Car Biz Today | July 2016 by CBTNews

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CAR BIZ TODAY The Official News Source of The Retail Automotive Industry

July 2016

Volume 3, Issue 7

CBT AUTOMOTIVE NETWORK

ANNOUNCES IT'S 2017 CONFERENCE & EXPO Save the date for the 2017 CBT Automotive Conference & Expo! Addressing every aspect of the industry, this is the must attend conference for auto dealers.

...See Page 16

SERVICE DRIVE ROI

COMFORT ZONE VS ACCOUNTABILITY DON REED ... See Page 28

DEALERSHIP DEFENSIVE

The steps to get serious about compliance and protecting your dealership ...See Page 12

THE LA CAR GUY Mike Sullivan is passionate about his family, his hometown, customers and the environment. See what he is doing to improve each

...See Page 20

THINK LIKE A CUSTOMER IMPROVE YOUR NEGOTIATING SKILLS

MARK TEWART

CHALLENGE YOURSELF GET OUT OF THE PATTERN TRAP

CORY MOSLEY ... See Page 24

... See Page 6

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CAR BIZ TODAY M

Letter from the editor Long before marketing consultants would talk about community involvement as a way to connect with customers, auto dealers throughout America were involved in their communities. They were — and are — among a town’s best corporate citizens. They have always supported Little Leagues, volunteer fire departments, civic clubs, garden clubs and any misfortune that happened to a citizen. Yes, car dealers are an intricate part of our country’s fabric of caring. Caring because it’s the right thing to do. Caring because they are passionate about their hometowns and its people. Caring because they are good people. And, that will never change.

Managing Editor

Take Mike Sullivan, known through southern California as the LAcarGUY. He started in the business working for his father’s Volkswagen dealership and today he owns 10 thriving dealerships and his children are continuing in the tradition. Mike is passionate about his family, his customers, and the environment.

He put in charging stations in his Toyota dealership for anyone to use — even if he suspects some use it because they need a parking spot and may as well charge at the same time. He not only implements recycling and environmental friendly policies at work but he goes into the schools to teach children about sustainability, responsibility and protecting the environment for their children. He not only wants to educate but to change habits. His dealerships are environmentally friendly and he not only sells electric and hybrid cars, he is among a handful in California who will be selling the Miraj. He even has an environmental manager. So hat’s off to another great car dealer and great corporate citizen. We have so much in this issue. Jim Radogna takes a look at the old adage that the best offense is a good defense and applies it to compliance issue. Compliance can be your friend, he says, and he tells you how. Gina Reuscher says the way to break through all the information out there is to bring emotion to the table when advertising and making a deal. Ryan Williams advises that the best way to ensure repeat customers in your service drive is to offer a prepaid maintenance plan while Don Reed stays in the service department and brings the three Cs with him — all of which will bring more profit to your bottom line. Over the next months you’ll be reading and hearing about our CBT Automotive Conference & Expo that will take place March 7-9, 2017. Count on hearing all the exciting news about this must-attend event in the upcoming months. In the meantime, stay cool but make sure your sales are hot!

President, Tewart Enterprises, Inc

All About Emotion

By Gina Reuscher, Director of Marketing, Flick Fusion

10 Industry News 12 Dealership Defensive

Game Plan By Jim Radogna,

Director of Compliance, The Lloyd Andersen Group

14 Connecting with Your

Customers By John Fairchild,

President, Fairchild Automotive Services

Conference & Expo

Automotive Distruption

By Zach Klempf, CEO, Selly Automotive

20 Dealership Profile: LA Car

Guy Goes & Sells Green By Mary Welch

24 Challenge Yourself By Cory Mosley, Sales Strategist 26 Ask The Pros 28 Comfort Zones Vs.

Accountability By Don Reed, CEO, DealerPro Training

Managing Editor Mary Welch Creative Director Brandy Brewer Graphic Design Ashley Race Director of Marketing & Events Karen Locadia Web Developer Demarus Perry Subscription Manager Emily Wiggins Producer Danny Ramos Production Assistant Chris Riggins Jillian Kaszubski Jordan Chipps News Anchor Joe Gumm Bridget Fitzpatrick

Megan Wilson mwilson@cbtnews.com d 678.221.2955

In This Issue 16 2017 CBT Automotive

Vice President/COO Bridget Fitzpatrick

ADVERTISING

Mary Welch 6 Think Like a Customer By Mark Tewart,

Email newsroom@cbtnews.com Phone 678.221.2955

President And Publisher Jim Fitzpatrick

Dear readers,

MARY WELCH

CAR BIZ TODAY MAGAZINE

30 Women Car Buyers & The

Top 10 Car Brands By Anne Fleming, President, Women-Drivers.com

32 Drive Customer Retention By Ryan Williams, President, Fidelis PPM

Annual Partnerships

By Russ Chandler, Product Marketing Manager, PERQ LLC

36 Association News 38 On The Set 39 Shop Talk: WOWing with a Premium Experience

By Rian Locadia

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

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IS YOUR NEGOTIATING PROCESS HURTING YOU? BY MARK TEWART

t’s a fact that the majority of customers still want to negotiate. Depending on the formal study you may read, they all say well over 50 percent of people want to negotiate on the purchase of their vehicle. The question is, do you negotiate in a manner that hurts more than helps you? Imagine a water slide. You get into the beginning of a water slide and then go effortlessly down the water slide, picking up speed and momentum and you always reach your destination. There is nothing that stops you. This water slide example would be a great analogy for a perfect buying process. Unfortunately, you may be utilizing methods every day that do the opposite. You may be using techniques that create fear for the customer and slows or stops the buying process altogether while perpetuating long held feelings about car salespeople and dealerships.

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CAR BIZ TODAY JULY 2016

THINK LIKE A CUSTOMER Utilize an approach based upon TLC – Thinking Like A Customer. Traditional sales processes have been based upon a linear road to the sale. The linear process is not as applicable as it once was. Based upon online behavior, you must be willing to be nimble in your approach and process. If a customer is on step four of your traditional process and because of their time spent in online research they are in a heavy logic phase, do you now tell them you don’t care and shove them back to step one? Nature abhors a vacuum. It will fill up the vacuum quickly. The same thing will happen in your sales and negotiation processes. If you are willing to let go of long held traditional beliefs and strategies, you will quickly fill the space up with something better. Be willing to start with a clean erase board in your thoughts, behaviors and strategies. As Bob Dylan said, “The times they are a changing.” Have you changed? Has your desking, deal proposal and negotiating process changed? Even if your dealership adheres to a one-price philosophy, there is negotiation that occurs in the mind of customer from the moment they first see anything online associated with your dealership to the in store process. Strive to be intentionally congruent. Is everything in your appearance, approach and process congruent from online to offline?

LET’S BE MORE CUSTOMER-FRIENDLY

Let’s look at a few strategies that may improve your negotiation process and move it to be more customer-friendly. First of all, are you practicing transparency by sharing everything you can in the proposal? Do you share the price, trade value, payoffs, total balance, payment options and lease options. Although the far majority of customers buy cars by financing, I still see dealerships that work deals on price and trade difference. The customer negotiates a price or trade difference and then often goes into F&I and winds up renegotiating the deal based upon payments. The F&I department is essentially your closer. The process takes twice as long and is very frustrating for the customer. They feel squeezed and pressured by having to continually negotiate. The process is abased upon the dealership and not the customer. It is common for many dealerships to rarely if ever show leasing options today. Although leasing is rising in numbers and may be the best option for the customer, dealers and managers are often not giving the customer the option because they don’t understand leasing and often don’t know how to calculate a lease properly. It should be common practice to show at least one lease option on every new car proposal.

“The reality is that in the information age, customers are looking for a relationship as much or more than ever. They used to need you for information, now they need you for comfort.” OPTIONS, OPTIONS, OPTIONS! Often, when managers give proposals to customers, they are showing only one payment-down payment option. Buyers are educated today and educated consumers want options. Three options can help create comfort for a customer and allows them to choose. This is called the, “Power of Three.” More than three options can create confusion. Think back to the time you bought your first house. In your zeal, you may have looked at twenty houses. By the end of the process, you may have had a hard time remembering the key things of many of those houses. It simply became overwhelming and led to discomfort. The same can be true of a customer.

Take a moment and close your eyes. Imagine you are buying a vehicle at your dealership and you are sitting in the chair of the buyer. Imagine your standard deal proposal and negotiating process. Imagine a deal from beginning to end in a typical fashion your customers go through. Try your best to become like the customer. Think as your customers think, feel as they feel. Change the paradigm and ask yourself, “Would I want to go through my dealerships sales process, negotiate a car deal in the way we do it and try to buy a car from our dealership?” Unfortunately, if you are brutally honest, the answer may be, “NO!” It’s easy to become jaded in the world of automotive sales. You have customers acting in their own best interests that in trying to protect themselves may not always be completely truthful. Your customers may shop and utilize you to get a better deal.

ELEVATE, MOTIVATE AND EDUCATE So what’s the answer in handling this? You must elevate, motivate and educate. You must up what you do, how you do it and how you share it to such as a way that you lower the customer’s dependency on price. Will this work for every customer? The answer is absolutely not. The great news is that you don’t have to sell every customer. You cannot and should not even try to be everything to everybody. Take what you do and do it so well that you attract and sell to the customers you want to sell to. There is a quote, “Be somebody, be somewhere and do something” Once you define those things in detail and create processes based upon the customer, delivered in such a difference making way, you will changed your sales and negotiating process to a way that helps rather than hurts you.

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.

When you share a proposal of figures with a customer, are you prepared with two to three ways to respond to any objection on price, trade, down payments and payments? Does your response acknowledge the customer first? Does your response verify and validate your original proposal? If you cannot say yes to any of these questions, then you are practicing positional negotiation. Positional negotiation is the traditional strategy used in many dealerships that upon a customer stating an objection to anything, we typically ask, “What figure(s) were you thinking Mr. Customer? This simple misstep causes fear in customers, creates the back and forth of negotiating that customers do not like. This ill-advised strategy causes many of your customers to move from being buyers to shoppers. The customers now must shop to fully feel comfortable that your best figures are your best figures. This is as much or more true today in the internet shopping and buying age and pre-intern et days. The reason is that customers have information and now want to feel comfortable with the information and the person(s) they are dealing with. The reality is that in the information age, customers are looking for a relationship as much or more than ever. They used to need you for information, now they need you for comfort. Your mission to move your customers from being transactional to transformational in the way you deal with them and the process. Become a car buyer concierge!

VALUE-ADDED NEGOTIATIONS Your negotiating process must move from being positional in nature to value added. The fact is that many customers don’t dislike negotiating; they dislike the WAY we negotiate.

JULY 2016

CAR BIZ TODAY

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DIGITAL MARKETING

N O I T O M E T U O B A ALL The Proven Psychology Behind Video Marketing, Emotions and Sales BY GINA REUSCHER

in gross margin and 85 percent in sales growth.” Emotion sells because it happens on a very instinctive level. People may not be aware of why they're buying--they just know they feel good about it.

n today's world filled with massive amounts of information and intense competition for consumers' attention, finding a way to cut through the clutter is critically important. Today's consumers are largely desensitized to traditional marketing messages; in fact, according to advertising tech firm Unruly, 97% of Internet users don't trust advertising. That means for dealerships that are still promoting "blowout sales," and "monster deals," your messages are probably being met with healthy skepticism or even being downright ignored.

According to global marketing research firm Nielsen Holdings, emotion is key for driving purchases. In a recent study, ads that generated above average electroencephalogram (EEG) scores delivered a 23 percent lift in sales volume. Conversely, ads with below average EEG scores were associated with a 16 percent decline in sales volume. In case you're wondering, EEG is a technology used to track brainwave activity and non-conscious response to communications.

So what's the best way to gain a car shopper's attention and their trust? Develop a video marketing strategy that taps into their emotion. Small, medium and large companies alike can use emotion to create and strengthen bonds between their brands and their customers.

In another report from the UK-based Institute of Practitioners in Advertising, 1,400 case studies of successful advertising campaigns were analyzed. The analysis compared the profitability boost of campaigns that relied primarily on emotional appeal versus campaigns that used rational persuasion and information. The results: campaigns with purely emotional content performed twice as well as those with only rational content, and those that were purely emotional outperformed those with mixed emotional and rational content.

