Car Biz Today | April 2016 by CBTNews

CHECK OUT OUR DAILY NEWSCAST ON CBTNEWS.COM

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

April 2016

Volume 3, Issue 4

BUILDING A CUSTOM WEBSITE

GENERATES MORE LEADS

RUSS CHANDLER

CLICKS DON’T SELL CARS Questions to ask your PPC provider to get the ROI you are looking for.

... See Page 6

FIND A DIGITAL GOLD MINE HIDING IN YOUR SERVICE DRIVE

BUILDING GOOD PHONE HABITS

GLENN PASCH ... See Page 14

TEST DRIVES

Fixing the phone leaks and keeping the customer connected creates efficiency and output to your bottom line. ...see PAGE 21

...see PAGE 24

DRIVE EMOTION BACK INTO THE SALE

MARK TEWART ... See Page 18

NOW IS THE TIME

TO EVALUATE YOUR FIXED-OPS STRATEGIES

JEFF COWAN ... See Page 34

CBT Automotive Network 5 Concourse Parkway Suite 2410 Atlanta, GA 30328

PRE-QUALIFYING SHORTENS THE SALES CYCLE

Earn higher customer satisfaction while selling cars in less time ...see PAGE 12

ADAPTING TO TODAY’S HIRING PROCESS ...see PAGE 36

DID YOU MISS US AT NADA? INCREASE ROI, DECREASE AD EXPENSE DEMO HELIX TODAY: FORCEMKTG.COM/POSTNADA CHECK OUT OUR DAILY NEWSCAST ON CBTNEWS.COM

2 n

i w

! 6 01

Setting the Digital Standard in

F&I

• Innovative training for all experience levels • Integrates technology into the business office • Multiple trainers for one-on-one interaction • State-of-the-art training facility • Customized in-dealership training

View our complete class schedule at www.AFASinc.com

• Build rapport with everyone. • Find wants and needs for buying. • Don’t talk price – focus on value. • Stop prequalifying. Quit trying to be smarter than the customer, your manager or lender. • Give every customer on the lot your best ‘targeted’ demo and presentation.

RDE SAL VE ES E

Management Workshops

• Leave all problems at the curb now, and go to work to sell some cars.

• Don’t ask – assume each prospect will buy today and treat them all as buyers.

1985–2015

198 5 – 2015

Learn How To Train – Coach – Manage Salespeople

• Look, act, sound and think like a pro!

“Am I doing the most productive thing possible right now?”

EXCELLENCE

JOE VERDE TRAINING WORKSHOPS

Then do everything on this list!

• WORK a full shift. Don’t stand around waiting – just ‘work’. Read this often...

YEARS OF

Want To Sell More This Month?

AINING,I TR N

The #1 Training Company In The Car Business

AG MAN EMEN T

JOE VERDE

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

• Write up everyone you can - period.

Sales Workshops

• Focus all negotiations on ‘terms’, not price. Keep it focused on down and payments. Budget, not price, is the real decision 90% have to make to buy.

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

The Sale

• Follow up everyone: the ones who bought and those who didn’t - yet.

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

Do all this, and I guarantee you’ll have a great month in sales!

n How To Close, Overcome Objections

& Negotiate Tired of missing deals that should have become deliveries? Live & Online...Call today.

Double Your Net Profit And Income!

n Phone & Internet Leads Dealerships miss 8 out of 9 deliveries from these lead sources. We fix that, live in this workshop and online at JVTN®.

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

Would you like results like these? “We’re up 103 units from last year, and growth is going strong!”

“Units are up 29% and gross is up 71% from your classes and JVTN®”

“Our Buick / GMC dealership is up 29% and Subaru is up 22% from last year!”

– Dennis Andrews, General Manager Jim Pattison Lexus Toyota

– Brian Nesbitt, General Manager Fred Beans C-D-J

– Patrick Stone, Sales Manager Roper Buick GMC Inc.

“After your Sales Workshop, I went from 20 to averaging 67 per month!”

“In just two months, our gross is already up $27,000 per month.”

“Our units are up from 80 to 130 and gross profit up $200,000 per month.”

– Abner Elidor, Salesperson Toyota of North Miami

– Reko Fracassi, Sales Manager Napoli Indoor Auto Outlet

– Ben Gonzales, Sales Manager Pitre Buick GMC

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

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

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

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

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

Call Now • 888-712-6647 SC 12351

CAR BIZ TODAY M

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

Letter from the editor President And Publisher Jim Fitzpatrick

Dear readers, We hope that everyone has rested up after an exciting and informative NADA convention and that the afterglow of learning and networking is still shining brightly. As always we work diligently on providing the latest information so that you can go back to the dealer and implement best practices in HR, F&I, Service, Marketing and Sales. As you may or may not have gathered at the convention, there’s a lot of new ideas, solutions, technology and challenges for the industry and we intend to keep you well armed on the front lines as well. Improving sales through better phone habits seems so simple. But, as Mike Haeg says, it may be obvious but not enough dealers are implementing proper phone etiquette. Mike has some easy solutions so your customers get the best service the first time they call.

MARY WELCH

Chuck Sujanksy tackles the unpleasant but necessary subject of employee theft. Almost 100 percent of employers believe they are victims of employee theft and the violations are not just monetary. Employees can rob a dealership of its reputation, relationships, lost time as well as trust. Sujanksy says the best way to curtail this growing problem is to screen employees better, particularly in areas of drug and alcohol problems.

Managing Editor

Speaking of reputation, Jim Radogna discusses the virtues of compliance and ethics, and as he points out, they’re not the same. Every dealer and person must obey the law — that’s compliance. But, he says, ethics is personal. It’s up to the person’s own moral code and should guide how a dealership is operated just as much as compliance laws. In today’s world of social media, having a sterling reputation may bring in more car buyers and service customers than al the advertising or price cuts combined. Gino Cipperoni in a thoughtful column reminds dealers that the goal of Internet advertising isn’t to get clicks but to get a return on the investment. It’s the average value of the potential customer’s click than the average cost, he says.

Vice President/COO Bridget Fitzpatrick Managing Editor Mary Welch Creative Director Brandy Brewer Web Developer Michael Marley Director of Marketing & Events Karen Locadia Digital Marketing Associate Erin Mumphord Subscription Manager Emily Wiggins Marketing Associate Emily Lord

There is a lot of information in this April issue and we hope you read it and let us know you’re thoughts. We are committed to quality, relevant material so let us know what you think and what you’d like to read about and we’ll heed the call. Down in Atlanta, spring is in the air. People are smiling and I’ve noticed that convertible tops are down. It’s a great time to take a car ride — or go buy a new one.

Mary Welch

Jim Fitzpatrick jfitzpatrick@cbtnews.com d 678.221.2955

In This Issue 6 Building a Custom Website to Generate More Leads

By Russ Chandler, Product Marketing Manager, PERQ LLC.

Ethics Garner Long-Term Benefits

18 Return Emotion to Sales

PPC Marketing Doesn’t Have All Of The Answers By Gino Cipperoni, Director of Digital Marketing, Dealer eProcess

By Jim Radogna, President, Dealer Compliance Consultants

24 Be CRISP With Phone Calls

10 Industry News 12 Pre-Qualifying Shortens

And Earn More Customers By Mike Haeg, Director of

Founder, eLEND Solutions

26 Ask The Pros

14 Digital Gold Mine Hiding In

29 Adapting Hiring Processes

Sales Cycle By Pete MacInnis,

Service By Glenn Pasch,

CEO, PCG Digital Marketing

Automotive, Century Interactive

And Acquire Workers You Need By Chuck Sujansky, CEO of Key

Group/Applied Behavioral Insights

CBTNews.com

32 Association News

With A Test Drive By Mark Tewart, President, Tewart Enterprises, Inc.

