFILE

Miami Dealership Group Keeps

EXPANDING ITS Brickell group could open another store in its hometown soon but has designs on more Florida markets. BY JON MCKENNA

iami-based Brickell Motors is continuing its recent aggressive growth trend, having since last year opened one dealership and bought another, acquired a Miami property with designs of another store site, and set its sights on eventual expansion into Tampa and Orlando.

For 11 years after President and CEO Mario Murgado and his partners bought then-struggling Honda and GMC dealerships in Miami’s Little Havana district, they increased sales substantially but didn’t expand the business’ footprint. Everything started changing in 2012, when they opened a luxury models store and broke ground 100 miles north on new Infiniti and Audi dealerships in Stuart, Fla.

This year brought the construction of a Mazda rooftop a short distance from Brickell’s original dealerships and the buyout of a family owned Cadillac store. The company also bought a well-known motel property in Miami out of foreclosure, and Murgado vows to build “something very unique and special” in retail automotive on the $7.8 million site.

REACH Years Of Groundwork

How to explain the burst of expansion after more than a decade of seemingly just running the first dealerships? “It may look to you like it happened quickly, but trust me, it was not quick,” Murgado said recently. “The reality is, back in 2001-02, I was already reaching out to manufacturers in the luxury world. But it’s just not easy. These are all mature markets [in Florida,], and in mature markets [OEMs] don’t award points very easily. “I wrote to manufacturers regularly about my dealerships’ performance, but it took a long time.” Brickell Motors now has seven dealerships selling Hondas, Mazdas, Audis, Infinitis, Buicks and GMCs, and a variety of luxury models ranging from Bentleys to Corvettes. Murgado cut his teeth in the business has a 19-year-old salesman who gravitated to the lot’s Cadillacs and Rolls Royces, and admits a natural affinity toward luxury cars.

Expanding With Own Cash Flow Murgado: Years of preparation and groundwork came before his dealership group’s recent expansion burst.

The company’s expansion funding has been grown entirely internally by Murgado and his partners, Alex Andreus and Rick Barraza. Murgado, an energetic first-generation American who arrived in the U.S. just before his fourth birthday, feels dealers in general need to be more frugal and cautious about taking on debt. “I’m afraid there’s a lot of guys who don’t create budgets. I’m afraid there’s a lot of guys who don’t have the right expense reports. I’m afraid there’s a lot of guys who do things by the seat of their pants. “The world is too sophisticated to do those things. You have to be able to bring certain key metrics to the business and to every department, and to create an environment that’s about complete transparency and authenticity. You have to have good action plans and be on top of them on a consistent basis.” Having bought existing dealerships and built them organically, he would rather develop from the ground up, “because I get to build with the process and the plans and everything that I like to.”

Ground-Up Easier Than A Turnaround Certainly the purchase of the original Brickell (named for a district in downtown Miami) dealerships would give anyone cause for pause. Having only recently caught the bug to be an owner after 19 years in the business, Murgado thought about shopping out of state but decided “Miami was our home – so I went looking for the worst lot in our town.”

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

The Honda and GMC stores were owned by an absentee doctor and run by his daughter, and selling about 50 new and used vehicles per month. They were on track to lose $1.5 million a year and facing stiff, mature competition. Murgado paid $5 million and pushed his salespeople to be more aggressive and follow the fundamentals. This year, he estimated, those two stores will sell about a combined 7,000 new and used vehicles. By comparison, the Ocean Cadillac dealership that Brickell bought last year was in much better shape, a 33-year-old family business that was ready for a jolt of energy. Sales are up 45 percent there, he said, “and we’re only scratching the surface of what we might do.”

Emphasizing High-Touch Service In the culture that Murgado is trying to create, “fundamentals” includes intense community involvement and charitable contributions, outreach such as hosting fundraisers and offering free meeting rooms in the Stuart dealerships to community board members, delivery of vehicles to homes and businesses (where Brickell hopes to identify other prospective customers), and letting techs communicate directly with repair customers rather than through service advisors. In fact, his COO Andreus, and not the service manager or sales manager, is the one who responds to customer comments on Yelp. “I want one of the owners making that contact,” Murgado said of his longtime friend. He insists it is not really that complicated to deal with as many OEMs as he represents and that in fact he’s hoping to represent new nameplates on future expansions. Too many dealers spend too much of

Conveniences in Brickell dealership waiting rooms are a priority for management. their time on turf fights with OEMs, he feels; better to work with them.

Managing From Afar Murgado makes it a point to work from his far-flung Stuart dealerships on Thursdays or Fridays, but otherwise communicates by videoconference and gives his GMs there a lot of leeway. “My job is not to run those stores all the time.” Both stores were sales-effective in their first year, and the Audi store won Magnum Elite status. After more than three decades in automotive retailing, he believes the biggest change is the preparedness and qualifications of buyers visiting his lots and showrooms. “We don’t have as many people walking in, but you have to assume everyone is a

Customer Dora Aldo bangs the gong after completing her car purchase, a tradition at Brickell Honda.

buyer. They’ve already done all the research online about the vehicle they want, the financing and the trade-in value. “You have to deliver them the experience they want. If the desire is to get in and out in two hours, then I want to deliver it.” At 54, he has no desire to retire anytime soon but hopes his will become another dealership business handed down to the next generation. One son, Mario Jr., has worked a succession of bottom-up jobs with the company and recently was given the GM job at the Mazda store. Another son works for a Big Four firm and is studying for his CPA exam, but could end up working with Brickell someday, his father said.

Salesman Jose “Musico” Proveyer meets with a customer.

NOVEMBER 2015

CAR BIZ TODAY

CBTNews.com

Patrick Lencioni:

EXECS SHOULDWithNOT EQUATE Productivity, Or Fear SCREEN TIME ‘Micromanagement’ BY JON MCKENNA

ne of the most eagerly anticipated keynote speakers for the CBT Automotive Conference & Expo in Atlanta Feb. 9-11 is business leadership authority Patrick Lencioni.

Lencioni is founder and CEO of The Table Group Inc. in Lafayette, Calif., the author of nine best-selling business books and one of the nation’s most sought-after and interviewed speakers and writers on business leadership challenges. This edition, we bring you examples of his work to give you an advance look at the kinds of insights he will offer at the February event (www.cbtconferenceandexpo.com). Lencioni’s writing is excerpted from his blog.

From “The Blessing of a Power Outage,” August 2015: When you were a kid, did you ever have a power outage at your home, maybe in the middle of a big storm, and find yourself without access to distractions like television and other forms of technology? Most of us who grew up before iPads and iPhones and “mobile everything” know what I’m talking about. The family ended up lighting candles and playing a game or engaging in some other group activity that it wouldn’t otherwise do, and afterward everyone said, “We should do this more often.” And then the power went on and we got sucked back into television or e-mail or some other technological distraction. Well, I was recently thinking about this as it relates to work life. When I arrive at work, I almost always find my colleagues staring at their computers, working hard at whatever they’re doing. This usually makes me a little uncomfortable.

Don’t get me wrong. My concern has nothing to do with the idea that my co-workers are doing personal business at work; I expect them to do that because it’s an inevitable part of life. And I certainly know that they aren’t slackers; they do whatever is necessary to make our company successful. What bothers me is that we – in my office and in society – have come to visualize productivity as people staring at a screen and typing. Whether we’re responding to e-mail, writing a Word document or doing online research, we’re usually performing a solitary activity that a person sitting more than 5 feet away has no idea about. After years of observation, contemplation and deliberation, I’ve come to the conclusion that this is the productivity equivalent of being “penny wise and pound foolish.” Sure, everyone is individually busy and focused. But as a whole, we’re not maximizing our collective ability to get the most important things done.

Today, for every real micromanager I come across, especially at the top of organizations, there are dozens of abdication managers. These are the people who know little about what their direct reports are working on, and defend their approach by citing their own busy schedules, or worse yet by proudly using words like trust, autonomy and empowerment. Unfortunately, the results of abdication management are consistent: a lack of necessary guidance, delays in recognizing problems, stunted professional development of key people, and anxiety among employees. The consequences of this on the bottom line of an organization are not hard to imagine.

From “Micromanagement is Underrated,” April 2015:

From “The jerk Factor,” January 2015:

When I entered the workforce after college, I first became acquainted with the term “micromanagement.” I quickly learned that this wonky sounding word actually had deceptive power. People who accused their bosses of micromanaging seemed to do so as a permanent insult more than a mere suggestion for change. It was the organizational equivalent of being labeled a Neanderthal, or a corporate version of being politically incorrect. Micromanagers were assumed to be insecure and distrustful, so no one wanted to have that label applied to them. To make matters worse, being called a micromanager was almost indefensible; if an employee felt that they were being micromanaged, those feelings had to be validated and addressed. It might be tempting to read this and think, “What’s the big deal?” Well, there was an unintended consequence to this micromanagement witch hunt, one that had a chilling effect on leaders that continues today. See, the pendulum swung far away from micromanagement and seemed to get stuck on the opposite end of the spectrum, in a place I’ll call “abdication management.”

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

Addressing the abdication management problem requires understanding its root causes. Those include the fear of being accused of micromanagement, which I discussed above, as well as a strange combination of negligence and ignorance.

I had the opportunity to work with a college baseball team recently, and came to a realization that helps explain why accountability is one of the biggest challenges for team members and leaders alike. I call it “The jerk Factor,” and yes, the “j” is not capitalized for a reason. I was doing an exercise with a group of about 10 team leaders in which I asked each of them to identify their key strength and weakness as a leader. After a few players admitted that their weakness is their reluctance to confront teammates who aren’t living up to the team’s standards, another of the leaders reported that his weakness is being too confrontational. He said, and I’m paraphrasing here because college guys don’t talk the same way that executives do: “I felt like a jerk the other day when I called out the team and said they were wimps for not doing enough reps in the weight room.” One of his peers replied, “Yeah, I heard a few of the guys say they thought you were being a jerk, but they also said you were right.” This didn’t seem to make the leader feel any better. I advised him to go back to his teammates and admit that even though what he said may have sounded harsh, he was doing it for their good, and the good of the team. And that’s when I realized that part of being a leader and team player is the willingness to be a “jerk” from time to time.

Jason Dorsey:

EASE OF USE AND VISUAL To Millennial IMAGERY HELP SELL Buyers

BY JON MCKENNA

o one in the country speaks and writes with more authority about what motivates, and de-motivates, millennials than Jason Dorsey does.

Working from his Center for Generational Kinetics in Austin, Texas, Dorsey is perhaps the country’s most noted expert and speaker on Generation Y. He will be a keynote speaker at the CBT Automotive Conference & Expo (www.cbtconferenceandexpo.com) in Atlanta Feb. 9-11. For this edition, Dorsey fielded several of our questions pertinent to how dealerships sell and market vehicles to millennials.

Car Biz Today: What would you consider to be the single-mosteffective marketing channel for a car dealership to reach millennial buyers? Dorsey: The most effective marketing channel to reach millennial buyers is a strong crosschannel digital approach. There is no one channel, campaign or secret digital sauce that will get every millennial buyer. However, by tracking the results of your digital outreach by channel, you can get good insight into what is actually working and where to invest more. In fact, in different parts of the country you can see very different results engaging millennials by digital channel. The most important thing when it comes to marketing is to go where millennials in your area are searching for cars online. Be there ready for them with visuals, messaging and as few steps as possible for them to reach out. And, whenever possible, don’t try to call them! See if you can send a text message instead. Writing both as a millennial and a millennial researcher, please don’t leave us a voicemail. That is what our dad does.

However, we do see some consistent starting points that work well across the generation when it comes to the auto industry. Those starting points include: 1) Make it as easy as possible to get the information millennials want when they are looking for a vehicle online. Every single click you require or extra second you make them search means millennials are more likely to go somewhere else. 2) Millennials read and learn almost entirely through imagery. Skip the blocks of text and instead show them photos, videos and bullet points. 3) Make sure your website works seamlessly on mobile and tablets. You’d be shocked at how many dealership websites we review that are extremely difficult to navigate when not on a traditional computer. 4) Show millennials how easy and low-risk it is to contact your dealership. Every blank you add that they have to fill out to complete an info request form makes them less likely to complete it. Instead, let them just send you an e-mail or text message to start the conversation, and then you can amaze them with how great your dealership is.

Car Biz Today: How much importance do millennials really place in online customer reviews, when they are researching a car purchase? Do they understand there are two sides to a negative review? Dorsey: Depending on which data you look at, millennials value online ratings and reviews more than any other source when considering what car to buy and where to buy it, or at least they rank online ratings and reviews them among their top three car-buying influencers nationwide.

Car Biz Today: : What potential benefits in that marketing message (price, selection, vehicle features, speed and integrity of the process, quality of the dealership staff, etc.) are most likely to appeal to a millennial?

While millennials certainly recognize that there is more than one side to a negative review, the only thing that really matters is how the dealership responds to the negative review. Millennials are watching to see if the response is sincere, personal and human. If it comes off as defensive, automated or generic, then the benefit of the doubt too often goes to the person posting the negative rating or review.

Dorsey: Millennials are a huge generation, numbering nearly 80 million in the U.S. alone. In our research, it has become clear that all millennials don’t fit neatly into one huge box.

We believe that negative reviews in auto retailing are often the best opportunity for a dealership to show how great you are based on how you respond. You can win customers based

on how you handle negative reviews, because your handling of the reviews offers a great snapshot into your culture and shows the world how you treat others.