When it comes to buying, emotions matter more than logic and reason. According to a recent Gallup study, “businesses that optimize this (emotional) connection outperform competitors by 26 percent

Admittedly, these analyses refer to large-scale advertising campaigns. But the psychology of tapping into emotions can be applied on a smaller scale to your dealership's video marketing strategy.

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CAR BIZ TODAY JULY 2016

“When it comes to buying, emotions

matter more than logic and reason.” DEFINE EMOTIONAL GOALS In marketing, we talk a lot about calls-to-action. What do we want the customer to do? Including a call-to-action is important in video marketing as well. For every video that you create, first ask the question "What is the action I want the customer to perform at the end of this video?" The second question to ask is "What do I want the customer to feel during this video?" Every video should have two ultimate goals: generate an emotion, then tie that high-power feeling to a specific action. In video marketing, there are basically two actions that customers can take: share and convert. Your dealership's video marketing strategy should include both types of videos.

“For dealerships, the action goal of sharing is most appropriate for videos designed to promote brand awareness.” ACTION GOAL: SHARING

ACTION GOAL: CONVERSION

Social sharing is an effective and important marketing strategy, but it's not easy to achieve. A recent study conducted by frac.tl digital marketing agency found that videos evoking surprise and anticipation-related emotions were most likely to be shared, and that in general, videos that generate positive emotions get more shares. According to the study, the most impactful emotional responses are:

Videos can also produce deeper funnel results. In Barry Feig’s book Hot Button Marketing: Push the Emotional Buttons That Get People to Buy, he uncovered 16 emotional opportunities that drive conversion:

• Amusement • Interest • Surprise • Happiness • Delight • Pleasure • Joy • Hope • Affection • Excitement For dealerships, the action goal of sharing is most appropriate for videos designed to promote brand awareness. These include dealership value proposition videos, employee profile videos, and customer testimonial videos. The easiest way to generate an emotional response in these types of videos is to tell a story. Tell the dealership's story, tell a customer's story, tell your employees' stories. For each video, define its emotional goal and also identify what the social motivation is for sharing. This will help you shape the content of your video. According to Unruly, the mains reasons why people share videos are: • To connect with friends about a shared passion or interest • To help socialize with friends offline • The sharer believes the product or service could be useful to friends • The video promotes a good cause • The video is about a current trend or event • It demonstrates the sharer's knowledge and authority about a subject • The sharer wants to be the first to tell friends about a subject • To start an online conversation • Because the video says something about the sharer • To see what friends think

1. Desire for control 2. I’m better than you 3. Excitement of discovery 4. Revaluing 5. Family values 6. Desire to belong 7. Fun is its own reward 8. Poverty of time 9. Desire to get the best 10. Self-achievement 11. Sex, love, romance 12. Nurturing response 13. Reinventing oneself 14. Make me smarter 15. Power, dominance and influence 16. Wish-fulfillment For dealerships, the action goal of conversion is most appropriate for inventory videos and video emails used in the lead follow-up process. As you sit down to create these types of videos, select the most appropriate emotional opportunity from the above list. Then tie it to a desired call to action, whether that's making a phone call, sending a text or clicking through to a landing page. The emotions that you want to generate will most influence the audio or voiceover portion of your videos. Let's face it, with inventory videos there's only so much you can play around with lighting or mood effects without getting cheesy.

all the features and data that the consumer can already see on the Vehicle Details Page (VDP). So if you can create a unique voiceover that generates desire, excitement, taps into the sex appeal of a car, appeals to safety issues or family values, you can really differentiate your dealership. Additionally, you may want to consider adding a music track to your videos. Music is a powerful tool that heightens emotion. Music can be fast-paced and exciting, or slow and gentle. Just Google "royalty free music tracks" and you'll find plenty of sites out there offering music free of charge. Just be sure that the music volume is low and stays in the background, and doesn't become a distraction from the data being presented. Creating a video marketing strategy that ties emotional responses to specific calls-to-action will help your dealership cut through the noise. Videos are the ideal medium for increasing brand awareness, social sharing and conversion rates. Incorporating the power of emotion into your video marketing program will help your dealership strengthen its bond with customers, increase brand loyalty and increase sales.

40 Emotional Responses to Aim For in Your Videos: Happiness

Exhilaration

Amazement/Awe Inspiration Contempt

Sadness

Delight

Fear

Hope FOCUS ON HOW THE VEHICLE WILL MAKE THE BUYER FEEL To generate an emotional response, focus on how the vehicle will make the buyer feel. In most inventory videos, the voiceovers simply recite

Interest

Sympathy Pleasure

Affection

E xc i te m e nt

Warmth

Greed

Frustration

GINA REUSCHER

Director of Marketing for Flick Fusion

Pride

Gina oversees branding and marketing initiatives at Flick Fusion, and manages partner training and communications. Reuscher has over 20 years experience in digital and affiliate marketing, sales, product development, analytics and performance management.

Anger

Humor Cranky Shock

Joy

JULY 2016

Nostalgia

Sex Appeal

Desire Admiration

Trust

Passion Uncertainty

Humor

Disgust

Love

Grumpy Surprise Confusion

Optimism

CAR BIZ TODAY

Knowledge Serenity Validation

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INDUSTRYnews DENSO NAMES SR. MANAGER OF QUALITY ASSURANCE

NISSAN DEVELOPING A SOLID OXIDE FUEL-CELL

DENSO Products and Services Americas, Inc., a division of leading global automotive supplier DENSO Corp., promoted Wayne Eiffes to senior manager of Quality Assurance. In his new position, Eiffes is managing DENSO’s Quality Engineering and Technical Services departments responsible for customer and supplier quality; technical support, service and training; warranty operations; and the diesel component sales and service network across the Americas.

Nissan Motor Co., Ltd. announced that it is currently researching and developing a Solid Oxide Fuel-Cell (SOFC)-powered system that runs on bio-ethanol electric power. The company intends to bring it to market for fleet vehicles around 2020. The new system – a world first for automotive use – features an e-Bio Fuel-Cell with an SOFC power generator. SOFC is a fuel cell utilizing the reaction of multiple fuels, including ethanol and natural gas, with oxygen to produce electricity with high efficiency. The e-Bio Fuel Cell generates electricity through the SOFC (power generator) using bio-ethanol stored in the vehicle. The e-Bio Fuel-Cell uses hydrogen transformed from fuel via a reformer and atmospheric oxygen, with the subsequent electrochemical reaction producing electricity to power the vehicle.

IAC OPENS FIRST SOUTH AMERICAN PLANT IN BRAZIL, TO SUPPORT JAGUAR LAND ROVER Automotive interior components supplier International Automotive Components (IAC) is continuing its aggressive global growth with the opening of its first South American plant in Itatiaia, Brazil. The new 48,437 squarefoot facility is expected to employ approximately 40-to-50 people when production reaches full capacity.

Unlike conventional systems, e-Bio Fuel-Cell features SOFC as its power source, affording greater power efficiency to give the vehicle cruising ranges similar to gasoline-powered cars (more than 600km). In addition, the e-Bio Fuel-Cell car’s distinct electric-drive features — including silent drive, linear start-up and brisk acceleration — allow users to enjoy the joys and comfort of a pure electric vehicle (EV).

It assembles and delivers highly crafted cockpits to Jaguar Land Rover do Brasil to support the production of the 2017 Discovery Sport and Range Rover Evoque premium sport utility vehicles. IAC Itatiaia assembles cockpit components provided by five of the company's United Kingdom (UK) facilities, which are located in Halewood, Elmdon, Sunderland, Scunthorpe and Coleshill. The completed cockpits are delivered to the nearby JLR do Brasil in Itatiaia.

#PINKBEETLE GOES INTO PRODUCTION

25 YEARS OF GM SALES

Volkswagen of America Inc. announced that the #PinkBeetle will go into production as a 2017 model, having been shown as a concept at the 2015 New York Auto Show. The first vehicle ever to officially be named as its own hashtag, the exclusive run of #PinkBeetle models will be available in coupe and convertible configurations and will go on sale in the Fall. Pricing of this value-oriented limited-edition model will be announced closer to launch.

John Dralle accepts a plaque in recognition of 25 years of being a General Motors dealership.

The 2017 #PinkBeetle will be offered in limited quantities across the United States. With a 1.8-liter turbocharged direct-injection TSI® engine and a six-speed automatic transmission, #PinkBeetle produces 170 horsepower and 184 pound-feet of torque, and is poised to become an immediate automotive trending topic.

RAM NATION TO THE RESCUE More than 20 Ram Nation volunteers from Finnegan Chrysler Jeep Dodge Ram dealership and the Ram Truck brand’s Southwest Business Center teamed with the First Response Team of America in Rosenberg, Texas, (southwest of Houston) to deliver supplies and to help clean up homes damaged in the recent Memorial Day weekend floods. The Ram brand established a partnership with the First Response Team of America in 2012 to help communities across the country respond to natural disasters. Since then, Ram – through the FCA Foundation – has donated more than $300,000 to First Response. As a result, Ram and the First Response Team of America have led similar collaborative operations in many areas, including Wimberley and San Marcos in central Texas, Tupelo, Miss., and Moore, Okla. Ram Truck created Ram Nation in 2012. It is a grassroots organization of like-minded people willing and ready to help people in need, such as those in flood-damaged Texas.

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CAR BIZ TODAY JULY 2016

HEARST AUTOS NAMES NEW TECHNOLOGY OFFICER Hearst Autos, a unit of Hearst Magazines composed of consumer brands Car and Driver and Road & Track, business-to-business digital media solutions company Jumpstart Automotive Group, and Veretech Holdings, Inc., announced that Ryan Mannion has been named chief technology officer. He is based in Atlanta. Mannion was the technical co-founder and chief technology officer of Politico, from its launch in 2007 to 2014, leading a team responsible for product and technology strategy and vision, designing, architecting and developing the website’s CMS, publishing system, analytics, video and all front- and back-end support. Most recently, Mannion was senior vice president, head of product and technology at OZY, a daily digital magazine, where he led a global product and technology team, as well as the ideation, design and execution of the site and its suite of mobile apps.

Ford Motor Co. Starts Pilot Program in Africa A new Ford Motor Company pilot program aims to enhance mobility heath services in rural areas of South Africa and Nigeria. Ford Project Better World brings together multiple organizations such as World Vision South Africa, and social entrepreneurs to deliver health education, medication, nutrition and basic services to thousands of underserved people in remote areas. The services will be accessed using enhanced mobility and connectivity technologies from Ford vehicles. Two modified Ford Rangers will work as mobile clinics to deliver health services, dispense medication for chronic conditions and monitor the growth of children in South Africa. The information gathered will aid agencies in tracking the health of children and help with protective services. Each truck is equipped with connectivity technologies including a dual-battery management system that powers a video projector, mobile refrigerator, tablet computer and other equipment to enable child healthcare, protection and gender-based violence awareness campaigns. In Nigeria, Ford is working with Riders for Health to strengthen healthcare access by training the group’s technicians to maintain their motorcycles, four-wheeled vehicles and trucks in other to deliver medical professional and supplies to people in rural areas.