CAR BIZ TODAY MARCH 2016

ADVERTISING

34 Drive The Future With A

CUSTOMER SERVICE info@cbtnews.com

Better Service Drive Plan By Jeff Cowan, President, Jeff Cowan’s ProTalk

SUBSCRIPTIONS

Digital Marketing Advances Co-op Marketing By Gary Galloway, Automotive Digital Marketing Evangelist

38 On The Set

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.

RETAINING CUSTOMERS SINCE 2004.

Become a Dealership For Life Dealer! 100 90 80 70 60 50 40 30 20 10 0

81% DFL AVERAGE RETENTION RATE (New & Pre-Owned Retention Rate)

PROFIT MARGIN SALES & SERVICE

“Our retention numbers have more than doubled and we are consistency at an 80% or higher customer retention rate in our service drive.” Ken Shreve - President, Hamilton Hyundai

“In our service operation we see about 162% of the average number of customers per 100 vehicles that other Ford Dealers would see in our market.” Chip Doetsch - President, Apple Ford Lincoln

Reinsured Lifetime Powertrain $99 Lifetime Engine | Prepaid Maintenance - Customized Marketing and Retention Programs - Increased Closing Power - Seamless DMS Integration - Unique Dealership Branding - Customized Dealership Specific Collateral - Customized Dealership App Plus UNLIMITED Graphics at No Additional Charge to all DFL dealers!

EVERYTHING You Need In ONE Administrator!

800.717.4988 | DealershipForLife.com

MARKETING

Is a Website Personalization Strategy for You? A Custom Website Strategy Generates More Leads BY RUSS CHANDLER

n this day and age, your website is, arguably, the most important aspect of your dealership’s overall marketing — both online and offline. There’s a lot that goes into creating a pristine dealership website. Your ideal website should be highly functional (cleanly and properly coded), and all promotions/inventory should be completely up-to-date.

they have a ton of different offers or calls-to-action to leverage with consumers… and a banner to go with each one of those solutions, thus, leaving your site cluttered with banners that may or may not be relevant to certain consumers. Additionally, the overabundance of banners might cause car-buyers to completely miss banners that are indeed relevant to them.

Of course, what’s particularly important about your dealership’s website is the overall experience it provides potential customers. The last thing you want to do is deter consumers away from your website because your site is just well…. ugly!

Luckily for all of us, the 21st century has been extremely kind to dealers wanting to improve their online consumer experience. Programmers, engineers and developers have made great strides to ensure that dealers (really, businesses in general) have been able to fully cater to individual consumer needs. That said, has your dealership fully explored its options for complete website personalization?

Thankfully, there aren’t very many dealerships out there whose sites look like they were build in a 1995 version of FrontPage Express — or in GeoCities, if you’re cool enough to remember that website hosting service!

TOO MANY CALLS TO ACTION RESULT IN LITTLE ACTION Unfortunately, despite being beautifully crafted and coded, many dealership websites possess an often-overlooked design flaw that leaves consumers feeling lost and overwhelmed. What design flaw would that be, you may ask? An overabundance of calls-to-action!

YOU DON’T NEED LOTS OF BANNER ADS! What if I told you that your dealership didn’t need all of those different banner ads placed on its initial landing page? Did you know that you could set it up so your website only serves relevant ads to specific consumers based on their personalized website activity? Yep, it’s possible all right — and given the ever-increasing advances in technology and services, it’s become easier than ever.

As a dealer, you’re probably aware that meticulously placed banners allow consumers to learn about options that can ease them further down the car-purchasing funnel. You probably have a banner or two on your website that directs consumers to a trade appraisal or test drive forms.

With fewer banner ads cluttering your landing pages and confusing website visitors, your consumers won’t need to hunt for a solution, but rather, have one presented to them. Instead of providing a multitude of options (some relevant, some not), relevant banners ads will be served to the consumer that will take them to what it is they are seeking and want.

The problem a lot of dealers in the U.S. have is that

There’s no question that there are tons of tools and

CBTNews.com

CAR BIZ TODAY APRIL 2016

services out there to help you simplify your banner ad situation. And there’s certainly no shortage of engineers, programmers and developers out there to help you get your site in order. So, you might be asking yourself: Why aren’t more dealers doing this? While many dealerships have adopted fewer banners on their landing pages, some have found the concept of creating different variations of these ads to be a huge challenge in and of itself. I mean, let’s face it your consumer base is diverse. The more diverse your consumer’s needs are, the more banner ad variations you should create. Do you need five ad variations or do you need 10? Do you need three different types of banners that say “Check Our Inventory” or just one? Better yet, why do you need three of these ad types? Here are a few different plausible consumer archetypes to help you understand this type of logic:

“...meticulously placed banners allow consumers to learn about options that can ease them further down the car-purchasing funnel.”

“Instead of trying to convince consumers of what steps they should absolutely, positively take, your website does a lot of the work for you . ” CONSUMER A

CONSUMER C

Consumer A is at the very beginning of their car-shopping journey. He doesn’t know what he wants, and he hasn’t clicked on any of the leads on the front page of the dealership website. Still, he peruses the site quite often - making lots of stops in the “Preowned Trucks” section of your site. If the code is implemented correctly, the next time Consumer A visits (or as he continues to peruse the site), a banner ad that says “What’s Your Trade Worth?” might be served to him.

So, let’s say a Consumer 3 is a new website visitor. They hit your website and their behavior indicates that they’re a very engaged used car shopper, who is likely to buy soon. Based on their behavior, your site is able to serve up a used car special offer based on their behavior and WHAM, you successfully capture the lead. Exciting news, right?

Consumer A’s previous actions on the website might indicate that he’s looking to upgrade to something a little newer, and that’s what caused that ad to automatically be served to him. Additionally, he hasn’t done much else besides look at vehicles, so it’s a good way to get a feel for the customer. The ad served wasn’t one for financing. It wasn’t an ad for taking a test drive. It was an ad for something very relevant – especially since it was his first visit. These types of “retargeted ads” can help folks who already have an idea of what they want to solidify their decision. Additionally, dealers can look at this data on the backend to learn about consumer behavior. It’s almost as if they’re looking at them through a glass window. Now onto Consumer B…..

CONSUMER B Consumer B doesn’t visit the site often, so she doesn’t have a ton of activity under her belt just yet. That said, the ads that she’s served as she browses through the website are relevant to the dealership, but not necessarily to her situation. However, on this last visit, Consumer B decided to fill out a trade appraisal form and see how much her current vehicle was worth. After getting her vehicle appraised, she left the site and didn’t come back for about two weeks.

Well, not so exciting, actually…. Unfortunately, that lead never ended up responding to any of your guys, so they eventually went cold. A few days later, however, that same customer returns to your site. Because they were already captured as a lead, they’re now being identified as a “returning visitor.” Of course, the big difference NOW is that they’re being identified as a new car shopper as opposed to a used car shopper. Obviously, this new onsite behavior changes everything. Thankfully, through the power of website personalization, this issue can be quickly rectified. In real time, your website can leverage this new online activity and serve a more aggressive “new car test drive” incentive banner on whatever pages they happen to be on at the time. If things go as planned, Consumer C will click on the banner and schedule their test drive for the very next day.