Car Biz Today: What about when it comes to servicing a car? What are the critical success factors in establishing a relationship of confidence and trust between a dealership’s service department and a millennial car owner? Dorsey: The critical success factors come down ease and amount of stress in scheduling a service appointment, interaction with service professionals throughout the process from dropoff and hang-out areas to pick-up, transparency in fees and payment, and ease of departure. The bottom line is, you want to give millennials plenty of options to make, confirm and remind them of their service appointment; reduce their stress by telling them in advance what to do and expect (which might literally mean a short video showing where to park or pull up to the service drive and what to bring); a clear explanation of the work to be performed, in regular English not servicespeak; and updates available by text. In a perfect world, millennials would be able to pay before they pick up their car and enjoy free Wi-Fi and a decent cup of coffee while they wait. Ironically, other generations increasingly want the same things; so, if you know how to win millennials, then you are in position to make every other generation happier, too. Most importantly, millennials are the fastestgrowing generation of auto buyers in America. They’re also incredibly loyal if you know how to win their loyalty. That combination provides a powerful backbone for dealership leaders to drive sustainable growth for the next 10 years – if they make the changes necessary to win this generation now.

NOVEMBER 2015

CAR BIZ TODAY

CBTNews.com

INDUSTRYnews COX-DEALERTRACK DEAL FINALLY CLOSES

PEAK FOR U.S. VEHICLE SALES SEEN IN 2017

After several postponements and a late divestiture of a business line to satisfy federal antitrust concerns, Atlanta-based Cox Automotive Inc. finally closed its $4 billion all-cash purchase of Lake Success, N.Y.-based Dealertrack Technologies Inc.

In marketplace data releases of note, research firm IHS Automotive issued a report predicting the U.S. auto market, which has been expanding for several years, is nearing a peak and sales will retreat after 2017 due to rising interest rates and other factors.

In order to keep Cox from obtaining an estimated 86 percent share of the inventory management solution marketplace, the Justice Department filed a lawsuit to block the purchase of Dealertrack and its Inventory+ business line. At the same time, the agency filed a proposed settlement to address the competitive concerns, and when Dealertrack agreed to sell Inventory+ to DealerSocket of San Clemente, Calif., for $55 million, the lawsuit went away.

If IHS is correct, U.S. vehicle sales will top out at 18.2 million in 2017 and gradually dip to about 17 million by 2022. A new analysis by McKinsey & Co. concluded that ride-sharing services like Uber and Lyft inevitably will soften car sales, even if they don’t have a dramatic disruptive effect. And ADESA Analytical Services said that certified pre-owned vehicle sales accounted for 18.5 percent of franchised dealerships’ used vehicle sales during the first half of 2015, up from 16.9 percent in the first half of 2014.

Government questions about the deal led to the Cox offer being pulled and revised several times after it was first unveiled in June. As of the closing, Dealertrack stock is no longer publicly traded; Cox is a private company.

S.C. STORE LEADS LIST OF TOP DEALERSHIP WORKPLACES

Baker Motor Co. of Charleston, S.C., which represents six nameplates, was named the best dealership workplace in North America in Automotive News’ fourth “100 Best Dealerships to Work For” ranking. The list was based on surveys submitted by 62,000 employees of dealerships that applied for inclusion. After Baker Motor, the top 10 included: 2) Jaguar-Land Rover-Volvo Marin in Corte Madera, Calif.; 3) Yark Alfa Romeo-Fiat in Toledo, Ohio; 4) Faulkner Subaru Mechanicsburg (Pa.); 5) Yark Subaru of Toledo, Ohio; 6) Patriot Subaru in Saco, Maine; 7) Greg May Chevrolet of West, Texas; 8) Faulkner Subaru-Harrisburg (Pa.); 9) Landers Chevrolet in Benton, Ark.

MERCEDES TO ADD NEW U.S. STORES METHODICALLY Steve Cannon, CEO of Mercedes-Benz USA, said his company will keep adding new U.S. dealerships for the next couple of years before stopping in 2017 at about 390 stores. Mercedes-Benz currently has 370 U.S. dealerships, up 14 from 2012. Most new outlets will be in the Sun Belt, the West Coast and Eastern Seaboard, according to Cannon. He emphasized the company wants to maintain careful growth in the number of its stores and said a more critical goal is annual throughput, which rose by 5.4 percent in 2014.

VW ACTS TO COMPENSATE DEALERS AFTER DIESEL EMISSIONS SCANDAL

Volkswagen of America launched financial assistance programs to compensate dealers after sales of 2015 model-year diesel vehicles were halted and the EPA refused to certify 2016 cars as complying with emissions rules. According to media reports, bonus payments were guaranteed in September equal to $300 for each new car sold and $600 for each Passat. Also, floor plan financing will be reimbursed for diesel vehicles on lots that were grounded by VW’s stop-sale order. And, dealers will get guaranteed payouts under VW’s customer experience bonus program. Those payouts equal 1 percent of sticker price for each vehicle sold in 3Q and 4Q of 2015.

FAMILY MEMBERS GET GM’S DEALERSHIP EMPLOYEE DISCOUNT General Motors Corp. is turning to families of its dealerships’ employees to boost U.S. sales. The OEM made a one-month offer to anyone sharing an address with an employee of one of about 4,200 dealerships. Those people will qualify for the company’s employee discount for 8 to 10 percent of sticker price on most Chevrolet, GMC, Buick and Cadillac models. The deal ran through Nov. 2. 10

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

EXECUTIVE ANNOUNCEMENTS Atlanta-based Cox Automotive fired off a series of C-suite announcements, including:

• Jared Rowe was named president of the automotive media division, putting Kelley Blue Book and Autotrader under common leadership. • Brian Geitner became president of the company’s financial services and NextGear Jared Rowe Capital businesses. • Raj Sundaram was tapped as chief client success officer. Former TrueCar Inc. President John Krafcik took over Google’s autonomous car division effective Sept. 15. The announcement came not long after Scott Painter, founder and CEO of Santa Monica, Calif.-based TrueCar, decided to step down by year’s end. Momentum Auto Group, which has 10 stores in and around Fairfield and Vallejo, Calif., hired George Athan as COO. He is a 32-year industry veteran with experience at AutoNation and eLead, among other companies.

FTC OFFICIAL GIVES AD TACTICS THAT GET DEALERS IN TROUBLE Guidance sometimes comes from unexpected sources, as dealers who attended the recent DealerSocket “innovate” conference could attest after hearing a presentation from Cindy Liebes, director of the Federal Trade Commission’s Southeast region office.

The FTC, of course, polices the accuracy and integrity of dealership advertising, and Liebes offered her audience “seven deadly sins” that could put them in the crosshairs of federal regulators. The violations Liebes’ staff sees most often include: Cindy Liebes 1) Twisting the fact about add-ons, that is undisclosed additional charges would eat into or even exceed the savings on a car or financing package. 2) Giving a lowball pitch, such as advertising a photo of a loaded car without explaining that some of the features weren’t included in the stated price. 3) Making misleading “zero” promises, e.g. “$0 down” or “$0 drive-off lease. Often, the consumer had to pay a lot more up front. 4) Hiding the strings tied to a deal, as with not disclosing that a special discount or rebate wasn’t available to everyone. 5) Burying key disclaimers in fine print that doesn’t live up to the FTC’s “clear and conspicuous” standard. 6) Ignoring applicable federal credit laws, such as the Consumer Leasing Act that requires other key facts be disclosed if a business is advertising its monthly lease payments. 7) Violating prior FTC administrative orders; do that and your business could be hit with civil penalties.

E X C E L L E N C E .

I N T E G R I T Y .

D E P E N D A B I L I T Y .

CERTIFY YOUR OTHER MAKES AND MODELS DOUBLE YOUR

STAND OUT IN

CAPTURE

PRE-OWNED SALES

YOUR MARKET

MORE LEADS

CALL US AT 844.549.6410 DEALERS.MOTORTRENDCERTIFIED.COM/CERTIFY

SALES

LIVE CONVERSATIONS, NOTJUST DIALING Outbound Phone Sales Efforts Must Be Judged By

Just picking up the phone and dialing out cannot be regarded as productive by this salesman.

Dealerships need to manage to the right metrics and be smart with technology to maximize phone success. BY MIKE HAEG

t’s 2 p.m. on a typical Tuesday. Unfortunately, the weekend sales numbers weren’t great and now it feels like a ghost town around the dealership. Foot traffic is light. Inbound phone calls are slim. There’s no buzz of sales energy; the atmosphere is dead. Yikes, it’s one of those afternoons when it’s quiet … too quiet. I bet this scenario sounds familiar. Every dealership goes through a lull here and there. However, great dealerships fight through the periods of downtime and keep them from compounding. They create their own opportunities and develop a culture of action, not reaction. Slow-moving Tuesdays are when they kick it up a notch and have their people hit the phones. Great dealerships own the phone in one area where others fall prey to apathy and laziness: Outbound sales calls. What makes a great outbound-calling culture? In my opinion, it takes a simple infusion of leadership, technology and the right metrics to empower managers to hold their teams accountable, encourage the right activities and stay confident in their people’s efficiency.

Managing To The Right Metric

Traditional thinking in our business holds that a “smile and dial” mentality is what matters most when it comes to outbound calling efforts. In other words, the more outbound calls, the better. Salespeople just need to hit the phones as hard and often as possible. It’s a numbers game, with total outbound calls being the Holy Grail. If a dealership is managing its outbound processes at all, it more likely than not abides by the simple metric of total outbound calls placed in a day or week. For example, Salesman Steve would be expected to make 25 calls today or 125 calls in a week. To get your outbound-calling culture off the ground, “smile and dial” isn’t a terrible mindset. In fact, it’s better than nothing. What that approach fails to do, however, is encourage tracking the 12

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

metric that matters most on an outbound sales call: Executing an actual, live conversation with your prospect. In reality, a mere 12 percent to 14 percent of outbound calls actually reach an intended prospect and lead to a live conversation. The vast majority of outbound calls are greeted by voice mail, non-stop ringing, spouses or receptionists. Even worse are the fake outbound calls that conniving salespeople place to say, a CVS Pharmacy to rack up their call counts. Ultimately, would you rather a salesperson have 15 actual live conversations with prospects in a day or simply place 50 outbound calls? There is a fun secret behind layering this new unique metric on outbound accountability: It works. When that metric is measured, salespeople naturally gravitate toward actions and techniques that will increase their chances for live conversations. For example, a dealer should find his salespeople stop trying to fulfill their outbound call quota at inconvenient times for prospects. Rather, they start peppering their calls throughout the day and into early evening. If the prospect is unavailable, salespeople are more inclined to ask the spouse or receptionist, “When is a better time to reach him or her?” They are more polite to those who answer the phone, because that person may ultimately be a gatekeeper to the decision-maker. Without adding new staff or investing in expensive new phone systems and/or phone training, a dealership will find the number of quality outbound

sales conversations will go up simply by managing its sales team by the right metric.

Utilizing Phone Technology

A strong outbound culture requires tracking outbound phone activity in a meaningful way. Using the right technology is the only way to feel confident on this front, I believe. The first step is to research, identify and hire a phone technology company to track and actually record outbound phone calls at the agent level. This gives dealership management insight into who is placing phone calls and when. Think of it as a scoreboard for outbound phone calls and live conversations. Salesman Bob will absolutely hate having his name listed below his archrival Saleswoman Sally on the outbound phone call scoreboard. Recording the outbound phone calls also increases the likelihood of quality (i.e., live) conversations. The simple truth is that

“Recording the outbound phone calls also increases the likelihood of quality (i.e., live) conversations. The simple truth is that salespeople

improve their phone performance when phone-tracking is in place.”

salespeople improve their phone performance when phone-tracking is in place. Plus, the recordings provide valuable training opportunities. Just as with inbound sales calls, top-performing dealerships listen to outbound phone calls during daily and weekly sales meetings. These training sessions aren’t about table-pounding or a Big Brother culture; they should be constructive and open in tone. Both the good and the bad calls should be reviewed. Every salesperson should be subject to having calls reviewed and trained upon each month. Outbound sales phone calls offer deep value and transparency when integrated into a dealership’s CRM. As we all know, it can be tough getting prospects back on the phone after an initial contact. Outbound call integration would give management easy access to the activity and processes behind every prospect interaction. Imagine that Prospect Pete was considered a hot lead just a few days ago, but he hasn’t even been called back. WIth CRM integration, managers can spot prospects who are falling through the cracks and act first.

a hyperlinked prospect phone number in the CRM to initiate a tracked and recorded outbound call. This functionality is a total game-changer for dealerships looking to step up their outbound sales call game. The process to reach a prospect, track a call and integrate that call into the CRM is easier than ever before.

Right Prospect At Right Time

With phone calls integrated into the CRM, the best dealerships focus much of their time on identifying the right prospects to call at the right time. This is low-hanging fruit to sell more cars. Take Prospect Patricia, who previously called the dealership about a car she saw on AutoTrader. She is a great lead but unfortunately wasn’t offered a firm appointment to come visit the store.

Great outbound dealerships focus on mining, pursuing and nurturing leads like Prospect Patricia.