AUTOMOBILI LAMBORGHINI UNVEILS THE CENTENARIO Automobili Lamborghini and a group of clients gathered at the Petersen Automotive Museum for a private viewing of the Lamborghini Centenario, the company’s newest one-off supercar. The evening’s event marked the first time that the Centenario was on display to U.S. clients since its debut at the 2016 Geneva Motor Show. “This car is the ultimate expression of Automobili Lamborghini,” said Alessandro Farmeschi, Automobili Lamborghini America Chief Operating Officer. “The Centenario marks what would have been the 100th birthday of Ferruccio Lamborghini and is a fitting tribute to our company’s founder. Its cutting design showcases the latest technologies that give our super sports cars such a competitive edge.” The Centenario features an all-carbon-fiber body available in either an exposed or painted finish showcasing the perfect attention to detail Lamborghinis are known for. Over the course of its production, a total of 20 coupes and 20 roadsters will be delivered to clients. In addition to breaking new ground in body styling and material composition for the brand, this car is also the first Lamborghini to use all-wheel steering to enhance agility at low speeds and offer improved stability at high speeds. The rear wheels are able to turn in the opposite direction of the front axle to create a virtual reduction in the wheelbase or to rotate with the front wheels for the opposite effect. Future Centenario owners may choose from a long list of customization options for the car that will allow each unit to be totally personalized, but a touch screen with connected capability is one feature that will come with every model regardless of equipment specification. For the first time ever, the touch screen – mounted in the center console – brings Internet connectivity to the world of Lamborghini. Aerodynamics were an essential consideration in the development. During that process, Lamborghini’s engineers chose to use an adjustable rear wing that actively adapts to vehicle speed in order to provide optimal downforce as conditions demand. The Centenario's dry weight is only 3,351 lbs, yet it houses the most powerful engine in Lamborghini history. The 6.5-liter naturally aspirated V12 creates 770 horsepower capable of propelling the car from 0-60 mph in only 2.7 seconds toward a top speed in excess of 217 mph.

HONDA MAKES A DIFFERENCE For the first time in its history, associates at Honda companies in North America joined forces with its dealers and suppliers in a coordinated effort to make a difference in the communities where they live and work. Team Honda Week of Service involved volunteer community activities by Honda associates, dealers and suppliers in 41 states, as well as Mexico and Canada. Timed to coincide with the company’s Founder’s Day, which marks the establishment of the first Honda business operation in North America, Honda is leveraging its scale and the strong relationships it has with community and business partners to take the Team Honda spirit to the community to help improve the lives of those who live in them. The Week of Service will call nearly 15,000 volunteers to action from Honda companies, along with additional volunteers from the more than 325 dealerships and 76 suppliers.

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COMPLIANCE

DEALERSHIP

E V I S N DEFEPLAN GAME

Make Compliance Your Friend

BY JIM RADOGNA

n many dealerships, the thought of putting together a compliance program is similar to contemplating a diet and exercise regimen: you know it’s something you need to do or eventually it will catch up with you. Like getting in shape, keeping up with regulatory changes can seem like a daunting task – not to mention costly. Many compliance programs on the market are quite expensive and simply out of reach financially for the average dealership. As a result, some organizations end up settling for trying to fly under the radar and hope for the best. In truth, setting up and maintaining a strong compliance program in your dealership doesn’t have to be difficult or expensive. By following these steps, you can dramatically raise the level of compliance in your organization without breaking the bank.

GET COMMITTED Ignoring compliance just doesn’t make good business sense. The automotive industry is changing dramatically and will become even more heavily regulated in the future. Dealerships who continue to operate without a focus on compliance will invariably struggle. So what are you waiting for? Make a commitment to establishing a culture of compliance and ethics in your dealership.

FOLLOW THE LEADER The culture starts at the top but someone in the organization needs to take up the reins. All too

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often, an “everyone’s in charge thus no one’s in charge” attitude comes into play where compliance is concerned. In order to avoid this type of situation, it’s a good idea to designate a company compliance officer. Ideally, this will be a senior level employee who reports directly to company ownership. This person should be made responsible for monitoring all aspects of compliance, and be allowed the resources to learn as much as possible about the state and federal regulations that affect the dealership.

While appointing an in-house compliance officer generally doesn’t entail adding an additional salary, it would be wise to consider some compensation for the employee’s additional duties – this is an important position and must be taken seriously. In larger organizations, a compliance committee consisting of department heads may also be useful.

ASSESS YOUR COMPLIANCE LEVEL Dealers should not assume that their employees are

“Dealers should not assume that their employees are well-versed in compliance simply because they’ve been in the business for a while.” well-versed in compliance simply because they’ve been in the business for a while. At some point in their career, many automotive professionals were taught the “old school” way of doing business. Some dealership practices they’ve learned are not necessarily legal or ethical but the employees have no idea that they are doing anything wrong. The vast majority of dealership employees are well-meaning, honest people just trying to earn a living. However, if they have never been properly trained in compliance matters, they may simply rely on doing business the way it’s always been done. Simply stated, assuming that your dealership is doing everything right from a compliance standpoint without verification is risky at best. When was the last time you performed a comprehensive risk evaluation? If it’s been a while (or never), this is a vital step. A risk evaluation can be completed either by someone on staff who is well-versed in federal and state regulations or by bringing in outside compliance professionals. The key is to take a base-line reading of exactly what the areas of vulnerability are in the dealership. Forms, advertising materials and deal jackets should be thoroughly evaluated. Policies, such as Red Flags, information safeguards and privacy should be reviewed. Vehicles for sale should be checked for proper display of Buyers Guides, Monroney labels, etc., and facility signs and notices should be verified. Chances are, you may be unpleasantly surprised by the results.

GET EVERYONE ON THE SAME PAGE Many dealers will send two or three of their top people to a seminar or two each year and hand out the monthly compliance newsletter for the managers to read. While these are great resources, there’s quite a bit more that needs to be done to ensure that the dealership is not at risk. In many organizations, management personnel have at least some knowledge of proper legal compliance and ethics, either through training or osmosis. On the other hand, many salespeople haven’t a clue about the laws and regulations that affect our

industry. Why should they? Compliance training, if conducted at all, generally occurs only at the management level. Without proper knowledge, it’s very easy to step over the line legally when trying to make a deal. It’s wonderful to have a well-trained management staff, but there’s a good possibility that an uninformed salesperson may make compliance missteps without the management team’s knowledge. After all, salespeople typically spend hours talking with their customers and it’s unlikely that management is going to be privy to all of those conversations. Unfortunately, attorneys and regulators don’t differentiate between job descriptions when pursuing a claim against a dealership. Some dealers assume that the cost involved in training all staff members is just too high. That is not necessarily the case. Training can be accomplished in-house by your compliance officer or, if that is not practical from a time and preparation standpoint, there are affordable alternatives. While some F&I training programs would require writing a five-figure check to cover the entire staff, there are also outstanding programs available that cost less per employee than a box of business cards and can be completed in a matter of hours.

MONITOR YOUR PROGRESS Once your compliance program is in place and the staff is trained, it is imperative that the compliance officer or committee ensure accountability. Many dealers spend thousands of dollars for compliance audits only to find that the same violations continue to occur shortly after the auditors move on. Employees need to recognize that your compliance program is here to stay and that they will actually be held accountable for their actions. Let everyone know that the organization is serious about compliance and ethical behavior. Written procedures should be put in place and consistent processes should be mandatory. For instance, everyone should use the same menu; desk deals the same way, etc. In addition, all employees should sign a Code of Ethics upon completion of their training, and mini-audits of deal jackets should be completed on a regular basis. There you have it - five steps to getting serious about compliance and protecting your dealership. Sure, it will take commitment and a few bucks, but this plan is certainly achievable for virtually any dealership. It’s just a matter of getting started.

JIM RADOGNA

Director of Compliance for The Lloyd Andersen Group of Companies Inc Jim is a nationally-recognized auto industry consultant specializing in dealership sales and finance department legal compliance. His background includes founding and operating a national compliance consulting firm, Dealer Compliance Consultants, Inc., as well as having spent over 15 years in various dealership management positions. Being well-versed in all aspects of dealership operations, Jim has used his knowledge and industry experience to develop unique, no-nonsense compliance and reputation management solutions for automobile dealerships of all sizes.

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FIXED-OPS

CO ECTING WITH YOUR CUSTOMERS

Don't skip this in your Service Drive BY JOHN FAIRCHILD

hen a customer enters the Service Drive, do you smile? Do you make eye contact? Do you say hello? Do you introduce yourself? These are, of course, the expected reactions Service Advisors should make when customers enter the lane, actions alone, however, will not endear you to your customers. Relating with customers takes a committed effort to get acquainted with them – every single one of them. While a simple smile and nod of the head works for some people, most consumers in this day and age want to feel you appreciate their interest in your store and their business, as well.

BUILDING CUSTOMER RELATIONSHIPS AND RETENTION The following are some guidelines to think through when building your customer relationship and retention skills. If you skip connecting with your customers, you’re better off doing something else for a living!

Focus on customer experience in your Service Drive as strongly as you focus on your sales efforts. You can’t make a sale OR provide the best CSI until you effectively connect with your customer and provide a favorable experience. If you have been in the Service business I know

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you’ve had or heard the following sentiment: Customers, in the best cases, are at the very least inconvenienced to be at your dealership to begin with. Whether it be for a repair or even just an oil change, your customers would prefer NOT to be at your Dealership for service. A customer’s experience, excellent or poor, is something people tell the story of again and again. Will people speak positively or negatively about their experience at your Dealership? Most of the time a person’s experience will be dictated by the expectations you set and your ability to follow through and deliver. Here are a couple of pointers. • First impressions cannot be done over, make sure you impress your customer. Greet promptly, be upbeat and overtly attentive. • Under promise and keep people in the loop. Ensure you’ve established the best contact method and time when YOU will contact THEM. • For waiters, check on them often in the waiting area, and express your sense of urgency. Don’t let waiters get “overdone” by leaving them

sitting there too long. • Ensure you establish a ready-time for waiting customers and express it by telling them a clock time and getting their assumptive approval. “That job should take about an hour and a half so we are looking around 12:45, OK?”. By establishing the time on the clock you will cut down on the customer’s anxiety while waiting. In this example, If you just say “about an hour and a half” the customer may lose track of time and is more likely to think they have been waiting a lot longer. • Regarding time and money, make sure you are a little bit early and a little bit less than you originally quoted. What a nice surprise to be LESS than they expected and EARLIER! Pad your estimates at least 5 to 10% and over estimate on time by 25% of the job. • Stay on top of status updates. No matter what the status is, make sure to keep waiters updated frequently and to re-contact drop-offs BEFORE they call YOU. The goal is NO INCOMING CALLS for status.

"Relating with customers takes a committed effort to get acquainted with them – every single one of them."

LOOK FOR OPPORTUNITIES

Opportunities for CUSTOMER growth in retail sales and improves CSI comes from CUSTOMERS – not the SERVICES you sell. In other words, if they don’t come back, they can’t buy more services! Here are some simple steps to make sure customers are coming back • Don’t leave it to chance they will return! Set the next service appointment with a statement NOT a question; “Sir, I set your next service appointment REMINDER for April 18th at 4:05. If for some reason you need to change that please call me (or our BDC) and we will reschedule you, OK?” Follow up and reschedule no shows. • Let your customer know YOU want to be their ONLY Service Advisor. “Ma’am please make sure to see me anytime you need help on any of the cars your family owns, I really want to help you maintain your vehicles properly.” • Give your card to every customer and invite them to contact you anytime they need help.

PAY ATTENTION TO CUSTOMERS

It’s imperative to HEAR your customers, not just TALK to them! Make friends! You can tell them about specials, recalls, and upcoming

service needs BUT ALSO listen to what it is they have going on want and need. It’s not phony or superficial to show empathy if you genuinely care.

Personalize your customer service whenever possible. GET TO KNOW YOUR CUSTOMER. Introduce yourself, smile, make small talk. Refer to customers by name, bring up past conversations, talk about their kids. Each customer is distinctive, so be unique and authentic in your conversations. Connecting on an individual level with customers pays dividends in spades!

Reply to customer questions ASAP! Not all customers will show up in person. Many will send you an email, leave posts on your or the dealership’s social media channels and believe it or not, as well as actually call you. Be sure to react quickly to their queries. With as much competition

in the market place and the pervasive culture of instant gratification, if you snooze, you may well lose! Most people are so busy if you don’t act, you will be left behind. Each customer and every Service Lane is unique, so consider this when planning your approach to every situation. Remember… customers return to Dealerships because they want to, not because they have to. It’s likely, as a Service Advisor, your treatment and consideration of the Customer that will make the situation better or worse. Yes, connecting is a required skill set to succeed as a Service Advisor. Remember, in a world with lots of options, make sure YOU are first on their list.

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 fixedops 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. Reach John at john@johnfairchild.net, or visit the website at www.fairchildautomotivesolutions.com.