PERSONALIZE YOUR WEBSITE As mentioned, there are an abundance of programs and service providers out there that can help you to simplify your dealership’s website. And if you don’t find everything you’re looking for in a program or service provider, you can always go out on your own and hire a developer to do all the dirty work for you. Regardless of how you go about incorporating these changes into your website, adding these personalized touches is important to your bottom line. Instead of trying to convince consumers of what steps they should absolutely, positively take, your website does a lot of the work for you. Again, the activity information you receive (as a dealer) is a lot like looking through a window. Once a consumer has signed up for whatever the initial offer was, the dealer can take it from there and make educated conclusions based on their previous online behavior. Think of this type of personalization as a means of being able to help consumers even more than you ever could. It’s not taking OVER the job of the dealer. It’s just making their jobs even easier… and for that matter, more lucrative.

No matter where a person is on their car-buying experience, they will visit your website, so make sure it connects with them.

About two weeks passed since Consumer B filled out her Trade Appraisal, and the first banner she notices on the front page of the website is something along the lines of “Ready to Schedule a Test Drive?” So, as you can see, the website was able to conclude that the seemingly most appropriate next step was to help her find a vehicle to try out, and eventually buy using her current trade-in. So, the previous two examples were really cool, but really simple. How about a more complex consumer example… ?

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.

TO SEE MORE FROM RUSS CHANDLER GO TO CBTNEWS.COM

APRIL 2016

CAR BIZ TODAY

CBTNews.com

ETHICS

COMPLIANCE VS. ETHICS:

BENEFITS OF AN ETHICAL APPRAOACH Taking an ethical stand comes with long-term benefits

BY JIM RADOGNA

thics and compliance are different from each other, but both are vitally important to the long-term success of dealerships and automotive professionals. Often the terms “unethical” and “illegal” are used interchangeably. Ethics is personal. It means the process of discerning what the correct action is. Law is impersonal and requires no discernment, just compliance. Ethics refers to moral principles and values that guide a person or an organization, and ethical conduct refers to knowing the difference between right and wrong and choosing to do what is right. A company or person can be unethical without breaking laws. For instance, it’s not illegal per se to charge different prices for the same F&I products – and many finance practitioners do so on a regular basis. They’ll charge one customer $795 for GAP and another $1500 for the same coverage because “X Bank allows that much”. Another example I recently read about is that some dealers charge a “certified “ pre-owned” fee to customers on CPO vehicles they sell. Although that practice may be against OEM guidelines, it’s not necessarily unlawful from a strict legal standpoint.

car;” “This 2010 Elantra is for Hyundai fans that are searching for that babied, one-owner creampuff” and “From the looks of it, I’d say this car has been garage kept and babied regularly. If only my wife treated me as nice!!!”

IS IT PUFFERY OR DECEIT? Now some will argue that these statements are just harmless puffery that is intended to make the vehicles stand out, but isn’t it safe to assume that most consumers place more value in a true one-owner car than a prior rental? Even if the dealership discloses the vehicle’s previous histories at some point, is it OK for the first contact with a consumer to be secured by misleading claims? Even if it’s legal, is it truly ethical? The reality of the car business is that pay plans and sales quotas can sometimes make acting

the above scenarios, but here’s where the lines have gotten blurry. While I agree that “profit is not a dirty word,” it appears that regulators and consumer attorneys have been redefining what is “legal” by applying their own interpretations of “ethical” standards.

GOVERNMENT INTERVENTION AGAINST DEALERS In the last few years we’re seeing more and more enforcement actions and lawsuits against dealers for a number of seemingly “legal” activities. Recent cases have charged dealerships with assessing dealer fees that were deemed excessive even though they aren’t regulated by state laws. Another target for regulators is pricing of add-on products. For instance, NY Attorney General Schneiderman said in a statement announcing a $14 million settlement “New York consumers must beware: Car dealerships sometimes pad their pockets by charging for worthless after-sale items, which inflate the price of their car. These items are often ones that consumers don’t need, did not ask for and often are not even ” told about. Businesses need to make a profit to survive, but it’s illegal to do so by duping consumers.” Whether or not these products are “worthless” is a matter of opinion, but these consumer watchdogs seem to think so.

The increase in the amount of data available to consumers has brought them a quick and easy way to analyze not only different prices but also to identify who they want to do business with.

One more illustration of dubious ethics in my opinion is vehicles that are marketed as a “One Owner,” even when the “one owner” was a rental car company. Even though the “one owner” statement may be technically true, the descriptions I’ve seen for some of these vehicles are questionable at best: “With just one previous owner, who treated this vehicle like a member of the family, you’ll really hit the jackpot when you drive home with this terrific

CBTNews.com

CAR BIZ TODAY APRIL 2016

ethically a challenge. Dealership personnel may be under continuous pressure to abandon their personal standards to achieve sales goals. The actions of salespeople mirror the behavior and expectations of their managers. The words and actions of sales and F&I managers often reflect the moral and ethical considerations of top management’s philosophy. Ethics can be a very personal decision and different people will have different opinions about

Another notable case is where a dealer group agreed to pay $1.6 million to settle a class-action lawsuit that claimed the dealerships sold car buyers an over-priced window etch package (and they were only charging $295!). Former CFPB official Rick Hackett had this to say

at an industry event: “If I found out that Walmart set the price of their products at different levels, and they were all the same product, and they were just hoping I would buy one for $20.95 because I was a particularly gullible consumer, I’d be grumpy. That’s the bureau’s perspective of variable pricing of ancillary products.” We can complain all we want that it’s not fair for the government to limit our profits but it’s clear that they’ve drawn a line in the sand and there’s no relief in sight.

VALUES OF AN ETHICAL APPROACH But here’s the good news. Taking an ethical approach has several benefits beyond just avoiding legal issues: Increased Closing Ratios and Higher Product Penetrations - Higher levels of satisfaction with the selling process result in higher closing rates and higher sales. The more people trust you, the more likely they will buy from you. Lower Cancellations and Chargebacks – How many times do your customers read the contract after the sale and realize they paid much more than they thought? How many times are credit unions, insurance companies, friends or family members telling your customers they paid too much? Even if you hold their feet to the fire for non-cancellable products, what are the chances you’ll ever see that customer again? Improved Reputation (your REAL reputation, not necessarily the one you “manage” online) - A dealership’s reputation is difficult, if not impossible, to maintain when staff members depend on “old school” practices. Customers often make

decisions during a vehicle sale transaction that they come to regret after the “ether has worn off.” You can be sure they’re telling somebody about the transaction. Or perhaps they’re telling thousands of people online?

to do business with. Car shoppers simply have too many choices and will quickly discard dealers they feel are hiding something. Holding back information or playing fast and loose with the truth will only make them trust you less.

Increased Customer Satisfaction - Lack of ethical behavior and old school tactics invariably diminish the customer experience. Nobody likes surprises. Sure, you made the deal but are your customers truly satisfied with your processes or do you just wear them down? At the end of the day higher customer satisfaction translates into more repeat and referral business.

You’ll Stand Out From Your Competition – Progressive dealers can easily differentiate themselves by marketing their ethical processes and demonstrating their honesty. Consumers will respond - after all, how many consumers prefer old-school tactics?

Increased Customer Loyalty - Customers only have loyalty if you earn it from them. Ethical processes help build customer loyalty and retention. You’ll find that customers will be willing to spend more when they feel they’re buying from a business they can trust. You’ll Exceed Customer Expectations - Your potential customers have unprecedented access to information in real time. The increase in the amount of data available to consumers has brought them a quick and easy way to analyze not only different prices but also to identify who they want

Good ethics can be the pot of gold at the end of the rainbow. An ethical business model can greatly enhance your sales, reputation, customer retention, and bottom line. The most successful dealerships have not only a standard of “don’t break the law” but a standard of “always do the right things.” Here’s something to think about: If you treat each customer as you would like your mother to be treated, you’re most likely practicing good ethics. After all, it was probably your mom who first said “just because you can, doesn’t mean you should.”

JIM RODOGNA

President, Dealer Compliance Consultants, Inc. Jim Radogna 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.