Phone Excellence Starts At Top

Excellence starts at the top. That is worth repeating because it’s so important: Excellence starts at the top. Any dealership with a strong outbound phone culture is anchored by a dealer principal, GM and general sales manager who are committed to excellence. As dealerships continue to invest their time and money in people, processes and technology, those that fail to do so will be exposed. An outbound culture driven by accountability and technology is no longer something to be considered. It is a must for any dealership aiming to stay ahead of the competition.

Finally, many CRMs even offer outbound clickto-call technology. Sales agents can merely click on

“What makes a great outbound-calling culture? In my opinion, it takes

a simple infusion of leadership, technology and the right metrics.” MIKE HAEG

Director of Automotive at Century Interactive

This phone call should be recorded and reviewed later with the salesman, for purposes of ongoing training.

Mike’s company produces the Car Wars automotive call-tracking program. He loves fusing technology with people to help dealerships “own the phone.”

TO SEE MORE FROM MIKE HAEG GO TO CBTNEWS.COM

NOVEMBER 2015

CAR BIZ TODAY

CBTNews.com

LEADERSHIP

Don’t Hear Vendor Presentations On

“Unless dealers and their managers really organize in a disciplined way the process for dealing with vendors,

they may find themselves turning away businesses offering something they really need, simply because they were too time-stressed.”

[

A T R O SH E

[

C I T NO RESTRICT THEM TO SPECIFIC DAYS

Solicitations can overrun a dealership’s management if you don’t funnel them to 1 to 2 days each month. BY DAVID LEWIS

An initial vendor presentation that cannot be completed in 15 minutes should be considered a time-waster.

CBTNews.com

nyone who operates a business understands the concept of time equals money. Just as we measure the cost and value of our products and services using a cost-benefit analysis, it is important to understand how much time is spent on any process, to ensure we don’t waste profits along with time. Effective time management is essential for anyone who expects to be successful in his or her business or in life in general. Marketing and economics expert Louis E. Boone was aware of how difficult this can be at times, when he once quipped, “I am definitely going to take a course on time management – just as soon as I can work it into my schedule.” It’s a joke with a serious side to those of us who sometimes find ourselves planning our day with interruptions included. Why am I so focused on the time management topic? Think about how many vendors come to your average dealership (often unannounced) every month. TV and radio station ad reps. Representatives of billboard and direct mail marketing companies. Salespeople for manufacturers of petroleum products and for tool distributors. Janitorial services. Printers. Lighting installers. Even vendors that fill helium balloons. Unless dealers and their managers really organize in a disciplined way the process for dealing with vendors, they may find themselves turning away businesses offering something they really need, simply because they were too time-stresse

Vendor Solicitation Day Really Works At my company, this actually became a matter of critical importance that needed to be addressed. Thankfully, we eventually found a solution that has made a tremendous difference. Once or twice a month, we hold what is in effect a Vendor Solicitation Day. We have scheduled appointments to hear

what vendors have to offer, and we calendar those presentations in a way that keeps them out of the way of the most important business flow. We usually set aside two hours, which lets us hear from as many as eight vendors. The structure has been tremendously beneficial for our company, and incorporating this approach into your dealership can do the same. From the outset, it is important to put one person in charge of setting appointments for vendors on the designated day. This can be one particular administrative assistant, to whom all merchants will be referred when they phone or show up unannounced. Practically anyone at your dealership can handle this job, but the process must be consistent and followed correctly if you are to get a handle around vendor management. Everyone in the dealership (not just the managers) must be aware of how the process works and have his or her schedule organized to accommodate it in a precise and effective manner.

Cut Them Off At 15 Minutes Each vendor is given exactly 15 minutes to make an initial presentation to a panel composed of managers from the various departments in our company. The vendors are notified beforehand that our management will not make any decision that day about buying their product or service, and warned that they must keep their presentation under 15 minutes if they want to be considered. This way, when a particular vendor’s presentation time rolls around, our team will be totally focused on its product or service presentation and not moving another salesperson in or out of the room. It is important to inform each vendor, politely but firmly, that at 15 minutes they must be finished or will be asked to make way for the next scheduled presentation. As soon as all vendors for that day have made their pitches, our management team sits down to discuss all of the products and services presented while they are fresh in our minds. We summon back any vendor in which we’re interested, to give a more thorough presentation on another day. After that follow-up presentation, our team typically makes a final decision on whether to buy the product or service.

Follow A No-Exceptions Policy At our company, this has proved to be an extremely effective approach to manage a large number of vendor solicitations and give each proper consideration.

CAR BIZ TODAY NOVEMBER 2015

TO SEE MORE FROM DAVID LEWIS GO TO CBTNEWS.COM

Any salesperson who shows up at our office unannounced is informed firmly that he or she will have to wait for a designated vendor day, and no one will meet with them that day or take their materials. In addition to helping us effectively manage what could turn out to be a schedule-killer for our managers, it also has motivated vendors to focus their sales pitches for a 15-minute time slot. In any industry, professionals are challenged with time management. They have to find the best solution for handling every aspect of making a profit and growing the business. There certainly are times when executives and managers must make immediate decisions. However, when it comes to the most important issues, the more organized they are the more likely they will be to make the right decision.

It’s A Way Of Juggling Priorities Managing how and when sales presentations are delivered to your dealership is one critical way of getting and staying organized that is well worth the time and effort. It fortifies the old Chinese proverb that says, “One cannot manage too many affairs. Like pumpkins in the water, one pops up while you try to hold down the other.” On a busy sales day, that certainly is the way dealers, GMs and sales managers feel when they are trying to keep the business running. Often, we have to sacrifice one “pumpkin” in an effort to save another. However, it does not have to be this way as we deal with different opportunities and challenges that come our way. We may find out we let the most valuable pumpkins get away while trying to save others that proved to be less valuable in the end. When it comes to managing vendor solicitations, this can be a costly mistake that could be easily avoided by scheduling a regular Vendor Solicitation Day once or twice a month and organizing the presentation of various products and services that come our way in the daily process of building our business and servicing our customers.

Vendors that make the cut after their initial presentation can be invited back for a more detailed conversation.

PROTECTIVE’S VEHICLE PROTECTION PLAN IS A NO-BRAINER. Introducing the NEW Vehicle Protection Plan from Protective Asset Protection.

Coverage that better meets the needs of an evolving marketplace

Updated F&I technology, including e-rating

Simplified contract and materials

Backed by over 50 years of reliably serving dealers

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.

For more information: visit

protectivevpp.com email

newprograms@protective.com

Protect Tomorrow. Embrace Today.

or call

888 326 2545

Limited Warranty Products, Vehicle Protection Plans (VPPs) and GAP are backed by Lyndon Property Insurance Company in all states except NY. In NY, VPPs are backed by Old Republic Insurance Company, Limited Warranty Products are backed by Western General Insurance Company and GAP is not available. Credit Insurance by Protective Life Insurance Company in all states except NY, where it is backed by Protective Life and Annuity Insurance Company.

DEALERSHIP CONSTRUCTION

• AS-BUILTS:

These are plans/blueprints of your current facility as it is constructed today. This gives the reviewing company a place to start. This is important if your project is a remodel, because as-builts will show locations of your building’s steel framework including column lines, utility connections, plumbing routes, fire suppression systems and electrical service connections.

What To Expect In A

DEALERSHIP REIMAGING PROJECT

Be prepared for extremely detailed project plans and numerous meetings with reviewers, architects and contractors. BY CHIP WALKER

and other local influences. All of these can be incorporated into the building’s design and flow, however, while still maintaining compliance with the manufacturer’s requirements.

If your manufacturer offers a reimaging compensation package, you need to grab it. “Reimaging” refers to the design elements that the OEM and its design team have put together to help dealers visualize what the project should resemble at the end. Many of these elements are required to ensure a construction project is compliant at the end of your build.

First, let’s delve into some key terms of a reimaging project in more detail.

The reimaging process can be overwhelming, but with some help and some patience it can be very impactful for your dealership, your staff and your customers. A reimaging project has to respect the individual culture of your store and the dealer’s personality, as well as civic interests

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

The OEM will provide your dealership with minimum standards you must meet. They usually are based on your plan scope, market size and past sales volume. Architects and general contractors: These are the professionals who work directly for your dealership. They are your partners to navigate with the OEM reimaging program and represent your interests with the third-party reviewers.

• THIRD-PARTY REVIEWERS:

These are companies that the OEM has hired to help review, oversee the overall project and building plans, finishes and space requirements to ensure they meet all goals and benchmarks established by the OEM for its image program. The OEM will provide your dealership with minimum standards you must meet. They usually are based on your plan scope, market size and past sales volume.

• ARCHITECTS AND GENERAL CONTRACTORS:

ongratulations! You have made the decision (maybe with help) to upgrade your dealership buildings in your OEM’s new image package. Now what?

Investing in your dealership site and buildings can be an adventure, to say the least. Before proceeding with a reimaging, it is helpful to have a better grasp of how they work and the parties and cost centers involved.

Third-party reviewers: These are companies that the OEM has hired to help review, oversee the overall project and building plans, finishes and space requirements to ensure they meet all goals and benchmarks established by the OEM for its image program.

Key Players And Elements • REIMAGING PACKAGE:

More specifically, this could cover everything from floor tiles to lighting, paint colors, wall coverings and more. The package also addresses exterior image items that give each OEM its signature branded look. This almost always involves the main entry points to the store and exterior finishes. Dealers find these reimaging packages to be very comprehensive and detailed, as they include names and contact information for manufacturer’s representatives, model numbers, pre-approved color pallets, options and alternates for most materials.

Architects and general contractors: These are the professionals who work directly for your dealership. They are your partners to navigate with the OEM reimaging program and represent your interests with the third-party reviewers.

OEMs are particularly concerned that reimaging projects convey the brand image they want at a dealership’s entranceway.

The reimaging package will be extremely detailed with regard to tiles, finishes, lighting and paint colors.

Pavel L Photo and Video / Shutterstock.com

“Dealers find these reimaging packages to be very comprehensive and detailed, as they include names and contact information for manufacturer’s representatives, model numbers, pre-approved color pallets, options and alternates for most materials.” What To Expect Now, let’s discuss some of the practical realities in dealing with the key players and elements I just discussed.

✓ WITH THE REIMAGING PROJECT ITSELF:

To start the process, if your dealership is undergoing a remodel, you will have to produce a set of as-builts plans. Your architect or general contractor should be able to help here. If a new, ground-up building is being constructed, some basic floor plans and a site plan will jump-start your first DID (design intents documents) meeting. You will typically

get support from the OEM’s facilities team or zone representative. These people can smoothen the path and be very helpful with feedback, materials and support. Typically, they already will have managed several similar projects and can anticipate the challenges that come up almost every time. They will walk you through the process and how to work with any third-party reviewing company.

✓ WITH AS-BUILTS:

It is expensive to move or relocate some of the systems detailed in as-built plans. During the design process, look for any opportunities to let one or more of these systems stay where they are, so that cash can be spent in other areas of the reimaging project.

“A reimaging project has to respect the

individual culture of your store and the dealer’s personality, as well as civic interests and other local influences.” JuliusKielaitis / Shutterstock.com

Sometimes, relocating one or more of these systems is unavoidable. That is fine; the overall negative effects on the project can far exceed the cost of relocation.

✓ WITH THIRD-PARTY REVIEWERS:

Working with these people begins with your DID meeting. You will pay a fee to the third party for this review and support. The results from this meeting will be a package for you that will show space-planning; rough building size; key element locations; branding materials including any required furniture, point-of purchase displays, signage and internal graphics; and much more. Once you receive your materials back from your reviewer, your architect will take those guidelines

CHIP WALKER

President of Custom Facilities Inc. Chip has 25 years of construction and design experience and also spent 10 years as COO of one of the largest dealership groups in the Midwest. He also serves as his company’s in-house expert on manufacturer’s imaging programs and on compliance requirements. See the website at www.customfacilities.com.

TO SEE MORE FROM CHIP WALKER GO TO CBTNEWS.COM

and turn them into construction documents. You will also need to pay a fee to the architect for this service, and it usually is based on a per-squarefoot price. These are your real building plans that your general contractor will use to apply for a building permit and to invite subcontractors to bid on your work. During creation of construction documents, regular reviews of those plans should be performed with the third-party company to make sure required components, materials and other benchmarks are accounted for and in the correct locations (which includes interior and exterior finishes, colors and materials). This is important, because these reviews ensure your finished plans are “compliant” such that your dealership qualifies for any OEM funding for the project.

✓ WITH ARCHITECTS AND GENERAL CONTRACTORS:

In selecting these professionals, dealers need to tackle the job early and take their time. This is the team that will take your project to the finish line. Always make sure to check their references. Have they designed or built other auto dealerships? Do they understand what is required with reimaging programs? Do they have the experience to see the project through to completion? Just because they have designed or built a business strip center doesn’t mean they understand how a dealership should look and, more importantly, how it should work.

In Conclusion Construction at a dealership can be extremely exciting, even if it is very disruptive while you conduct business at the same time. There will be good days and challenging days during your project. A comprehensive plan and timeline are key tools and will help to reduce frustration among both your staff and your customers. Try to have fun with your project. Motivate your salespeople with opportunities to market the renovation process in their favor by having “Pardon our Dust” and “Construction Reduction” sales. Or, display a rendering of the finished building in your guest waiting area so your staff and customers can share your vision.

