Car Biz Today | January 2016 by CBTNews

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The Official News Source Of The Retail Automotive Industry

JANUARY 2016

VOLUME 3, ISSUE 1

Jared Rowe

President of Cox Automotive Media / AutoTrader & Kelly Blue Book

Joseph Michelli Jason Dorsey

Best Selling Author and Millennial & Gen Y Expert

1# New York Times Best Selling Author Driven to Delight ..Delivering World-Class Customer Experience the Mercedes Benz Way

Marcus Lemonis

Star of CNBC’s Hit Show THE PROFIT Founder & Chairman of Camping World Business Turn Around Expert

Patrick Lencioni

Harry Hynekamp

General Manager of the Customer Experience Mercedes Benz USA

Nick Saban

Head Coach of University of Alabama

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1# New York Times Best Selling Author Leadership Guru

Dale Pollak

Founder & President of vAuto

Leadership • Management • Technology • Marketing

MAKE 2016 YOUR BEST YEAR EVER!

Over 65 dynamic breakout sessions covering every department of your dealership.

STRIKE A CHORD. STRIKE A CONVERSATION. STRIKE A SALE. Every market strums to a different tune. Autotrader provides unique local market insights that keep you steps ahead of the competition, helping you sell more cars.

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DIGITAL MARKETING SOLUTIONS // SHOPPER INSIGHTS // LOCAL MARKET GUIDANCE

BEHIND EVERY PASSIONATE CUSTOMER is a dealer who loves the car business.

For a chance to win your very own #lovethecarbusiness documentary, register at

www.lovethecarbusiness.com and don’t forget to stop by CBT Automotive Conference & Expo booth #309 on Feb.9-11 in Atlanta, GA.

CAR BIZ TODAY M

Letter from the editor Dear readers, As your dealership launches into a successful 2016, sales of cars and services aren’t the only things on your plate. You also need to make time on your calendar and travel plans for the Feb. 9-11 CBT Automotive Sales, Service and Marketing Conference & Expo in Atlanta. More so than any other conference for retail automotive, this event will target every business activity in a franchised new car dealership – from dealer leadership to marketing, used car sales to service – with strategically tailored keynote and breakout sessions and leading executives and thought leaders from the industry. Remember, you can register today at www.cbtconferenceandexpo.com. To help affirm your decision to send your dealership’s managers, you’ll want to read our advance coverage of the conference in this edition. We’ve given you a road map of our keynote Managing Editor speakers (such as Nick Saban and Patrick Lencioni), panel discussions (on topics like successful digital marketing and getting better results from your used car department) and lead sponsors (including AutoTrader, EasyCare and ELEAD1ONE). Plus, you can review the panelists and topics for the latest list of breakout sessions, which will eventually reach approximately 70 highly relevant meetings.

JON MCKENNA

Also in this edition, we’ve given you a very practical analysis of the potential for the newly released automotive domain names .car, .cars and .auto. After reading our staff coverage, you’ll be in a position to decide whether to reserve one of these new, easily remembered web addresses and start promoting it in your marketing and advertising campaigns. Plus, this edition has some great advice on how to refine the way your salespeople deal with customers. Most sales reps respond to a customer who messages or phones in to ask about price by suggesting they arrange a sit-down meeting with the sales manager. Dale Pollak of vAuto Inc. makes the case in his article that the salesperson should simply give the customer the information he or she seeks; the candor will pay off in the long run. And, Paul Moran of Vboost Inc. offers guidance on how to improve the odds that a customer will refer your dealership to friends and family after the purchase.

CAR BIZ TODAY MAGAZINE Email newsroom@cbtnews.com Phone 678.221.2955

President And Publisher Jim Fitzpatrick Vice President/COO Bridget Fitzpatrick Managing Editor Jon McKenna Creative Director Randall Veugeler Art Director Erica Abrams Production Manager Laura Payne Designers Shay Harbaugh Brian Hassinger April Miller Christina Zavlanos Creative Director - Digital Michael Marley Director of Marketing & Events Karen Locadia Marketing Associate Erin Mumphord Subscription Manager Emily Wiggins

Hope January is a great one for your dealership, and see you in Atlanta.

ADVERTISING Director of Sales Gary Blitzer gblitzer@cbtnews.com d 678.221.2955 c 770.330.6821

In This Issue 6

A description of three days of the CBT conference

An overview of the CBT conference breakout sessions

10 Industry News 12

New .car, .cars, .auto web names could help your dealership’s marketing By Jon McKenna

Why you should leverage an auto dispatch function in service

By Ken Rock, Auto/Mate Dealership Systems

Ask The Pros

Why not be forthright if a customer seeks a car’s price over the phone? By Dale Pollak, vAuto Inc.

CBTNews.com

20 How to boost the chances

that more customers give referrals to friends, family By Paul Moran, Vboost Inc.

22 Association News

Dealers must stop deferring marketing decisions to agencies

By Mark Tewart, Tewart Enterprises Inc.

26 Don’t let your sales staff devolve into a business prevention department By Bill Playford, DealerKnows Consulting

28 Rotating lifts are a

promotional system that still has mileage left By Jon McKenna

CAR BIZ TODAY JANUARY 2016

30 Dealership websites must be designed with mobile devices in mind

By Amy Farley, Force Marketing

32 Know the optimum times and places to buy new service equipment By Chip Walker, Custom Facilities Inc

Making the case for a dealership chief of customer engagement By Anne Fleming, Women-Drivers.com

36 KPIs that truly track how well your store’s service advisors perform

By John Fairchild, Fairchild Automotive Solutions

38 On The Set With CBT

Automotive Network

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CBTCONFE R ENCE A N D EX P O.CO M

CONFERENCES

WHEN: Feb. 9-11, 2016

CBT Conference Keeps Adding

WHERE: Omni Hotel at CNN Center in downtown Atlanta

LEADING SPEAKERS, THOUGHT-PROVOKING SESSIONS AND SPONSORS

HOW TO SIGN UP: Complete information is available and being constantly updated at www.cbtconferenceandexpo.com.

With the Feb. 9-11 event not far off, the time to register is now.

n recent weeks, the pace of news has been predictably brisk with the CBT Automotive Sales, Service and Marketing Conference & Expo, which will be held Feb. 9-11 at the Omni Atlanta Hotel at CNN Center in downtown Atlanta. Manheim Consulting decided to present its “2016 Used Car Market Report” during a press conference at the CBT event. Mercedes-Benz USA general manager of customer experience Henry Hynekamp and Joseph Michelli, author of a new book on the Mercedes approach, signed on to join a panel discussion on the car customer experience. ELEAD1ONE joined the roster of platinum sponsors of the conference. The list of breakout sessions hosted by the industry’s top dealership executives, consultants, trainers and vendor representatives continued to expand. Those developments will be explained in greater detail in the subsequent pages of the magazine. Here, we wanted to review the benefits that await you in Atlanta as the last few weeks wind down before the most broad-reaching conference in retail automotive. Remember, you can register today at www. cbtconferenceandexpo.com. The site has an easy registration process and offers even more detailed information about the event than you’ll find in this edition of Car Biz Today.

KEYNOTE SPEAKERS

A huge draw to the conference comes from the keynote speakers who will address four general sessions spread across three days, offering their successes and setbacks, and actionable strategies in marketing, motivating and retaining key staff, and keeping an edge as a dealer. The keynoters include:

JASON DORSEY, TUESDAY, FEB. 9, 9-10:15 A.M.

Dorsey is chief strategy officer at the Center for Generational Kinetics in Austin, Texas, and one of the world’s leading authorities on how to effectively market products and services to millennial customers. He will tell dealers how to do a better job marketing to Generation Y and getting those customers to buy now. 6

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CAR BIZ TODAY JANUARY 2016

PATRICK LENCIONI, WEDNESDAY, FEB. 10, 9-10:15 A.M.

Lencioni is one of the most famed speakers and authors in the world on business leadership and organizational health. The founder and CEO of Lafayette, Calif.-based The Table Group, and author of nine best-selling business books, will give dealers strategies to keep their most valuable and productive employees.

NICK SABAN, THURSDAY, FEB. 11, 9-10:15 A.M.

The University of Alabama head football coach practically needs no introduction, but just in case … he has led four teams at two universities to collegiate national championships and twice been named Associated Press coach of the year. Oh, and he also happens to own two car dealerships in Birmingham, Ala. Saban will give dealers insights into how he assembles and motivates winning teams, both on the football field and in the dealership.

MARCUS LEMONIS, THURSDAY, FEB. 11, 3-4:30 P.M.

Viewers know Lemonis as the self-made host of the small business-oriented reality show “The Profit” on CNBC. They might not realize he is CEO of Camping World and Good Sam, the nation’s and world’s, respectively, largest RV and outdoor retailers. Lemonis will explain his philosophy and discipline for winning in business every day.

chief marketing officer at Sonic Automotive Group; and John Fitzpatrick, president and CEO of Force Marketing. On Wednesday, Feb. 9, Jim Fitzpatrick, founder and CEO of CBT Automotive Network, will lead the panel that explores how to wring more profit from a dealership’s used car operation. Best operational practices, CPO sales, inventory management and marketing approaches will be discussed. Panelists include Dale Pollak, founder and president of vAuto; EasyCare President Larry Dorfman; Jeremy Anspach, president and co-founder of PureCars; and Stuart Bailey, VP over the pre-owned division of Asbury Automotive. On Thursday, Feb. 11, Hynekamp and Michelli will give their insights on creating a dealership culture that emphasizes the customer’s experience (see next page).

BREAKOUT SESSIONS

An in-process schedule describing each breakout session and presenter is provided on pp. 8-9.

PLATINUM SPONSORS

Three leading vendors in the automotive retail space have signed on as conference platinum sponsors, meaning their brand and executives will be very visible. The companies are Autotrader Inc., EasyCare and ELEAD1ONE.

All panel discussions are slated to last from 10:45 a.m. until noon.

Autotrader, a subsidiary of Atlanta-based Cox Automotive, is an online marketplace for new, certified pre-owned and used cars. EasyCare, the dba of Automobile Protection Corp. of Norcross, Ga., markets a variety of vehicle service contracts. Valdosta, Ga.-based ELEAD1ONE provides a variety of dealership software including CRM, inventory, data mining and other packages.

On Tuesday, Feb. 9, Brian Pasch, president and CEO of PCG Consulting, will moderate a panel on how to win more web traffic in marketing campaigns to an online car buyer. He will be joined by Jared Rowe, president of the Cox Automotive media division; Rachel Richards,

Platinum sponsorship means attendees can look forward to company representatives serving as breakout session leaders, introducing keynote speakers and hosting events. Also, the companies’ products and logos will be on prominent display throughout the conference.

PANEL DISCUSSIONS

PRESENTATION OF

THE MERCEDES WAY MANHEIM’S USED WILL SHAPE PANEL CAR REPORT On Auto Customer Experience Burnishes Conference Agenda W O ith Mercedes-Benz USA in the midst of moving its North American headquarters to Atlanta from Montvale, N.J., you’d logically expect the CBT Automotive Sales, Service and Marketing Conference & Expo to have a noticeable Mercedes flavor. The conference doesn’t disappoint. A panel discussion has been added to the conference agenda for Thursday, Feb. 11 from 10:45 a.m. to noon that features Harry Hynekamp, Mercedes’ general manager of customer experience; and Joseph Michelli, author of the justpublished “Driven to Delight: Delivering World-Class Customer Experience the Mercedes-Benz Way.” Not surprisingly given their backgrounds and the Mercedes’ brand reputation, the panel is entitled “Driving the Customer Experience: What It Takes to Bring the ‘Right’ Culture to Your Dealership.”

ne of the most authoritative and eagerly awaited resources in the used car retailing sector is the “Used Car Market Report” from Manheim Consulting, a subsidiary of Atlanta-based Cox Automotive.

The highly detailed report typically examines the previous year in review for used cars, the vehicle remarketing sector’s performance, sales by dealerships, rental industry revenue, leasing activity, sales to commercial and government fleets, and the international marketplace, among other key topics. As such, dealerships and every other business involved with the thriving used car sector regard the report as go-to data. The “2016 Used Car Market Report,” which is the 21st annual edition, will be unveiled at the CBT Automotive Sales, Service and Marketing Conference & Expo in Atlanta. Attendees of the presentation will hear an overview of the report, which examines 2015 performance. Tom Webb, the veteran chief economist at Manheim Consulting Tom Webb and one of the report’s co-authors, will present the findings and lead a press conference at the Omni Atlanta Hotel at CNN Center.

Harry Hynekamp

Joseph Michelli

Hynekamp was promoted to his current job in early 2012, when it was a newly created position. He joined Mercedes in 1991 and over time served in a variety of jobs including department manager of finance and general manager of learning and performance. Michelli is a New York Times best-selling author, and his most recent book is “Driven to Delight.” It gives a behind-the-scenes look at the Mercedes leadership team’s multi-pronged strategy to deliver a best-in-class experience across all brands. Through his Pinellas Park, Fla.-based consulting firm called The Michelli Experience, Michelli speaks around the world on organizational development and companies that do a superior job serving their customers. In that regard, in addition to “Driven to Delight” he has authored books about Starbucks, Zappos, the UCLA Health System and the Ritz-Carlton Hotel Co. He was named one of the top 10 thought leaders in customer service by Global Gurus.