Customers appreciate an ethical dealership and reward them with repeat business.

TO SEE MORE FROM JIM RADOGNA GO TO CBTNEWS.COM

APRIL 2016

CAR BIZ TODAY

CBTNews.com

INDUSTRYnews EVOX EXPANDS ITS VIRTUAL REALITY PHOTOGRAPHY CONTENT

GM BUYS SELF-DRIVING TECHNOLOGY STARTUP

EVOX Images®, a world leader in high-quality automotive stock photography, announced expansion of its virtual reality content, while reporting significant consumer response to its recently introduced RelayCars™ mobile app. EVOX utilizes its industry-leading 360-degree imaging, which it supplies to more than 22,000 dealer web sites, to power its new virtual reality technology. EVOX’s virtual reality products and solutions enhance the car-buying experience by transporting shoppers into the driver’s seat. Powered by EVOX Images, the company’s new RelayCars™ consumer-facing application has already generated more than 165,000 downloads and is consistently ranked among the top 5 downloaded apps since its launch just over three months ago.

General Motors will be acquiring Cruise Automation, a San Francisco-based startup that deals in self-driving technology. Although the price wasn’t released, sources say the auto manufacturer could have paid as much as $1 billion.

NEW SCISSOR LIFT FOR QUICK-SERVICE BAYS INTRODUCED Rotary Lift introduced a new scissor lift designed specifically for dealer quick-service bays. The Rotary Lift Double-Section Scissor Lift’s twin platforms were designed with productivity in mind. To service the widest range of vehicles, the lift’s extra wide platforms feature hinged ramps that fold up and lock in place to extend the vehicle pick-up point surface. The ramps also can fold 65 degrees down and away, to give technicians more access to perform wheel and brake service. With more than 78 inches in clearance (when installed above ground) the lift provides technicians more headroom than competitive lifts. A low-profile design allows vehicles to pass over the lift platforms with ease. The Rotary Lift Double-Section Scissor Lift incorporates a patent-pending, fully mechanical hydraulic system that does the lifting work equally for both platforms. Named Synchrodrive™, the hydraulic equalization system uses fewer moving parts, hoses, valves and seals than other scissor lift systems.

CREDITMINER RELEASES DEARLERAR Modern vehicles can be attacked in countless ways—attackers can remotely stop moving cars, open locked doors, and even take control of the steering. Connected cars are becoming increasingly intelligent, but their security is too often an afterthought. The Car Hacker’s Handbook, by Craig Smith, takes an in-depth look at the computer-based systems in modern cars that make them vulnerable to attack and exploitation. Smith runs Theia Labs, a research firm that focuses on security auditing and building hardware and software prototypes. He has worked for several auto manufacturer. He is also a founder of the Hive13 hackerspace and OpenGarages.org. Smith is a frequent speaker on car hacking and has run workshops at RSA, DEF CON, and other major security conferences.

EXECUTIVE CHANGES AT VOLKSWAGEN Michael Horn left his job as president and CEO of Volkswagen Group of America through a mutual agreement with Volkswagen AG. Horn left to pursue other opportunities. On an interim basis, Hinrich J. Woebcken, who was recently announced as the new Head of the North American Region and Chairman of Volkswagen Group of America, will assume the role of president and CEO of Volkswagen Group of America. The company also announced the appointment of Ronald Stach, 48, as vice president, sales for the Volkswagen brand. In this role, Stach will direct activities of the U.S. sales regions, retail programs and fleet and RONALD STACH remarketing. He will report to Mark McNabb, chief operating officer, Volkswagen of America. Stach succeeds Mark Barnes, who assumed responsibilities as Chief Operation Officer at Bentley of the Americas, within Volkswagen Group of America.

CBTNews.com

CAR BIZ TODAY MARCH 2016

Before founding Cruise Automation,. Vogt worked on the video-streaming service Twitch, which was sold to Amazon for approximately $1 billion in August 2014. Nissan Extended Services North America presents its Top Performer Award Nissan Extended Services North America presented its Top Performer Award to Jenkins Nissan in Lakeland, Fla. According to Bill Alexander, NESNA’s general manager, the dealership received the award for the continued success of its Finance and Insurance department with selling Security+Plus® products, including Security+Plus® and QualityGuard+Plus® vehicle service contract sales. This is the first time NESNA has presented the Top Performer Award and plans to make it an annual event.

HYUNDAI CELEBRATES MILESTONES In 1986 Hyundai entered the U.S. market with one nameplate. Thirty years later, the manufacturer posted 10 million sales across a lineup of 14 models. Not only is Hyundai making an impact in the market but it also deepened its U.S. ties with its Hyundai Motor Manufacturing Alabama plant that opened in 2005, which builds the Sonata and Elantra models. In addition the Sante Fe Sport will be added to the production line. Adding fuel to the milestone is that Hyundai reported its best February in company history, selling 53,009 units for the month, up one percent versus the same period last year.

AUDI & MINI BEST IN CUSTOMER SATISFACTION Audi and Mini were the two winners in customer satisfaction at dealership service departments in a benchmark study that J.D. Power and Associates. Mini was the highest ranked mass-market brand in J.D. Power’s 2016 U.S. Customer Service Index Study while Audi was the top luxury brand. Mini, which finished second in last year’s study, scored an 858 on a 1,000 point scale, up from 834 in 2015. Buick, GMC, Chevrolet and Hyundai rounded out the top five. Among luxury brands, Audi scored an 874, up nine points from its third-place finish last year. Following Audi were Lexus, Cadillac, Mercedes-Benz and a tie between Jaguar and Lincoln. The study measured customer satisfaction with service at a franchised dealership for maintenance or repair work. Conducted between October and December 2015, the study was based on responses from more than 72,000 owners and lessees of 2011-15 vehicles.

CAR HACKER’S HANDBOOK Modern vehicles can be attacked in countless ways—attackers can remotely stop moving cars, open locked doors, and even take control of the steering. Connected cars are becoming increasingly intelligent, but their security is too often an afterthought. The Car Hacker’s Handbook, by Craig Smith, takes an in-depth look at the computer-based systems in modern cars that make them vulnerable to attack and exploitation. Smith runs Theia Labs, a research firm that focuses on security auditing and building hardware and software prototypes. He has worked for several auto manufacturer. He is also a founder of the Hive13 hackerspace and OpenGarages.org. Smith is a frequent speaker on car hacking and has run workshops at RSA, DEF CON, and other major security conferences.

Visit DealersLink at NADA Booth 6457N

F&I

G N I Y F I L A U Q E R P S DOE SHORTEN

? S E L C Y C S E L A S

Better Closing Rates and Customer Satisfaction Among the Benefits BY PETE MACINNIS

ealers and their F&I managers are always looking for an easier and quicker way to pre-qualify customers in order to shorten the sales cycle, as well as to ensure better qualified buyers. Early results from eLEND Solutions’ ID Drive show that not only is the sales process shortened, but that dealers are having impressive closing ratios.