NOVEMBER 2015

CAR BIZ TODAY

CBTNews.com

MARKETING

DEALERSHIPS NEED TO EXPECT MORE FROM

CO-OP AD PROGRAMS You may be getting shortchanged on your digital marketing expenses, report says BY JON MCKENNA

utomotive OEMs are expected to set aside a collective $6.5 billion this year for co-op advertising programs helping North American franchised auto dealerships. Most dealers eagerly grab the dollars for their new car marketing, and 72 percent of them tap co-op to promote their service departments.

How happy is your dealership that your manufacturer’s co-op program adequately subsidizes the type of marketing you favor? A new survey indicates that co-op terms and rules lag behind dealers’ increasing preference for various forms of digital marketing, and that they should lobby OEMs to liberalize their programs. Dealers can continue to let their co-op administrators or their manufacturers know where they’re finding the consumers shopping today, which is overwhelmingly on smartphones and with video outside of television,” said Tim O’Rourke, VP of automotive at Netsertive, a Morrisville, N.C.-based digital marketing intelligence firm. Netsertive and Borrell Associates, a Williamsburg, Va., marketing research firm, co-released the report titled “Kick Automotive Co-Op Into High Gear: Optimize OEM Dollars for Video and Mobile to Drive Local Dealership Sales.”

Co-Ops’ Rules Can Frustrate

On average, co-op programs cover one-third of a U.S. dealership’s total advertising budget, and some dealers rely on them for half their spend. However, more than half of the dealers surveyed by Netsertive and Borrell feel co-ops hit them with too many rules and restrictions, and nearly one-third said there is too much associated paperwork and the program rules change too often. In the dealer ad mix, various digital channels account now account for 66.5 percent of spending on the typical “buy this make and model now” messages. Manufacturers actually aren’t too far behind, devoting 56 percent of their budgets for

More manufacturers should defray their dealers’ costs of optimizing websites for smartphones and other mobile devices. brand marketing to digital this year, according to the survey report. “Dealers, who are closest to the consumer, are leading the way, and the manufacturers are following along,” O’Rourke said. However, the message may not be passed along to the OEM execs who draw up their co-op program rules. Co-ops tend to support more basic digital efforts such as SEO or ad production, the report said, but expenses frequently are not covered for website hosting, optimizing websites for mobile devices, database management and fees to run social media programs.

Not All Digital Video Treated Same

Only 34 percent of dealers interviewed said their co-op plan supports digital video, and merely 29 percent said they get financial help with mobile marketing. What’s more, coverage for digital video may obscure the reality that many plans pay expenses for pre-roll but hardly any subsidize longer-form videos that dealerships post to their websites rather than YouTube. “Longer-form video is becoming more effective, with say a tour of the service department or a video walk-around,” O’Rourke noted.

The report summarized: “A dealership that spends, for instance, $1 million annually on advertising might spend an additional $500,000 or more on digital marketing services, yet less than 10 percent of those services might be covered by co-op programs.” Ironically, co-op rules are far more generous when it comes to low-tech marketing, covering with few questions asked expenditures on promotional giveaways like key chains, pens and coffee mugs bearing the dealership’s logo.

Dealer Groups Stick With Tradition

Another interesting finding in the report was that dealership groups are much less invested in digital marketing than individual stores are. This year, groups on average will devote only 10 percent of their ad spend on average to digital. They are putting 32 percent of their ad budgets toward TV and cable, compared with only 9 percent by individual dealerships. Despite their extensive marketing resources, dealership groups lean heavily on their outside agencies, which continue to favor their relationships with TV affiliates, O’Rourke believes.

“Dealers, who are closest to the consumer, are leading the way [to digital marketing], and the manufacturers are following along.” -- Tim O’Rourke of Netsertive. 18

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

INTRODUCING

FORCE

M ARKE TING’ S

EXCLUSIVE GEOFORCE SEM STRATEGY

™

GeoForce is an advanced paid search targeting strategy that combines your dealerships DMS data with more than 18 other data integrators and uses our proprietary Forcetell technology to pinpoint the most effective and efficient zip codes to target.

USING GEOFORCE, WE’VE ACHIEVED THE FOLLOWING RESULTS FOR OUR CLIENTS:

15%

increase in leads!

29%

increase in CTR!

58%

decrease in CPL!

24%

waste eliminated!

ELIMINATE WASTED DIGITAL DOLLARS AND INCREASE YOUR ROI! VISIT FORCEMARKETING.COM/GEOFORCE FOR MORE INFORMATION

ForceMarketing.com | Atlanta • New York | 866-854-2815

CUSTOMER RELATIONS

Take Steps To

DE-MYSTIFY NEW VEHICLE TECHNOLOGY FOR YOUR CUSTOM

Instruction and outreach by dealerships are vital during the first few weeks of car ownership. BY MATT RODEGHERO

rogress might have been all right once,” humorist Ogden Nash once observed, “but it has gone on too long.” Apparently he is not alone in that attitude. Recent research found a disproportionally high percentage of new vehicle buyers in the U.S. don’t use, or even understand, many of the high-tech features included in today’s vehicles. This leaves dealerships to explain to customers why they should pay for technology they don’t use and don’t necessarily want. The report by J.D. Power found that half of the 33 cool high-tech items on late-model vehicles still were ignored by at least one-fifth of owners and lessees after 90 days. Topping the “unused” list were in-vehicle concierge (43 percent), mobile

routers (38 percent), automatic parking systems (35 percent), head-up displays (33 percent) and built-in apps (32 percent). While it’s easy to conclude that 20 percent of new car buyers are stubbornly averse to technology, the real impacts sadly are much simpler:

The technology features were not turned on when the vehicle was delivered to the customer.

Owners were not even aware their new car had those features, or

Those features were not explained to the owner when he or she took delivery.

Learn About Tech Adoption Quickly As a dealership, it is sound practice to contact your customers during the first month of ownership to ask if they are using certain in-vehicle technology, and if not to ask why. That knowledge is critical to your business; owners who experience more of the available benefits in their new vehicles will be more satisfied and likelier to become repeat buyers. They’re also much more apt to refer new business to your dealership. If your customers tell your people they are not trying technology because they don’t know how to use it, then it’s to your advantage to offer to educate them (I suggest how later in this article) as quickly as possible, before they lose interest. As with any new acquisition, interest in exploring car technology’s possible uses is always highest immediately after the purchase.

Too many owners are simply unaware of many of the dashboard technology features in their new car. 20

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

Younger people actually enjoy greater credibility in explaining technology to their seniors.

MERS Comfort With Safety Features Is Vital Keeping customers engaged and happy is important, but their safety is an even bigger priority. Driver safety technology features seem to be among the most challenging for owners of new vehicles. Vehicle-health diagnostics, blindspot warning and detection systems and adaptive cruise control have proved intimidating to many buyers. And automotive insurers, according to the J.D. Power study, are concerned that these owners – and those struggling to use new technology without proper training – may actually pose a higher risk of causing an accident. One example is drivers who use their own smartphones rather than hands-free in-vehicle technology. This is not only dangerous but also widely forbidden in the U.S. The Insurance Institute for Highway Safety lists 14 states that have banned talking on hand-held cell phones while driving, and 37 states have restricted all cell phone use by novice drivers. Teaching new buyers how to properly use in-vehicle safety technology could provide a great opportunity for forward-thinking dealerships. They’d be offering a crucial public service AND helping their stores stand out in the marketplace, potentially strengthening customer loyalty and fostering repeat and referral business.

Turn To Younger People As Instructors Coaching customers to use more of their cars’ high-tech features wouldn’t necessarily be expensive. Quirk Auto Group, which has 14 stores in New England, pays tech-savvy teenagers $11 an hour to tutor new car buyers after school, on weekends and during school vacations. With minimal product training, the teenagers answer customers’ questions, give live demonstrations and help owners link their mobile devices to their vehicles via Bluetooth for handsfree communication. Buyers learn at their own pace, either at the time of vehicle delivery or during service visits. Or, they can schedule special appointments. Paying a teenager $11 to spend an hour with a new customer at the time of vehicle delivery is much more cost effective than tying up a salesperson or service advisor for the same amount of time after the sale is made. Salespeople can move on to other

TO SEE MORE FROM MATT RODEGHERO GO TO CBTNEWS.COM

“As a dealership, it is sound practice to

contact your customers,

during the first month of ownership to ask if they are using certain in-vehicle technology, and if not to ask why.” prospects, and the technology instruction is less rushed. Given that, generally speaking, younger people tend to be more tech-savvy, not only do customers accept and appreciate their help but also salespeople and service reps could use them to field tougher questions.

Online Forums Can Be Useful However, other approaches to buyer education may work better for your dealership. For example, an online customer training forum – set up on your dealership’s website – might be more your style. Tech-savvy customers could share their knowhow with other owners, and one of your sales or administrative staff could monitor the forum and answer questions as needed. To maximize the program’s effectiveness, new owners would receive marketing literature at the time of delivery that explains how and where to join the forum. A dealership also could consider a separate area of its website that provides customers with easy to follow, graphically illustrated, step-by-step instructions on using every new high-tech feature offered in the makes and models it sells.

Add Video To Tech Instruction Using your sales team is another great approach to customer education. Select one team member

who is articulate, personable and well versed in the latest in-vehicle tech features. Videotape him or her explaining clearly how every component works. (You might even designate this person to be your dealership’s go-to guru for customers and staff regarding all things tech-related.) Ideally, you’d have a separate, short video about each tech feature posted to a special page on your dealership’s website. At the time of vehicle delivery, your staff could give customers a business card bearing the site address and encourage them to watch the videos. An added advantage: Owners could view the videos multiple times if necessary, at their own pace. No one method will work equally well for every dealership. The important thing is to make training and support available, convenient and customer-centric. It also is vital to make the tech training seem like a normal part of the process. Customers who may be too embarrassed to ask for help will be less reticent once they realize they are not alone. In the end, any ideas, approaches and programs that help your customers understand and use their new in-vehicle high-tech features help distinguish your dealership as a leader that’s willing to go the extra mile for customers. And that is always good for business.

MATT RODEGHERO

Chief Product Officer at AutoLoop Matt is responsible for planning, oversight, testing and delivery of nearly 12 different software products in more than 2,000 dealerships worldwide. His company is one of the fastest-growing software providers to dealerships, and gives dealers a marketing platform designed to improve customer engagement and retention. See the website at www.AutoLoop.net.

NOVEMBER 2015

CAR BIZ TODAY

CBTNews.com

MARKETING

TAKE BETTER ADVANTAGES OF Available In THE MARKETING TOOLS Google Analytics

A variety of reports help identify where a dealer’s website traffic originated, how your results compare, and other key performance metrics. BY AMY FARLEY

igital marketing for car dealers isn’t just about putting a solid strategy into place. It’s also about taking an in-depth look at your results to determine what’s working and what’s not.

Google Analytics is an incredibly helpful tool that allows dealers to see quantifiable results from their marketing channels. That said, many dealers aren’t aware of some of the more robust features in Google Analytics that can make their marketing even more effective. Here are a few tips and tricks that will allow your dealership to make the most of its Google Analytics account and, in turn, improve your overall marketing strategy.

Behavior Flow Reports

can view data aggregated from businesses within designated industries or geographic areas, and volume of traffic. You can compare your data across a number of different metrics using these reports. Metrics include number of sessions (how many hits your website gets), new sessions (how many unique visitors you receive) and pages per session (how many pages within your site a visitor sees during one session), to name a few examples. You should be sure to filter down to the most relevant industry vertical available. Google Analytics gives you the option to be more specific than simply “Auto & Vehicles,” for example, so you should find the best possible choice to analyze your comparison data. You’ll also want to adjust

your region choice to get the most comparable information for your area. Using these Benchmarking reports, a dealership can get a better idea of how it performs compared with other websites within the automotive space. It will give you a general idea of how your site performs, and let you spot and correct red flags. For example, if the Benchmarking report tells you that average bounce rates within your industry are about 30 percent, and your website’s average bounce rate is 70 percent, then that’s something your team may need to investigate. You can find these reports in the Google Analytics “Reporting” tab; select “Audience” and then “Benchmarking.”

What happens once a car shopper reaches your dealership’s website? Does he or she seek out individual vehicle detail pages, or browse the content on your service-related pages? Perhaps an online customer clicks through to pages describing your facility or amenities. Behavior Flow reports in Google Analytics can tell you all this by offering a visual outline – similar to a flowchart – of a user’s path through your website, showing how that person traveled from one page to another. Once you know how your customers and potential customers typically explore your website, your management team can draw a few conclusions. You can identify which specific pages or types of content are getting the most shopper engagement, which in turn can lead you to create more of that content. Conversely, you can determine which types of pages get the least response or even tend to drive visitors away from your site. These pages may need to be tweaked or revamped for best results. In Google Analytics, these reports can be produced by going to the “Reporting” tab and selecting “Behavior,” followed by “Behavior Flow.”

Benchmarking Reports Sometimes it’s smart to get an idea of how your data compare to those from other dealerships. This can be accomplished using Google Analytics’ Benchmarking Reports. Within these reports, you

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

To which pages does a car shopper navigate once he or she arrives at your website? You need to know.

“You can identify which specific pages or types of content are getting the most

shopper engagement,

which in turn can lead you to create more of that content.”

Ingvar Bjork / Shutterstock.com

Dealers and their marketers should become familiar with various benchmarking reports offered by Google Analytics.