The findings are confidential until then, but a flavor of the report can be captured with some highlights from the 2015 edition, including: ✓ At just more than 42 million units, used vehicle sales were virtually unchanged in 2014. ✓ Auction volume grew by 5 percent to 8.8 million units in that year and was expected to keep growing. ✓ U.S. dealers’ used vehicle operations produced record profits in 2014, when sales of certified pre-owned vehicles also hit a record of 2.3 million units. ✓ Rentals hit record revenue for the fifth straight year, climbing to $26.1 billion. ✓ Lease originations exceeded 3.5 million units for the first time since 1999. Apart from its comprehensive examination of the various segments of the used car sector, the report usually presents a series of brief case studies and highlights from previous editions.

JANUARY 2016

CAR BIZ TODAY

CBTNews.com

BREAKOUT SESSIONS *In-process list; new sessions are being added daily

MIKE ANDERSON

LEE HARKINS

C E O / P a r t n e r, T h e R i k e s s G r o u p “Negotiation Free Selling: It’s Time Has Come” Learn about the automotive tradition with the Automotive State of the Union & what challenges/ recommendations come with that. Meet your customers expectations & learn common challenges that come along with having the keys to success. This industry is a changing marketplace, rethink “profit” and reduce expenses while increasing sales.

President & CEO, M5 Management Service, Inc. “The Process of Winning” Increased profitability and customer retention requires an adherence to a series of disciplines. The #1 challenge a service department has is consistency of process. This workshop will provide a “how to develop” approach to develop the process of winning! We will define the components and the reward for changing the behavior.

J E R E M Y A N S PA C H

D AV I D K A I N

C E O & C o - F o u n d e r, P u r e C a r s “Overcoming Automotive Advertising’s Greatest Deficiencies” Through the information overload that has accompanied the digital age, one asset has emerged that puts the odds in our favor: big data. This session will show how data provides powerful intelligence that makes decisions based on probability. Learn why it allows us to analyze, optimize, & amplify all aspects of digital strategy to create the ultimate digital experience.

President, Kain Automotive Inc. “Advanced Internet/BDC Success Tactics” In this session, David Kain, President of Kain Automotive, Inc. will demonstrate 10 Proven Internet / BDC Tactics used by leading dealerships that you can put into play today. No theory, actionable techniques that work and will work right away. David will cover communication skills, professional development of your team and marketing strategies in this session.

CLINT BURNS

CHIP KING

CEO, The Next Up “Don’t Let Your Showroom Benefit Others” As a dealership you spend millions of dollars ensuring your staff, inventory & showroom appeal to buyers who walk through the front door every day, but often it’s just a showroom. Learn a consistent, accountable approach that assures the best customer experience & helps your sales staff prove value, thereby ensuring those internet sales stay where they belong– at your dealership.

O w n e r & M a n a g i n g P a r t n e r, C a l l R ev u “Driving Revenue: Focus on Your Caller’s Journery” Your phone is the number one point of contact in volume and influence on your customer’s journey. You deliver more than 15 out of every 100 sales opportunities entered into your CRM, yet over half of the sales calls are never entered because they can’t be. The focus on the sales call has fallen into the same bucket as training. Learn how to avoid this and make your dealership’s sales process as effective as it can be!

J E F F C O WA N

TIM KINTZ

Fou n d er & C EO, J e ff Cowa n ’s Pro Tal k “Solve the Customer Retention Problem Forever! ”

service department.

Learn how solid proven methods can take your Service Customer Retention from the current national average of 40% to above 80% within nine months. Attendees wil llearn that these easy to understand techniques are even easier to implement. This is a must see meeting if you’d like to get the highest Customer Retention possible for your

President, The Kintz Group “How to Lead, Coach and Motivate for Exceptional Results” Wouldn’t it be great to start every month knowing you have several salespeople who will sell 15+ cars each? Are you finding it challenging to recruit & retain good salespeople? Business has changed – & in today’s competitive market getting & retaining customers is critical to future success. Learn how to turn your team into top producers to dominate your market.

M I K E E S P O S I TO

D AV I D L E W I S

CEO & President, Auto/Mate “How to Create Loyal Customers Without A Customer Loyalty Program” Dealers spend millions of dollars every year on customer loyalty programs, but you can’t buy loyalty with free oil changes. The fact is, customers will never love your dealership unless your employees love your dealership. The best way to improve customer loyalty is to focus on making your employees happy and creating a great place to work.

President, David Lewis & Associates “Creating Sales & Profits by Understanding Your Customer” n this session the attendee will get a better understanding of their Customers, why they are so defensive and how to defuse their apprehensive Areas of focus will be on the both the presentation and demonstration, and the negotiations. Today’s customers expect a sales process & get that sales process, change the process and you will change the customers game plan.

J O H N F I T Z PAT R I C K

P E T E M AC I N N I S

Dealers are constantly being told that the future of marketing is data-driven and technology-enabled. In this session, we’ll talk about why that’s the case, and how dealers can embrace that future right now with the resources at their disposal. With the data available today, dealers should be closing their internet leads at a much higher rate.

In this session dealers will learn how to leverage new online and instore technologies to sell more cars faster and enable a streamlined workflow for dealers that reduces risk to profit and customer satisfaction by slashing the ‘deal’ process from

CEO & President, Force Marketing “Increase Market Share, Decrease Ad Expense”

JIM FLINT

President & Founder, Local Search Group “Car Dog Millionaire: Drive Digital Sales” “Car Dog Millionaire” covers the auto industry’s leap of faith into the Internet during one of the all-time worst recessions in American History. Jim will break down digital details that continue to keep car dealers ahead of their competitors. With fact-based retail tracking the results lead to sales gains for his clients and more satisfied customers across the country.

GREG GIFFORD

D i re cto r o f S e a rch & S o ci a l , Deal erOn “Local SEO - Don’t Risk Your Business” In this fast-paced session, Greg will explain how Local SEO is different from regular SEO, then show why Local SEO applies to car dealerships. Walk through signals that influence local visibility in organic searches and explain exactly how to optimize each signal. Attendees will get a roadmap for SEO for their dealerships in 2016 across every important aspect of organic visibility.

CEO, eLen d Solu t ion s “Creating a Connected Buying Experience”

hours to minutes.

CORY MOSLEY

Principal, Mosley Automotive “Best Practices Kill Sales Growth” Best practices represent a normalization of things every dealership might be doing, so in a crowded and competitive marketplace why would that be anyone’s goal? Back-to-basics thinking will suffocate your dealerships growth and hurt profitability. In this session Cory will break down these challenges & lay out a clear path for innovation, separation, and domination in your marketplace.

E R I C N AC H B A H R

C E O , H e l i o n Te c h n o l o g i e s “Invest Now, Save Later: Your I.T. Game Plan” Get Your Game Plan to making smart technology investments that will save you dollars. In this information-packed session, attendees will learn: How to develop the correct infrastructure, carrier bill analysis and recommendations for continuous up-time, and how to spend smart dollars by learning where you are overspending and how to better invest.

The CBT Automotive Sales, Service and Marketing Conference & Expo addresses every area of the retail automotive industry. The conference will feature over 70 dynamic general and breakout sessions addressing the latest industry trends, best practices and training for sales, leadership, service, digital and social marketing, F&I, management, BDC, Pre-owned sales and much more.

D AV E PA G E

O w n e r/ D i r e c t o r, D e a l e r e - P r o c e s s “2016 Digital Strategy Playbook Revealed” The landscape of the auto industry is changing faster than ever, it’s disruptive. Dealers need to deal with newfound strategies on business that involve OEM brand protection, Google, Lotlinx, Facebook etc., while consumers expectations are changing. How does a dealer get it right? The foundation of a dealers strategy will be challenged in this presentation.

B R I A N PA S C H

F o u n d e r, P C G D i g i t a l M a r k e t i n g “Defining the KPI of Automotive Digital Marketing” Brian Pasch will present his research on the metrics that dealers should focus on to determine if their online marketing investments are engaging consumers and contributing to an increase in auto sales and service revenue. In this workshop, Brian will help dealers create an action plan to improve marketing performance based on the KPIs introduced in this session.

G L E N N PA S C H

CEO, PCG Digital Marketing “Why Your Training Dollars Are Being Wasted” Maximize your investment for higher employee Performance. Glenn Pasch will share how thousands of training dollars are being wasted each year. He will share a proven system to prepare, deliver and implement training or your team and how to turn that investment into higher performance.

S COT T P E C H ST E I N

VP of Sales “Ready, Set, Text... The Compliant Way! Best Practices for Texting Consumers” The majority of dealers are already texting their consumers and you should be too. But what most don’t know is how to stay compliant in doing so. The TCPA released new provisions which could get you in trouble, $1500 per infraction/ $1500 per text. Review how to stay compliant & learn a process that keeps your personnel on track, gets texts to the CRM & best practices.

APRIL RAIN

Marketologist, Digital Rain “Fearless & Contagious Branding” This session will define the most impactful solutions instituted by both big business and leading dealerships around the country. This is NOT your average collection of tips, but an equal blend of tangible how to’s combined with motivation to execute & elevate a bold branding strategy in 2016. This session provides the knowledge you need to have a fearless & infectious branding strategy.

ALAN RAM

JASEN RICE

Owner, Lotpop, Inc. “5 Processes to Improve Gross & Volume for you Used Car Operation” 5 controllable, key processes that are essential for every used car manager to get inventory turning and get both gross and profit. Leave with 5 easy-to-implement processes that a used car manager has the most control over to make the biggest difference in their used car operation, increasing dealership’s bottom line & with fewer missed opportunities for better profit.

TO M ST U K E R

P r e s i d e n t o f S t u c k e r Tr a i n i n g “Sell 20 Cars a Month on 10 Quality Conversations a Day” In this session, quality conversations will be defined and the exact word tracks to master outbound calling through a soft cell method will be provided. Attendees will takeaway scripts and selling techniques to maximize household prospects and master the art of the referral. A specific formula of database management combined with these techniques guarantees that any sales person can sell.

PHIL SURA

V P of S a les , Un ity Wo rks “Developing a Video Strategy to Drive Results” Video is one of the hottest opportunities for retailers but where should you invest your time and energy when developing a video plan? YouTube is the second largest search engine—How can you leverage this to sell cars? Can video help your service department? Attend this session to get the answers and a plan for developing a video strategy for your dealership.

M A R K T E WA R T

S a l e s & M o t i v a t i o n a l Tr a i n e r “Death of the Traditional Dealership & Salesperson” n this session Mark will give you the critical question all leaders will have to ask and answer to be successful. Mark will share changes you can make in the “Road to the sale” to match today’s marketplace. Attendees will learn the top do’s and don’ts in leadership and sales to increase productivity and sales.

GARY TUCKER

CEO, DealerRater “Building Trust With Car Shoppers to Fuel Dealership Growth ” This session will explain how Product, Price, Place and Person work in the sales funnel for dealership success. negative review (can you convert a negative experience into a loyal customer?) and the importance of the salesperson in building trust for the dealership, generating continued business for the sales department and the service lane.

ALEXI VENNERI

Founder, Alan Ram’s Proactive Training Solutions

“Converting Off the Telephone and Internet Better, Faster, and Smarter! ” Join Alan Ram as he lays out proven strategies for converting more and higher quality traffic to your showroom floor through the effective utilization of telephone and Internet. Learn the biggest mistakes dealers make when it comes to conversion and how to avoid them, what’s killing many BDC’s & which specific models have proven to be most effective long term & more.

CEO, Digital Air Strike “Social is the New Search: How to Dominatethe Networks” Car buyers and service customers are increasingly relying on the social networks to find and research dealerships. Digital Air Strike’s co-founder/CEO Alexi Venneri will show real examples of how dealers are using social media and review sites to increase leads and sell more.

JOE WEBB

DON REED

C E O , D e a l e r P R O Tr a i n i n g “Six Simple Changes for a Record Year in Fixed Ops” Want Some Good News? Shocking Facts about Service Writers: Service Traffic Drivers Are Declining! Learn the changes to turn your service department into an effective and accountable dealership department. These six changes will make for a motivational and successful service department!

JENN REID

Sr. Enterprise Channel Partner Manager, Equifax Inc. “The Role of Credit Report Transparency in the Sales Process” In this session, Equifax will walk you through a credit report, helping you interpret what is shown in the fraud, compliance, public record, inquiry and tradeline sections of the report. Understanding the details in a credit report gives you a better understanding of the potential risk and opportunity associated with each consumer and should ultimately help you finance more deals.

Founder & President, DealerKnows “What is Your Digital Aptitude?” Prepare to be tested. Much the same way customers are analyzing your dealership, you need to inspect where you are succeeding and failing both and through your dealership’s management efforts. In this interactive session, attendees will be given a live test that will grade them on their digital aptitude, policies, and management store structure, and personnel.

AARON WIRTZ

The Unforgettable Pitchman, Super Car Guys “Quantifiably Explosive Used Car Marketing” Looking to send your used car sales into overdrive? Learn the advertising secrets that took Super Car Guys from one store with double-digit monthly sales to a multiple location powerhouse with triple digit sales at each store. Get tips on effective marketing mix, developing the courage to move against the herd, & learn what digital marketing vendors aren’t telling you about video. session is for dealers straight from the dealership floor.