“Customers appreciate not having to share their SSN and knowing there won’t be any negative impact on their credit score – and they love the fact that it shortens the sales cycle” -Pete Shaver

ID Drive, a product from eLEND Solutions, is managing partner - Huntington Beach an ID authentication program that instantly and automatically converts a driver’s license scan Chrysler Dodge Jeep Ram into a consumer consented soft pull credit prequalification application, without even requiring a social security number. Its pre-qualification ID Drive's authentication program differs from preconverts a driver's license scan into screening or hard pull a soft credit pull without using a inquiries because it does Social Security number. not require a SSN or impact the consumer’s credit profile while providing the dealer with a full credit report and real-time credit score. In addition, ID Drive is the only ‘driver license scanner’ that authenticates every version of driver license for all 50 states, appending validated address and phone information, and automatically converting a driver license scan into a consumer consented pre-qualification application. Once scanned, the consumer’s lead information is electronically integrated with any pre-existing lead or credit application data - prior to the test 12

CBTNews.com

CAR BIZ TODAY APRIL 2016

drive, then securely exported into the dealer’s CRM and finance systems. This integrates the historically fragmented sales and finance processes. ID Drive’s Pre-qualification also includes much lower costs per credit pull and simplified compliance requirements and cost savings for dealers. This new enhancement is designed to help dealers sell more cars in less time, improve CSI by reducing bottlenecks in the F&I department and improve overall profitability. Dealers get the information they need to put customers in the right vehicles with the right deal structures, matched to specific

PETE MACINNIS

Founder and CEO of eLEND Solutions eLEND Solutions is a company that focuses on providing a more efficient sales and finance process for the entire automotive industry. eLEND’s patented platform streamlines car selling by bringing more functionality online. Its suite of products includes CreditPlus, ID Drive and MOBILOT.

THEY’RE RIDING IN IT.

lender programs at the front of the sales process. Huntington Beach Chrysler Dodge Jeep Ram in Huntington, Calif., scanned nearly 900 driver’s licenses in one month and captured the relevant data for its instore systems as well as providing an accurate record of who drove its vehicles. The results were quick and impressive. Of those scanned, nearly 50 percent opted for pre-qualification and the dealership converted 36 percent of those into a sale. “It is one of our highest performing and most profitable channels,” said Pete Shaver, managing partner. “And, because the process is so fast and easy, we can verify their address and pull credit in less than 10 seconds. We are saving a huge amount of manpower and time.” Shaver estimates that the software e l i m i n a t e d between one to two hours off the sales process, a benefit both to the customer and the dealer. “Customers appreciate not having to share their SSN and knowing there won’t be any negative impact on their credit score – and they love the fact that it shortens the sales cycle,” said Shaver.

YOUR REPUTATION IS RIDING ON IT.

CARS KEEP ADVANCING. YOUR F&I SHOULD TOO. As automotive technology continues to advance, your customers expect more from service contracts and you expect more from an F&I provider. The Protective Vehicle Protection Plan gives you the best of both worlds: A service contract better designed for today’s rapidly evolving vehicles, backed by a provider with over 50 years of helping dealers maintain their stellar reputations. Working together, we can keep your customers happy and your legacy thriving for years to come.

Visit protectiveassetprotection.com Call 888 320 5725

Vehicle Protection Plans | GAP Coverage | Credit Insurance Limited Warranty Products | Dealer Participation Programs F&I Training | Advanced F&I Technology

Lifetime Engine Warranty, Limited Warranty, Vehicle Service Contracts (VSCs) and GAP are backed by Lyndon Property Insurance Company in all states except NY. In NY, VSCs are backed by Old Republic Insurance Company. GAP, Lifetime Engine Warranty and Limited Warranty are not available in NY. Credit Insurance is backed by Protective Life Insurance Company in all states except NY, where it is backed by Protective Life and Annuity Insurance Company.

DIGITAL MARKETING

Facebook Ads

TARGET POTENTIAL SERVICE CUSTOMERS

Unlocking Digital Gold Mine in the Service Department

BY GLENN PASCH

hink of the Gold Rush of the early 1900’s. People crossed the country because they heard there was a way to find gold and become rich. Some were successful because they had the right investment in tools and had the right location. They also had the courage to take a chance. Others failed because they were not educated and prepared.

average, dealers give as little as 5% to possibly 15% of their marketing budgets to the service and parts departments.

Today, dealers are told there is gold in the service drive. There is gold in your fixed marketing operation online.

Now before we dive in, currently many dealers use SEM (Search Engine Marketing) to market fixed operations and they should continue to do so. But you have to make sure it is being run correctly.

Optimized landing pages for each of the 8-10 basic services they handle with video explaining the service that include the same pricing as the ads.

There are many companies out there doing some service advertising SEM campaigns mixed in with the other branding, such as new model and used model campaigns. I have seen some successful but in some cases they are not well thought out. One of the biggest issues for dealers when doing

Remarketing efforts to highlight service

Most dealers I speak to always ask, “How do I do it?” “How do I know it is working?” “Where can I learn more?” First, dealers need to realize the potential is there if the marketing of this department is done correctly. Often the focus is only on new or used vehicles. If you find this odd, understand that, on average, Fixed Operations account for an average of 54% of dealerships net profits but only have — (wait for it) — 2% of the visibility on the average dealership website. Two percent? I asked a few of my clients for some real numbers to back up my hypothesis. My findings were that on

CBTNews.com

CAR BIZ TODAY APRIL 2016

I think there is more gold to be mined. I want to smash a misconception and arm you with a new strategy that many dealers ignore — Facebook Advertising.

SEM marketing is that the website is not set up for success. Excuse me if I sound like a broken record but your website and SEM campaigns need to have the following: Specific targeted ads including your special pricing

Have a “Why Service With Us” video on their service page or confirmation page Have a great “Thank You,” page for customers who book service that pops up and offers

“On average, Fixed Operations account for an average of 54% of dealerships net profits but only have — (wait for it) — 2% of the visibility on the average dealership website.”

HELIX IS AN ADVANCED TECHNOLOGY MARKETING PLATFORM }} View market-specific customer opportunities }} Generate advanced audience segments for targeting }} Analyze consumer behavior in real time }} Track attribution for improved ROI

INCREASE YOUR ROI DECREASE YOUR AD EXPENSE! SCHEDULE A DEMO TODAY:

FORCEMKTG.COM/POSTNADA

ForceMKTG.com | 866-854-2815

“A very high percentage of

Facebook traffic is mobile so having the click to call button was important and easy for the user

to connect with the dealer .”

other options for them to view while they are still on the site. Remember that it is extremely important to educate yourself to fully understand reports from their SEO and SEM provider in layman’s terms. Now let’s talk about Facebook advertising. I feel that right now this is one of the most cost effective ways to market service. The two types of advertising placement is either in the sidebar or in the newsfeed stream. PCG prefers to have them in the news feed because as people scroll through their feed, their first instinct is to think it is a regular post. We have seen more clicks using this strategy versus the sidebar. It is easy enough for a dealer group to do it themselves but in many cases you should find a competent agency partner to help you. Without getting too technical, reviewing what we did for a client in simple terms will help frame the conversation.

CLIENT INTERACTION The client came to us because their Facebook page had little engagement and was not driving traffic to their site. We created a click to call awareness campaign. This was designed to let FB users in their area know about the service center, their hours and location. Pretty simple. The ad would show on desktop FB users as well as mobile. One difference we set for the mobile user was having a click to call button in the ad. Remember that a very high percentage of Facebook traffic is mobile so having the click to call button was important and easy for the user to connect with the dealer. As I mentioned, this form of marketing can be very targeted and also very cost effective. Because this was an awareness campaign, we set the radius of 20 miles around the dealership and goes off of impressions to a local audience. Anyone who is logged into Facebook within a 20 mile radius will see this ad. This ad was shown to 11,838 people 37,849 times and the dollar spend has only been $85.25. See how cost effective this is?

TO SEE MORE FROM GLENN PASCH GO TO CBTNEWS.COM

Fixed Ops can be a gold mine if you know how to market it properly and use social media correctly.

What did this mean in terms of calls or clicks to the website? There were 53 clicks on the call now button. The link clicks were 28. The photo on this ad is attached to the dealerships service page, so when it is clicked, the customer is brought right to service specials. In a separate ad we offered a discount for any service the chose. In other campaigns we focused on a tire special or tune-ups and were targeted specifically to their customers who matched using a customer audience for FB. Custom audiences in FB are created by uploading your customer emails from your CRM. Facebook will match profiles based on those emails. It is not a 100% match but think of the targeted marketing you can do based on your customer’s service history.