Location Reports It’s easy to see how much traffic your website is getting, but how do you determine from where that traffic is coming? Once you are able to analyze your online traffic by location, you can use this information to your advantage in a few different ways. You can choose to better target a given area from which you don’t get a lot of traffic through SEO and paid search. You can also see where your budget might be wasted. For example, if yours is a California dealership but half of your referral traffic comes from New York, then something is wrong. You can and should break these reports down by source (for instance, separating out paid traffic, organic traffic, referral traffic and direct traffic). That way, you can determine what type of traffic comes from certain regions and locations. Is there a city from which you get very little paid traffic? It might be time to adjust your marketing campaign that targets that area. You can find these reports under the “Audience” tab; select “Geo,” then “Location.”

Identify Traffic Coming From Bots Getting traffic to your website is important, but if that traffic comes from bots – automated traffic that doesn’t have a human being behind it – then it’s not worthwhile. There’s no true way to prevent bots from visiting your dealership’s website, but using Google Analytics, you can at least separate out that traffic. Your marketing team or you can compile a list of known bots (which can be found online) and then create a filter or segment that excludes those URLs. Never do the opposite, which is creating

TO SEE MORE FROM AMY FARLEY GO TO CBTNEWS.COM

an inclusion filter or segment with URLs that you trust; you run the risk of blocking legitimate traffic to your site that happens to come from a URL with which you aren’t familiar. The important goal is to filter out the URLs you know aren’t trustworthy. Once you know how much of your traffic comes from bots, you also know how much real traffic your dealership’s website is getting and can adjust your strategies accordingly.

Analyze Your Top Conversion Paths It can be difficult to track all the touchpoints a car shopper hits online on his or her path to purchasing a vehicle at your store. Google Analytics can at least help, through its MultiChannel Funnels. Multi-Channel Funnels are reports that show you how the different sources of traffic to your website interact and combine to lead to sales and conversions. Instead of simply telling you what action (like an ad click or a referral link from another website) led to a conversion, it lays out how a car shopper got to your website over time. It might show you, for example, that a given user came in three times through organic search, then once by paid search, and finally by filling out a form as a conversion. This gives you a better idea of attribution, because you know that your organic traffic was a contributing factor to that conversion.

“You can choose to

better target

a given area from which you don’t get a lot of traffic through SEO and paid search. You can also see where your budget might be wasted.” These reports can be found when you visit the “Reporting” tab if you select “Conversions,” followed by “Multi-Channel Funnels.” The Google Analytics tools and reports laid out here may seem somewhat technical, but they’re incredibly useful to you and your marketing team. Try implementing one or all of them as you examine your traffic and work to streamline your website, and you’ll find it’s easier than you think to achieve improved marketing results.

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.

NOVEMBER 2015

CAR BIZ TODAY

CBTNews.com

SALES A good starting point is creating a comprehensive list of everyone you know.

YOUR PERSONAL POWER BASE

Should Be Your Mother Lode Of Sales Prospects

Anyone with whom you have even a casual acquaintance should be treated as a potential car buyer. BY GRANT CARDONE

or an automotive salesperson, the most lucrative opportunity to ignite your sales is to tap into your personal power base. Your power base is composed of all the people you know or are connected to in some way.

“Oh,” you probably say, “I don’t want to bother my friends and family.” That is a ridiculous attitude. If you believe in your product or service, you have an obligation to tell your network first, and keep reminding them often. When I first got into sales, I spent every bit of my time and energy trying to sell to people I didn’t know – cold prospects. Then one day, my uncle told me he had just purchased a vehicle from a competitor. When I asked why he didn’t buy it from me, he replied, “I didn’t know you sold vehicles.” That day, I swore to myself that I would never let this happen again. As a salesperson, you must leverage your personal power base – your family and friends – first. This is much more effective than working with strangers and cold contacts.

Write Every Name You Can Think Of First, make a list of every person you know, starting with those closest to you. Begin with your spouse or partner; then expand to your kids, your aunts and uncles; and keep spreading out from there. Then, continue on with your friends, associates, teachers and business contacts. Write down the name of the owner of the place where 24

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

you buy lunch once a week, and of anyone with whom you have ever made contact. Just make your list, and worry later about exactly how you will reach these people. The saying “It takes money to make money” is simply not true. It ought to be: “It takes contacts to make contracts.” Use the following three tips to network your power base and make those contracts.

Promote Like A Politician Your everyday routines offer a way to capitalize and grow your power base. For example, I recently had a meeting with a bank to talk about refinancing some real estate. I shared my business card with everyone with whom I came in contact, from the guy who parked my car to the receptionist to the bank president. I even gave my card to the folks at the nearby sandwich shop.

I said the same thing to each person: “If I can ever do anything for you, please give me a call.” Let people know what vehicles and services your dealership can provide, and all of the many reasons they should visit your store immediately. Even if they don’t need a new car or tune-up right now, once you get them to your dealership, you can find out about their real problems and offer real solutions. Get your pitch right and operate like a politician running for office. Make a commitment to being out there shaking hands, giving out business cards, making friends, kissing babies and taking an interest in everyone you meet.

Be Omnipresent On Social Media Every day I use social media to get attention, pay attention, ask questions and find people who

“As a salesperson, you must

leverage your personal power base

– your family and friends – first.”

may be interested in what I am doing. Facebook, Twitter, Google, YouTube, Instagram, Pinterest, Periscope, Medium, Facebook Mentions and LinkedIn have changed the way we get known. If I don’t know you, I won’t pay you. Plus, it is now possible for automotive salespeople with no budget but a lot of desire, motivation and creativity to not only create a power base but also become a celebrity in their space. Today, I will Tweet more than 20 times, post on three different Facebook pages, do a Facebook Mention that will reach more than 100,000 people, create a Facebook Q&A that will reach more than 40,000 people in four hours, respond to dozens of online comments, write blogs for LinkedIn and Medium, and post some videos to YouTube. I do this every single day, and sometimes I do much more. You need to be fully committed. I also keep my eye on trending social media topics. For example, one day I saw #WhatBrokePeopleSay trending on Twitter, so I started banging out related Tweets like: “Money doesn’t make people happy.” It only took a few seconds of my time. Then, about every 15 minutes I posted new Tweets on the topic while making calls to people on my power base list – even those to whom I had already reached out. In a very short period of time, with no investment other than my creativity, I got attention for my brand, engaged with followers and added new followers to my power base. Try looking up trending topics for your market and think of some creative ways to capitalize on them. Something for #WhatBrokePeopleSay could be, “New cars just aren’t worth it.” This is

“The saying ‘It takes money to make money’ is simply not true. It ought to be:

‘It takes contacts to make contracts.’” how I have amassed more than 700,000 likes on Facebook, 340,000 followers on Twitter, 103,000 YouTube subscribers and 466,000 followers on Google+ in just a few years. It takes a willingness to be engaged. In that time alone, I’ve posted more than 72,500 Tweets.

Never Stop Working Your Power Base

a video for his staff ’s sales meeting. Another month I checked in using a text, and then asked if he would contribute to my blog. The next time I called him, I asked, “When are we going to do business? You know I won’t quit until we do.” I still haven’t gotten his business, but I am growing my power base and I won’t quit until he’s a customer.

Once you spark interest and connect – or reconnect – don’t quit. Never stop following up, whether the person is sold or unsold.

You can use all of the follow-up techniques I’ve mentioned and more to stay in contact with your power base – your warm contacts, cold contacts and anyone else you want to see your product or service.

I have a prospect who hasn’t been quite ready to do business. I had to figure out very creative ways over a period of eight months to stay in contact with him. One month, I sent him a report that I thought would interest him. Then I sent

Light up your power base and keep it lit by turning those you know and meet into screaming fans. Become exceptional in building and growing your power base, and you will never be without opportunity.

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.

That teller in your local bank branch? Absolutely a potential car customer.

Joinmepic / Shutterstock.com TO SEE MORE FROM GRANT CARDONE GO TO CBTNEWS.COM

NOVEMBER 2015

CAR BIZ TODAY

CBTNews.com

ASK THE ?

PROS

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

WE HAVE NOT BEEN HAPPY WITH THE QUALITY OF THE LAST COUPLE OF HIRES IN OUR F&I AREA, AND ARE THINKING ABOUT TARGETING CERTAIN INDUSTRIES RATHER THAN POSTING AN AD. WHAT BUSINESSES AND JOBS OUTSIDE OF DEALERSHIPS HAVE YOU FOUND TO BE A GOOD FIT WITH F&I WORK? – Edgar, Portland, ME

Tony Dupaquier, director of the training academy at Service Group: Dealers often debate whether should they hire from the inside or outside of the industry, and there are pros and cons to both directions. Either way you go, give your new business manager a fair chance at success. Have them professionally trained and evaluated for their strengths and weaknesses.

forward your inquiries to our ensemble of experts.

My primary recommendation is to always hire inside of your dealership. We want to look for individuals with the talent and ability to be successful in the business office. The most successful business managers are not always the top-performing salespeople. When looking inside the dealership, we want to look for employees who are trustworthy, have the ability to follow very specific direction, are trainable, are detail-oriented and are great with paperwork.

This person may come from other areas of the dealership such as the general office, the receptionist desk, the sales floor and even the service drive. Look in all areas of the dealership when looking for somebody for the business office.

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

WE REALLY NEED TO IMPROVE OUR OPEN RATES ON E-MAIL MARKETING. SHOULD WE BE EMPHASIZING THE SUBJECT LINE OR LOOKING MORE AT THE VALUE PROPOSITION IN THE BODY COPY? – Sarah, Los Angeles, CA

David Kain, president of Kain Automotive: Great question and it’s actually a combination of the subject line and an engaging first sentence that promotes open e-mail rates. We’ve learned that the use of the customer’s name is helpful, as well as a quick reference to what they are asking about. For example: If customer Jon McKenna requests an e-price on a 2015 Ford F-150, that would generate a subject line of, “Hi Jon, your e-price on the F-150 from David@ Kain Ford.” The first sentence that can be seen in most e-mail service preview panes could be, “Hi Jon, I’m happy to provide you with an e-price on the F-150 you saw on our website.” Online shoppers love it when we “mirror” back to them what they ask about, so you’ll want to adjust your subject line based on the request ... “Hi Jon, your trade value request ... Hi Jon, availability on the F-150 ... Hi Jon, warranty info on the F-150” etc., etc. Other subject line strategies that generate high open rates are the simple ones such as, “Do you … ?” “Have you … ?” “Would you … ?” with a first sentence of, “Do you have a moment for a quick call so I can tell you about … ?” or “Have you had a chance to review the information I sent?” Give these ideas a try and experiment with others you can think up, and let me know what you discover that works. I’m at david@kainautomotive. com. 26

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

If you’re going to look outside of the automotive industry, there are some great directions to go. Target other industries that require the same talents as required of the business manager. I have always found that people out of the insurance, real estate, banking and service (think waiters and bartenders) industries do very well in the business office. We have all met that person outside our industry and thought, “That person would be great at my dealership.” Next time you have that thought, hand them a business card and invite him or her in to talk with you. If you are going to hire from outside of the dealership and from a different industry, I still would highly recommend having them get experience selling vehicles, at least for a short time. There’s a certain amount of knowledge gained from working with customers on the showroom floor. It helps with rapport-building, product knowledge and general closing techniques that are required in the business office. I have even seen business managers go back to the showroom floor to sell cars for a short time to better themselves in working in the business office, with very positive results.

WE ARE THINKING ABOUT CREATING AN INTERNAL AUCTION PROCESS WITHIN OUR DEALERSHIP GROUP, WHERE AFTER 45 DAYS UNSOLD A USED CAR GOES UP FOR INTERNAL AUCTION, PRESUMABLY AT LESS OF A LOSS THAN IF WE WENT THE EXTERNAL AUCTION ROUTE ANOTHER 15 TO 45 DAYS LATER. DO YOU HAVE ANY THOUGHTS ABOUT BEST PRACTICES IN SETTING UP AN INTERNAL AUCTION? – Steve, Charlotte, NC

Dale Pollak, founder of vAuto: Internal auctions can be an effective means to clear dealership inventories of units that have run out of their retail potential. Before launching an auction, however, I would recommend examining your inventory management and pricing practices to determine if your team and you have done everything possible to retail the units before 45 days. You may find opportunities to sharpen your acquisition and pricing practices and reduce the number of cars that fail to sell, thereby minimizing the need for an auction. Depending on your group’s size and the volume of internal auction vehicles, it may be worth exploring using an online platform that allows your managers to efficiently evaluate, bid for and purchase the vehicles. (I’ve also seen groups use a more physical process, with a walk-around and sealed bids. This approach, however, adds the burden of moving vehicles to a single location.) It’s also important that your managers evaluate the internal auction vehicles the same as with any other wholesale opportunity – with a dispassionate, market data-informed view of whether the vehicle offers a good retail fit for their respective inventories. I would also advise a “one and done” rule that if the auction cars don’t sell to another store on the first run, then they get wholesaled quickly through more traditional channels. Likewise, if a store purchases an internal auction vehicle, that store should be held responsible for retailing it within the next 45 days. Two final points: 1) Stores that fail to retail a unit initially should pay the price. That is, it’ll be your job to ensure that managers don’t use the auction to mask the mistakes of their peers. 2) Look for patterns among the internal auction cars. You may well discover insights that help you better align inventory to individual stores from Day One and retail a larger share of units within 45 days.