INDUSTRYnews BILL TO LIMIT CFPB ON AUTO LENDING SAILS THROUGH HOUSE Critics of the federal Consumer Financial Protection Board’s policies and practices won an important victory in the U.S. House, whose members approved a bill handcuffing the CFPB’s policing of indirect auto financing. By a vote of 332 to 96, the House passed H.R. 1737, or the Reforming CFPB Indirect Auto Financing Guidance Act. NADA President It would make the CFPB, when proposing or issuing guidPeter Welch ance on indirect auto lending, to provide for a public notice and comment period, make public all information it relies upon for the decision, and redact any information exempt from disclosure under the federal Freedom of Information Act. Also, the bill would nullify a highly controversial, previously issued CFPB bulletin that pushes dealerships to stop taking commissions on indirect car loans. The bill has not yet received any Senate committee action. Afterward, Peter Welch, president of the National Automobile Dealers Association, said it “is reasonable for Congress to ask for minimal due process to protect consumers.” Cody Lusk, president of the American International Automobile Dealers Association, said the House “chose to support small businesses by pushing back against CFPB policies that reduced competition among lenders.” Separately, the Republican staff of the House Financial Services Committee showed just how much support CFPB critics have amassed in the House. They released a 54-page report titled “Unsafe at Any Bureaucracy: CFPB Junk Science and Indirect Auto Lending,” ripping the history of the Board’s enforcement.

VENDOR DEVELOPMENTS: AUTO/MATE, eLEND, AUTOALERT, CARFAX In news involving vendors to dealerships: • Albany, N.Y.-based Auto/Mate Dealership Systems announced it has integrated its DMS software with CRMSuite in order to give dealerships real-time integration. • eLEND Solutions, a Mission Viejo, Calif.-based provider of dealership credit products, joined the DealerVault Premier Network for syndication and distribution of DMS data, and named Pogo Parr chief sales officer.

LARRY H. MILLER USHERS IN A NEW BOARD

Sandy, Utah-based Larry H. Miller Group of Companies named a new, 12-member board. Earlier in 2015, the parent corporation, which owns 54 dealerships among other properties, had announced a new corporate structure and a nationwide search for board members with experience outside of the Miller organization. New outside directors include Brigham Young University professor Steve Albrecht; Dennis Haslam, former president of the Utah Jazz basketball franchise; Michael Montelongo, chief administrative officer of Sodexho Inc.; Beryl Raff, chairman and CEO of Helzberg Diamonds; Robert Restrepo Jr., chairman of the State Auto Insurance Companies; Mary Lee Schneider, ex-president and CEO of Follett Corp.; and Lloyd “Buzz” Waterhouse, senior advisor at New Mountain Capital. Family member directors include Chairwoman Gail Miller and Bryan, Greg and Steve Miller. CEO Clark Whitworth also will serve on the new board, and he praised the “wealth of knowledge from a variety of industries and specialties” of the new outside board members for the privately held corporation.

DEALER.COM BECOMES COX AUTOMOTIVE’S PRIMARY DOMAIN Atlanta-based Cox Automotive said it will make the Dealer.com website that it acquired through the Dealertrack Technologies purchase the primary web destination for its customers. The migration of current customers to Dealer.com will start in early 2016 with the VinSolutions site, and will take about two years to complete companywide. Mark O’Neill, the longtime Dealertrack CEO and now the CEO of Cox Automotive Software, noted the Dealer.com website is certified by 19 OEMs “and has a history of success and stability.” In other Cox Automotive developments, the company bought a significant stake in Mahindra First Choice Wheels, an India multi-brand, certified used car company. Mahindra owns IndianBlueBook.com, that country’s version of Cox’s Kelley Blue Book.

INDUSTRY VET CHIP PERRY TAKES THE REINS AT TRUECAR

• AutoAlert, an Irvine, Calif.-based data mining company, bought MotoFuze LLC, the operator of a customer experience management platform.

TrueCar Inc. has a new president and CEO, Chip Perry, who launched the business now known as Autotrader. Perry was the first employee of AutoTrader.com and spent 16 years building the online marketplace as CEO until he departed in 2013, with the company owned by Cox Automotive.

• Carfax will invest $15.8 million to expand its headquarters in Fairfax County, Va., and its data center in Loudoun County, Va., adding a projected 120 new jobs in the process.

Perry had become president and CEO of Atlanta-based RentPath LLC, a digital platform for people hunting for apartments. Effective Dec. 15, TrueCar founder Scott Painter stepped down from his posts as CEO, chairman and director.

NHTSA GETS ACTIVE, SEEKS IMPROVEMENT ON RECALLS

In a prepared statement, Perry said his first task will be to mend TrueCar’s strained relations with dealers, many of whom complain that TrueCar demands ever-increasing access to their DMS and then uses the information to help buyers drive down car prices.

The National Highway Traffic Safety Administration met recently with large automakers, seeking a voluntary agreement to improve recall completion rates, spot defects earlier and block cyber attacks on vehicle technology.

FIAT CHRYSLER TO COVER COLLEGE FOR ALL EMPLOYEES Dealers always struggle to find incentives that will keep talented employees on board. FCA US LLC, which runs the Fiat Chrysler dealerships in the U.S., is expanding a pilot program offering no-cost college educations to employees and their spouses and children. FCA’s Degrees@Work offer was launched last May at 356 dealerships in the Southeast, and now it is being extended to all 2,600 stores nationwide. The company will pay for tuition, fees and books to take a degree program at one of Strayer University’s 77 campuses in 15 states and Washington, D.C. Dealers do incur costs to run the program. 10

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FORD AXES INCENTIVE PROGRAM, CADILLAC WORKS ON NEW ONE With results of the campaign flagging, Ford Motor Co. ended its “Friends & Neighbors” promotion five weeks earlier than planned. The sale was to run through Jan. 4, but Ford instead dropped it effective Dec. 1 and moved on to new incentives. Friends & Neighbors invited all consumers to take advantage of a deal normally extended only to employees’ contacts. It set a no-haggle price within about $200 of dealer invoice, although dealers could and had been undercutting that figure, which drew worries that the program was pulling down Ford’s profit margins. Meanwhile, Cadillac officials said their company is drafting a new incentive program to significantly improve factory rewards to dealers who invest in their businesses and technology. Still in the drafting stages, the new program would replace the existing “Standards for Excellence” and “Essential Brand Elements” bonus plans.

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MARKETING

How A Dealer Can Capitalize On A

.CAR, .CARS OR .AUTO DOMAIN NAME New web address extensions could make your online brand a lot easier to remember. BY JON MCKENNA

et’s say your dealership is Smith Motors, doing business in Topeka, Kan., with a website at www.smithmotors.com. Would car buyers remember your brand more readily if you promoted the domain name www.smith.cars? Would your used car inventory page get more organic web traffic if your business owned www. topekaused.auto? As of early December, these were no longer hypothetical marketing scenarios in the retail automotive world. A business operated from Santa Monica, Calif., and called Cars Registry Ltd. began making available three new, so-called top-level domains, or TLDs: Web addresses ending in .cars, .car and .auto. Obviously, these domains offer the most utility to auto manufacturers, dealer groups and individual dealerships, and suppliers and vendors serving the automotive industry. Cars Registry is a joint venture of domain

name remarketers XYZ and Uniregistry Corp., which operate the TLDs .xyz, .lol and .college, among others. Through Jan. 12, Cars Registry will distribute the auto-related domains to businesses that have a registered trademark, and then the general public has eight days to secure one by paying a premium fee. On Jan. 20, the domain names will be distributed by retailers like Network Solutions and GoDaddy at a recommended retail price of $3,000. It’s in Cars Registry’s interests to stimulate a market for the new domains, but of course dealers need to critically evaluate how they would serve their business interests. After all, dealerships can’t just start over with a new business name tied to a punchy new URL.

EASIER TO TYPE INTO A DEVICE

The questions become whether and how to add a .car, .cars or .auto domain name to a dealership’s

current brand marketing as a valuable adjunct. Mike Ambrose, chief operating officer at Cars Registry, believes the primary appeal is the ability to offer a shorter and easily remembered web address in an era when businesses are aggressively marketing online identities to consumers calling them up on a mobile device. “We expect to see .car, .cars and .auto be well adopted in the auto industry and to see a lot of clunky .com and .net domain names to become the second, third and fourth choice for dealers,” he predicted. “More and more visitors are visiting dealership web sites on a mobile device, and they want a short URL. The shorter the domain, the more likely that the web site is popular.” Why would the new web address necessarily be shorter? Because the automotive tie-in can be pushed to the right of the address dot. An effective and punchy domain name ideally will be no longer than eight characters long to the left of the dot, Ambrose said. Shorter and memorable domains also work better when a dealership prominently mentions a web address in its electronic, print, TV or radio advertising and marketing campaigns; e-mail addresses; and business cards. The goal is unaided recall by the consumer. Those domains automatically would route someone to the dealership’s home page, which would keep its existing URL.

“We expect to see .car, .cars and .auto be well

These millennials don’t want to take a lot of time typing a dealership’s web address into their smartphones. 12

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CAR BIZ TODAY JANUARY 2016

adopted in the auto industry.” - Mike Ambrose of Cars Registry

CAN YOU GET MORE WEB HITS?

What about SEO benefits? Ambrose says the new TLDs enhance the chances that a dealership’s name would be the first hit when a prospect searches for, say, used cars in Topeka, Acuras in Denver or even just cars in Boston. Ambrose is hoping that even if they’re not sold on the prospects right away, dealership groups and individual stores will reserve one of the new domain names over the next few weeks and then park it for a few months while they study their options. “You want to be the forward-thinking dealership group that appeals to the generation of car buyers that is coming online today,” he said.

GETTING AWAY FROM ‘CLUNKY’ URLS

David Kain, a former dealer and now president of the Lexington, Ky.-based Kain Automotive training and consulting firm, is recommending that his dealership clients do just that. For his own part, he has reserved the www. kain.auto domain that he plans to promote as the business’ primary web brand, although traffic will continue to be directed to a home page at www. kainautomotive.com. He believes the biggest

potential benefit of the new TLDs is “the ease of communicating and marketing the URL.” Kain added that he sees “a lot of clunky web names out there” in the dealership world. Is www.stlmotorcars.com such a clunky address? Some might not think so, but it’s not punchy enough to suit Graham Hill, principal of the St. Louis Motorcars dealership group that sells Aston Martins, Bentleys and other luxury brands. Hill immediately reserved www.stlmotor.cars to become his group’s primary domain name, has already migrated to the new site and is starting to advertise the new web address. He also reserved stl.cars for his staff ’s new e-mail addresses. “I’m not a tech guy, I’m a car guy, but obviously how could you forget either .cars or .car? It gives the dealer the ability to go straight to the customer with its own name and identity, not the OEM’s, emphasized. .cars is totally relevant to the car business, obviously, and I think as time goes on, it will become the norm for the business over .com.”

For more coverage of the new automotive domain names, see pp. 14-15.

“Shorter and

memorable domains also work better

when a dealership prominently

mentions a web address in its [various] advertising and marketing campaigns.”

F&I

PUT ASIDE YOUR RESERVATIONS ABOUT

DMS AUTO DISPATCH FEATURES

If you enforce the system and prevent cherry picking of jobs, then your service department will operate more efficiently. BY KEN ROCK

f at first you don’t succeed, try and try again, right? However, when dealership management system vendors first announced auto dispatch features about five years ago, many service managers tried them and quickly gave them up. Their avoidance was understandable given that the first auto dispatch systems were complicated and bug-riddled. But as programming improved and features evolved, auto dispatch features became more user-friendly. Many service managers tried them again but most yet again dropped them (perhaps slightly less quickly than before).

WHY SERVICE DEPTS. DRAG FEET

In my experience, the three main reasons why the majority of service managers still aren’t using auto dispatch today include: 1) Service managers are afraid that, if fully utilized, auto dispatch will replace a human being – meaning they’ll have to fire a dispatcher, foreman or technicians. I’ll explain later why this fear is unfounded. 2) Some techs try to game the system and cherry pick jobs, causing problems in the system that require human intervention. So, the thinking goes, it’s just easier to assign jobs manually in the first place. 3) Setting up the automated dispatch system takes time. It can take weeks to set up initial parameters, and months to transition from a manual system to fully automated dispatch. It takes continuous effort and commitment by the service department through this transition to ensure success. You might ask, why bother at all with auto dispatch? My answer: Auto dispatch assigns the right tech with the right skill to the right job at the right time. Service departments that successfully transition to auto dispatch have enjoyed a 15 percent to 50 percent increase in labor hours sold, and everyone in the department makes more money. 14

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CAR BIZ TODAY JANUARY 2016

How Auto Dispatch Displays Status Of Jobs, Etc. I believe that once your service group has transitioned to auto dispatch, both service managers and their personnel will love it.

HOW A TYPICAL SYSTEM WORKS

In a DMS, the auto dispatch function is integrated with the service module. Setting up auto dispatch

requires assigning certain skills, such as “brakes” or “electrical,” to techs; along with skill levels such as “beginner,” “experienced” or “certified.” It also requires that jobs be prioritized based on qualifiers such as “waiting,” “VIP,” “promised time” or “appointment.” When a repair order is created, the system

These techs should become more productive, not be replaced, under an auto dispatch system. electronically files that RO into the dispatch route sheet. Parameters are set ahead of time, so the system knows which skills and how much time should be needed for each job. The system then prioritizes jobs and searches for a tech with the needed skills and availability.

service manager must enforce the process. One reason why many service managers don’t is they have favorite techs who are accustomed to being assigned plum jobs. Or, service managers may tire of hearing techs complain about auto dispatch and back off.

When tech finishes one job, the auto dispatch function automatically releases another job to him based on the pre-set parameters.