DO YOU SEE THE POSSIBILITIES? One of our other clients who embraced this type of advertising told us that their previous month revenue for the service drive increased by 80%. There are many dealers who finally understand that social media can sell products and services. I think Fixed Operations is a gold mine. This of how you can now compete with the Independents for oil changes and other services. Think of how you can make it easier for customers to see your Why Service message. It is time to embrace marketing your service drive with the same commitment as your retail side of the dealership. Take advantage of this type of marketing before your competition does and while it is very cost effective.

GLENN PASCH

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

APRIL 2016

CAR BIZ TODAY

CBTNews.com

AD FUEL TO YOUR SALES

SALES

TURN A

TEST DRIVE INTO A SALE Internet Research Takes Out Emotion; A Test Drive Puts It Back

BY MARK TEWART

ne of the most critical moments of the sales process is the test drive. You have a sales process for a reason. All things in a sales process work together for an emotional and logical path to a sale. In that path there are specific things that can be done to increase the likelihood of there being a nexus between emotion and logic. When emotion and logic are combined it provides the intensity to the buying momentum that moves the customer from the demo stage to the write-up stage and sale stage. The Internet has changed shopping habits. The customer does a tremendous amount of research online and then validates the research with an in-store visit. However, in many dealerships, Internet personnel and sales people are using the online research done by the customer as an excuse to skip the demonstration phase of the process. This is a huge mistake that short-circuits the sales process.

CHARACTER, EMOTION, LOGIC — SALE In the days before Internet shopping, car buyers followed a path of Character-Emotion-Logic to a sale. Buyers met you and judged your character and trustworthiness, then got emotional about the vehicle and the buying excitement and then justified the emotion with logic. Today the process has been inverted. The buyer is researching and shopping online and is in a heavy logic phase first. The first contact with salesperson or Internet

representative that is often now by email, text or phone is based upon logic with no emotion. By the time they reach the dealership physically, they are still in a logic phase. When customers are in a logic-only phase, they move into price and make decisions on the vehicle and price only. You become a commodity, selling a commodity. There is nothing to distinguish you, your dealership or even the vehicle from anything else. In this situation, you will sell fewer vehicles at lower than acceptable profits and will often have a lesser-satisfied customer when you do. When a customer buys a car, they consider three things – Money, Me, Machine. The secret sauce in selling is the salesmanship of being able to differentiate in all three of those areas. If you don’t, you are simply an order taker. The demonstrative drive is the perfect place to set you, your dealership and your vehicle apart from others. Let’s discuss a few specific points to make that happen. After you have made a vehicle presentation, have the customer get into the passenger side to go over some very important features, such as Navigation system etc. Turn the ignition on and have them physically go through the features as you instruct them into mental ownership.

USE A TEST DRIVE TO SHOW STRONGEST SELLING POINTS When you are finished, begin your test drive while

“You want them to mentally

instructing them that you want to demonstrate some of the fantastic features and the drive of the vehicle. From a safety standpoint, it is always best that you drive off the lot first. In the first part of the drive, point out the strongest selling points and verbally explain your SDP – Specific Defining Proposition — that differentiates your dealership versus others. The best time to speak in the demo process is when you are driving. When you have completed your part of the drive, find a safe place such as parking lot and pull in, park the car, get out, go around to the passenger side, open the door and with a smile and enthusiasm, say “your turn!” When the customer gets behind the wheel, make sure they get very comfortable with the seating position, mirrors etc. and over emphasize that you want them to be comfortable before beginning to drive. As the customer begins to drive instruct them on different routes to take that emphasizes different driving conditions. In the past, for safety reasons, dealership managers encouraged a demo route of all right hand turns in case a car broke down, they could find you. In today’s world, you have cell phones and that is no longer necessary. The average demonstration drive is about 2 or 3 miles. This is a huge mistake. Have you ever rented a car? How did you feel when you got into a strange car? How long did it take you to get comfortable? It takes 15-20 miles to even begin to feel comfortable! Yet, a salesperson often takes a customer on a 2-mile test drive and asks a customer

see themselves as owning and driving this vehicle.” 18

CBTNews.com

CAR BIZ TODAY APRIL 2016

to buy a $5,000 to even over $100,000 vehicle. That makes no sense! Taking a much longer test drive allows the customer to experience the car and learn it kinesthetically. This means the customer is physically learning the car and making intuitive decisions. This creates a completely different type of persuasion in the buying process from logic.

RELATE TO THE CUSTOMER’S NEEDS When the customer is driving, they are in learning mode dominant. So, if in this stage you are talking too much, it is overloading them with auditory influence. They will naturally pick one of the modes to concentrate on. It will either be listening to you or learning the car. They will either be irritated by you or not get fully comfortable with the car. Think back to a time you were driving at night and were looking for an address. You reached down and turned down the radio while you looked! You shut down the auditory influence to concentrate on your visual influence. It’s hard to be two dominant modes at once so let them be kinesthetic dominant by choosing words wisely. On the demo drive, relate back to the customer, the keywords and phrases that the customer gave you during your discovery phase of the sales process. If it was safety, relate succinctly the safety features using the words safe, safely, safest, safer etc. as anchoring words that provide emotional and logical buying leverage. In other words, demonstrate what they want to buy. Everything else is superfluous. Use the demo drive to bring everything together that will provide buying momentum. Use words, phrases and stories that provide present tense ownership. You want them to mentally see themselves as owning and driving this vehicle. Use similar situation stories that involve you and

your customers to assure the customer of making a wise decision. It also lets them know they are not making a mistake through these stories. Facts tell but stories sell! As the customer pulls back into the dealership, if possible, have the customer pull the vehicle right next to their current one. This allows a vivid mental comparison and a reminder for the customer that he really does not want to get back into the old vehicle. After the customer parks, do not get out of the vehicle first. If you do, the customer will follow. You are rushing through a critical moment where a customer is now beginning to justify the emotional demo journey into the justification of buying phase. Stay in the vehicle until they want to get out! Allow them to ask justification questions.

“On the demo drive,

relate back to the customer, the keywords and phrases that the customer gave you during your discovery phase of the sales process.”

GET THE SALE IN DEALERSHIP, NOT THE CAR When the customer gets out of the vehicle, use the following questions and statements? “What did you like most about the vehicle?” “Is there anything you did not like?” (Find all vehicle objections before the write up phase) “Anything you would like to change?” (Flush out objections) “Fantastic! Let’s get you the rest of the information” “Let’s give it a try!” (Non-threatening) My opinion would be to avoid the customary trial questions about money at this point such as “If I could get the figures right today, could we do business.” I believe this creates massive fear, takes the customer completely out of trust and emotion and moves them into fear. You are asking the customer to say yes about the possibility about figures they have not seen. I would prefer you ask

a commitment question about the car rather than the money. Leave the trial close about buying and money until you are inside the dealership — if you are going to even ask that question at all. The demonstration drive is even more critical in the buying process in the Internet. However, there has been a steady decline in the number demonstration drives. There is even debate the demo drive is no longer necessary. However, a massive amount of data has been collected from the “The Next Up” company that shows a clear correlation of test-drives to sales percentages. Do not shortcut yourself, the customer or the experience. The difference today in the world of a transparent and online experience can be the old fashioned, “Feel behind the wheel.”

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.