“My primary recommendation is to

always hire from inside your dealership.”

- Tony Dupaquier

SALES

4 WAYS TO RAMP UP S T I F O R P AND

Your Dealership’s Used Car Sales Velocity – If more than half of your units are at least 30 days old, then it’s time to perform more analytics. BY DALE POLLAK

n September 2015, sales of pickup trucks inI would encourage franchised dealers that also sell used vehicles to do a little investigative work into their store’s performance with used inventory. This investigation would consist of two steps.

exercise would starkly reveal the importance of increasing the velocity of your used vehicle sales. When I’ve conducted this exercise with dealers across the country, I’ve seen that front-end gross profits typically diminish over time and get dramatically worse after 30 days.

First, dealers should examine the front-end gross profits of their retail units by age segments. That is, they should determine the average gross that their dealerships achieved for vehicles that sold in seven days or fewer, those that sold in seven to 15 days, 16 to 21 days, 21 to 30 days, 31 to 45 days, and 46 days or more.

In fact, when my company has looked closely at gross profits for used vehicles retailed after 30 days (and especially for those that needed more than 45 days to sell), it has not been uncommon to see more units retailed at a loss than those that achieving even a minimal profit.

Second, dealers should determine what percentage of their total monthly sales fall into each age segment. If you’re like most dealers, the first step of this

LESS TIME TO SELL BEORE A LOSS This exercise and our findings underscore an important reality of today’s used vehicle market that many dealers have yet to recognize. The combination of increased competition, pricing

transparency and price volatility has compressed the timeline under which a used vehicle can deliver an acceptable return on investment. The second part of the exercise often shows that dealers are retailing more used vehicles than they should after 30 days. At a minimum, given today’s market conditions, I believe it’s imperative that dealers maintain at least 50 percent of their used vehicle inventory at under 30 days of age. This operational standard effectively forces dealers to pay more attention and apply more discipline to selling a greater share of their used vehicle inventory within 30 days, in order to maximize front-end gross and ROI. However, now comes the critical question: How can dealers achieve this more efficient, profitable and faster rate of used car sales? I recommend four operational best practices:

“The combination of increased

competition, pricing transparency and price volatility has compressed the timeline under which a used vehicle can deliver an acceptable return on investment.”

The owner of this dealership better know how many of these units have gone unsold for longer than 45 days.

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

1. Know each unit’s potential up front.

This can’t be someone’s best guess or hunch, given the realities of today’s used vehicle marketplace I noted earlier. Rather, dealers should use technology and tools to estimate how many competing vehicles a particular unit will face if acquired, and how quickly it might sell. With these insights, a dealership can chart a market-informed, time-sensitive retail course for every unit. You’ll know right away if you need to work harder from a pricing or marketing perspective to ensure the used vehicle sells quickly and maximizes its profit potential. Conversely, you’ll also have better insights about whether you’ve got a trueblue winner that will draw buyers to you who will pay your asking price.

2. Address “get ready” inefficiencies that slow your sales velocity.

There are two areas of inefficiencies that often hurt a dealership’s ability to increase the rate of its used vehicle retail sales. These typically occur after a vehicle has been acquired, during what you might call the “get ready” phase of its retail lifecycle. The savviest dealers recognize that it’s no longer acceptable to lose a week or more of a used vehicle’s retail timeline waiting for the service department to recondition the car. They’ve designated specific processes and technicians to get the cars retail-ready in three days or fewer. Some dealers have made reconditioning even more of a timesensitive priority, requiring a 24-hour turnaround unless there’s a good reason for a longer delay. The second “get ready” challenge relates to marketing and merchandising each vehicle online. Dealers have differences of opinion on whether it’s okay to post descriptions, photos and videos of a vehicle before it’s fully reconditioned and detailed. Either way, dealers should recognize that every day lost waiting to promote a used vehicle online – fully merchandised and ready for sale – slows their sales velocity and diminishes the prospect for full gross profit potential on each vehicle.

3. Strike a balance between front-end profit and turn in your pricing.

With a 30-day window to truly maximize a used vehicle’s front-end gross profit potential, it’s imperative that dealers price their vehicles competitively from Day One. The operative word is “competitively” – meaning, your initial asking price should reflect a vehicle’s value in relation to competing units on the market. The best dealerships use technology and tools to calculate each used vehicle’s pricing sweet spot. They recognize

TO SEE MORE FROM DALE POLLAK GO TO CBTNEWS.COM

Before these used cars were purchased, the dealer should have calculated each one’s sales and profit potential.

“At a minimum, given today’s market conditions, I believe it’s imperative that dealers maintain at least 50 percent of their used vehicle inventory at under 30 days of age.” there’s little room in today’s market for pricing guesswork and imprecision. They know that vehicles priced above the marketplace, without proper cause or justification, are effectively biding time until a future price cut finally makes them more attractive to buyers. Dealers often ask how often they should revisit their used vehicle pricing. To be sure, you can’t simply apply a “set it and forget it” approach to pricing used cars. However, each local market behaves a little differently. Some dealers find it’s necessary to assess the price-tomarket metric for their used vehicles on a near-daily basis, given the aggressive competition and market volatility they face. Others conduct this assessment once or twice a week, and adjust prices accordingly.

4. Strive for a maximum 45-day retail timeline.

Once dealers recognize that used vehicles largely lose their ability to deliver a sufficient ROI after 30 days, many adopt

a 45-day retail timeline. It’s important to note that this 45-day standard isn’t treated as wishful thinking; it’s a firm expectation. It reflects a dealer’s understanding that any vehicle that doesn’t retail within 45 days reflects a failure by managers to maximize the dealership’s expectations for a sufficient ROI. In some cases, dealers hold their used vehicle managers accountable to this standard through compensation plans that either reward them for retailing a larger share of units in fewer than 45 days, or penalize them when they miss the mark. Dealers who consistently adhere to these best practices will typically find that they are able to stock fewer cars while selling more units every month. This higher level of operational efficiency often translates to an annualized inventory turn rate of 12 to 13 times or more. But even better, dealers who make used vehicle sales velocity a top priority discover the real benefit of their newfound emphasis on efficiencies – their dealership net profits increase as the F&I, parts and service departments all benefit from higher-performing, more productive used vehicle operations.

DALE POLLAK

Founder of vAuto Inc. Dale is a highly sought-after speaker and author of several books on his Velocity Method of Management.™ He is one of the leading authorities on automotive dealership management strategies, and offers dealerships a better way to appraise, manage and price their pre-owned vehicle inventory. He provides strategic development and integration for his company as well as other AutoTrader group companies. Visit the website at vauto.com.

NOVEMBER 2015

CAR BIZ TODAY

CBTNews.com

LEADERSHIP

Competition Between Your Departments Is Great, But

DON’T LET IT BECOME A Dealers must employ specific tactics to foster a culture that is defined by skin in the other manager’s game. BY MARK TEWART

am betting you have experienced this pain as a dealer too many times: The new car department constantly fights with the used car department, which is always upset with the service group. Service and F&I dislike and disrespect both sales staffs, and everyone hates the office manager. It’s time to stop the insanity. I actually have heard a few dealers say they like their departments feuding, because each is trying to outdo the other so everyone stays aggressive and on their toes. My reply is, “Are you kidding me?” A healthy level of competitiveness and willingness to stand up for your department are one thing. However, constant battles and bickering between a dealership’s departments will inflict far more damage than any good that results. The success of every dealership starts with the culture and work environment. Even an expensive luxury home eventually will crumble if the foundation is bad. And, a business’ culture and environment are built upon having the right people

doing the right things in the right way, i.e. character. In turn, character requires good leadership, and good leaders communicate effectively.

“I actually have heard a few dealers say

they like their departments feuding, because each is trying to outdo the other so everyone stays aggressive and on their toes. My reply is, ‘Are you kidding me?’”

In every struggling dealership I’ve seen that is experiencing infighting with its departments, there has been little to no communication. Communication must come both from the top-down and bottom-up, and without it, your different departments will never

Combative dealershipwide staff meetings are not what you want; aim for broad strategy meetings instead.

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

understand and empathize with one another. Now, let me address some potential approaches to improve communication, and minimize or eliminate inter-department wars in a dealership.

Pay Based On Other Group’s Success If each one of your managers gets paid in part upon the success and failure of other depa or she has skin in the game with those groups. How would such a pay plan be set up? You could use a manager compensation pool that is based on the dealership’s overall performance, or for example pay the new car manager a percentage “cross-banded” system. There’s an old saying in our industry that the used car department is the service department’s best customer, yet it is often treated the worst by service and waits the longest. You could create a days-from-reconditioning-to-sale component of compensation for both the used car and service directors or managers, thus incenting them to work together. These pay components or bonuses also could have a punitive effect if desired outcomes are not achieved. A successful business comprises successful departments. Encourage your individual staffs to

Job-Shadowing Helps Managers’ Perspectives I also believe job-shadowing by managers helps with communication, understanding and empathy. All managers should be required to periodically work in other departments for a day. Imagine if the new car or used car managers shadowed a service writer or service manager for a day. What do you think would happen to their perspective? Also, all managers should periodically work the jobs of the people they manage. A sales manager should occasionally work the floor for a day, and a GM should staff an F&I job, etc. Managers should never lose the perspective of their staffs. assume at least some responsibility for their colleagues’ performance, using an overall dealership success bonus that fosters a “we” mentality.

Also, require training in another function that occurs outside of the dealership. For example, try sending a service manager to a sales seminar and vice versa. Plus, schedule social activities outside of the dealership that give your teams an opportunity to interact in a relaxed fashion as regular people. At the end of the day, they will be able to understand one another and relate at work better.

How To Defuse Staff Tensions As a dealer, you must also make sure to always handle conflicts between your departments immediately. Inter-department wars start off as small embers of dissent; eventually, the fire can grow so large that it’s tough to put out without firing people. Ignoring problems only makes them worse; you can’t sweep manure under a rug and expect the stink to go away.

Cross-Departmental Strategy Meetings If you aren’t already, try holding a weekly meeting between top leadership and your managers. Heads of every department – new car, used car, F&I, Internet, BDC, service, parts, body shop and controller – should attend and be prepared to report on performance against five top metrics established for their groups. They will cover month-to-date numbers and extrapolate them to project future performance, based on working days.

the sales and F&I managers on one another’s positions. You should reap benefits from increased customer focus, faster processes and improved communication.

With that in mind, let me provide some tips for resolving conflicts: Not only should leaders of sales and service functions be compensated in part on the other department’s success, but also they should periodically work the other group’s jobs.

I call this a “war board meeting,” as I prefer that each manager write his or her numbers on a large dry erase board that is broken into columns. Physically recording your department’s data on the board promotes personally responsibility. You should not rely on doc sheets, as their numbers usually are behind. Once the group has discussed each department and filled in the projected profit and loss based upon working days, take a few minutes to talk about one thing that each department can do to help another. Doing this helps creating a culture and environment based on teamwork and purposeful communication. For the same reason, I suggest daily save-a-deal meetings with the available managers. Apart from producing possible ways to revive a sale that is in trouble, these meetings improve communications, teamwork and accountability to other departments.

TO SEE MORE FROM MARK TEWART GO TO CBTNEWS.COM

Find Cross-Training Opportunities The days of silo management in dealerships may be coming to an end. As one example, technology has blurred the lines between the sales and F&I managers and process. Try moving your F&I managers into the sales offices and use their current offices for contracting only. Cross-train

Address the problem immediately, but only in private with the parties involved.

Be concise, handling only the issue at hand, and be firm. Address the issues, not the people.

Don’t let your emotions get the best of you. It leaves scars on you and your team.

Don’t let your managers play the one-up game (“Yeah, but you …”)

Avoid conflict words such as “always,” “never” and “but.”

Give suggestions and alternatives. Build your managers back up. Show them and tell them that you care.

Always end the meeting by talking in terms of “we,” not “I” or “you.”

As a dealer, there is no better feeling than going to work each day to a successful dealership staffed by successful, happy and professional team players. There is no worse feeling than trudging into an underperforming store drained by staff infighting and backstabbing. Do not tolerate inter-department strife that can ruin your team and your business.

MARK TEWART

President of Tewart Enterprises Inc. Mark is a sales expert and professional speaker, trainer, consultant, entrepreneur and author of the best seller “How to Be a Sales Superstar – Break All the Rules and Succeed While Doing It.” He has a 27-year career ranging from sales to becoming an executive manager at age 27, to founder and president of four successful companies. He is a professional member of the National Speakers Association and the Author’s Guild. Visit his website at www.MarkTewart.com.

NOVEMBER 2015

CAR BIZ TODAY

CBTNews.com

RETAIL AUTOMOTIVE MARKETPLACE

INNOVATIVE NEW COMPANIES

Could Vie With Dealerships’ Used Sales Departments Are dealers ready to adapt to the flexibility these businesses bring to test drives and trade-ins? BY ZACH KLEMPF

he automotive landscape is being disrupted faster than ever before. If you thought the advent of the Internet during the late 1990s and early 2000s was a game-changer for retail automotive, then just wait for what is in store over the next five years. Silicon Valley is funding innovation in the automotive industry and is willing to participate in hundreds of millions of dollars of venture capital and private equity funding for new business models. Meanwhile, well-known automotive players such as Cox Automotive are internally incubating companies like Flexdrive, which is a subscription-based, on-demand car service. Amid all that activity, three newer companies come to mind for me as having the potential to particularly disrupt the traditional dealership model. These businesses want to innovate that model by fusing e-commerce with Uber-like, on-demand services. Shift Technologies Inc., Carvana LLC and Beepi Inc. have become the automotive darlings of Silicon Valley and have been given very high valuations. Let me tell you a little more about their business models.