Whatever the reason, it’s critical to stop letting techs cherry pick the best jobs. Believe it or not, 90 percent of the time the computer does know better than the service manager, foreman, tech or advisor about who should be working on what job, and when. If given a fair chance, auto dispatch will increase every tech’s productivity and pay.

You’re probably thinking that parameters like prioritization of jobs cannot possibly be set in stone. After all, conditions in shops constantly change. Sometimes, a “waiter” may need to take precedence over a “VIP,” or a “promised time” may need to have a lower priority assigned if the customer won’t show up until three hours later than expected. Also, what about techs who try to game the system?

AUTO DISPATCH WON’T REPLACE PEOPLE

You’re right: Conditions in service departments are always changing, and that’s why auto dispatch will always require human intervention and will never replace a human being. Auto dispatch is not designed to replace anyone. Rather, the function is intended to increase employees’ productivity. For example, say your shop foreman currently spends 70 percent of his time manually dispatching jobs, 15 percent of his time training techs and 15 percent performing high-paying diagnostics. With auto dispatch, his time spent on dispatching jobs can be managed and reduced to 10 percent from 70 percent, with training rising to 40 percent and valuable diagnostics work to 50 percent.

Recent upgrades to many auto dispatch functions have attempted to address the challenge of cherry picking. For example, in the version from my company, Auto/Mate, service managers now have the ability to control how many active ROs a tech can have open at one time. Users also have the option to disable techs’ ability to place jobs on hold and make them get a manager’s approval first. If some techs prove more trustworthy than others with the system, permissions can be adjusted accordingly.

PAYOFF ON THE BACK END

Depending on the size of your shop, it can take anywhere from two days to two weeks to set up all of the parameters. It can take anywhere from several months to a year to transition from a manual system to one that is fully automated. Once the system is established, regular maintenance is required.

Whenever a tech quits or is hired, that person has to be removed from or entered into the system, with appropriate skill sets assigned and adjusted as necessary. Ideally, the service manager or dispatcher should allocate 15 to 20 minutes every day for ongoing system maintenance. The good news is, finding the time to do this should not be a problem, because auto dispatch will be creating more free time. I am cognizant of the innate fear about handing over such an important responsibility to a computerized system. “What if a bottleneck occurs?” you worry. “What if the system screws up and creates chaos?” Auto dispatch is no different than any technology in that the “garbage in, garbage out” saying applies. Auto dispatch is not something a service department can set up and forget. Every shop is different, so there’s not one set of recommended parameters. During the transition, parameters will need to be constantly tweaked until you find what works with your individual processes. It takes dedicated commitment to switch to auto dispatch, but once it’s humming smoothly, the time you invested – plus a whole lot more – will be repaid on the back end. I think your service department will become more profitable, each employee will generate more revenue, and customer satisfaction will increase due to quicker turnaround with fewer tech errors. And, if at first you don’t succeed, then try and try again.

HOW TO STOP CHERRY PICKING

Because auto dispatch functions in DMSes are designed to be flexible, most do allow manual overrides in certain circumstances. Most let techs place a current job on hold and view the next job assigned to them, so they can choose to start work on the second job instead. This behavior causes obvious problems, including jobs not getting done on time and honest techs who don’t game the system receiving less desirable work. For auto dispatch to succeed, the TO SEE MORE FROM KEN ROCK GO TO CBTNEWS.COM

KEN ROCK

Corporate Training Manager and Customer Support Specialist at Auto/Mate Dealership Systems Ken has trained dealership customers for more than years, after having worked as a fixed-ops director for a dealership group in New York and Massachusetts. He has more than 25 years of dealership experience and hands-on training of dealership staff.

JANUARY 2016

CAR BIZ TODAY

CBTNews.com

ask THE

pros

hat is an effective way to evaluate a prospective employee about how good he or she is with inbound calls? -Carla in Defiance, Ohio

A: Mike Haeg, senior

compliance specialist at KPA and president of Dealer Compliance Consultants Inc.: This is a terrific question because it indicates a dedication to phone excellence at your dealership. Bravo! The first step is to understand and communicate your own standards for success on the phone. If you are like most dealerships, the single-mostimportant outcome of an inbound call is setting a firm appointment. Don’t be afraid to clarify that with the prospective employee in your interview process. Ask how they feel about the appointment as a metric for success and what their experience setting appointments in previous positions was like. Next, have the prospective employee actually handle a mock phone-up placed by the sales manager. Make sure to give tough objections and questions that can be expected during a routine sales call. Note how the prospective employee greets the shopper, if they steer the conversation toward an appointment, if they offer two appointment times, and if they set a firm appointment. Use your call-tracking technology to actually review the phone call with your prospective employee. This should be a normal training routine at the dealership anyway. Ask about their thoughts on the call, where they could have improved, and what they would have done different to better handle the opportunity. But, isn’t this a lot of work? Maybe, but if you’re serious about improving phone performance and capitalizing on these expensive hot leads, then a little hard work will go a long way. 16

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CAR BIZ TODAY JANUARY 2016

t CBT News, we are fortunate to partner with the best trainers in the industry. Whether it’s information on sales, F&I, marketing, management or fixed ops, our contributors are the go-to professionals for reliable, relevant advice for dealership personnel. You have access to the foremost authorities in the retail automotive industry. Need a new closing technique? Wondering what’s the best way to increase sales in the service lane? Send us your questions at AskThePros@ cbtnews.com. We’ll forward your inquiries to our ensemble of experts.

e 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 in Charlotte, N.C

A: 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.

hould I make sure the statement I get from an outside advertising agency that indemnifies us against FTC fines for false or misleading advertising, also covers state advertising laws? For that matter, how well do these statements usually hold up in court if the agency wants to contest -Tonya in Grand Rapids, Mich.

A: Jim Radogna, President

of Dealer Compliance Consultants Inc.: Yes, it’s very important that you ensure that your ads are compliant both on the state and federal levels. The FTC Act gives a broad overview of advertising compliance, while state regulations tend to be more specific. For instance, state guidelines may proscribe minimum type size for disclosures, allowable exclusions from advertised selling prices or prohibitions on guaranteed trade values, to name a few examples. That said, advertising agency indemnifications are likely of little or no value in court, because the primary responsibility for compliance lies with the dealership, not the vendor. According to state and federal laws, a dealer has the duty to investigate the accuracy of any statements made in advertising. Keep in mind that if your dealership is cited for advertising violations, your advertising agency may indemnify you against monetary penalties, but you will still suffer the ensuing reputation damage. Worse yet, many regulatory actions include injunctions or consent judgments under which your advertising practices will be scrutinized for as long as 20 years. In that scenario, in addition to the inconvenience of having to submit regular reports to the regulatory agency, there’s a very real chance of future substantial penalties. For instance, the FTC entered consent judgments with five dealers for advertising violations in 2012. Since then, two of the dealers were charged with violating the judgments, resulting in settlements of $360,000 and $80,000, respectively. There’s just no upside to having regulators breathing down your neck! A best practice is to have your advertising reviewed by competent professionals before publication. You should never assume that advertising agencies or vendors know all the laws and regulations governing advertising compliance. This is particularly true of companies based in other states, such as Internet and direct mail providers.

888.628.6779 | eleadsales@eleadcrm.com | www.elead-crm.com ÂŠ Data Software Services, L.L.C. 2016

SALES

START BEING CANDID

WITH CUSTOMERS WHO ASK ABOUT PRICE FIRST

Dealerships need to stop replying to that question with an appointment request, and just tell buyers what they want to know. BY DALE POLLAK

f there’s one thing dealers could do to improve customer satisfaction in the coming year, it might well be this: Change your answer to the “What’s the price of the car?” question that customers always ask.

Most salespeople I’ve seen habitually answer this question with one their own: “What’s a good time for you to come into the showroom?” Unfortunately, this common response is out of step with the expectations of today’s car buyers. They can get a price for virtually any other product they want to purchase with little or no effort. In most instances, they don’t even have to ask; the price is right at their clicking fingertips. Not so in the car business, and that reality is, I believe, one of the principal reasons that buyers remain distrustful of dealerships and wish there was a better, easier way to buy new and used vehicles.

MOST BUYERS DON’T SET APPOINTMENTS

Consider these findings from recent Autotrader and DrivingSales.com surveys on buyer expectations:

60 percent of customers just show up at the dealership. They don’t tend to call, chat or e-mail the store before they visit. Analysts offer a lot of reasons for this, but I believe it’s because buyers at some level consider the pre-visit engagement with dealers to be an unproductive hassle. They believe that if they ask a question, they probably won’t get a good answer unless they come into the showroom. Many also skate on initial contact because they know how persistent dealership sales teams can be once they’ve got someone’s contact information. They don’t want to be bothered; they’re just interested in a car.

Why is this salesman so reluctant to answer the question directly when it comes by phone, chat or e-mail?

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CAR BIZ TODAY JANUARY 2016

That means 40 percent of buyers do contact the dealership first. In most cases, the buyers simply want to know if the vehicle they’ve found online is available and “What’s the price of the car?” As noted earlier, most dealers now use this question as the basis to try to set an appointment, not necessarily to provide an accurate and direct answer. Let’s think about the bigger picture for a moment. Given the size of the investment that dealers make in advertising and merchandising their store and vehicles online, it is reasonable to wonder why only 40 percent of potential buyers actually use the applications, forms and other online calls to action on dealership websites. It seems there is a disconnect between dealers and their buyers and a sizable investment inefficiency for dealers – problems that improved transparency would no doubt help solve.

56 percent of buyers want to start making a deal online. They don’t necessarily want to complete a deal online; in fact, 84 percent of buyers would prefer to wrap up their purchase at the dealership. I’m actually surprised that the proportion of buyers who want to work car deals at home isn’t higher. After all, this represents buyers who have concluded they’d prefer to avoid some of the hassles they associate with visiting a vehicle showroom. The statistic also reflects an expectation that is shaped by people’s other online retail experiences, where “click to buy” options are commonplace.

As this couple shows, most buyers want to start negotiating a deal online but prefer to close it in person.

1 DEALER RAMPS UP TRANSPARENCY

These findings lead me to back to the idea that dealers have an opportunity to increase buyer satisfaction and trust, if they just rethink what their salespeople say as soon as a prospect asks, “What’s the price of the car?” In early 2015, one Chevrolet dealership I know of in the Northeast tackled this opportunity. The staff began implementing greater transparency in new and used vehicle-pricing. In new cars, every listing now shows discounts, rebates and a price that’s competitive for the local market. Every new car has its own complement of custom photos and a description. In fact, the dealer says, “We pretty much started merchandising and pricing new cars the way we’ve been doing it in used cars.” Next, the dealer tore up the scripts his staff long had been using to handle customers who contact the dealership. “We realized that we really weren’t answering the customers’ questions,” the dealer says. “We were like everyone else. We wanted the name, phone number and appointment.” The dealership also made a decision to squarely answer the “What’s the price of the car?” question. Now, when a customer contacts the dealership or

“Buyers at some level consider the pre-visit

engagement with dealers to

be an unproductive hassle.” shows up in the showroom, the BDC and sales teams refer to the price posted online. If a buyer asks for an even better price, the dealer’s people have an answer. “We’ve factored a $300 discount into all of our pricing,” he says. “We used to get managers involved for any discounts. Now, we give the discount up front, when customers ask.” Interestingly, this dealer says customers who contact the dealership are more likely to set and keep appointments. And, if they ask for and get the $300 discount, the vast majority are done negotiating. “We’ll get an occasional customer who’s persistent,” he says, “but they back off when we remind them of our competitive prices and easier process.”

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“Some dealers may challenge the idea that offering a clear answer to the ‘What’s the price of the vehicle?’ question makes sense for their businesses.” ADAPTING TO PEOPLE WHO WORK IN ADVANCE

Dealerships also can address the “What’s the price of the car?” question by incorporating technology and tools intended to satisfy the 56 percent of buyers who want to work out initial deal terms from home. The tools let customers effectively do their own “first pencil” with vehicle price, financing and trade-in terms (using dealer-set parameters). Here’s how one Honda dealer in the Midwest explains his decision to enter the early stages of e-commerce: “We’re really trying to make our purchase process transparent, efficient and seamless,” he says. “You make us an initial offer online. You deal with a product specialist, then you talk to a sales manager, and you’re done. My whole deal behind this is, you get what you give. It’s like Burger King – the customer’s calling the shots. Customers aren’t used to that, and it gives us an opportunity.”

STOP GRASPING FOR CONTACT INFO

It’s important for the online tools to work most effectively, this Honda dealer says, that dealerships let go of their desire to immediately capture customer information. “You could say we leave the gate open now,” he says. “We used to require a name, e-mail or phone number for credit information, a price or trade-in value. Now, it’s all right there, and customers appreciate it.”

One of my e-commerce colleagues, Mike Burgiss of MakeMyDeal, calls this approach “connected commerce.” It’s especially appealing, he says, for the 45 percent of buyers who prefer to be anonymous while they settle on deal terms. (Not coincidentally, these buyers are part of the 60-some percent that avoid direct contact with the dealership, because they don’t like the “give to get” process that dealers currently require online.) Some dealers may challenge the idea that offering a clear answer to the “What’s the price of the vehicle?” question makes sense for their businesses. Their resistance, I think, stems from the traditional belief that giving customers a price and straightforward answers to their other questions just provides ammunition that they’ll use at another dealership.