It is important to allow enough time so the customer feels comfortable driving and gets to appreciate the car. TO SEE MORE FROM MARK TEWART GO TO CBTNEWS.COM

APRIL 2016

CAR BIZ TODAY

CBTNews.com

MARKETING

WHAT’S THE BIG QUESTION Clicks Don’t Sell Cars; Marketing Should Aim For the Return on Investment BY GINO CIPPERONI

How many cars did my digital marketing sell me? That’s the Big Question. Every month, dealers call up their paid search vendors and ask this question, and every month they get a variety of different answers. Their PPC (Pays Per Click) vendor will begin the standard speech of how “your website got a ton of clicks,” or “your impression share was as high as it’s ever been,” or, “you got a good amount of ‘conversions’” but none of this tells us anything about selling cars.

APRIL 2016

CAR BIZ TODAY

CBTNews.com

If you want to have the conversation about Return on Investment (ROI), you can’t just look at how many clicks you got and call the campaign a success. You didn’t invest thousands of marketing dollars just to get clicks; you did it to sell cars. The problem is that your PPC vendor can’t tell you whether or not all the money you spent on Google, Yahoo, Bing, or wherever else actually sold you any cars. Why is this? Why can’t dealers know that if they spend $10,000 per month on Google AdWords that it will result in an extra 35 cars sold, and an overall increase in front-end and back-end profit per vehicle? Why can’t budget decisions be made based on the average VALUE of a click, rather than the average COST? That’s how all other e-commerce businesses operate, and a car dealership is every bit an e-commerce business as Amazon or eBay.

WHAT’S THE BIG QUESTION? The inability to answer the Big Question – how many sales came from digital marketing – has caused dealers to rely on budgeting decisions and marketing strategies that are not optimized the way other e-commerce businesses optimize their budgets. In the world of e-commerce, marketing decisions are actually made based on the potential return in real dollars that can be expected from that campaign. Take Amazon, for example. When Amazon has a product to sell, they go about marketing that product very much the same way any car dealer would market their inventory. They define the demographics of the customer base that best match the product they’re selling. They create a strategy using multiple different campaign types and marketing channels, then they drive customers to their website and, ultimately, to a purchase. The budget they spend to run this campaign is based on the expected profits of the sales that this campaign will generate. As long as profit remains positive on this product, the budget to advertise it will be infinite. To determine whether or not a campaign is effective, they look at sales! Now, I’m not trying to pick on anyone, but I’m here to tell you the truth. When it comes to measuring the actual cars sold and dollars earned from your digital marketing, few, if any, PPC vendor or website company in the industry can give you a straight answer. And if we ever want to be able to market as efficiently as Amazon or any other successful e-commerce business, then we need to change the way we do things; we need to be better, and we need to be able to answer the Big Question!

The good news is that the answer is to the Big Question is out there, and it lives within your DMS. Thanks to developments in marketing and website technologies, we now have the ability to tie digital marketing leads to actual sales by connecting your website and marketing systems to your Dealership Management System (DMS). Using that connection, we’ll finally be able to answer the Big Question!

MAKE DECISIONS TO DRIVE SALES, NOT LEADS By connecting the DMS to the marketing data, we can now look at automotive digital marketing in a whole new light. Now decisions can be made that actually are geared towards driving sales, not just leads. This data allows us to completely change the digital marketing conversation. Consider the following example: It’s the end of the month and you’re on the phone with your PPC Vendor for your regular account review. Your vendor points out to you that there are two campaigns he’s been keeping an eye on and wants to run through with you. There’s Campaign A, which received 50 leads over the last month and has had some fairly decent exposure across the search networks. Then there’s Campaign B, which received over 100 leads and dominated search positioning over the last 30 days. Based on this data, you and your vendor would both agree that the best course of action is to take some budget and shift it to Campaign B, since it is by far producing better results than Campaign A. In this scenario, this is probably the correct course of action. Let’s take this same example, and incorporate DMS data. What we now find is that although Campaign A produced fewer overall leads, it actually resulted in 16 car sales, where Campaign B only resulted in 3. This data now changes our perspective entirely, and we would do everything we could to add more funding to Campaign A since we know that’s where SALES area coming from. Having this data in hand now makes us like Amazon! We can know exactly how much money we stand to make from certain campaigns, and can make budgeting decisions and marketing strategies designed to increase sales and revenue. You’ll never be in the dark again.

“You didn’t invest thousands of marketing dollars just to get clicks; you did it to sell cars. ” 22

CBTNews.com

CAR BIZ TODAY APRIL 2016

CAROI MATCHES MARKETING AND WEBSITE LEADS TO SALES The great thing about all of this is that this technology is here today! After years of building all of the pieces necessary for this to work, we’re now finally able to link paid search leads, and in fact all website leads, straight to the DMS. We’re now finally able to answer the Big Question!

more informed decisions with your money in order to increase your true ROI month over month. The days of clamoring for clicks, impressions, and traffic are over. You’re not in business to get clicks, you’re in business to sell cars. So now that the Big Question has been answered, the only question left to ask is, “What’s your CAROI?”

We call this system CAROI (pronounced Car-O-I), and we’re proud to be the only company in the industry who can tell you how many sales resulted from your digital marketing. With this system, you’ll no longer be in the dark. You’ll know exactly how many cars your marketing is selling you, what campaigns are producing the most sales, and exactly how much money all of this digital marketing is making you! We’ll be able to make much

“In the world of e-commerce, marketing decisions are actually made based on the potential return in real dollars that can be expected from that campaign.”

GINO CIPPERONI

Director of Digital Marketing Sales for Dealer eProcess He has been in the digital marketing business for over 10 years, and has worked exclusively in automotive for the past 5. He has helped a wide variety of customers, from large dealer groups to smaller independents, identify and take advantage of opportunities within their own markets; helping them drive sales and grow their businesses. Gino is a regular speaker at industry events, and a frequent contributor to many industry blogs and publications.

ADVERTISING SOLUTIONS

ADIN EVERY MARKET FOR EVERY SCREEN

LET US HELP YOU REV UP YOUR MEDIA PLAN. LISA PILZNER - DIRECTOR, AUTOMOTIVE STRATEGY TO SEE MORE FROME: MARK TEWART GO TO CBTNEWS.COM T: 248.728.0808 LISA.PILZNER@NCCMEDIA.COM

www.nccmedia.com

APRIL 2016

CAR BIZ TODAY

CBTNews.com

GOOD PHONE HABITS

KEEP CUSTOMERS CONNECTED Fix The Phone Leaks Or Fade Away

BY MIKE HAEG

There are plenty of shiny objects that vendors are desperate to install at your dealership. The phone isn’t a shiny object. It’s not flashy or sexy. Don’t fall for a “Get rich quick!” Mindset. The phone requires discipline and fundamentals. It’s about blocking and tackling, not one-handed catches in the end zone.

t’s well known that one the quickest ways to increase sales is to improve on the phone. The opportunity becomes more obvious as the volume of phone calls to businesses skyrockets. More mobile shopping, more targeted marketing, more car shoppers than ever before. This means more calls and more competition. Before you decide to tackle this poisonous leak at your store, there are some deep rooted truths associated with the phone. These truths are worth examining: 24

CBTNews.com

CAR BIZ TODAY APRIL 2016

There are, however, some activities and areas that will quickly have a positive impact on your bottom line. The challenge is sustaining these tomorrow, next month, and next year. Dealership consolidation and professional investors are making the competition even stronger. Dealers who do not improve their core phone processes will fall behind. It’s not too late, but you must act fast.

BE CRISP The best mindset to attack and sustain healthy phone processes is to be CRISP. The tenants of CRISP are simple. They work. That doesn’t mean being CRISP is easy though. Remember, this is about hard stuff like blocking and tackling.