Shift Technologies And Trade-Ins

This San Francisco-based start-up would like to disrupt customers’ experiences with trade-ins and buying a used vehicle. In millennial terms, think of the company as Uber for test drives and Airbnb for consignment sales. Customers of Shift Technologies can schedule test drives to start at their homes or other locations of their choosing. With trade-ins, the company assigns a “car enthusiast” to come to the customer’s location and appraise the vehicle. Shift operates on a consignment model and gives a minimum price, for which it will write a check and later split profits 32

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

50-50 if the vehicle sells for more than the minimum. This can be very intriguing for consumers who don’t need immediate cash and otherwise might sell their car on Craigslist. Once a customer agrees to the quote offered by the car enthusiast, Shift takes the vehicle and stores it in preparation for selling.

Beepi, Shift Technologies and Carvana have the potential to be significant disruptors in retail automotive.

Carvana And 7-Day Test Drives

Atlanta-based Carvana delivers a vehicle that it owns to an online shopper’s door via truck. The customer then gets a seven-day test drive to decide whether to return the car. Acting similar to a dealership in some ways, then, Carvana must survive by low overhead. The company also will buy a vehicle from a customer who lives in one of its “live” cities, which are mostly in the Southeast. Carvana was No. 5 on Forbes magazine’s “Most Interesting Companies” list for 2015 and garnered consumer mindshare from its viral Super Bowl campaign last year.

Beepi And 30-Day Assurance

A Silicon Valley based company, Beepi has a similar business model to Shift’s except that the company will let customers continue driving their vehicles for 30 days. During that time, Beepi is trying to sell

the car. The company promises that if it is unable to find a buyer within 30 days, it will buy the vehicle at a pre-agreed price. Beepi is very strict about buying only vehicles that meet its purchase criteria. In fact, the company says only two-thirds of vehicles it inspects meet those criteria. Beepi will not buy vehicles that have suffered accidents or former rental or fleet vehicles. It also lets a customer return the car within 10 days and gives a standard three-month, 3,000-mile warranty.

My Experience With Drive Shift

I recently had the opportunity to test Shift and compare my experience against my local Ford dealership, when I sought to sell my 2013 Ford

“Three newer companies come to mind for me as having the potential to particularly disrupt the traditional dealership model.”

Mustang. My vehicle had around 44,000 miles and one minor accident, so I was not able to use Beepi. Moreover, Carvana was not available in the San Francisco Bay area. I started my research while getting an oil change at the Ford dealership. I had already researched on Manheim and had a general idea of the auction value. The Ford dealership offered me $500 below Manheim MMR due to the accident and need for minor repairs. The process was very slow, and it took around 45 minutes to get a trade appraisal. When I got home, I went on Shift’s website and submitted my vehicle information for an appraisal. I set an appointment with a car enthusiast for a couple of days later. Within 15 minutes after that appointment started, I had a quote for my Mustang that was $1,500 above MMR and $2,000 more than the Ford dealer’s offer. I felt Shift offered a much more expedited process and a more competitive price for my vehicle than the Ford dealer did. The only disadvantage was Shift’s limited inventory if I wanted to buy a car from the company.

Impacts On Dealers’ Used Sales

Beepi and Shift are focusing their operations on larger urban markets like San Francisco and Los Angeles. If your dealership is in a big city market, companies like these will definitely offer a legitimate option to which not only

“Some dealers already are taking notes from Shift, Beepi and Carvana … offering off-site test drives that start at a potential customer’s house or workplace, as well as

“X”-day return policies on pre-owned vehicles.”

millennials but also older customers will relate, especially on the trade-in side of the business. A recent study by Accenture reported that 75 percent of respondents would consider purchasing a car via home delivery, completely online.

However, some dealers already are taking notes from Shift, Beepi and Carvana. Dealers are offering off-site test drives that start at a potential customer’s house or workplace, as well as “X”-day return policies on pre-owned vehicles.

In some cases, these services will bring a dealership into the sales process. For example, Carvana customers likely will want to visit a local dealership to test-drive the vehicle they want to buy online, in order to experience the car’s look and feel. If they confirm the make and model suits their needs, they presumably would go home and buy it online.

Dealerships also enjoy advantages of CPO programs and a bigger inventory in specific makes and models. Another fact to consider is that these services are in their infancy. Beepi, for example, only has a year in business although it already is working on a $300 million venture capital round.

Depending on the local market, a Carvana vehicle might be slightly cheaper or more expensive than at the dealership. The major selling point the company is offering is converting the traditional dealership experience into hybrid e-commerce.

I believe Shift, Beepi and Carvana in some ways pose a bigger threat to Carmax and DriveTime than to a franchise dealership. With that said, dealers definitely should take note of, and possibly adapt, these company’s streamlined processes. The alternative is losing sales of used vehicles in select, competitive local markets.

ZACH KLEMPF

CEO of Selly Automotive Zach’s background includes working in both automotive and high-tech industries in Silicon Valley. As a millennial CEO, he has his finger on the pulse of that generation’s shopping preferences. His expertise is in digital marketing, CRM and general dealership technology. Visit his website at SellyAutomotive.com.

Will dealerships respond to these flexible new companies by being more open to test drives that start at the customer’s home? TO SEE MORE FROM ZACH KLEMPF GO TO CBTNEWS.COM

NOVEMBER 2015

CAR BIZ TODAY

CBTNews.com

F&I

When a customer signs the retail installment sales contract, that is a critical event that has serious implications for your dealership.

Properly Disclosing An

AUTO SALES CONTRACT – If You Follow All The Steps ISN’T DIFFICULT Remember that the RISC is active as soon as the customer signs it, so be deliberate. BY TONY DUPAQUIER

s business managers, it is our responsibility to protect the dealership’s interests during interactions with every customer. In the business office, that responsibility rises to an entirely new legal level upon consummation of the retail installment sale contract (RISC). Many F&I managers make handling and explaining the RISC substantially more complicated than necessary, and in some cases can expose the dealership and themselves to litigation.

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

To manage the anxiety over the sales contract, I’d like to review the basic legalities with which you must be familiar and best practices to clearly but properly explain the contract. A quick disclaimer: This article in no way should serve as legal advice. You should always contact your legal team or state dealer association regarding the laws in your state and addendums that must be signed. As an additional measure, I always recommend AFIP certification.

“As soon as the dealership has printed the contract, handed it to the customer on-premises and had it signed by that customer, it is

consummated, hot, active.”

“If a customer ever requests a copy [of the RISC], I would bet you are being tested. Do not fail this test.”

Contract Is Self-Disclosing Contrary to popular belief, there are no federal requirements for a verbal disclosure of the RISC. Under the Federal Reserve’s Regulation Z, the contract is a self-disclosing instrument that is to inform a vehicle customer of the cost of financing to make a purchase on that day. In my opinion, the most important thing that every business manager, dealer, general manager and sales manager needs to remember about the RISC is that as soon as the dealership has printed the contract, handed it to the customer on-premises and had it signed by that customer, it is consummated, hot, active. Under that contract, the selling dealership is the original creditor. It is not the customer’s concern if the dealership winds up unable to get the loan approved or funded at the stipulated terms for any reason. (That is, except for in the handful of states that give recourse to the dealership assuming proper notification was made to the customer in the contract.)

Instead, it’s safer just to use your pen to point to where the customer is to sign, without ever leaving a mark. Once the customer does start to sign in your business office, you should verbally direct him or her to sign the contract with an official signature. There should be no doubt in the customer’s mind that he or she is signing a contract.

Following is an eight-step verbal disclosure about the RISC that my group teaches in F&I school:

Conditional Agreement Isn’t An Option I know some of you reading this article are thinking, “We’ll just have the customer sign a conditional sale agreement/bailment to protect us in the event we can’t secure financing from an outside source or funding of the RISC.” Maybe your state association or legal team has told you this is an option.

The Truth in Lending copy does not need the customer’s signature on it, although the most common practice in the marketplace is to hand over the entire four-page RISC and say, “This is your retail installment sales contract. I would like for you to take it and review it.”

It is critical that all dealership managers remember that a customer has a right under federal Regulation Z to review the RISC before signing it. That customer can take the yellow Truth In Lending copy for 24 hours, knowing the stated terms must stay in effect, before signing it.

Review the agreed-upon term, payment and first payment date on the RISC.

Start at the top of the contract and review the customer’s information as well as the seller/creditor information.

Review the information about collateral on this contract. This means the vehicle year, make and model, and VIN.

Review the federal Truth in Lending boxes with the customer. A good verbal disclosure of these boxes would be: “This shows your APR, your finance charge, your amount financed, your total payments, and your total sales price including your down payment.” Your staff is not required to verbally review any of the numbers listed in these boxes. According to federal Truth in Lending laws, this is what makes the RISC self-disclosing.

Steps To A Careful Disclosure

Hand the Truth in Lending copy of the RISC to the customer. Don’t slide it across the desk. If your dealership prefers electronic RISC transmission, print off a physical copy and hand it to the customer.

In reality, such a conditional form is null and void upon consummation of the RISC. In fact, many dealerships have gotten themselves in hot water by demanding the vehicle back from the customer or trying to have the buyer sign a different RISC after the fact. Once the customer signs the RISC in your dealership, the dealership becomes the lienholder. If you look at the top-right box on most RISCs, it will read “Seller/Creditor.”

Disclose the itemization of amount financed. This would be the selling price including sales tax, title and licensing fees, and the prices of any financial services products and insurance policies that the customer opted to purchase along with his or her loan.

Go back to the agreed-upon payment and re-disclose the term, payment and the first due date of this loan.

With your shiny tip pen, point to the individual signature lines that the customer must sign. Have the customer sign the RISC in the appropriate locations. Depending on your state, you will need a minimum two signatures. In California, 10 signatures are required on the contract.

Explaining the RISC and making all necessary disclosures do not amount to a difficult sequence, and it should not prove taxing for the customer to understand the terms and conditions. Business managers should make sure to follow up with any appropriate state laws about which they need to be aware, and with any additional addenda to the contract that also must be signed.

If a customer wants to take the copy to his or her attorney or accountant, or to the dealership down the street, then you must let that happen. This does not mean your dealership has to deliver the vehicle, but it does mean you must provide a copy of the contract for review. This is clearly written on the bottom of the RISC, and if a customer ever requests a copy, I would bet you are being tested. Do not fail this test.

Review a copy of the RISC for a customer without making any physical marks on it.

Don’t Mark Up The RISC However, your people want to refrain from making any foreign marks on the white copy of the RISC. If you do, the finance company may deny funding. Although there has been debate recently about whether a business manager can at least mark where the customer is to sign, it is better to be safe than sorry. Don’t highlight, don’t make an X, don’t leave a dot.

TO SEE MORE FROM TONY DUPAQUIER GO TO CBTNEWS.COM

TONY DUPAQUIER

Director of the Academy of Service Group Tony’s company sells financial and insurance products to dealerships and agents. He began his retail automotive career in 1990 as a salesperson and went on to hold positions including business manager, fleet sales manager, sales manager and general manager. He also conducts various F&I and advanced F&I workshops and has presented to more than 20 industry groups and state, national and international dealer associations. Visit the website at www.sgifs.com.

NOVEMBER 2015

CAR BIZ TODAY

CBTNews.com

SALES

y t i n u t r o p p O e Seize Th e r o M t r e v n o C To

N E M O W S R E P P O SH S TO PICKUP FROM CARS

ruck sales continue to soar nationwide, and while many dealers don’t realize so, this trend provides them with a bonus opportunity to particularly increase market share in the women buyer’s segment that is responsible for over half of all vehicle sales. In September 2015, sales of pickup trucks increased 11.3 percent month over month compared with 2014. Through September, year-to-date sales of pickups were up 10.5 percent over 2014, according to motorintelligence.com. Women represented 15 percent of truck buyers in the first nine months of 2014 (19 percent of midsize model sales and 13 percent of heavy duty trucks). Those figures were up over 2013 sales to women. Full-sized trucks are prime moneymakers for Detroit, and Japan is looking to follow. Since the majority of women currently buy smaller cars that offer less per-unit profit, persuading them to convert to truck ownership on their next purchase offers dealerships a chance to fatten their own profit margins. Women typically buy trucks for many reasons including utility, business requirements and recreation. Crew cab models, which represent 70 percent of truck sales, provide the interior room of

Guiding women shoppers toward a light truck is a smart strategy for the dealership and its customers.

Using women-centric advertising and sales strategies can help move truck sales, boost profits. BY ANNE FLEMING show women with families enjoying the convenience features a truck provides. Camping trips, tailgating at sporting events and hauling the kids’ sporting equipment are all great ways to present the versatility a truck offers.

a car with exterior space to haul heavy equipment, toys and sporting gear. Plus, a truck that transports the family all week can then be used to haul a travel trailer for a weekend outing. Current truck designs include many luxury features that make the vehicle easy to drive and comfortable. Major automakers are starting to think about women buyers when they design truck models, and hiring women for their truck engineering teams. These engineers are bringing their experience in designing cars to the truck segment and helping the OEMs focus on making vehicles that appeal to a wider audience.