DON’T ANGUISH OVER CHANGES

The dealers I’ve discussed in this article would beg to differ. Yes, they worried that front-end grosses might suffer as their teams increased transparency for buyers and became more forthright about answering questions. However, those worries proved to be unfounded. I especially liked how the Midwest Honda dealer sums it up: “The experience lends itself to gross. We all pay more when things are convenient. As dealers, we make things more convenient when we recognize that sales really need to be a service to win today’s customers.”

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.

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SALES

Your Deal-Hungry Salespeople May Forget To

ASK CUSTOMERS FOR REFERRALBUSINESS You cannot truly control the flow of referrals, so use these techniques to improve your chances. BY PAUL MORAN

ur industry is typically one of immediacy. Questions like “What would it take to earn your business RIGHT NOW?” are very typical and posted daily. Not many sales managers would feel comfortable with – or approve of – a salesperson letting a customer leave the dealership without a TO simply because that customer is not ready or just beginning to shop. Managers typically stress the importance of buying now, and their salespeople naturally become laser-focused on accomplishing this. However, getting referrals typically doesn’t cross either of their minds until a customer has bought a vehicle – if at all. Why is that? Auto salespeople cannot fail to notice the lack of job security in their industry. Particularly for a new salesperson, the revolving door in their department coupled with any insecurity or indecision they may have about remaining in the car business can leave little motivation to think

about future sales to a customer’s friends and family. Considering they aren’t sure if they will still be in the industry, much less working at that dealership, three years down the road, they make a commission and pursue the next one. However, this rushed mindset can turn a potentially great customer buying experience into a poor one. A friend of mine recently bought a new vehicle and enjoyed an excellent experience with the salesperson – until delivery. It was very important to her to get an in-depth review of the in-vehicle systems like adaptive cruise control and back-up camera, and she repeatedly stressed this to the salesperson. However, due to some necessary pre-delivery accessory installs, the walk-through was delayed until a few days after the purchase, and the salesperson spent minimal time with her because he needed to meet with his financial advisor. This salesperson ruined what had shaped up

as an excellent experience and likely was not thinking about potential referrals. How can your dealership increase the number of customer referrals, knowing that many of your salespeople operating on a short-term mindset? You can start by implementing processes that aren’t dependent on that mindset.

REFERRALS CAN’T BE DIRECTLY MANAGED

In our industry, there are two types of referrals: Direct and indirect. Direct referrals come from customers who actively recommend your dealership to an acquaintance, who comes to the store because of that recommendation. We know that consumers tend to trust opinions of their family and friends more than any other source, including online reviews. Indirect referrals involve everything from a paper license tag or brand logo affixed to the vehicle, to someone who notices and likes a neighbor’s new car, to photos and videos shared on social media platforms. A dealership doesn’t have much ability to control either category of referral. Sure, you can implement a policy of asking for referrals during

“How can your dealership increase

the number of customer referrals, knowing

These days, buyers can’t wait to announce their new ride over social media; make it easier for them. 20

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that many of your salespeople operating on a short-term mindset?”

If the smiles on these customers’ faces are genuine, then they may refer sales business without being asked. the sales process, but many people are hesitant to provide contact information for friends and family without getting their permission first. For the most part, getting that permission simply isn’t practical before the sale closes.

CUSTOMER EXPERIENCE HAS A DIRECT LINK

However, there are two approaches I have seen increase both direct and indirect referrals without relying on a request from a salesperson or an automated follow-up e-mail. First and foremost, you can emphasize an excellent customer experience both before and after the sale and instill its importance with your entire staff. The key is to give your customers the experience they want and make it easy for them to shop at your store. Increasingly, consumers want to handle as much of the car shopping process as possible online, and hopefully come into the store just to test-drive the vehicle and sign papers. So, dealerships need to make sure their online showrooms offer a good experience. For example, make sure your online credit application is highquality and fast and easy to complete. Display your inventory well on your website. Consider offering apps that let buyers conduct most of the buying process via your website, interact with your staff, obtain price quotes and submit counter-offers. However, you also need to make things easy for those customers who prefer to do more of their research in the showroom. Make sure your salespeople work with them. Make sure your coffee doesn’t suck. Offer free Wi-Fi so customers can research the competition, if they wish. Showrooming is going to happen anyway, so why not make it easy for customers and win the day by improving their experience? You need to utilize both old and new approaches to maximize your customer’s experience. Don’t spurn the old school. Consider having your salespeople send a gift as simple as a tin of cookies TO SEE MORE FROM PAUL MORAN GO TO CBTNEWS.COM

to their customers after the sale. Ideally, send it to their workplace, where they can share the cookies and hopefully tell co-workers who sent them. This can stimulate actual word-of-mouth referrals. Also, send handwritten thank you cards or notes, just because nobody does this anymore.

MAKING SHARING ONLINE EASIER

A second approach that can ultimately generate more referrals is to facilitate your customer’s desire to announce their new vehicle purchase to family and friends via social media -- which almost all of them will do. Sadly, most dealerships don’t have a consistent process in place to take pictures or video of their customers, who then wait until they get home to do that task themselves. At this point, the dealership has lost out on an incredibly powerful opportunity to get exposure on their customer’s social network. It’s completely natural for customers to share their new vehicle with their social networks, but it’s not natural for them to mention the dealership. Many people take to Facebook to invite their network to “Check out my new car!” but few ask, “Check out the new car I bought from ABC Motors!” If a dealership has a branded delivery area where you take pictures or video, then your brand automatically gets included in the social media share. The more creative your images compared with what the customer would take, the more likely he or she will want to share them. Have a

buyer jump in the air, hug the car or whatever. Have fun with it! This branded content can ultimately generate direct referrals through interactions with the shared content (e.g., “We were thinking of buying a car. How was your experience at ABC Motors?”) and indirect referrals from the online exposure (e.g., “Johnny bought his car from ABC Motors and mentioned they treated him well, so maybe we should give them a shot.”). Also, consider friending the customer on Facebook or Instagram. This requires a little extra effort from customers, and not all of them will be open to this. But, even if you can only get one in 10 to accept, your store still has a great opportunity to become the “car guy” for his or her circle of friends.

DON’T END REFERRAL REQUESTS, AUGMENT THEM

I want to emphasize that none of these activities will generate referrals unless your dealership is providing a great customer experience and actually generating and giving that customer high quality, branded content. In no way am I suggesting that your salespeople should stop following up with customers after the sale to ask for referrals. By also incorporating the techniques I have addressed, they increase the possibility of referral business without having to worry about a customer’s reluctance to provide direct contact information for family and friends.

PAUL MORAN

President and CEO of Vboost Inc. Vboost offers a proactive process to create positive viral marketing in the retail automotive space. Paul has more than 28 years of experience in creating digital marketing programs and introducing dealers to effective technologies. His expertise covers all aspects of traditional, digital and social marketing. See the website at vboost.com.

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ASSOCIATIONnews STUDY ORDERED BY NADA WARNS AGAINST RECALL RESTRICTIONS

FLORIDA ASSOCIATION VOWS TO PROTECT DEALER MEMBERS’ DMS

The National Automobile Dealers Association, a vocal opponent of prohibitions against selling vehicles that are under open recalls, says a J.D. Power study it commission bolsters its argument.

The Florida Automobile Dealers Association says it intends to push a bill in

J.D. Power said the value of trade-ins could dip by anywhere from an average of $1,210 to $5,713, if dealerships are prevented from selling used vehicles that are under open recalls. U.S. Sen. Richard Blumenthal, D-Conn., has introduced a bill that would make dealerships fixed all outstanding safety recalls before selling or leasing any used vehicle. The J.D. Power figures represent weighted averages for both in-brand (e.g., a GM car traded to a GM dealership) and out-of-brand (e.g., a GM traded to a Toyota store) trade-ins. However, dealers on the out-of-brand trade-in actually incur additional costs for holding a vehicle during a repair delay and then transporting it to an in-brand dealership, J.D. Power said. The study only looked at the additional expenses in financing a recall vehicle bought from a consumer, storing and insuring it, and depreciation. But there are additional costs that would be incurred during a recall grounding period, J.D. Power warned. Plus, dealers have to estimate how long a recall delay will last, which could further reduce consumers’ trade-in values, argued Jonathan Banks, a J.D. Power executive analyst and the report’s lead author.

PROFILE SHOWS NUMBERS THAT AN AVERAGE DEALERSHIP IS RECORDING The researchers on NADA’s staff have crunched their latest numbers to profile the financials of an average U.S. dealership selling new cars and/or trucks. The profile posted in October typically would reflect business conditions as of July. According to the NADA numbers guys, a typical U.S. dealership is now recording: • Total sales of $43.5 million, up 7.1 percent from a year earlier. • Gross profit of $5.7 million, up 6.3 percent. • Net profit before taxes of $1.1 million, a gain of 8.8 percent. • New vehicle sales of $25.0 million, an increase of 7.7 percent. • Used vehicle sales of $13.6 million, up 6.6 percent. • Service and parts revenue of $4.9 million, a 5.6 percent gain. • $428,875 in advertising expense, a gain of 6.2%.

AFSA OVERHAULS ITS WEBSITE The American Financial Services Association launched a redesigned website at afsaonline.org as well as new websites for its four conferences and annual meeting. Washington-based AFSA says the more streamlined website will make it easier for members to monitor federal legislation and regulation, research state initiatives through AFSA*Track, access white papers and briefs, manage their personal profiles and read the association’s buyers guide.

GUARANTEED ASSET PROTECTION ALLIANCE NAMES BERGER AS PRESIDENT Rob Berger, executive vice president at Wise F&I LLC, was elected recently to become president of the Guaranteed Asset Protection Alliance, a group that promotes the interest of insurance companies, lenders and other providers of guaranteed asset protection products. The alliance is run from Tallahassee, Fla., and lobbies and monitors legislation affecting its industry. Guaranteed asset protection products are more frequently called debt cancellation or debt suspension agreements. Berger was elected by GAPA member companies at an annual conference in Las Vegas. He has worked for more than eight years at Fenton, Mo.-based Wise F&I, which specializes in these products.

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the 2016 state legislative session to limit the ways that manufacturers require dealers to provide access to their DMSes. Tallahassee-based FADA says its bill would define consumer data as “dealer data” under state law, and make OEMs provide a written statement to the dealer describing how any third party or they will meet or exceed federal or state consumer protection requirements, in accessing a DMS. Also, a manufacturer could no longer require that a dealer open up its DMS, if the bill becomes law.

MINORITY DEALERS ASSOCIATION FETES CARS WITH ‘DIVERSITY’ APPEAL

The National Association of Minority Automobile Dealers, in conjunction with IHS Automotive, announced nominees for their first Diversity Volume Leadership Awards, which will be handed out Jan. 10 at the North American International Auto Show in Detroit. Based on an analysis of more than 13 million personal new vehicle registrations, Largo, Md.-based NAMAD and HIS are trying to honor makes and models that are most popular with racial minority, woman and millennial customers. Toward that end, three vehicles were nominated in each of eight regions as “ethnic volume leaders.” There are also three nominees for top women’s vehicle and top women’s luxury vehicle; for “top ethnic millennial vehicle”; and for standard and luxury vehicles that are most popular with African-American, Hispanic, Asian-Pacific Islander and Native American buyers.

NEW CHAIRMAN TO LEAD NEW YORK STATE ASSOCIATION

Ken Miller was named chairman of the Albany-based New York State Automobile Dealers Association for the 2015-16 term. He is president of Miller Motor Car Corp. in Vestal, N.Y.

CALIFORNIA DEALERSHIP PROFILE OFFERED BY STATE GROUP The Sacramento-based California New Car Dealers Association released its “2015 Economic Impact Report,” which shows that the 1,358 franchised dealerships in the state gather an average $77.4 million of revenue per year

That sales number breaks down into $48.7 million from new cars and $15.8 million from used vehicles, $5.7 million from parts and accessories, $4.0 million from service, $2.6 million from the F&I department and $580,000 from other sources. The average new car store in California has 88 fulltime and eight parttime employees and an annual payroll of $5.1 million, according to the report prepared for the association by Auto Outlook Inc.

ASSOCIATION SIGNS VENDORS TO PROVIDE CONTRACTS TO MEMBERS The Arlington, Texas-based National Independent Automobile Dealers Association inked Reynolds and Reynolds as a member benefit partner that will provide business forms and sales contracts, compliance services, branding products and other dealership supplies to NIADA’s dealer members in North America.

Reynolds and Reynolds has been in business since 1866 and provided automotive-related documents since the 1920s. The Dayton, Ohio-based company says its Reynolds Law 553 universal retail installment sales contract is the most widely accepted document in automotive finance. “We’ve worked informally alongside NIADA and its members for a number of years,” said Jerry Kirwan, SVP and general manager of the Reynolds Document Services unit. “This agreement helps solidify our commitment to providing a broad portfolio of business documents and supplies that help independent auto dealers manage their compliance risk, brand their stores and improve their operational efficiencies.”

MARKETING

DEALERS NEED TO FIGHT THEIR TENDENCY TO DEFER ON

IMPORTANT MARKETING DECISIONS

They can and should be familiar enough with advertising/marketing basics to steer the direction of campaigns. BY MARK TEWART

f you are a dealer and you are currently outsourcing all of your advertising and marketing to an agency, or even if you are taking a completely hands-off approach with your in-house marketing director, STOP IT! In over-delegating that way, you have abdicated your responsibility for the lifeblood of your business. You have handed over the keys to your kingdom and allowed someone else to set the direction for the business. You are setting yourself up to lose the leadership mantle in your dealership and the understanding of your customers. I hear lots of excuses why so many dealers want to back away from the tough decisions on advertising and marketing campaigns. “I don’t have time.” “I don’t know enough about advertising and marketing.” “The advertising companies are professionals that know more about that stuff than me.” “I am from another era and I don’t get this digital stuff.” “I need to focus on what I know best, which is selling cars.” Do any of these sound familiar?