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CONFERENCE

SAVE THE DATE

CBT AUTOMOTIVE CONVFERENCE & EXPO A

s a car dealer you face many challenges from staffing to sales. Our industry is in constant change; sometimes keeping up with these challenges can set back your success and dampen profits. What you need are solutions! There will be plenty of solutions from the industry’s leading experts and problem solvers at the CBT Automotive Conference & Expo March 7-9, 2017 at the Hyatt Regency in Atlanta.

The CBT Conference & Expo is the most comprehensive and information-packed event in retail automotive. This must attend conference for auto dealers addresses every aspect of the industry including Leadership & Management, Marketing, Social Media, Technology, Sales Strategy, F&I, BDC, Fixed-Ops, Customer Experience and much more. We have designed this conference to give you a fresh perspective on the evolving retail automotive industry, as well as the tools and strategies you will need to succeed. Our general sessions will feature speakers from outside our industry who will bring fresh ideas to help you approach your challenges in a new way and position your organization for success in a time of seismic change. In addition, over

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70 DealerTalks breakout sessions led by industry elite offering game-changing solutions and inventive techniques which you can use at your organization. As always, you will also have ample opportunity to meet with your peers and colleagues to exchange ideas and solutions during free-flowing networking events.

In CBT’s continued dedication to the industry and providing dealers with tools for advancement and success, we have taken this conference to the next level. Our industry needs this and we’re set to go above and beyond. So Save the Date! We’ll be announcing the speakers and break-out sessions soon but count on this being the must attend conference of 2017! You can pre-register now for exclusive discounts, updates and promotions at cbtconferenceandexpo.com. See you in Atlanta! For those who want to be a partner for the conference, contact Karen Locadia at klocadia@ cbtnews.com to learn how it will boost your business.

FOR 2017 Lower Dealer Price! Our industry needs this conference and we just made it possible for everyone. DealerTalks Our new 30 minute rapid fire approach to the traditional breakout session. Get more, in less time. New Venue We’ve expanded to bring in more vendors, more dealers and more take-aways. More Keynote Speakers Just when you thought our line-up could not get any better...think again! The Customer Excellence Lounge Relax with a coffee and take-in interactive discussions, displays and take-aways from customer experience gurus. The Digital Lab Online innovation and social media converge. Meet oneon-one with industry experts for free consultations. CBT Stage Right in the heart of it all. Our bigger stage means more interviews for our partners and more content for our viewers. The CBT Conference Kick-off Party The who’s-who of the retail automotive industry. Mix, Mingle and Reconnect with colleagues and new clients.

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ECONOMICS

AUTOMOTIVE DISRUPTION Change is Happening BY ZACH KLEMPF

AT MACH SPEED

n the past 18 months, over $35 billion in major equity transactions have taken place within the automotive retail space. In fact, 2013 and 2014 were two of the biggest years for private equity transactions in the sector since 2002. Not since the land speed record of Mach 1.020 was set by Andy Green in October 1997 has the space moved as fast. Clearly, digitizing the car buying experience and the rapid growth of the “anything as a service” model is transforming the industry at a break neck pace.

Even the OEMs are starting to catch the technology driven investment wave. Take a look at General Motors (GM) who recently invested $500 million in Lyft giving them a $5.5 billion valuation. Or consider the new GM Factory Pre-Owned collection that will sell lightly used, former GM company lease and fleet vehicles totally online in an effort to combat the Carvana-like upstarts of the world. Not to be left out, Ford is partnering with Google to build autonomous vehicles, and with Amazon to connect the home to the vehicle. With a goal of becoming a “technology driven transportation services company,” Ford is also piloting ride-sharing and pay-by-mile rental car services.

DRIVING FORCE THAT’S DISRUPTING THE AUTO INDUSTRY A key driving force behind the disruption in the automotive industry is the rise of the digitally intrepid Millennial generation (aka Gen Y). With their eyes and fingers seemingly glued to their mobile devices, and their preference for e-commerce transactions and on-demand transportation options, they have redefined car buying into a more transparent and online-focused experience. In 2014 alone, Millennials accounted for 25 percent of new car vehicle purchases surpassing Gen X for the first time in volume of new vehicles purchased. Positioning themselves to capitalize on the Millennial market, last year automotive e-commerce companies focused on the higher end of the $36 billion pre-owned market. Automotive services challengers like Beepi, Drive Shift, Carvana, and Vroom raised over $450M collectively. To finance their frantic growth, Beepi is already working on another $300M round and has received funding from one of the biggest auto manufacturers in China. Vroom also continues to make big moves with its recent $95 million acquisition of the Number 1 Retailer on Ebay Motors – Texas Auto Direct.

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"A key driving force behind the disruption in the automotive industry is the rise of the digitally intrepid Millennial generation (aka Gen Y)."

LET’S SHARE

The whole sharing economy is another major force behind the disruptive investment in the automotive industry. Services like Uber and Lyft are winning over consumers in urban markets as their go-to means for transportation. The rapid adoption by consumers of these offerings has caused the automotive industry to take an unprecedented business model detour with Ford and others moving toward a “transportation-as-a-service” (TRANSaaS) model. It’s no surprise that with these types of smartphone enabled, automotive services being so popular that Uber has had success raising funds. What IS a surprise though is their recent eye-popping $62.5 billion dollar valuation. So is all this money following hype or is it creating a new automotive industry reality? Are we looking at a new tech bubble in the space or the birth of the defining business model of the next decade with TRANaaS? Perhaps it’s too early to call it but with innovative software centric, tech companies like Google and Apple launching their own automotive initiatives, there will continue to be tons of innovation and change for the foreseeable future. Expect more strategic partnerships, business model pivots, and M&A activity as the industry becomes less fragmented and remains flush with VC investment.

ZACH KLEMPF

CEO of Selly Automotive

Zach started out working in the automotive industry when he was 19 years old and is now a thought leader writing for multiple dealership magazines as well as other media outlets like Forbes and Tech Crunch. Zach was also selected for 40 Under 40 Automotive Remarketing in 2015.

CONVERSICA: THE PERFECT COMPLEMENT TO ANY AUTOMOTIVE SALES PROCESS

With the same number of leads, two dealers can have dramatically different sales results based on process, technology, and their human resources. Managers of automotive dealerships know that despite investing in sales training and perfecting CRM workflows, human nature will always impact final sales results.

DECEMB

It’s natural for sales associates to choose to work a “fresh” lead in the CRM. In the auto industry, this behavior is called “cherry-picking,” and it is costing dealers thousands of dollars each month in lost auto sale.

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iv e a u to m o t n t to a n y e m le p sa le s. ect c om ent and th e p e rf engag em is r a e ic m rs su e on C o nv c re a se c c e ss to in sa le s p ro

Our research has also discovered another factor hindering sales conversion: a technical issue that we have not publicly discussed to the degree that would satisfy our concerns: email deliverability. What if the emails that dealers thought were being delivered to customers, were not consistently being delivered? Our research into assisting dealers on how to increases sales by maximizing all their Internet sales leads led us to Conversica. We encourage you to learn more about this product. Request our 25 page research report and we will email a full color PDF to you immediately.

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DEALERSHIP PROFILE

LA Car Guy

GOES GREEN (and sells)

Mike Sullivan Sells Cars and Spreads the Word about the Environment BY MARY WELCH MEET LACARGUY

ike Sullivan has always been environmentally aware — whether it is surfing, putting in charging stations in his dealership or helping convince Tom Hanks to take a Prius to the Oscars back in 2003. Today, as president and CEO of Sullivan Automotive Group with 10 award-winning dealerships and a state-of-the-art body shop, Sullivan is not only a proponent of environmentally friendly cars, he extends his environmental passion to teaching employees, friends and even school children the valuable lessons of caring for and protecting the environment. In fact, he, along with John Paul DeJoria, co-founder of Paul Mitchell and Patrón Spirits Co., was recently honored by the Grades of Green, an environmental education nonprofit, for their efforts in creating environmental awareness in young people. And, while he aims to change everyone’s behavior towards the environment, he admits it’s not always easy. “My wife drives a Porsche Cayenne plug-in hybrid. We plug it in at night,” he says. “She doesn’t like going to the gas stations and she frankly doesn’t care about the electricity. Even if it’s 50 percent more [environmentally friendly], it’s progress!”

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Of course Los Angles is a fertile market for the green message but Sullivan, AKA “LAcarGUY,” has no problem mixing the car business with saving the environment. His passion and community works are only matched by the outstanding service and innovative practices he brings to his dealerships. His dealerships rank among the top 25 of all Toyota dealerships, 2010 revenues of $634 million and more than 800 employees. He currently owns: Audi Pacific, Pacific Porsche, Subaru Pacific, Lexus Santa Monica, Pacific Volkswagen and Volkswagen

“I started to show up organically on environmental pages and it gave me a platform to talk about it and become more of a public figure.”

Santa Monica, Scion of Hollywood and Santa Monica and Toyota dealership in Hollywood and Santa Monica. He is one of the top hybrid dealers in the world and has the largest used Prius inventory in the world. For every car sold he donates $100 to a green charity. Since hybrid and diesel vehicles are highly advanced that require a very specific expertise, he built the largest green car service department in the country and staffed them with experienced green service technicians. He has seven service departments in Los Angeles County as well as two body shops that are experts in also repairing diesel, hybrid and plug-in vehicles

- MIKE SULLIVAN | PRESIDENT, SULLIVAN AUTO GROUP

He is the first automotive dealer to install electric charging stations in Los Angeles for anyone to use free of charge and one of only eight dealers in California selected by Toyota USA to sell the new Miraj, Toyota’s hydrogen fuel cell vehicle. He also added the position of manager of the environment whose sole job is to ensure they are reducing their carbon footprint through employee education and infrastructure changes. In 2010 he launched LAcarGUY.com/ green that features his green vehicle inventory as well as green technology news and updates on his internal sustainability efforts. Sullivan father opened a Volkswagen dealership in 1964 in Santa Monica and he went to work with his dad in 1976 before eventually buying him out in the 1990s. “I had 25 years working with my dad and now my kids are in their 30s and working with me and it gives me a whole new outlook on the family car business.”

ADDING AND SUBTRACTING DEALERSHIPS While his father was content with one dealership, Sullivan had more aggressive plans. While they were together Sullivan added an Isuzu franchise and eventually a Hyundai franchise as it was just starting out in this country. And while those brands didn’t work with his Santa Monica customer base, he knew Lexus would and became one of the first Lexus dealers, a decision he has said launched his career. He started adding dealerships — VW-Porsche and Audi store in South Bay, near Santa Monica, Toyota of Hollywood in 1997, Scion in 2002, Toyota of Hollywood in 2002 — while subtracting both the Isuzu and Hyundai dealerships. He brought another Hyundai dealership but faced challenges with a Mitsubishi one so he closed both and used the Mitsubishi property to build a new Lexus dealership. He also, for a short time, added the Lincoln-Mercury brand in Hollywood but sold it in 2007. “It was hard making money,” he says looking back at his early days. “I could sell Prius in Hollywood and then moved to Santa Monica and now we’re among the biggest Prius dealers in the world. Lexus Santa Monica is the largest hybrid dealer. I realized that in a business that’s known for being environmentally dirty, I could be the good one. I could be the best of that group and that’s how it started.” He then set up free charging stations in his Toyota dealership. “People would come in and use our charging stations even if they weren’t interested in buying,” he says. “I think they really wanted a parking space in Santa Monica for a couple of hours. I started doing things like that and it caught on.”

COMMUNITY OUTREACH

environment and I grew up with surfers. I learned early on that after a rain storm all sorts of stuff would be in the water. I’d go diving and people were allowed to dump sewage 100 yards off shore. That’s stupid and I didn’t understand. But, that was forming the foundation as to why I cared. I started giving my hard-earned money to the causes as well as my time. I live in a beach house with solar panels. I love off the grid 90 percent of the times. There are things you can do.” He started a large community outreach, as well as in his dealerships, about changing habits to benefit the environment. “I realized it was my job to show people it wasn’t all that difficult to change and to get into the habit of working with the environment.” He started out with little things at the dealership such using the right recycling piles. Every four months the company recycles any accumulated E-waste, which is all the electronic components and products that are no longer used. Last month he diverted more than 3,000 pounds from landfills. “If we could reduce the size of landfills, that’s substantial. I brought mulch worms, which is a really fascinating ject. People like to hear poop when you’re havbreakfast. But as I was

subabout i n g

Sullivan’s environmental crusade started early. “I grew up in Santa Monica in a real natural

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educating my employees and they were going home and educating their families. Sometimes the kids were learning things that they’d bring home that information. I wanted to make it fun and meaningful for kids but also to change their habits.”