Your website and social media pages should include links to reviews and comments about trucks by women owners and shoppers. Also be sure to include reviews about your dealership. Women researching a vehicle purchase like to read reviews, especially those posted by other women.

Strategies For Truck-Oriented Ads

Auto manufacturers have created several woman-centric truck branding ads for national campaigns. As for dealers, here are some tips to develop regional and local advertising that will appeal to women considering a pickup truck:

Broaden your audience. Be sure your truck ads are genderbalanced. On your website, take steps to feature images of women using trucks. Don’t just present work situations; also

Show truck reviews from women.

Speak to your demographic. Trucks usually are a pretty easy sell in rural areas and to businesswomen who need a truck for work. However, don’t neglect the ways that trucks are practical in a number of city settings. Be sure your local target demographic is represented in your advertising.

“Since the majority of women currently buy smaller cars that offer less per-unit profit, persuading them to convert to truck ownership on their

next purchase offers dealerships a chance to fatten their own profit margins.”

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

Many women still may not think about pickup trucks as an option when they are shopping for a new vehicle. Try host a special monthly event for women and help them learn how a truck can easily fit into their lifestyle. The bottom line: Marketing and advertising, especially on your dealership’s website and social media, are a quick and easy way to help expand women’s thinking to consider the practical aspects of owning a truck.

Strategies For Making The Sale When selling to women car shoppers, dealers know it is never wise to make assumptions about the make and model she is likely to buy. Apart from representing half the market share of vehicle buyers, women also influence an estimated 80 percent of all sales in this country. They may not be the primary driver, but women prospects who walk through your dealership’s door still are viable targets for a pickup truck sale. Even so, given that women today represent only 15 percent of truck purchases, you have to acknowledge there may be some obstacles in persuading them to convert from car ownership. Here are five tips to help your salespeople overcome any hesitation by or concerns of women shoppers in committing to a larger vehicle:

hybrid of car and truck. They also are good matches for family driving and can be much more convenient than an SUV because of the easy access to the truck bed for loading and hauling gear.

Host events like women’s truck days.

Emphasize comfort.

Present a pickup as a second vehicle. A truck can be an ideal second vehicle for a family that also owns a smaller car, since each vehicle than can be applied to its best use within the family’s activities. The bottom line: Understanding how a woman shopper tends to view pickup trucks, and then showing her the comfort, style and versatility of today’s models, may help your salespeople to convince her to upgrade from a smaller, less profitable (for your dealership) car.

What’s Ahead For Women And Trucks In December, Becky Blanchard took over as director of Chrysler Group’s Ram brand, becoming the brand’s No. 2 executive. Other women who are front-and-center in the engineering and design of pickup trucks including Anita Burke at GM, Jackie DiMarco at Ford and Diane Allen at Nissan. Blanchard was quoted in media reports that her move to pickups was a natural career evolution that mirrors customer trends. “A lot of cross-shop data show people are moving from SUVs and minivans into trucks,” she said. “You don’t have to sacrifice anymore to own a truck.” As women engineers move into truck design from other roles at the major automakers, they can bring

Gone are the days of bumpy rides and uncomfortable interiors with trucks. Be sure to tout luxury features like leather, heated seats and chrome. Also, features such as standard running boards and adjustable pedals may be a welcome surprise for drivers of smaller physical stature.

“Marketing and advertising, especially on your dealership’s website and social media, are a quick and

easy way to help expand women’s thinking to

consider the practical aspects of owning a truck.”

knowledge of what women customers have really wanted in other vehicle brands. This cross-pollination will continue to drive innovation and help convert more women into truck lovers. The continued rise in truck sales and the increased market share of women truck buyers help create an equation for increased profits at your dealership. Using the information and selling tips shown above should help create a win-win for your women customers and your dealership alike.

Advertising can emphasize how a pickup truck is useful for a working woman’s family weekend activities.

Put vehicle size in context. Unless a woman is used to driving a very small car, driving a truck shouldn’t prove a lot different than handling a large SUV or a minivan. Superior handling found in today’s pickups will help convince her, so be sure to encourage your shopper to take a test drive. If necessary, your salespeople should be prepared to spend time reframing the old stereotype that trucks are big and bulky and only for a specific (male) audience.

Tout the visibility advantages. Trucks have a big advantage over cars when it comes to visibility on the road. A pickup’s extra height and advantageous lines of sight around its rear corners make for confident driving, even in heavy traffic and tight spaces.

Point out the versatility. Crew cabs are a versatile, convenient design for women drivers, the perfect

TO SEE MORE FROM ANNE FLEMING GO TO CBTNEWS.COM

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.

NOVEMBER 2015

CAR BIZ TODAY

CBTNews.com

ON THE SET WITH

AUTOMOTIVE NETWORK

Leadership expert John Maxwell (center) with Jim Fitzpatrick and Bridget Fitzpatrick of CBT , at the Zurich-CBT conference in Chicago.

Clint Burns of The Next Up

Jeff Cowan of Jeff Cowanâ&#x20AC;&#x2122;s PRO TALK

Corinne Lillis of CBT with Alexi Venneri of Digital Air Strike

Kirk Manzo of Assurant Solutions

Curtis DeGroote of Driving Loyalty

Entrepreneur, writer and commentator Grant Cardone

Jennifer Reed of Equifax

Joe Gumm of CBT with Robert Carmendy of RSM Honda

Jared Rowe of Cox Automotive

Ned Nielsen of Highlinesale.com

Paul Tully of Mercedes-Benz of Buckhead

Tim Clemmons of The Remember Group

Todd Katcher of Digital Dealer Systems

Zack Klempf of Sully Automotive

CBTNews.com

CAR BIZ TODAY NOVEMBER 2015

David Kain of Kain Automotive.

Corinne Lillis of CBT with Alex Perdikis of Silver Spring Automotive

RDE SAL VE ES

EXCELLENCE

“From 57 to 184 units a month!”

YEARS OF 1985–2015

198 5 – 2015

Proven Results!

JOE VERDE TRAINING WORKSHOPS Learn How To Train – Coach – Manage Salespeople Management Workshops

– Marvin Potter, General Manager Matthews Auto Group, Vestal, NY

7 Easy Ways To Double Your Net Too many dealers and managers are looking for profit in all the wrong places. Get Joe’s new book today, and you will:

n Managing For Growth & Profit Our ‘Team Leadership’ workshop is the critical class managers never got on “Managing Salespeople & Profits”. Attend this workshop first. n Working Deals (Negotiation) Improve your sales and gross with this easy ‘customer friendly’ 3-Step Process on every deal you work. n Learn To Hold Effective Training You train M-W-F for 2 reasons, to improve & grow. Problem: If you don’t train, you don’t improve and you don’t grow! Sign up today.

• Earn More

Sales Workshops

• Net More • Sell More

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

• Gross More

The Sale Want a 20%-50% boost in sales and gross overnight? Sign up now or take the course on JVTN®.

• Save $$$ • Lower Costs You have more profit potential in each of these Top 7 Sources than you have in all of your other sales and profit opportunities combined. Save time, save money and tap into Joe’s 7 simple solutions found in his latest book and you’ll see how to double your net profit almost overnight, with no new expenses.

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

n How To Close, Overcome Objections

& Negotiate Tired of missing deals that should have become deliveries? Live & Online...Call today. n Phone & Internet Leads Dealerships miss 8 out of 9 deliveries from these lead sources. We fix that, live in this workshop and online at JVTN®.

Would you like results like these? “Units are up 29% and gross is up 71% from your classes and JVTN®” – Brian Nesbitt, GM, Fred Beans C-D-J “Our units are up from 80 to 130 and gross profit up $200,000 per month.” – Ben Gonzales, Sales Manager Pitre Buick GMC

“From 130 units @ $2,700 to 239 @ $4,100 with Joe’s training.” – Brandon Bourke, GSM, Texas Dodge “Your training has been the best money we’ve ever spent.” – Randy Point, Vice President Menholt Auto Group

JVTN® – ONLINE TRAINING Train In-House The Quick & Easy Way

What is JVTN®? It’s the most powerful virtual sales training in the world! What would Joe Verde teach our salespeople? The complete sales process... n How to sell a car today. No salesperson will be left behind, not know-

ing what to say or do when they get a customer. Word for word – we’ll show them what to say from the greeting to the delivery!

n How to close the sale, overcome objections and stay off price on the lot to build value. We teach your salespeople how to handle every objection – including price questions and price concerns that come up during the sale, closing and the negotiation.

n How to build your business by phone. Phones ring and leads come in daily, unfortunately most don’t end up as deliveries. We teach salespeople how to take calls and leads and make outgoing contacts, to turn more lost sales into be-backs and more contacts into appointments that show. n How to follow up, prospect and retain your customers forever. Again, word for word on everything they need to say and do to build your future business. JVTN® includes a powerful, easy to use mini-CRM built for salespeople.

Call Now • 888-712-6647 SC 12351

AINING,I TR N

The #1 Training Company In The Car Business

AG MAN EMEN

JOE VERDE

it's like a

gym membership for your career

Get your team in shape for the new year with training from the NCM 速 Institute.

Executive Mgmt

Variable Operations

Fixed Ops & Specialty

GENERAL MANAGEMENT I

GENERAL SALES MGMT I

SERVICE MANAGEMENT I

Jan 19-22, May 3-6, June 21-24

Feb 1-3, April 11-13, June 13-15

Jan 18-20, March 21-23, April 18-20, May 23-25

GENERAL MANAGEMENT II

GENERAL SALES MGMT II

SERVICE MANAGEMENT II

March 8-11

Feb 3-5, April 13-15, June 15-17

Jan 20-22, March 23-25, April 20-22, May 25-27

SALES & MGMT COMPENSATION

GENERAL SALES MGMT MASTERY

SERVICE MANAGEMENT MASTERY

Feb 4-5, May 12-13

March 2-3, June 21-22

March 15-16

FINDING TOP TALENT

USED VEHICLE MGMT I

PARTS & ACCESSORIES MGMT I

Feb 2-3, May 10-11

Feb 15-17, March 14-16, April 18-20, June 6-8

Feb 22-24, May 2-4

LEADERSHIP

USED VEHICLE MGMT II

PARTS & ACCESSORIES MGMT II

May 17-19

Feb17-19, March 16-18, April 20-22, June 8-10

Feb 24-26, May 4-6

SERVICE & PARTS FOR SR. EXECS

USED VEHICLE MGMT MASTERY

EXPRESS SERVICE MGMT I

April 26-27

May 23-24

May 16-17

FINANCIAL ANALYSIS

MASTERING INTERNET SALES

EXPRESS SERVICE MGMT II

April 11-13, June 13-15

Feb 23-24, May 17-18

May 18-19

ADVANCED FINANCIAL MGMT

LEAD IN THE DIGITAL MARKETPLACE

BHPH COLLECTIONS

April 13-15, June 15-17

Feb 25-26, May 19-20

April 25-26

GENERAL MGMT EXEC PROGRAM

DESKING AND F&I INTEGRATION

Classes start in March / Aug

March 2-3

HOW TO MANAGE YOUR DATA March 10-11

For more info and to register, call 866.276.6669.

future of the customer buying experience

n Oct. 15 in Chicago, Zurich North America and CBT Automotive Group co-sponsored a symposium on the future of the customer buying experience for an audience of dealers. Best-selling author and leadership coach John Maxwell gave the keynote address, and a panel of industry leaders also explored the customer experience topic. The symposium followed the Automotive News “Best Dealerships to Work For” awards the previous evening. Here are scenes from the event.

Marie Knight, VP of strategic relationships at Zurich North America, delivers opening remarks

Raj Sundaram, chief client success officer at Cox Automotive, discusses the importance of technology.

Rachel Richards, chief marketing officer at Sonic Automotive Group, talks about the “One Sonic-One Experience” sales process.

Jim and Bridget Fitzpatrick of CBT with John Maxwell.

Dealer Patty Koenig with John Maxwell.

John Maxwell talks about leadership demands on dealers.

Zurich North America VP David Putz welcomes dealers to the breakfast.

All photos courtesy of Tricia Wiese.

NOVEMBER 2015

CAR BIZ TODAY

CBTNews.com

DON’T MISS THE BIGGEST AUTOMOTIVE EVENT OF 2016

FEBRUARY 9-11, 2016 | OMNI HOTEL AT CNN CENTER | ATLANTA

Patrick Lencioni

NY Times Best-Selling Author, Leadership Guru

Nick Saban

Head Coach Alabama Crimson Tide

Marcus Lemonis Star of CNBC’s “The Proﬁt”

Jason Dorsey Millennial Expert, Best-Selling Author

EARLY BIRD REGISTRATION IS OPEN. REGISTER TODAY AND SAVE $200 The CBT Automoove Sales, Service and Markeeng Conference & Expo will feature over 70 dynamic breakout and general sessions addressing sales, service and markeeng delivered by the industry’s top thought leaders. AAendees will learn about industry trends, best praccces, leadership, new and pre-owned sales, digital and social markeeng, management, F&I, BDC, service & parts departments and much more.

To register and for more information, go to CBTConferenceandExpo.com