TRY TO BE A SKILLED LAYMAN

Look, I get that it seems to make sense to focus your time on the activities in which you have the best talents and skills. It’s just common sense that a dealer can’t be great at everything, and there’s only so much time in a day. However, there are certain parts of your dealership in which a dealer must have a strong layman’s knowledge and be heavily involved. Advertising and marketing definitely fall into that category. Dealer principals know their businesses better than any vendor or agency – even those that specialize in campaigns for dealerships – ever will. At a minimum, dealers should be directly involved in setting goals for any marketing or advertising campaigns, approving the strategies to be used and selecting media to execute campaigns. At a

Don’t fall for the myth that marketing elements are a foreign language best left to specialists.

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“There is no reason dealers cannot become

knowledgeable about fundamental advertising and marketing lessons.”

more advanced level, they should be familiar with basic marketing principles, tactics and strategies for both digital and traditional campaigns. I also believe dealers should attend occasional marketing-themed conferences and self-educate themselves, in order to keep a trained eye on their vendors and agencies.

DON’T GIVE MARKETING AGENCIES TOO MUCH CREDIT

work the masters of advertising and marketing into their outside reading. In reality, despite all the new digital channels and resources, certain principles still hold firm for either digital or conventional marketing and advertising. Reading books and articles from luminaries like David Ogilvy, Richard Benson, Claude Hopkins, Dan Kennedy, Jay Abraham, Victor Schwab, John Caples and Ted Nicholas will help you.

You may be startled to learn that many, if not most, outside marketing or advertising firms aren’t that much more knowledgeable than you are about effective campaigns for a dealership. Conventional advertising firms often are very well versed in production and buying ad time but are woefully undereducated about best marketing practices, in my opinion.

Dealers also should take time to learn both the art and science of copywriting, as this can be the single-most-important influence they bring to their dealership’s marketing. Their familiarity will enhance every dollar ever spent on marketing and advertising and also save wasted investment on agencies’ methods and ads that could be completely inappropriate.

To make matters worse, some of them are adding digital marketing services to their portfolios to adjust to shifts in dealerships’ spend, without developing or adding much real expertise. Some ad agencies outsource this work to digital marketing consultants without disclosing that to clients.

Also, there is no reason dealers cannot become knowledgeable about fundamental advertising and marketing lessons. Nobody knows exactly what will work in a campaign every time, but familiarity with the lessons of experience will greatly increase your odds and make best practices almost formulaic. There are also certain marketing tactics that almost never work. You would be surprised how many of those approaches are pushed on dealers every day, in spite of the complete lack of historical evidence that they are effective!

It’s important for the dealer to define, and be comfortable with, the dealership’s marketing goals. It’s easy to say that you want more web traffic or a certain increase in sales, but marketing runs much deeper than that. A dealer must define his business’ “four Ms”: Message, market, media and match.

BE FAMILIAR WITH KEY QUESTIONS

In other words, what specific markets is your dealership trying to reach? Who are your current customers and your best potential customers? Whom are your advertising and marketing not reaching now that they could and should? What messages will reach, motivate and engage those customers, and get them to react? What media options are best to reach those customers, and how can your dealership crosschannel-market to amplify the effectiveness of your spend? What is your competitors’ marketing approach? How do you define your dealership’s SDP (specific defining proposition), i.e. what makes your value better or unique? That’s a lot of questions, and the range of answers may seem overwhelming and out of your wheelhouse as a dealer. But, in order to meet your dealership’s goals, you must fully educate yourself, starting today, to at a bare minimum guide and assist your marketing director or outside agency.

OUTSIDE READING IS CRITICAL

One of the smartest things a dealer can do is to

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A/B TESTING IS AN UNDERSTANDABLE CONCEPT

As one example of a simple marketing principle,

“I hear lots of excuses why so many dealers want to back away from the tough

decisions on advertising and

marketing campaigns.”

A dealer can grasp the essential nature of A/B testing and make sure it is applied to all dealership campaigns. take A/B tests. An A/B test should be run on most, if not all, of your dealership’s campaigns. Pick two advertising headlines to run on your website, and utilize one for a month and the other for the following month. History shows that headlines can account for 90 percent of a message’s effectiveness with a consumer, so why wouldn’t you test options to see which works best? However, dealers often spend tons of money on mass mailings with absolutely no targeting and no A/B testing. They can invest four times the money to get 25 percent of the potential result. It is common to see TV commercials with zero hooks and no call to action, and radio commercials that don’t effectively and quickly mention the dealership’s name

DON’T FALL IN LOVE WITH 1 MEDIUM

Some agencies will push a particular digital or traditional marketing method or channel on a dealer. However, history shows there is no such thing as a bad media choice, only bad usage of the media. It’s true that some channels may work better for particular messages intended for particular audiences, but a dealer should never evaluate the media without weighing the message and how well the two match. In other words, don’t fall in love blindly with TV, radio, third-party lead sources or any other source as the dealership marketing Holy Grail. There are no Holy Grails among media resources. In conclusion, the more a dealer self-educates himself about advertising and marketing practices, the easier it will be for him or her to guide, direct and assist vendors as a true collaborative partner. You will also greatly reduce time and money wasted on uninformed outsourcers. If a dealer raises his game, you put pressure on vendors to raise their game as well. Dealership marketing is simply too important and involves too much money to completely delegate all responsibility to others. If you are doing that now, stop it!

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.

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SALES

Is Your Dealership Running

A SALES DEPARTMENT

OR A BUSINESS PREVENTION DEPARTMENT? If smaller deals and Internet leads are being blown off, then you know the answer to that question. BY BILL PLAYFORD

anagers typically stress the importance of buBack in my tech company days, apparent no-brainer agreements often got caught up in the legal department. Sometimes months would go by before we’d get a yes or no. Even though many of these deals had the potential to move our program (and revenue) further by galactic proportions, meeting after meeting would pass without an answer.

really trying. If you are reading this article and you are the person assigned to crunch numbers on every deal and you do constantly look for alternatives, talk to banks, suggest co-signers, broker trades and giving every single deal (no matter how thin it appears) 100 percent of the time it deserves, then my observations don’t apply to you. You already have my respect, and I’ll defend you until the day I die.

It was during one of these marathon waiting periods, as we burned money by the truckload, that I first heard the term “business prevention department” dropped. It was a pejorative term but it has stuck with me since.

Rather, I am writing for the others who in fewer than 22 seconds will draw brash conclusions like:

Today, I see and hear of dealerships doing the exact same thing. Their business development centers keep lining up deals, but the opportunities pile up on a sales manager’s desk without action. Whole days go by without the slightest movement. Even though many of these deals could contribute revenue, boost CSI, increase allocation or dump an unproductive business unit, they seem to be regarded as somehow too unimportant to be touched. The Internet opportunities are treated like political refugees by the showroom floor. In the meantime, the lights are still burning, health insurance premiums are being paid, vehicles are depreciating, interest is accruing – and salespeople are bitching about being bored. The very same department that has “sales” in its name is acting like a business prevention department.

EVERY DEAL NEEDS ATTENTION

All across the country, dealership sales managers are giving up on numerous opportunities before 26

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• “No gross.” • “Too flipped on their trade.” • “Sell what’s on the lot.” • “Ghost.” • “Who are you again?” I understand that sales managers need to make judgment calls. After all, that’s the nature of their position. However, it seems that appointments converted from Internet leads far too often don’t get the same level of regard as a traditional floor-up does. With studies regularly showing that Internet research continues to increase and thirdparty lead volume continues to decrease, we can safely conclude traditional and Internet shoppers are becoming indistinguishable.

MANAGING AN ONLINE BUYER’S EXPECTATIONS

The problem for most sales managers is that an Internet shopper comes with different expectations. When nearly every dealership website featuring vehicle detail pages that demand the customer click a giant button announcing something along the lines of “Get a better deal by clicking on this,” it creates certain assumptions

for the customer. These assumptions are further exacerbated by other giant buttons that say “Guaranteed approval!” (further backed up by radio ads, but I digress). Let’s not forget that OEM and third-party websites that give customers the ability to build any configuration of vehicles, giving an impression of infinite availability. The best sales managers understand this reality and have developed tactics to use the abundance of information to their advantage. However, a significant proportion of them are stick in habits from their earlier retail days, effectively waiting for that lob pass for an easy alley-oop slam-dunk. As we know, prejudices die hard. In this case, they are costing dealerships money.

EXAMPLES OF BIG MISTAKES

Here are a few real life examples that took place at my company’s client dealerships in the span of one just week: ✖ A call to confirm availability (of a 2015 unit, so the inquiry was totally justified) at a sister store took a day-and-a-half to get a response. I’ll give you one guess as to whether the customer has responded to any subsequent calls or e-mails. ✖ A first-time buyer lacked established credit, but her stepmother was very well known to the dealership. Still, the showroom staff sent the customer along on her way without suggesting a co-buyer. ✖ A sales manager told an agent to send details about a crossover vehicle rather than the sedan that was requested. Why? Because the dealership didn’t have any sedans on the ground (but a quick search on the consumer-facing OEM website confirmed nine in the immediate vicinity). It looked like the sale department decided the request was just too much effort to deal with at the time (I’m fighting back the urge to vomit). These are just a handful of scenarios that play out during any given week at other dealerships across the country. The time and energy of the Internet agents (not to mention the dealership ownership’s investment in technology, digital advertising and wages) is wasted on the apparent belief of the sales staff that something better is going to walk through the door.

HOW TO TACKLE THE PROBLEM

The good news is, there are ways to keep a lid on such mistakes.

“Business development centers keep lining up deals, but the

opportunities pile up on a sales manager’s desk without action.”

Dealerships tend to push Internet leads to the far-left side of this meter, to their detriment.

First, your dealership’s leaders and managers need to take a hard look at the business and admit if they are in reality running a “business prevention department.” If you come to this conclusion, please have a drink on me. Next, document everything (this is why you have a CRM). If overlooking valid leads and deals is a pervasive issue, keep written notes in case things, uh, “disappear” inside the computer. Meticulously track the times as well as what type of activity was necessary from the manager (dealer locate, appraisal, etc.), and log the results. Then, set performance goals for the offending sales manager (X activity should take 15 minutes, Y activity should take 30 minutes, etc.). That way, these expectations can be passed down to the customer. If the sales manager is not amicable, don’t be afraid to involve a general manager or dealer principal. Everyone has a job at the dealership, and accountability is a two-way street. Too many sales managers still measure their personal worth on the amount of gross they can make on a single deal, even if they are blowing off tens of thousands of dollars of dealership revenue by overlooking numerous other opportunities. Those small transactions collectively add up to a nice pot of lost service revenue and repeat and referral business. Sales managers who act this way flatly are robbing the business of its future. Rather than manage the progress of sales, sales staff are terminating many potential deals before they have a chance to generate any revenue or profit. Every opportunity to sell – regardless of its source, origination or required effort – deserves the utmost attention from anyone with “sales” in his or her job title. Dealerships cannot let a “business prevention department” stand in the way of their success any longer.

“A significant proportion of [sales managers] are stuck in habits from their earlier retail days.” BILL PLAYFORD

VP and Partner at DealerKnows Consulting Bill is a specialist in automotive lead acquisition, quality, scoring and segmentation. Before coming to DealerKnows, he was director of retail operations for the SmartLeads program at Trilogy Inc.

Every prospective sale needs some level of attention from the sales manager, even if it’s small or competing with a stack of other deals.

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RAISED LIFTS

ARE STILL TAPPING A NICHE IN DEALERSHIPS Catching drivers’ attention continues to have value in auto marketing. BY JON MCKENNA

360 Auto Display lifts in use at an AutoNation store and a Toyota dealership.

t a time when the best brains in automotive marketing are obsessed with digital campaigns, and orthodoxy holds that customers discover a dealership online, can there be much life left in roadside displays? Absolutely, say Dan Matheus and Chris Purtee, the owner and VP, respectively, of 360 Auto Display USA, a Fort Worth, Texas, business that markets 10-foot rotating auto lifts. Digital marketing may dominate the future of franchised new car retailing, they say, but there also is no denying that working Americans spend far too much of their lives in slow traffic, gazing at roadside businesses. “Every car dealership that’s worth anything is going to be on a major highway or major thoroughfare,” Matheus said. “We can attract attention of all those thousands of cars going by.” Or, if you like, think of their rotating lifts as an adjunct to a dealership’s website. The store can post photos of its entire inventory online but put a high-margin car up on the lift to catch a customer’s eye upon driving onto the lot. It’s a possible upsell, predicated upon the simple notion that elevation and motion command the attention of people whose heads are swimming with static web photos.