GREEN IS GOOD FOR BUSINESS Although he admits he would be on his environmental crusade regardless of his business, it does bring in customers, especially after he branded himself as LAcarGUY. “I started to show up organically on environmental pages and it gave me a platform to talk about it and become more of a public figure. We had the first gold LEEDS Audi store in the country,” he says. “Maybe that brings in business. Reviews are such a big part of my world and if they’re searching around and find me, maybe they’re predisposed to like me. All I ask it for them to give me a shot and I can show them I’m that guy.” He feels a real responsibility not only to the cause but to his business. “It’s a real responsibility and I get it. The world doesn’t want a poser. But I don’t mind being the front person. When Prius launched they were pretty ugly in the early days. But we got famous people like Tom Hanks, DiCaprio, Cameron Diaz to go to the Oscars in this funny car. Forget what their motivation was but whatever it was, it showed the public that it was a cool thing to do. Prius and Hollywood went mainstream. It became

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a part of the global green movement and once you start finding opportunities, you’ll see they’re all over.” He also is excited that the car manufacturers line up with him. “Toyota, Volkswagen and Subaru are arm-and-arm with me. Porsche gets it. They all want to be involved,” he says. He is excited about the Miraj, which he says is a “really cool car. If you look at the cars that are using alternative fuels, they are getting really strong numbers. Tesla is a fascinating story and I’m a fan. Prius is doing a great job, so is the Chevy VoIt and it’s changing the Chevy buyers’ mentality. I like the technology. I’ll take the time to plug it in. We’re moving toward the next battery generation. You always take arrows when you’re out in front.” Right now, Sullivan’s three children aren’t ready to be out front. “That’s fine, at their age I didn’t want to be either,” he says. But they are all involved in the business. “They get the car business and they get the whole giving back part. When they were little we would take one of their Christmas presents and give it back. I live this way and I’ve found an opportunity to teach others and expose them to being environmentally aware,” he says. “And I love selling cars and putting smiles on people’s faces.”

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TRAINING

CHALLENGE

YOURSELF

Falling into Patterns Won’t Deliver Sales BY CORY MOSLEY

doubt Janet Jackson was thinking about the car business when she wrote, “What Have You Done for Me Lately.” But the title of her 1986 single sums up our industry, because everyone from the showroom salesperson to the advisor on the service drive has to face that question daily. Unfortunately, the car business can be monotonous, causing even quality sales professionals to fall into patterns that zap them of their potential. This month, I’d like to help you fight the monotony with five ways to keep you fresh and operating at your best.

Break Patterns: We all have patterns that we fall into. They can range from what we say to customers during the meet-and-greet to how we respond

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to objections. We may even fall into a pattern when we explain features and benefits. It’s as if we operate on autopilot sometimes, right? Problem is, you limit your ability to adapt to situations or customer behaviors when you do. My challenge to you is to commit to trying different approaches. So, next week, I want you to try two to three new word-tracks to explain a process, feature or benefit to a customer. To prepare, start looking for new stories and analogies on which you can base your wordtrack. Then conduct some “A/B testing,” a cool term used by marketers to describe a method of testing different approaches on a targeted audience to see which garners a better response. Hey, the key to getting a few more deals every month could be a simple change in approach, so give it a try.

Be Likeable: Being likeable is like “relationship glue,” but you have to stay likeable from the

first interaction to the last. Being likeable means you have to be nice, respectful, enthusiastic, confident and, most importantly, authentic. The age of salespeople just being actors is either dead or dying, so be yourself because everyone else is taken. You also have to be there for your customer. Just make sure you’re doing it with a smile.

Deliver More Value: You can never deliver too much value. Many sales professionals believe that sharing information is a bad thing. Their belief is based on the idea that the more information you provide a customer, the more they’ll shop you and buy elsewhere. If you share this fear, then you are probably locked into a pattern that is preventing you from being likeable, which probably means you’re not creating enough value to make a prospect feel obligated to do business with you. Remember, the key to sales is to provide more value than what the prospect is expecting.

“The age of salespeople just being actors is either dead or dying, so be yourself because everyone else is taken.”

Understand Competitive Perceptions: In my opinion, one of the great opportunities you have to build value and close business is when a prospect brings up competitive vehicles. We could probably agree it’s silly to think a prospect isn’t looking at vehicles other than yours.

So, what sources are your customers using to get their information? You have to believe the salesperson at the store you’re competing against is one source. The internet is another obvious source of information. But let’s focus on the information coming out of the showroom, because that’s where excitement is created or killed. I remember selling the Geo Prizm (yes, I am dating myself a bit), which was basically the Toyota Corolla for about $1,300 less. I also remember watching as salespeople tried to sell the car without finding out if the customer had looked at a Corolla. If they had, they could have

used that knowledge to sell them on a vehicle that touted Toyota-like reliability but for $1,000 less. I wasn’t the greatest salesperson back when I was a green pea, but I was smart enough to sell a bunch of Prizms by understanding the competitive landscape and selling for and against consumer perceptions.

Follow Up: The mind-boggling thing about follow-up is we all know the benefits, yet many sales pros fail in the consistent execution of this

critical sales-generating practice. Hey, there is something to be said about being the last man (or woman) standing. Without even working on the quality of your follow up, you can win additional business every month by simply not giving up on a customer. See, long-term follow-up creates obligation, and obligation can sell you a bunch of additional units. The key is to focus on staying relevant. Just make sure you have something to say other than asking the customer if he or she has made a decision yet. Everybody talks about game changers in our business, but you don’t need a game changer. What you really need is incremental business that is predictable and sustainable. So challenge yourself to make it happen.

CORY MOSLEY

Automotive Strategist Cory is an in-demand sales strategist, speaker, and coach whose consulting company Mosley Automotive helps dealers and manufacturers become more progressive and profitable. Cory is the host of Progressive Retail w/ Cory Mosley on the CBT Automotive News Network and the author of The Way I See It, thoughts, commentary, and musings of a retail car guy. Visit corymosley.com for additional information and free content from Cory.

ask THE

pros

art of our plan to increase repeat business is to inform our customers about preventative maintenance. Most of the time they are receptive but sometimes they think we’re just trying to get more money out of them. Can you give me an example of preventative maintenance that we should offer our customers that may be the difference between a fix and a costly fix?

-Dan, Seattle, WA

A: Brian Medford, TAsk My Car Guys™: Of course. Let’s look at a broken timing belt especially if it is on a non-interference engine. In simplest terms the interference part has to do with whether or not the piston will strike a open valve as it reaches the top of the cylinder. A non-interference engine means that even if a valve is wide open as the piston goes by, it won’t touch it. Now for the bad part. An interference engine means that if a valve is open as the piston goes by, it will at minimum bend the valve, but at worst it will snap the valve head off and proceed to bang everything in the cylinder to pieces. Kind of like making egg salad with a jackhammer. The key is preventative maintenance. Each manufacturer has a specific replacement interval for the timing belt (usually in miles). This is one of those dreaded instances where it could be an expensive repair that didn’t have to happen. Damage can range from a few bent valves (requires a new or rebuilt cylinder head) to complete destruction of the engine (pistons, cylinders, cylinder heads and more). Repairs costs can range between several hundred to several thousand dollars. Even just replacing a single cylinder head can incur a few hundred dollars in shop labor costs plus the cost of parts. Always check the customer’s owners manual for specifics but if you are unsure of the number of miles on the current timing belt, it may be worth suggesting that it be replaced regardless. This is especially important with an interference engine, as a few hundred dollars in preventative maintenance may save your client thousands later on, plus it buys you peace

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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.

of mind knowing there isn’t a ticking time bomb under the hood. Our suggestion is to at the proper times point this out to your customer and get them to understand the economic value of preventative maintenance.

y parts inventory control is a bit disorganized. How can I get it organized and fully functioning? -Sal, Torrington, CT

A: Michael Roppo, Withum: Operational inventory audits can be viewed as a parts physical. It is an inventory of identified and repetitively monitored systems within the company, every process or task that drives, impacts and or influences specific areas of your operations and your overall business. Current specific examples of these operational inventories are listed below, which impact your parts inventory on a daily, weekly and monthly basis! The following are parts management requirements functions and a reporting process, that will affect your parts inventory and reconciliation results, and other areas as well. They are as follows: Monthly Reconciliation Process What are the Operational Inventories for the Parts Inventory Reconciliation process?

PARTS DEPARTMENT: • Timely receipting of all parts. • Timely posting of all packing slips. • Matching all packing slips to the appropriate invoice. • Parts manager is required to write the appropriate inventory account # that the invoice value will be posted to. • Providing all supporting documentation and backup information • All discrepancies are highlighted and communicated in a timely manner. • Adjustments to the physical inventory if any are made within the Reynolds inventory system. • Timely forwarding all documents on a daily basis to the accounting department. • Stamps and signatures are suggested • All exceptions are communicated- example: (freight charges, price differences). • Parts Management Performance report must accompany all documentation at end of month. • End of month reconciliation or recap form must accompany end of month process

ACCOUNTING DEPARTMENT: • Daily and timely posting of all credits and debits to the inventory general ledger. • Communicating all areas that may be of concern. • All posting of invoices, slips both credits/debits to the inventory must be entered before any reconciliation takes place. • The inventory management performance report receipts should match the entries made for the month. • The inventory management performance report must be scrutinized and matched to monthly reconciliation or recap form. • Any discrepancies should be reviewed and communicated with each respective parts manager or director.

y dealership will be getting the exciting 2017 vehicles in soon. What are some tips to get the message out and create excitement on Twitter? -Kyle, Cheyenne, WY

A: Toby Bloomberg, President of Bloomberg Marketing, @tobydiva:

It’s a visual world… even on Twitter so photos, photos and more photos are the name of this game! Why? Research shows images are more likely to increase engagement (Likes, RT/ retweets and Shares) than a text tweet. Engagement is your main reason for tweeting if your goal is to expand your reach and awareness through your followers’ networks. Photos should do more than just showcase the vehicle. In the cluttered Twitter world graphic images must be eye catching. In the food world beautiful photos are called “food porn.” I suppose we can call photos that evoke emotion and encourage people to visit your dealership “auto porn.” Much as we love cars, people naturally gravitate to photos of people. It makes sense to include people in your shots that represent the demographics of the customers for the vehicle. The Tweeter Secret is then to build a story around the photo that this group of customers can appreciate. For instance, if you’re posting an SUV family car your photo might include a mom or dad putting a baby in a car seat or kids in the car. Your story might be about a trip to see Grandma. To help bring your tweet to a larger audience, including possible influencers like the manufacturer who will love your tweet so much they’ll share it with their larger Twitter following, include the manufacturer’s # hashtag and the # hashtag for the vehicle. If you follow the marketing and social media people along with the brand include their Twitter handles too.

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

AD Jeff Cowan

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FIXED-OPS

DOES YOUR FIXED-OPS

GIVE A ROI ? ? Comfort Zones Versus Accountaibility BY DON REED

s a dealer, did last year bring you the return on investment that you expected? As a general manager did you meet or exceed your net profit projections for the year? If you are a fixed operations director did you increase your customer pay retail sales for parts and labor over last year? For all three of you, is your Service Absorption rising year over year? If any of your answers were “NO” then you must ask yourself why?