HELPING UPSELL PROSPECTS

So, then, the guys who run 360 Auto Display would argue that the prevailing opinion that most buyers come to the lot committed to a specific make and model, somewhat overblown? “There is always an opportunity to upsell,” Matheus insisted. “Half the market is women, and they are good candidates for upselling.” 28

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Added Purtee: “Also, it may not matter whether people are interested in buying the car on the lift, as long as you got them onto the lot. There are studies that show the elevation of a display, in conjunction with the motion, draws your eye, creates emotion and gets people on the lot. It’s a way to differentiate yourself from the stores to your right and left along dealership row.” Their company’s Auto Spinner units are not the most complex devices in retailing, by design. A 2-foot ramp can be lowered so that someone can drive a car up onto a battery-powered ramp. Once the platform is raised to its full 10-foot altitude, an electric cord plugged into a 110-volt receptacle rotates it. Promotional banners can be affixed to the framework, thus also keeping people from wandering underneath the lift. Vehicles of up to 9,000 pounds can be raised above the rest of the inventory on the lot or showroom floor, and the machine fits onto the equivalent of one parking space. “That’s very important, because you don’t want to be taking away multiple spaces from a car business,” Matheus said.

JUSTIFYING THE COST

360 Auto Display says it is leasing several dozen units to dealerships around the country, and sales are picking up as the company works through issues that have slowed down production. They have trucked lifts to stores in California, North Carolina, Florida, Ohio and Minnesota. Dealers can rent a rotating lift for a full-service rate starting at $1,800 per month, which includes

delivery, set-up and training. Or, they can buy a unit for $58,000. “It should take you only about 10 minutes to change a vehicle out, once you know what you’re doing,” Purtee said. The question becomes (as with any other marketing investment in auto retailing), how to measure ROI on that $1,800 per month? After all, who’s to say whether the lift display made that big a difference, and a customer was primed to buy that vehicle anyway? The 360 Auto Display entrepreneurs say it’s definitely important for dealers to query their customers and track whether they directly ask about a car on the spinner or say it drew their attention. At that point, it’s best to make sure a dealership’s experience parallels other users,’ meaning seven to 12 additional vehicles sold per month, they said. A good rule of thumb, Matheus added, is to give a car no more than two to four days of extra visibility on the lift before replacing it with a vehicle with better sales prospects. The two say that keeping in good stead with city and county sign ordinances (since advertising banners are draped below the lift, which can itself be considered a commercial display) has proved to be a bigger issue than lift safety and OSHA regulations. They make a point of poring over local sign regulations and calling the government offices before every installation.

MARKETING

YOUR WEBSITE ON MOBILE DEVICES:

WILL CUSTOMERS HAVE AN EASY AND PLEASANT EXPERIENCE? It’s worth your time to evaluate its overall design, individual elements and tools to rate mobile-friendliness. BY AMY FARLEY

y now, most dealers know how important it is to cater to the mobile car shopper. According to a Cars.com/Placed Inc. study, 81 percent of car shoppers use smartphones to do research when buying a car, and in October 2015, Google announced that mobile searches officially outnumbered desktop searches worldwide for the first time. Today’s dealers simply can’t afford to ignore their customers’ mobile experiences. Marketing with mobile shoppers in mind is a big part of creating a solid auto customer experience, but another critical component also is mobile usability and optimization. A dealer’s website should be properly optimized to look and function just as well on a mobile device as it does on a shopper’s home computer.

RESPONSIVE VS. ADAPTIVE DESIGN

There are two primary ways to design a website with mobile shoppers in mind – responsive and adaptive. A responsive design entails size, scale and arrangement of the website elements that automatically change in response to the size of a screen or mobile device. This provides the best possible experience for users, no matter what type of device they have. On the other hand, a website that utilizes adaptive design will have multiple, distinct layouts designed for multiple screen sizes. The layout that a user is shown will depend on the size of the screen he or she uses (be it on a mobile phone, a tablet, a desktop computer or other device). Which type of design is better for mobile users? In general, it’s always better to choose responsive design for your website. Responsive sites feature faster load times and are more flexible for a wide variety of screen sizes. The only downside is that responsive websites can be more difficult to create and design. For what it’s worth, Google also recommends that websites use responsive design. As a dealer, your options may be limited by your web provider. While most providers in the automotive space offer the option of responsive design, it’s possible your website is not responsive. If that’s the case, you may need to migrate to a new, responsive website in order to be fully mobileoptimized. These are issues to bring up with your web provider or Internet team.

CRAFTING A SUPERIOR MOBILE EXPERIENCE

There are a number of things to consider when you’re evaluating the usability of your current dealership website.

Ideally, a consumer will click on the image of one of these vehicles and go directly to a details page.

“Are the most important information and your

most effective call to action

featured prominently on first view?” 30

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A website with adaptive design will have a layout that looks different on this tablet than it will on a smartphone.

When someone researching a car purchase pulls up your website on a mobile device, consider what he or she sees right away. Are the most important information and your most effective call to action featured prominently on first view? Can that shopper find your dealership’s address and phone number easily, without too much scrolling or searching? These are important elements of your website’s usability. The buttons on your site – particularly on your home page – also are important. Are they easy to click? Buttons that are too small, too cramped or laid out in a peculiar manner can drive shoppers away from a mobile website. Are the size and layout of your text still readable on a mobile device? Auto shoppers have a lot of options. If you give them a reason to abandon your website in favor of your competitor, they might just do that. If you have images of vehicles on your homepage, be mindful of where these are linking. When shoppers click on an image of a vehicle, they should be taken to a vehicle details page (VDP, rather than to your main inventory page. All of the components I’ve mentioned work together to deliver a superior experience to mobile auto researchers.

TOOLS TO CHECK MOBILE-FRIENDLINESS

There are a number of free tests and tools that you can use to evaluate the mobile usability of your website. It’s important for your team to utilize these tools to be aware of elements that might need fixing or tweaking. First, you can use a “mobile emulator,” like the one found at MobilePhoneEmulator.com. This emulator lets you view your website as it would be shown on various mobile devices, so you see firsthand what is working or not. It can even show how your website appears on various brands of mobile devices – say, an iPhone as compared to an Android phone.

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“A dealer’s website should be properly optimized to look and function just as well on a mobile device as it does on a shopper’s home computer.” Next, you should make sure to set up Google Webmaster Tools for your website, which can be done for free. If you already have a Google Analytics account, you can use the same e-mail for Webmaster Tools; all you’ll need to do is add a small snippet of code to your site. Once you have Webmaster Tools set up, you will have access to a wide variety of helpful features. It can direct you to the Mobile-Friendly Test, which lets you paste in a page’s URL and find out whether the page is mobile-friendly according to Google. If the page doesn’t pass, Webmaster Tools will mark items that need improvement. Also within Webmaster Tools, you’ll find the Mobile Usability feature. It can be found under “Search Traffic” in the left-hand menu. Similar to the Mobile-Friendly Test, it will aid in identifying pages that contain one or more usability errors from a mobile perspective. It even reminds you to check certain things, like if a mobile page has horizontal scrolling (which is not considered a good mobile experience for a user). Lastly, a feature called PageSpeed Insights, which was created by a Google developer, can provide you with suggestions at a more technical level concerning mobile user experience and speed. While speed currently has a fairly low

impact on your mobile rankings, it’s very important for the overall mobile experience. Nearly 50 percent of mobile visitors expect pages to load within two seconds, and about 40 percent of mobile users will abandon a page that takes longer than three seconds to load. PageSpeed Insights will assist you in making your website faster and more user-friendly.

RISK OF DECLINING SEARCH RANKINGS

All of these tools will help evaluate your site and determine what may need to be changed, but of course, you may be limited in the changes you can make. It may be necessary to work with your web provider to ensure that your site is the best it can possibly be. Dealers who aren’t ensuring the superior user experience of their website on mobile devices risk losing more than customers who can’t properly navigate. They also could suffer declines in organic search rankings. Websites that aren’t mobile-friendly, according to Google, may get lower rankings for mobile devices. Your dealership should take the time necessary to make sure your website functions properly for customers using mobile devices, to achieve the best possible 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.

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FIXED OPS

COMFORT WITH FUNDAMENTALS

MAKES DECISIONS ON SERVICE EQUIPMENT PURCHASE OR REPLACEMENT EASIER Increase your familiarity with lift and compressor categories before you go shopping at the NADA show. BY CHIP WALKER

ou checked the dealership closet and you are fresh out of wire hangers. This means your service manager has no tool left to fix that aging lift for the 40th time. Now what?

Okay, that example was a bit facetious, but seriously, when was the last time your dealership took a realistic inventory of its service equipment? Does that equipment still help get the job done, quickly and well, or is your service staff so used to holding their heads right, standing on one foot and pressing the “On” button that they really don’t remember how the machine is supposed to work? Can your current equipment handle all of the new vehicle models, including trucks with extended cabs and dual rear ends, and run flat tires? Most importantly, is the equipment safe for both your employees and customers’ vehicles? If you had to answer “maybe” to any of the questions above, it might be time to think about adding to or replacing some of your service equipment. That means being comfortable with the fundamental questions of where to start and how to ascertain what equipment is really needed.

Service departments are able to turn to smaller, more efficient air compressors thanks to technology advances.

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“How can dealerships get the equipment that they need, at the best value, and comparison-shop? My best answer is simply to go to the NADA show.”

loads they carry. For example, materials can add as much as 5,000 pounds to the total weight of a plumbing truck.

ADVANCES IN AIR COMPRESSORS

How to deliver electricity and air is a critical factor in deciding on a new lift.

“It might be time to think about adding to or replacing some of your service equipment. That means being

comfortable with the fundamental questions of where to start and how to ascertain what equipment is really needed.”

LIFT MAINTENANCE PAYS YOU BACK Let’s start with the lift, your single-mostimportant piece of shop equipment. Whether they are in-ground, above-ground, old or new, lifts are the workhorses of a service department. They tend to require very little maintenance and work well day-in and day-out for years, without much thought given to them – until they suddenly fail. Regular maintenance on your lifts will give back years of dependable service, and routine inspections will ensure they are operating safely. If you have older in-ground lifts, make sure you have replaced the hydraulic fluid with an environmentally friendly replacement liquid. If your service department does suffer a leak that is above the shop floor, replacing hydraulic fluid decreases the odds that the lift will break down and prevents a hazardous waste spill. If your lifts are above-ground, check your cables to make sure they are not frayed and your pivot points to be sure they are lubricated.

CASES FOR IN-GROUND, ABOVEGROUND MODELS

Now, let me address some pros and cons for replacements for each style of lift. In-ground lifts can be situated closer together than other types of lifts. So, a dealership can lay out their bays tighter such that they fit an extra bay into the space that otherwise would hold 10 to 12 bays. However, in-ground lifts are more expensive and drive up construction costs because of the additional floor prep needed. Lastly and perhaps most importantly, once installed they cannot be moved.

lots of reasons, including lower cost than in-ground models, the lack of underground components to service, and the ability to reposition the unit or move it to a new shop. The most compelling point in their favor, for me, is that you now can purchase above-ground two-post lifts that have line voltage and compressed air delivered to the post itself. In other words, you don’t have cords and hoses running from the wall to the vehicle, which removes a tripping hazard and shop clutter. This type of lift gets all of its air and power connections from above, within a tech’s arm’s reach. In addition, a service department can mount trouble lights, hose reels, a cordless tool charger, etc. right on the post, although it will need at least one heavy duty two-post lift or a four-post drive-on model. A heavy duty two-post lift can service most commercial units and without the floor space needs of the much larger four-post drive-on model. However, service managers need to bear in mind that above-ground lifts do require more room in between to allow for posts and passage. This could be a significant factor in a smaller shop. And, remember this point: When deciding on the size of a heavy duty lift, you can’t think only about gross vehicle weight. If your shop services a lot of commercial trucks, you have to anticipate the

Let me now discuss air compressors. Repair shops’ air needs have changed dramatically over the last 10 years. With the advancement and power of cordless tools, techs use much less air then they once did. This may or may not be true for body shops, which continue to be active users of air-driven hand tools in order to reduce tool weight. Reduced air requirements means service departments can turn to a smaller, more efficient compressor. I have always liked having a main unit with a 5-horsepower back-up. This way, if the main unit goes down or requires maintenance, your techs still have air to get their work done. Also, you should look into a screw-type compressor. While the initial cost is a bit higher than with a piston model, it requires far less maintenance and is quieter in the shop. I won’t have space in this article to touch on other key pieces of equipment including tire equipment, alignment racks, floor equipment and AC machines.

WHERE TO SHOP? NADA

Now, how can dealerships get the equipment that they need, at the best value, and comparisonshop? My best answer is simply to go to the NADA show and shop the floor. You will find every key category of equipment, from scoop to nuts, all under one roof. Do your homework ahead of time so you know what equipment you want and the quantity you need. You can shop lift manufacturers with displays 150 feet apart that will work hard for your business. Almost all automotive equipment manufacturers present at NADA and will be happy to guide you through your purchase. Most of them will offer show specials if you order at the event, will offer to perform free floor layout evaluations for your shop, and provide specs for power, air, etc. Don’t forget to research possible financial support from your OEM. Most auto manufacturers have an equipment division that will finance your purchases at really competitive rates. I know Ford and GM both have excellent programs, and I am sure there are others. Finally do not overlook any opportunities from your suppliers. For example, your oil vendor may offer you an oil distribution system under a threeyear contract on bulk oil. I can’t overemphasize: Ask what’s available and comparison-shop. If you need service equipment, come to NADA in Las Vegas this year and get your shop back in shape.

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.buildmydealership.com.

Above-ground lifts are my preferred choice for

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MANAGEMENT

The Case For Creating A

DIRECTOR OF CUSTOMER ENGAGEMENT POSITION

One director visiting the sales staff and all other departments is more effective than a bottom-up approach.