To begin with, your financial statements will show you where the opportunities for improvement (conditions) are but what they won’t show you is how to fix them. To fix them you have to know what’s causing the out-of-line condition. Once the cause is determined you can then make the corrections necessary to properly bring the condition in line with industry guides. For those of you who have ever written a repair order you probably recognized this as the “Three C’s”— Condition-Cause-Correction. The Technician needs the Condition to properly diagnose the Cause, which then enables him to make the necessary Correction. It’s no different for the dealer, the general manager or the fixed operations director when it comes to making money. So, now that you

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have studied your financials carefully to determine the conditions that prevented you from attaining your respective financial goals, let’s determine what the cause might have been. I believe the culprits here are Comfort Zones and Accountability. Everyone in your dealership has a comfort zone just as you do. The issue is not to get rid of them but to simply move them again and again until you achieve the results you’re looking for and then move them again! This is important because it enables you to focus on the performance of your employees. Next, you must hold them accountable for their individual performance. Currently, most of you are doing that in the New Car, Used Car and F&I departments, which of course is where you devote much of your time and energy anyway, but you fail to do so in the Service and Parts departments. Allow me to give you some examples to clarify what I’m talking about:

1 2 3 4

If I am a Salesperson and I sold an average of 5 units per month last year, what are you going to do with me? Answer: Train me how to sell 10 units or more per month or replace me with someone who can. If I am a Service Advisor and I sold an average of 1.2 hours per customer pay repair order last year, what are you going to do with me? Answer: I have a job for life! If I am a Sales Manager and my Sales Team averages 5 units per month and my gross per retail unit is at $700, what are you going to do with me? Answer: Train me how to average 10 units per Salesperson and gross $1500 PRU or replace me with someone who can. If I am a Service Manager and my Service Team averages 1.2 HPRO and my Technicians’ productivity is at 80%, what are you going to do with me? Answer: Leave me alone because the other dealers in your 20

“For those of you who have ever written a repair order you probably recognized this as the “Three C’s”— Condition-Cause-Correction.”

Group are about the same!

5 6

If I am your General Sales Manager and my Sales Team averages 5 units per salesperson, $700 gross PRU, $200 F&I gross PRU and loose $600 per wholesale unit, what are you going to do with me? Answer: I wouldn’t have lasted 6 months let alone a year! If I am a Fixed Operations Director and my Parts and Service Team averages 34% in retail parts gross, 62% in labor gross, averages 1.2 HPRO, shop productivity of 80% with a declining repair order count, what are you going to do with me? Answer: Thank you for being back there because I sure as heck don’t want to fool with that stuff!

Are you starting to see my point? Most dealers and general managers will hold their sales team accountable for their performance on a daily, weekly and monthly basis and make any adjustments (moving their comfort zones) on an as needed basis NOW! Meanwhile their parts and service team remain in their comfort zones to continue to dwell in the land of “underachievers.” Why does this happen? My belief is that most dealers and GM’s are outside their comfort zone in the “back end” of their dealership since their roots are in the “front end.” What can a dealer do to enable him or her to leave their comfort zone and cross over the demarcation line to the back end of their business? To begin with you must measure the performance of the people you intend to manage. Second, your people must know that you are measuring their performance. Third, their performance will be compared to industry benchmarks. Last of all, they must understand that they will be held accountable for achieving or exceeding those benchmarks.

Simply say what you mean but more importantly mean what you say. Again, most dealers don’t hesitate to do this in their Sales and F&I departments so why not follow this same process in Fixed Operations? Now I want you to rid yourself of the usual whiny excuses that I hear from dealers when I’m speaking to 20 Groups, dealer associations, dealer groups or individual dealers. It doesn’t matter whether it’s north, south, east, west or rural versus metropolitan. I hear this all across the U.S., Canada and the United Kingdom: “Don, you don’t understand, my market is depressed.”

“Don’t you think it’s time to get out of your comfort zone and make the return on your investment that you deserve?”

“Don, you don’t understand, my Service Manager has been with me for a long time.” “Don, you don’t understand, I can’t find an Advisor that’s any better.” “Don, I don’t want to run off my customers by up selling.” Well folks, here is what I do understand. A depressed market has nothing to do with accountability for performance. Time on the job does not dictate a good performance on the job. If you can’t find better people, look harder because they are out there. If you or any of your people are afraid of “running off customers from up selling” then you need to get out of the retail business of selling parts and service. (By the way, the aftermarket already has about 80% of your customers’ maintenance business).

Don’t you think it’s time to get out of your comfort zone and make the return on your investment that you deserve? Please, drag your Fixed Operations Team out of their comfort zones and start holding them accountable! Once they stop kicking and screaming they will all make more money, they will be happier and your customers will realize you have the best dealership in town. “The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.” -Peter F. Drucker

DON REED

CEO of DealerPro Training After 26 years in the automobile business as a dealer, GM, sales manager, service manager, service advisor and salesperson, Don began a new career as a consultant and trainer. As CEO of DealerPro Training and founder of The Don Reed PRO Training Network, he has worked with hundreds of dealerships and major dealer groups across the U.S., Canada and the U.K. to increase profits in their fixed operations. He was rated a Top 10 Speaker at the NADA convention for four consecutive years. Visit the firm’s website at DealerProTraining.com.

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TRENDS

Women Car Buyers

AND THE TOP 10 AUTOMOTIVE BRANDS Vital Insights into Key Data Points for Largest Market Segment BY ANNE FLEMING

n its first analysis of the top 10 car brands of 2015, Women-Drivers.com provides insights into women car buyers’ preferences and experiences. The report includes the top selling brands by units sold including Ford, Chevrolet, Toyota, Honda, Nissan, Jeep, Hyundai, Kia, Subaru, and GMC (in descending order). This information, now available in the report: “Women Car Buyers – Analysis of Top 10 Brands,” includes the top sales brands (from GoodCarBadCar.net) with data about what women have experienced while shopping, buying and servicing their vehicles at new car dealerships. This data is specifically generated from participating dealers who are certified through Women-Drivers. com. It helps forward-thinking dealerships understand the nuances by brand for women buyers who are the largest buying segment and influence the most purchases. Unlike other reputation sites, the source of the information comes from reviews and opt-in surveys.

ONE SIZE DOES NOT FIT ALL Perhaps conventional wisdom says that most buyers are basically alike, that a “one-size fits all” approach is simple and works fine. The report indicates otherwise. While some results from the survey across brands appears similar, there are enough differences to warrant a closer look.

TIME SPENT PURCHASING VARIES BY BRAND The average time women spent purchasing a vehicle at a dealership ranged from 2 hours and 48 minutes for Honda, to 3 hours and 51 minutes for

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Kia. Knowing how much time women spend, on average, buying a vehicle can help dealers look at ways to shorten the cycle and make it a more pleasant experience with less down-time.

PROXIMITY Another interesting statistic is that Hyundai and Kia buyers purchased at the dealership closest to home (64.4% and 61.4%, respectively) while only 34.8% of Honda buyers purchased closest to home. Combining this information with how many dealerships a woman may visit prior to her purchase can provide insights into how car dealer reviews attract female buyers and the effectiveness of advertising campaigns.

SERVICING When it comes to women customers servicing at the original purchasing dealership, GMC leads the way with 77.1%, compared to only 46.9% for Toyota. Why would this be important? When selling Toyotas, it becomes critical to up-sell the service department during the purchase process to increase the revenue over the life of the car. Retention matters. So does an overnight courtesy vehicle; it’s the number 1 requested item by women in the service lane.

TO BUY OR NOT TO BUY

and emotions experienced by women buyers of the top 10 brands. For example, the top reasons women did not buy at the first dealership range from still looking, to a poor price, to not being satisfied with the way she was treated. Once a woman leaves a dealership, there is a six out of 10 chance she won’t return. Knowing to look out for the “did not buy” reasons can make all the difference between a successful and lost sale. Having highly engaging sales advisers that listen and ask questions is paramount.

BUYING ALONE And what happens when a sales advisor assumes that a woman shopping alone is not ready to buy? Over 52.5% of Ford buyers in this report purchased their vehicle alone. Making the assumption those buyers were coming back with someone else, or even mentioning something to that effect, might send them off to another dealer down the street. Nationally, 45% of women report buying a car alone. In today’s information-rich world, it is sometimes difficult to sort out what really matters. Reports like the “Women Car Buyers and the Top 10 Brands” distill key data points by brand into easily understood analysis that can help you drive more dollars to your dealership’s bottom line. The company produces similar reports to provide value-add intel for OEMs and dealerships who want make decisions based on data-driven evidence for this powerful purchasing demographic.

A very helpful section of the report includes reasons

ANNE FLEMING

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

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FIXED-OPS

DRIVE

CUSTOMER RETENTION Build Planned Retention Program and Drive Service Volumes BY RYAN WILLIAMS SETTING UP AND MANAGING THE PROGRAM

f you’re serious about growing customer retention and service sales, perhaps it’s time to put into play a strategy that many dealers point to as a winner – a prepaid maintenance plan, commonly referred to as a PPM.

As its name suggests, this retention tool leverages prepaid or discounted essential maintenance services that a dealer gives to buyers or sells at an appealing price, to connect them to long-term use of your service department. Unlike similar OEMbranded plans, this kind of retention offer should be redeemable by customers only at your dealership. The right plan, promoted, managed, and administered the right way, can drive customer retention (from customers using the programs) and generate increased customer-pay upsell dollars per repair order flowing from plan use.

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If you’re looking to build and manage such a program yourself, you’ll want to set up a number of key process basics as foundational: • Assemble an appealing combination of three to four products - a mix of LOF, tire rotation, alignment, or wiper services. Discount their package prices by as much as 45 percent – or give plans away as an incentive to start buyers servicing at your dealership. Remember, the value is in its ability to create downstream service revenue. Some dealers are enjoying as much as a 60 percent lift in fixed ops parts and service sales by using these plans. • Market this value-add to customers via mailings and point-of-sale materials, and have every employee trained on how to present the plan, how it works, and its value with confidence to every customer.

• Remind plan holders on a regular basis — at least quarterly — of plan value to encourage them to stop into your service department. • Establish a fund reserve -- a managed pool of the monies you collect from plan sales (or which you have set aside for give-away programs) -- that will fund plan products and services as they are redeemed or used by your customers at your dealership. Only the states of California and Colorado regulate these plans, as they consider them an insurance product, and the funds must be administered by a third-party. Dealers in other states may manage reserve funds as they see fit – or charge plan activities to a unique internal ops code. • If you have a BDC or outsourced service calling to set service appointments and make reminder and follow-up calls, update these resources regularly as new plan holders are added. You’ll increase plan usage – and extend upsell opportunities – by periodically reminding customers holding these plans to

“Professional PPMs can lift first-year retention by as much as 85 percent and second- and third-year repeat business by 65 percent.” use them. Likewise, have educational materials developed about your plan that you can provide to new customers, to help them see the value and benefits in your program. • Provide usage reports to your customers. The report should show their plan usage and the dollar savings they’ll realize by not paying retail for those services. The plan also reminds them to use plan benefits more frequently. • Create management reports. These should show: new business driven by the redemption of services in the program; who are the dealership’s more active users (perhaps you’ll see an opportunity to send reminder marketing materials to less active plan holders); and what the ROI is on your plan investment.

kills trust when customers are asked multiple times why they’re in for service. 4. Sell tires. Retain customers by being the first provider to suggest new tires might be in order, and demonstrate why buying tires from the dealership today has great value for them. 5. Buy trades in the service lane. Signage in the lane and in the wait lounge, informing customers that you want to buy their trade, does work. Put sales associates on the lane to ask customers if they might present them with a trade-in offer. In turn, compensate service and advisors for the work found on that

customer’s vehicle; consider this investment early completion of your recon processes’ mechanical/parts phases.

PROFITS SPEAK VOLUMES If all this sounds challenging, it is! Fortunately, software is available to automate, simplify, and manage PPM retention programs, provide accountability for the investment, and help management identify opportunities for improving the process. Professional PPMs can lift first-year retention by as much as 85 percent and second- and third-year repeat business by 65 percent. On average, dealers using software-driven plans that automate, structure and bake in accountability generate up to $70 customer-pay upsell per repair order

RYAN WILLIAMS

President of Fidelis PPM ACCOUNTABILITY IS KEY TO SUCCESS This reporting may prove one of the most challenging tasks when building your planned retention program. A paper-based plan is feasible — some of you may remember that before computers we all tracked business key indicators this way — but look to your IT expert to develop these reports to simplify the chore.

Ryan Williams is president of Fidelis PPM, and is a 20-plus year veteran of the auto industry, having served in multiple dealerships as sales manager, F&I manager, and GM. You can reach him at ryan@getfidelis.com.

This accountability/reporting feature should track the number of plan holders in use, as well as their activity rates and frequencies. Did customer-pay upsell revenue result from a plan redemption and how much was that RO increase? From what department did the plan presented to the customer originate? Who are the personnel responsible for putting plans into customers’ hands?

BEST PRACTICES Finally, you need to have, at minimum, the following best practices in place. If you already manage a plan, perhaps you’ve allowed these practices to lapse, so this should prove a helpful review: 1. Be consistent – put a process in place, so every buyer is given a quick tour of the service facility – the shop and not just the lounge – and set the customer’s first service appointment! 2. Get post-sale marketing in gear right away. Send out service invitations, and include coupons or other incentives, to get plan holders thinking about their first service even if it’s several thousand miles or months in the future. Send regular reminder mailers, to stay front and center with your plan holders. 3. Train and incentivize service advisors so they upsell confidently and comfortably. Teach them how to develop a rapport with customers – and to go out of their way to warmly greet the customer. If the customer left earlier service details with an appointment setter, make sure advisors are notified– it

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PARTNERSHIPS

ANNUAL PARTNERSHIPS Relationships Bring Value Added Benefits BY RUSS CHANDLER

worked (and often still do to some capacity), the demand for month-to-month services skyrocketed. With demand at an all-time high, vendors responded by creating products and services that would still be profitable in a month-to-month format.

ost, if not all dealerships have different providers that they work with to ensure things run smoothly. There are tons of useful providers out there for dealerships to leverage — providers for marketing, finance, inventory management, lead generation, website management, and the list goes on. In most cases, dealerships end up paying for these services on a month-to-month basis. Dealerships will sign up for a specific service, pay a monthly fee, and gain access to a plethora of different tools. Given how comprehensive and beneficial a lot of these services are, they’re obviously worth purchasing. Monthly subscription services give dealers the ability to plan out their own strategies, as well as observe how their campaigns are performing. They are, in fact, very useful. Many dealerships aren’t aware that they can do so much more. Because month-to-month contracts

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Of course, the problem with this is that now the market is literally filled to the brim with a bunch of “okay” products (that do exactly what they need to do) with few products and services that go above and beyond. This is where partnerships come into play. Unlike your simple, run-of-the-mill vendor, partnerships allow you (the dealer) to work closely with the folks who are developing and configuring the tools and services you use — often for an extended period of time. Instead of reaching out to a customer service rep when you have issues, you’re often provided with your own account rep — someone who can personally help you make the most of their products and service in order to ensure success.

Now, let’s be clear: Although annual partnerships are a fantastic way to surpass your dealership’s lofty goals, they won’t make sense for everyone. However, the folks who really could benefit from annual partnerships should take advantage of them. Here are some of the reasons where it would make sense for your dealership to adopt a partnership:

YOUR DEALERSHIP WANTS A CLOSE WORKING RELATIONSHIP One of the first benefits you’ll discover when entering an annual partnership is that you’ll forge close, working relationships with your account representative. Instead of being provided with software to install and use on your own, you get your very own account rep to assist you. And since you’re gonna be in it for the “long haul,” your account reps will be there to help you develop long-term strategies and maximize performance. With monthly agreements, dealerships will typically call or chat with a faceless, often nameless customer service representative and receive a list of possible solutions for their issues.

“One of the first benefits you’ll discover when entering an annual partnership is that you’ll forge close, working relationships with your account representative.”

With partnerships, however, assigned account reps can help you resolve issues one-on-one (without the phoned-in response) and sit down with you to determine how you’ll be able to determine (and achieve) your dealership’s goals. In addition to going to your account reps for assistance, many of them will take the time to reach out to you to see if things are running smoothly. They’ll often ask about how your campaigns are running, how your inventory looks, if your website is running well — and heck, they might even call to see how business at the dealership is going. I’m not saying you’re gonna become best buddies with your account rep, but knowing each other on a firstname basis certainly helps. The more you communicate with your account rep, the better your account rep will understand what works and what doesn’t work. They’ll also gain a thorough understanding of your preferences, budget, inventory and services. Essentially, the better your account rep understands your dealership’s operations, the more likely you are to succeed.

YOUR DEALERSHIP SEEKS MORE ADVANCED FEATURES Along with saving money, and having the opportunity to work closely with account reps, you’ll also have access to advanced features, tools and services that wouldn’t normally be available to someone in a month-to-month agreement. Again, because you’re in it for the long haul, having access to these advanced tools makes lots of sense. In addition to having access to advanced tools and services, partnerships often also provide early or exclusive access to newly developed features. QA testing plays a huge role in how successful certain platforms are. Being able to directly assist with the further development of these tools is nothing short of amazing. Not only are you helping the developers make the tool more efficient (and worth the cost of an annual agreement), but you’re using technology that most other folks haven’t even heard of yet. This gives your dealership a great competitive edge.

RUSS CHANDLER

Product Marketing Manager at PERQ LLC Russ has more than 11 years of experience in auto sales, dealership digital marketing and technology product sales. In his current job, he leads the sales and marketing of automotive apps powered by FATWIN for PERQ, a consumer engagement technology provider.

The next time you realize you don’t have that feature, enhancement or help that you wish you did, it might be because the month-to-month provider your working with couldn’t include under that type of relationship.

DEVELOP LONG TERM STRATEGIES & GOALS Depending on the complexity of your dealership's goals and its current problem areas, the account rep you’re assigned with an annual partnership will likely want to explore your current strategies and tactics in more depth. This is in order to develop more long-term, advanced strategies that can help your dealership continuously achieve both small and lofty goals. Here’s how it typically works: account reps will want you to pull specific data using their tools and services. When the necessary data is pulled, the account rep will go over it with you and assist with developing a logical plan of action. Again, since your dealership would be in it for the long haul, your account rep would have the opportunity to check out your progress, and make changes to your strategy along the way. In a nutshell, you don’t have to go about strategizing your next steps alone -which brings me to the final reason why someone would want to make the switch…

LOOKING TO OVERCOME CHALLENGES TOGETHER It’s extremely common for dealerships to see their seemingly “kick-ass” marketing and lead generation strategies fall flat. The most successful dealerships across the nation, with the most solid strategies, all

“If your dealership is serious about taking the time to come up with long-term strategies that lead to a successful ROI, then annual partnerships are going to be your best bet.” likely experienced a tremendous amount of failure before finally reach an epiphany of sorts. Most, if not all, successful strategies are built on years of constant testing and experimentation. If your dealership is serious about taking the time to come up with long-term strategies that lead to a successful ROI, then annual partnerships are going to be your best bet. Although there’s nothing wrong with hopping from tool-to-tool if services don’t work out as planned, your dealership might miss out on possible growth opportunities that they didn’t even know existed because they never continued to give these tools, strategies and relationships a chance. Now, you might find that annual partnerships might take a bit of time to “get going” but working alongside a subject-matter expert to try and find the root of your dealership’s conversion issues will almost always lead you to more fruitful growth, and more advanced strategies going forward. One of the other reasons why it would be good idea to stick with a strategy is that switching products and services constantly might reflect poorly on you -- the marketing/internet manager. The perspective of your GM might be that you don’t know what you’re doing because a) there’s been a lack of successful results and b) why would you switch products al the time anyway? Instead of spending most of your time looking for new products, you can spend more time improving the one you have – and that will reflect better on you. With little to no differentiation between so many tools, dealerships are competing on the same level; and that makes standing out extremely difficult. Partnerships allow dealerships to gain access to specialized tools and assistance that can help them rise above the competition. Although there are definitely perks to sticking with a month-to-month agreement, annual partnerships aren’t going away anytime soon. The faster you forge these relationships and collaborate on coregoals, the better off you’ll be.

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ASSOCIATIONnews PETER L. FONG NAMED SVP DEALERSHIP OPERATIONS AT NADA Peter L. Fong has joined the National Automobile Dealers Association (NADA) as senior vice president of Dealership Operations. Fong brings more than 20 years of industry experience to NADA, having held numerous executive-level sales, marketing and brand management positions at Ford Motor Company and Chrysler Group LLC. Fong also guided Carmoza, an auto transport start-up company, through its merger and acquisition.

NADA ASSISTS IN FEDERAL ADVERTISING COMPLIANCE The National Automobile Dealers Association issued a new publication that will assist new-car dealers in complying with federal advertising requirements on the sale, financing and leasing of automotive products and services.

Immediately prior to joining NADA, Fong was executive vice president and chief marketing officer at The Judge Group, a leading global firm specializing in technology consulting, staffing solutions and corporate training.

A Dealer Guide to Federal Advertising Requirements provides examples of "bad" ads and "good" ads and chapters on 41 different federal advertising topics, such as the use of discount claims, e-mail advertising, green marketing claims, Internet advertising, satisfaction guarantees and trigger terms. Readers can access the content quickly by clicking the hyperlinked topics in the table of contents page in the PDF document.

“My primary goal will be driving value-added changes in all areas of Dealership Operations, so that the next generation of products and services provided by NADA to dealers and their employees is second-to-none,” Fong said.

"The guide is user friendly and is a valuable resource for the entire auto industry," said NADA Chairman Forrest McConnell. "We are encouraging dealers to provide the publication to their advertising agencies, manufacturers, finance companies and others involved in advertising operations."

NADA's Dealership Operations department provides educational solutions and consultative services to member dealers in order to improve business operations. Dealership Operations includes Membership, Member Resources, NADA and American Truck Dealer (ATD) Academy, NADA/ ATD 20 Group and NADA/ATD University Online.

The release of the guide coincides with recent intense scrutiny by the Federal Trade Commission of dealer compliance with federal advertising standards. Since 2012, the FTC has initiated five separate rounds of advertising enforcement actions against 18 dealers in 12 states for multiple types of advertising violations, including actions against three dealers that the FTC announced last December.

Fong said one key area of interest in his new role at NADA will be implementing new best-in-class educational and training programs for dealerships to accelerate the 'online to in-store' car buying experience for consumers. Fong replaces John Lyboldt, who left NADA last year to become president

NADA STARTS DEALERSHIP MANAGEMENT TRAINING

The National Automobile Dealers Association is accepting applications for NADA Academy Plus, a new, cost-effective program that trains a dealership management team to improve business performance. “NADA Academy Plus is a rapid, fast-track program designed to align industry best practices with a dealership's vision, goals and objectives,” said Jim Schoonover, senior director of education and consulting for NADA Dealership Operations. “It's unique in that it encompasses all of NADA's educational and consulting offerings in one program.” The Academy includes six instructor-led weeks of education over a 12-month period. Each week focuses on a specific department discipline, including financial management, parts, service, pre-owned vehicle sales, new-vehicle sales and business leadership. Academy Plus provides the opportunity for key department leaders to attend specific class weeks together. “By sending a department manager or director to attend with a full-time student, the dealership is going to accelerate its results,” said Peter Fong, senior vice president of NADA Dealership Operations. “Implementing new processes to improve profitability becomes easier when your key leaders are on the same page.” This is the first program of its kind. Enrollment includes the industry-leading Academy curriculum plus extensive integration of the NADA 20 Group composite, an in-dealership consultation facilitated by the NADA 20 Group and a NADA University Online Premium Subscription for all employees at the dealership. Applications are being accepted now. The first class begins in October 2016. To enroll or for more information, call 800.557.6232 or visit nada.org/ academyplus. 36

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“There is healthy competition between new-car dealerships to sell and service vehicles, and this has meant consistently good deals for consumers,” Szakaly said. “As NADA Data has shown, despite rising sales, profitability has been flat at 2.2 percent for five years.”