How deep is your team’s insight into the quality of your customers’ experiences? BY ANNE FLEMING

ow much do you really know about your customer’s true experience while he or she is shopping for a car? As a dealership manager, you already read your CSI reports and customer reviews. However, obtaining a broader, authentic understanding of your customer’s journey through the sales process will drive more dollars to your bottom line. How can you accomplish this deeper dive and learn more about what happens before, during and after a sale, or during and after a service visit? Creating a director of customer engagement and experience position is one alternative.

This would be a key position responsible for collecting and analyzing data, and then leading an effort to optimize the customer life cycle with the end goals of improving customer satisfaction, loyalty and retention. This director would assess all of your dealership’s departments and find ways to make their customer service as seamless as

possible. It would be an especially strategic role at stores with multiple brands and that receive reviews on multiple platforms.

WHY MORE CUSTOMER INSIGHT MATTERS

You might think that the data you are already collecting are sufficient to understand your business. After all, if sales are up and your CSI scores have never been higher, it stands to reason that something is going well in the sales process. However, let’s be honest: Not all CSI scores are created equal. How many sales or service drive visits have been completed with, “If you’re not going to give us 5s on all answers, please give us a call first.” That can feel coercive and unfair to the customer, as if his or her true opinion doesn’t really matter to the dealership. In today’s complex marketing and sales environments, it is important for dealership to understand the nuances of your sales – and, even more importantly, of the sales

What kind of experience is this customer having on your lot? One person should be charged with finding the answer.

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and service customers you lost. A proper analysis requires collecting as much data as possible. CSM, an e-magazine for customer service professionals, reports that a typical dissatisfied customer will tell eight to 16 people about the bad experience. Analyzing customer interactions at a macro level to spot trends, and following up with micro-level analysis of specific issues can mean the difference between new or lost sales and satisfied or dissatisfied customers.

THE CASE FOR A SEPARATE POSITION

You might be inclined to let various managers throughout your dealership prepare data and reports to increase your understanding of customers’ experience. In order to obtain a cohesive, honest view of your processes, however, it can be much more effective to let one person lead the effort. Done right, this is a fulltime dealership position that will pay for itself many times over. A director of customer engagement would work closely with your BDC and Internet department and provide an overall perspective of the dealership. While the BDC and Internet teams will be the voice of the dealership to your customers, the DCE would help fine-tune scripts and follow- up calls. Having the DCE perform analysis would free your BDC to spend more time on direct contact with customers.

“In order to obtain a cohesive, honest view of your processes … it can be much more

effective to let one person lead the effort.”

“This director would assess all of your dealership’s departments and find ways to make their customer service as seamless as possible.” from February 2015, nearly four in 10 women out-earn their husbands. Also, an Autotrader Inc. study reports that 53 percent of millennial car buyers are women. Are you collecting enough information to understand those demographics in detail? How would a deeper understanding help you target these market segments at an optimal level?

Women’s buying habits: Women-Drivers. com reports that women visit 30 percent more dealerships than men do before buying a vehicle, and 48 percent of women purchase cars by themselves.

3 Customer experience management (CEM), also known as customer journey management (CJM), is a multi-faceted process that begins with collecting as many data points as possible from sources such as Google, DealerRater, women-drivers. com and Edmunds. It is a process that involves competitive analysis, reviews of social media (Facebook, Twitter, etc.) and customer reviews on auto and dealership websites and customer surveys. It also involves seeking perspectives from your employees about their interactions with customers. While the DCE wouldn’t interact with customers on a regular basis, there might be specific times when special surveys are created to explore customers’ viewpoints.

WHAT IS, ISN’T WORKING

Once data points are collected, the analysis begins to understand what is working and what needs re-tuning. Analysis helps identify gaps in the sales, service and marketing processes. An overview of the responsibilities of the DCE includes: ✔ Identify customer satisfaction drivers ✔ Assess sales performance gaps relative to competitors ✔ Create customer satisfaction surveys and interviews ✔ Perform on-site observations ✔ Conduct extensive reviews of social media and Internet reviews ✔ Create action plans to improve performance ✔ Identify metrics for success evaluation Here are three examples of when data collection and analysis can help you fine-tune your sales processes:

Millennials and technology: A survey by Edmunds in early 2015 found that 80 percent of millennials use digital strategies to shop for cars, compared with 46 percent of people over age 35. Do you vary your marketing strategies by age group?

DOWNSIDE, UPSIDE DOMINO EFFECTS

Now, I’d like to discuss how the lack of data could negatively affect your dealership. If you don’t know the demographics or buying habits of your customers, you may pay a big price when they walk out the door because: ➜ If a customer doesn’t buy at your dealership, he or she will buy from your competitor. That has a compounding loss for your dealership in terms of referrals. ➜ Chances are, a customer with a negative experience will tell people about it. A bad social media review can go viral in a hurry. ➜ When you lose a direct sale or lose a sale due to negative reviews, you also lose the service business of that potential buyer for at least three to six years. ➜ By not using digital marketing targeted to the right age groups, you run the risk of your competitor winning simply based on a better social media or Internet presence. The upside is much more interesting. Paying attention to details and correcting the course of your customer journey will result in fewer lost

sales. Suppose these changes resulted in a 1 to 2 percent increase in sales. If an average single-store dealership generates $52 million in business, then the increase in sales would more than cover the cost of a customer experience director. Realizing that sales gain will take time, but the gain will continue to increase as long as course corrections continue. A simple starting goal would be to identify how many lost sales are occurring and eliminate 10 percent of them.

POSITIVE, RECURRING CUSTOMERS

In his article “Customer Journey Management Is The Future Of Customer Experiences” (SmartBlog on Leadership, May 2013), Brian Solis indicates that as customers connect more and more with technology, they become more informed. Being more informed empowers customers, who then become more demanding. This is a double-edged sword, unless your dealership is doing everything possible to proactively move your customers through the customer journey. Today’s dealership customer journey involves more than the reactive approaches of the past. The days when a dealership is a buyer’s first stop are gone. When a shopper walks in your dealership’s door, he or she may already have read your dealership reviews and done research about desired car features and pricing. It is up to your sales advisors to ask the right questions to assess where your customer is in the buying lifecycle. The director of customer engagement can create a blueprint or flow chart for assessing the next steps. Collecting the right information can help identify disconnects in the journey that result in lost sales. The DCE may seem like a “soft” position – one that doesn’t have a direct link to sales or customers. In fact, it would be a key addition to your dealership staff that lets you go beyond CSIs and reviews and attain an in-depth understanding of what does or doesn’t work at your dealership. In essence, the DCE could provide the “glue” to create a seamless customer journey that doesn’t just happen once, but rather is repeated many times over.

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.

Understanding demographics: According to a U.S. Bureau of Labor Statistics report

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FIXED OPS

who cannot pick up the pace AND quality of the ROs they write over a period of time should be replaced or repositioned within the dealership.

TRACK THESE KPIs TO

MEASURE YOUR SERVICE ADVISOR’S PERFORMANCE

If your service department is slack on car count, in the short term service managers and advisors should ramp up their follow-up with existing customers and recruitment of new ones. Examples of activities to value are setting the customer’s next appointment, following up with previously declined work, e-mailing or calling customers who have received recall notices, and reaching out to customers who recently have defected or seem likely to go elsewhere.

Certain conditions must be met before KPIs are devised for your service advisors.

CUSTOMER PAY LABOR PER RO

The number of ROs written isn’t the only vital stat; various sales per RO are important ratios. BY JOHN FAIRCHILD

n any arena, business as well as sport, top performers are identified through constant, ongoing performance evaluations. Service advisors are no different. Amid the frantic pace of a service drive, the absence of performancetracking definitely can affect the bottom line, and quickly. A key performance indicator (KPI) is a business metric used to gauge activities that are crucial to the business’ success. KPIs differ based on the individual enterprise’s goals, but they are alike in that they are applied in order to identify trends and suggest a strategic response. Before KPIs can be identified for service advisors, the following conditions must be met:

✘ A defined service drive process ✘ Clear goals for each advisor ✘ An easy method of measuring each KPI, and consistency in reporting performance ✘ Willingness from management to fix and amend inconsistencies in setting and measuring KPIs, so as to avoid de-motivating the staff Looked at another way, KPIs are a set of standards against which to compare actual results. For both service advisors and their managers, KPIs are a success gage for the service drive. Ultimately, they help the manager and the advisors assess toward their shared goals. Now that we’ve established a foundation for KPIs, what should we measure with service advisors? Advisor KPIs need to be a stretch but still attainable. It is critical that advisors can view at any given time how their scores compare with established standards for each KPI. Most KPIs are measured on a comparable month basis, or month-to-date

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Substantial increases in RO counts over sustained periods indicate a pressing need for additional manpower. Stick to the guideline of 12 to 15 ROs a day per advisor, and don’t wait too long to act.

along with a projection for the end of the month if the advisor continues at the current pace. At this point, let me discuss the main customer pay metrics for improving advisor retail performance.

ROs WRITTEN BY ADVISOR AND DEPARTMENT

The number of repair orders that your advisors write is a metric that is very revealing, both for the individual advisor and the service department as a whole. Here are a few things to deliberate when measuring this KPI: As a department, are we tracking to exceed our car counts vs. historical data? Are we going to have more customers this month than last, and more than the same month last year? As an advisor, am I writing enough ROs per day, or too many to truly do a quality job for the customer’s and dealership’s interests? (The industry standard is typically 12 to 15 ROs per advisor per day.) Advisors who are not writing enough ROs, especially in conjunction with underperformance with other KPIs (such as low labor dollars per RO), should get the service manager’s attention and training. Advisors

Customer pay labor per RO is a metric that is likely to be a bit specific to your dealership’s car lines, demographics of your location and a few other factors. This metric actually breaks down for further analysis, so if your advisors are lagging in this metric, examine the following components: Customer pay effective labor rate MULTIPLIED by the customer pay flat rate hours per RO EQUALS the labor per RO. For example, ELR = $100.00 X 1.0 FRH = $100 labor per RO. If a service manager’s investigation concludes the ELR is low, then look for excessive discounts or mishandling of the estimating process. If the investigation reveals the ELR is OK but the FRHs are low, then analyze ROs to learn whether legitimate additional service needs are being presented to the customer.

CUSTOMER PAY PARTS PER RO

This metric also will vary based on a few different elements. As a rule, the parts-to-labor ratio should range from 1:1 to 1:1.6. While parts do follow the labor, you can take certain actions to improve this ratio. If the parts per RO metric seems low compared with labor, it may mean “parts-heavy” jobs are being undersold. Parts-heavy operations include tires, batteries, filters, wipers and pour-in additives. Investigate the percentages of these commodity sales by advisor, to learn if an advisor is underperforming.

JOHN FAIRCHILD

President and Performance Coach of Fairchild Automotive Solutions John has more than 35 years of experience in fixed-operations management and consulting, and trains fixed-ops staff to improve performance and customer service. He started working in auto repair and parts at age 15 and over time held numerous positions at dealerships, including general manager. Visit the websit https://fairchildautomotivesolutions.com.

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DEALERS, GMs, SERVICE MANAGERS, FIXED-OPS DIRECTORS, PARTS MANAGERS Check out ServiceDriveToday.com for news, information, best practices, training tips from the nation’s top ﬁxed-ops trainers, in-depth interviews with industry experts and more. It’s completely FREE to all dealership service department personnel!

Jeﬀ Cowan

Jeﬀ Cowan’s Pro Talk

Don Reed

DealerPro Training

Lee Harkins

M5 Management Services, Inc.

Steve Hall

NCM Institute

If profits are to be made in fixed ops, you don’t want to miss an episode of Weekly Tune-up with Jeff Cowan every Tuesday on Service Drive Today. Jeff is the president of Jeff Cowan’s Pro Talk and is the nation’s authority when it comes to training service advisors and service support staff. On Weekly Tune-up, Jeff interviews the top trendsetters in fixed ops, offering valuable information and insight into driving higher profits.

Featuring daily newscasts, guest interviews, and a monthly magazine with informational columns and articles from experts in the auto service industry, Service Drive Today is your trusted source for the latest news and trends in the automotive ﬁxed-ops ﬁeld.

ON THE SET WITH April Rain, CEO of Digital Rain Inc.

Harry Hynekamp (left) of Mercedes-Benz USA; Joseph Michelli (center), author of the book “Driven to Delight” about Mercedes; and Jim Fitzpatrick of CBT News.

Gary Tucker (right) of DealerRater, with Joe Gumm of CBT News.

Tim Kintz, president of The Kintz Group.

John Fitzpatrick of Force Marketing, with Corinne Lillis of CBT News.

Steve Cannon, CEO of Mercedes-Benz USA (at press time, he left the company to join the Atlanta Falcons football franchise)

Mike Anderson of The Rikess Group, with Corinne Lillis of CBT News.

John Malishenko (right) of Germain Motor Co., with Joe Gumm of CBT News.

Tyrell Jordan (left) of Nalley Infiniti, with Joe Gumm of CBT News.

Tim Hall (left) of United BMW, with Joe Gumm of CBT News.

Ryan Leslie (right) of DealerRater, with Joe Gumm of CBT News.

Zach Klempf of Selly Automotive.

Lisa Copeland of Fiat of Austin, with Joe Gumm of CBT News.

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Dan Mondello of DealerTeamwork LLC, with Corinne Lillis of CBT News.

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