MAY SALES FIGURES ON TRACK The American International Automobile Dealers Association (AIADA) released May’s sales figures for the international nameplate automobile industry. Brands sold by America’s 9,500 international nameplate franchises accounted for 55.8 percent of all new vehicles sold in the United States in May, up from 54.3 percent in April. AutoData Corp. reports that the seasonally adjusted annual rate (SAAR) in May was 17.45 million units compared to 17.42 million units in April and 17.70 million units one year ago. Total industry deliveries increased two percent over April 2016’s delivery figures. Industrywide, 1,536,276 light vehicles were sold in May, which had two less selling days than May 2015. Unadjusted for business days, sales for all brands for the year were down six percent from last May but up 1.2 percent year-to-date. “While sales slowed last month, dealers of international brands remain on track for a record setting year,” said AIADA President Cody Lusk. “May 2015 was a tremendous month for auto sales, so it’s not surprising to see a small dip in May 2016, particularly with two less sales days on the calendar.” International auto sales in the U.S. totaled 856,857 in May, up from 818,255 in April and down from 891,687 units a year ago. Asian brands occupied 47 percent of May’s auto market, up from 45.7 percent in April and beating the domestic nameplate’s 44.2 percent market share. Overall, Asian nameplate dealers sold 721,311 vehicles last month, led in part by Hyundai, up 11.6 percent to a record 71,006 vehicle sales for the month. European brands sold 135,546 vehicles for an 8.8 percent share of last month’s U.S. auto market. Their market share was up from 8.6 percent in April, but sales remain down 4.1 percent year over year. European brands were not helped by Volkswagen, who saw sales fall 17.2 percent from a year ago for their worst may since 2010.

ASSOCIATIONnews PROGRAMS FOR STUDENTS AND PROFESSIONALS TO ADVANCE IN THE AUTOMOTIVE SUPPLY CHAIN The Automotive Industry Action Group (AIAG) and Wayne State University's Mike Ilitch School of Business are collaborating on an innovative new initiative to develop talent in global automotive purchasing and supply chain management. Called the Global Automotive Purchasing Supply Chain Network (GAPSCN or "Gap-Scan"), the program helps provide community college, undergraduate, graduate, and adult continuing education curricula with real-world lecture material, automotive case studies, best practices, knowledge assessments, and standards.MMSDC will focus on advocacy, personnel development, and access to capital, while AIAG's emphasis will be quality management systems, supply chain management, corporate responsibility, and environmental compliance. "It is imperative that we accelerate the development of our next generation of global purchasing and supply chain professionals by providing them with a skillset and lexicon honed to manage the industry's increasingly complex business challenges," says J. Scot Sharland, executive director of AIAG, an organization providing industry-developed standards, allied tools, emerging best practices, and training in quality, supply chain, and corporate responsibility. "We have witnessed a strategic transformation of the automotive supply chain over the past 25 years," says Dr. John C. Taylor, chair of the Department of Marketing and Supply Chain Management at WSU's Mike Ilitch School of Business. "The rate of innovation in vehicle design, advanced manufacturing, and engineered materials has been truly remarkable and necessitated the creation of an unprecedented collaboration between industry and academia. We are fast-tracking future purchasing and supply chain leaders into industry assignments, saving time and expense often required to retrain entry-level professionals, and positively impacting employee retention rates.” AIAG will provide the program with guidelines, training, and educational opportunities in areas such as global materials management, customs and supply chain security, export compliance, packaging, quality management, finished vehicle logistics, corporate responsibility, and environmental compliance. WSU will give participants access to undergraduate and graduate courses and programs, executive education, thought leadership, basic and applied research, and internships as well as international studies programs currently offered in China, Italy, Brazil, and Poland. Degree programs are available, including undergraduate majors and MBA concentrations in purchasing and supply chain management.

NADA RAISED RECORD $128,000 TO TRAIN SERVICE DOGS Giving back was the theme during an ADESA auction at the NADA Convention & Expo in Las Vegas, where a record $128,000 was raised to train service dogs for wounded veterans. “ADESA is very proud to once again support the National Automobile Dealers Charitable Foundation (NADCF) and Canine Companions for Independence. We look forward to future opportunities to partner with these fantastic causes.” This was the fifth year ADESA has auctioned a motorcycle at the NADA convention. Funds from the event benefit the NADCF Frank E. McCarthy Memorial Fund, which supports the Wounded Veterans Initiative of Canine Companions for Independence. McCarthy served as NADA president for more than 30 years.

YOU AUTO KNOW CAMPAIGN LAUNCHED The American International Automobile Dealers Association (AIADA) announced the launch of its “You Auto Know” campaign, aimed at highlighting the positive impact America’s 9,500 international nameplate dealers have in their local communities and in the U.S. economy. America’s 9,500 franchise dealers are a significant economic engine in the U.S. They provide employment for more than 570,000 Americans in cities and towns across the U.S., creating a payroll of $32 billion and more than half of all light vehicle dealership employment. “The import label assigned to international franchise dealers—and the brands they sell—is long outdated. The truth is that these dealers employ the majority of all U.S. dealership employees, and in the process provide significant revenue and support in their communities,” said AIADA President Cody Lusk. “The You Auto Know campaign will share their stories about their businesses—and the brands they sell—with legislators, the media, and the public.” In 2015, international franchise dealers sold more than 8.3 million vehicles to U.S. consumers, accounting for 59 percent of U.S. auto retail sales. Their brands—including BMW, Honda, Hyundai, Kia, Mercedes-Benz, Toyota, and Volkswagen—built 5.4 million vehicles at their American production facilities last year. While most of these were in turn sold to American consumers, international automakers also exported more than 750,000 U.S.-built vehicles to 140 countries. For more on the “You Auto Know” Campaign visit youautoknownow.com.

ORANGE COUNTY AUTO DEALERS ECONOMIC IMPACT UP 10 PERCENT The Orange County Automobile Dealers Association (OCADA), based in Newport Beach, Calif., reports that the local economic impact of the 123 franchised auto dealers in the county was $12 billion in 2015, an increase of 10% over 2014. In fact Orange County Auto Dealers sold more new vehicles than those in 25 states. The 2015 Economic Impact Report, released by OCADA, shows that Orange County’s automobile dealers sold 298,275 new and used vehicles, generating more than $730 million in sales tax of which over $91 million goes directly to local cities. Orange County’s franchised dealers employ 12,300 people with a total payroll of more than $676 million. “Orange County’s automotive dealers are a $12 billion economic engine and a 10 percent annual increase bodes well for the whole county,” said John Sackrison, executive director, Orange County Automobile Dealers Association. “Auto dealers continue to grow Orange County’s economy by employing over 12,000 individuals, generating almost $100 million in local sales tax revenue and millions in charitable donations annually.” The report also highlights Orange County dealerships’ collective annual local expenditures of more than $350 million that support other Orange County and California businesses. Additionally, Orange County dealerships contributed more than $7.2 million to local charities and non-profit organizations. The entire 2015 Economic Impact Report can be accessed at www.ocada.org.

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ON THE SET WITH

Max Zanan of Total Dealer Compliance

Denise Chudy of LotLinx with Joe Gumm of CBT News.

Jeremy Alicandri of PxC

Larry Gamache of Carfax

Russ Chandler of PERQ with Joe Gumm of CBT News.

Trace Przybylowicz of Auto Lead

Paul Potratz of Potratz.

Glenn Pasch of PCG Consulting

Sa Jarvie of Ken Garff Hyundai with Mark Tewart of On the Mark.

Aaron Wirtz of Dealerography

Jonathan Banks of NADA Used Car Guide

Brett David of Prestige Imports and Lamborghini Miami with Joe Gumm of CBT News.

Brad Barnett of Tagrail

Kristen Judd with 3 Birds Marketing

Shrey Bhatia of Reputation

Ken Kolodziej of String Automotive

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SHOP TALK WowING

WITH A PREMIUM EXPERIENCE

AND A SMALL BUDGET

DON’T FORGET THE CAR WASH

Customer Service Goes a Long Way BY RIAN LOCADIA

am often asked how a small, family-owned operation with limited budgets can compete with the larger, flashier, corporate stores. It’s something that I think about a lot. Coming from a few smaller family operations myself, I must say that, as an employee, those dealers tend to be a much more laid back environment than the larger corporately owned stores. There seems to be a nice grassroots vibe in these kinds of establishments but on the flip side, a lot do tend to slack on the amenities for our clients. Coffee is weak, carpets and couches are older, televisions are smaller and there are no breakfast sandwiches! Now I’m sure this is not the case in all family-owned establishments, but I have seen plenty that fit this bill. But rest assured, you do not need to be a corporate juggernaut with a flashy showroom, Starbucks coffee service, state-of-theart massage chairs and a gymnasium to make it in this business. All that’s needed is some good old fashion above and beyond personal service. Having worked in both exotic and high-line dealers, I have firsthand experience with “premium” clients. I know what they expect. I know what they want and I know that they will keep coming back when you meet their expectations. They will scratch your back if you scratch theirs.

EVERY CLIENT IS A “PREMIUM CLIENT” So what is the problem with treating every client as

a “premium client”? If Premium treatment works so well for a client that is expecting it, can you imagine the outcome for a client that is not expecting that kind of treatment? The outcome is going to be a WOW experience! But again, you do not need to wow with a gourmet cup of coffee. It’s just little things like attention to detail and personal service. For example, instead of your Subaru client asking where the coffee machine is and you point to the back corner exposing your low budget coffee pot, let’s wow them and take their order! “Let me grab you a cup of coffee ma’am. How do you like your coffee?” Have them take a seat, get comfortable and you can bring them a cup of nice, hot coffee. It doesn’t even take that long. Your dealership does not need to have a world class espresso bar to make someone smile about their coffee. Other examples are simple things like walking someone to the rest room as opposed to pointing, little thank you cards in a client’s cup holder thanking them for their business and maybe adding a couple of pieces of candy with your business card and a personal signature. This, from experience, is a little tactic that goes a long way for making a client feel appreciated.

Then there is the car wash. This is a big one. You may not have a brand new $100,000 precision German engineered, drive through car wash, but a simple hand wash goes just as for in the client’s eyes. In fact, most people prefer a hand wash anyway. I find when you add tire shine to a freshly washed vehicle, there is no better look. This makes the client feel good driving away from your dealership and very likely to come back. Now, all of the above are very effective touches that you can do to keep them coming back to your doors but the most important and effective way to show appreciation care and class is the follow up call. This tactic is actually very versatile. Not only will a service advisor come off as genuinely caring that a client’s visit went well, but is also a good tool to set up a future service visit and also a time to remind the client about a potential service survey. This will plant the seed and ultimately make your business grow by having these clients come back. So as you can see, you as a smaller independent dealer can keep up with the big guns with a little piazza's and class. Most of these explained tactics take very little to no money to accomplish. All it takes is a attention to detail and the willingness to WOW!

RIAN LOCADIA

Service Consultant for Nalley BMW

Rian has been into automobiles and working in the the automotive servicing business since graduating high school since 2004. Starting with Harley- Davidson and he has worked with the most elite brands in the business. Rian currently works as a service consultant for Nalley BMW in Decatur, GA, where he looks forward to exceeding his clients expectations daily.

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POWER to the DEALER

It’s pretty simple. If a car isn’t being seen, it won’t sell. WE STUDIED THE VDP VIEW DISTRIBUTION OF 300 DEALERS IN Q1 2016.

25% of dealers’ cars got nearly 89% of the VDP View attention. 100%

% OF VD P V IE W S

80%

88.94%

Target the investment and profitability zone.

60%

These are the VINs that need more traffic driving to their VDPs.

40%

8.12%

20%

Top

Upper

2.48% Lower

0.46% Bottom

QUARTILE OF INVENTORY (VINs)

75% of these cars fight for 11% of the traffic, and may not sell on time. Dealers who focus their advertising on the “Investment and Profitability zone” increase the chance to improve turn rates significantly. We know it takes an average of 30 VDP views to sell a VIN on time. So naturally, you want to get those 30 views to every car on your lot. But that’s not what’s happening. And our proprietary research across more than 300 dealers proves it. Our Q1 2016 study showed that 25% of VINs are getting nearly 90% of the views. That means 75% of dealers’ inventory is fighting for the scraps. But how do you know which VINs are already attracting

attention, and which need help? Easy. The LotLinx Vin View Optimization™ report. And you can get yours for free.

CALL 1-800-625-5469 for your copy of the research report, and your free customized Vin View Optimization analysis. Or visit LOTLINX.COM.