CONNECT MORE CALLS The C in CRISP stands for Connecting phone calls. Most importantly, connecting calls to someone who can actually help the prospect. It’s a given that a receptionist will answer when the phone rings. That’s good, but not the whole story. The problem rests in the post-pick up process. Many dealers only connect inbound calls to a qualified agent 50-60% of time. Out of 100 sales leads, 40-50 may never even speak with someone who can help. That’s half the business! These shoppers are left stranded and unhappy. The worst part? They are calling your competition.

The reasons for stranded call aren’t surprising but still make you cringe: Hang ups on while hold, bouncing between departments, voicemails, and scribbled messages left on post-it notes. Dealerships who focus on connecting more calls to qualified agents see a bump in total leads. They do more with the hard earned and expensive shoppers already knocking on their door. This means more appointments, sales, and market share. Customers are more satisfied with their sales experience and willing to refer friends and family.

REQUEST AND INVITE THE PROSPECT The R and I in CRISP stands for Requesting and Inviting prospects. If the phone is a tool, it’s purpose is to ensure prospects visit your dealership in person. Every phone lead should receive a request to meet in person to see why buying from you is the only possible course of action. The huge value in requesting more appointments is a sheer numbers game. Right now, the average dealership invites a prospect for an appointment on only 44% of sales opportunities. Out of 100 hot sales leads, 56 are not even offered the privilege of visiting a dealership in person. What if that same dealership offered just 30 more appointments in a week? It’s fair to say they would see a healthy bump in appointments without increasing marketing costs or adding personnel. Everyone knows that appointment invites are critical, yet training is rarely built into the phone culture of dealerships. Managers get busy. End of month is here before we know it. Top performing dealerships see this appointment leak address it daily. Try this: Tape a piece of paper to each telephone in the sales department The paper should simply say “Every sales call has an appointment request.” Phone handlers will see this paper as a reminder to invite the prospect!

SET FIRM APPOINTMENTS When more prospects are invited in, more appointments can be set with a firm date and time. The S in CRISP stands for Setting firm appointments. Imagine these two unique conversations: One that ends with a prospect politely agreeing to “maybe come in this weekend.” The other conversation ends with a prospect confirming a visit at 6:15 on

Tuesday. Without a doubt, the second option offers a much better chance of selling a car. For years the industry has utilized specific phone skills to set more firm appointments. A salesperson should offer two appointments times. They should assure a prospect that they will help find the perfect car. The prospect should write down the appointment time on a piece of paper. These are important techniques but nothing matters without management buy in. Dealer principals, general managers, and sales managers are responsible for creating an appointment driven culture. Every sales meeting must include training specific to setting a firm appointment. Phone appointments should be tracked and celebrated. Top performers should handle more sales calls. This fundamental change in how dealership management views the phone will have a significant impact on the bottom line.

OUTBOUND PURSUIT OF OPPORTUNITIES Every inbound phone up is critical.

However,

“Out of 100 sales leads, 40-50 may never even speak with someone who can help.

dealerships will lose market share without a healthy outbound process. The P is CRISP stands for Pursue and guides dealerships toward a system that places calls to the best possible prospects. These warm prospects are often hidden away in CRM. It’s the AutoTrader lead who wasn’t offered an appointment or the website sales call who softly agreed to stop by. Outbound pursuit of this low hanging fruit should be done quickly and if possible, by a manager. Politely greet the caller with a reminder that your store can find a vehicle to meet their needs. Reengage their desires and give them the chance to meet you, the manager, in person. Shoppers appreciate the personal attention and can be intercepted before visiting another store. The best performing dealerships also realize the huge difference between simply dialing the phone and actually having a live conversation. At a typical dealership, 100 outbound calls will only result in 5-10 live conversations with the prospect. A CRISP dealer aims to better their pursuit by increasing the total count of actual live conversations. Imagine the same number of salespeople making the amount of calls, but engaging more prospects in conversation. This uptick creates more efficiency and output to the bottom line.

THE ROAD IS LONG BUT PAVED WITH GOLD If the phone were easy, any dealership could master it. Instead, it’s a long play that requires disciple and deliberate attention. Stop letting phone leads trickle out the back door and down the street to your competition. Buckle down and focus on being CRISP. No one said it would be easy, just worth it.

That’s half the business!” MIKE HAEG

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

Giving two specfic time slots for an appointment allows for a salesperson to get the upper hand on a sales conversation.

APRIL 2016

CAR BIZ TODAY

CBTNews.com

ask THE

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.

pros

that you’re charging amounts that provide good gross profit margins. You don’t have to be the lowest cost provider to have good performance in service. You have to be the best service provider. Make sure your advisors provide your clients with professional feature benefit presentations on needed maintenance items. Preventive maintenance is the key to unlock your dealerships results on labor sales per repair order. Best practice is to train on one labor operation a week with your advisor staff role-playing feature benefits together.

know I need to improve my service department but I don’t know where to start. What are some key areas I should look into first?

-Steve M, Houston, TX

A: Rob Gehring,

president and founder of Fixed Perfomance, Inc.: To start improving your service department, I’d start with changing these three critical components:

3. 26

Customer Intake Process: The way you treat your customers is critical to growing your service department. The dealership should prepare a pre-write order and review the customer’s history looking for needed maintenance items or declined repairs from a prior visit. Scheduling arrivals should be staggered as to not inconvenience any customer with excessive wait times. Advisors should walk around the vehicle with the customer looking for damage or needed items. They should also review every customer cancer visually so they completely understand expectations. Repair Order Count: Continuous growth of repair order counts is also a critical component of growing the service department. Best practice is to have service advisor staff contact a minimum of five open safety campaign customers every day. If the dealership has a business development center, this is a wonderful way to consistently build repair order counts. It is also wise to contact customers that haven’t been in the last six months to address any concerns they might have about the dealership. Labor Sales Repair Order: To improve labor sales per repair order review

CBTNews.com

CAR BIZ TODAY APRIL 2016

need some quick and easy tips to improve customer retention. Any ideas?

-James S. Denver, CO

A: Michael Roppo,

director of Fixed Operations and Training/ QPS at Automotive Domain Results.:

The number one way dealership organizations can improve customer service retention and business is to make customer retention your number one business priority! Customer retention is all about building long lasting meaningful relationships with your customers which is really an easy skill to learn. Start the process by:

Calling them by Name! Repeat their name from the first time you meet them whether that’s in person or over the phone.

Treat your customers like real valuable people. While the Internet is a wonderful thing, making an effort to relate to your customers on a personal level is often the difference between a sustainable business and one that’s here today, gone tomorrow.

Appreciate your customers. Thank your customers. Chances are you have competitors in your category and that means your customers have options. The fact that they chose you, whether or not because of your pricing or reputation or convenience, is something

that you appreciate, so show it. Use thank you notes, thank you gifts for onboarding new customers and/or discounts to your most loyal customers can speak volumes.

Welcome and ask for constructive feedback. Let your customers know that their voice is heard. Don’t wait for negative feedback to come to you, proactively reach out to your customers on a regular basis to find out what they like and what they think you can improve on.

Give customers what they want! Provide them with a value added service experience, every day, every time, without fail and no exceptions!

new dealership just opened close to me. How do I keep my employees, especially my service guys from joining them?

-Mike B., Birmingham, AL

A: Jeff Cowan,

President of Jeff Cowan’s ProTalk:

There will always be new businesses open and they are likely to have the latest and greatest. When those businesses open they almost always generate interest from employees who work in the same industry. The way to keep your employees from jumping ship is simple really. Create a work environment that is conducive to a long happy life and career. Is your workplace friendly? Do you pay well? Is your business able to deliver what it promises? Do you have a healthy flow of customers? These things are what draw employees in and keep them in place. Here at Pro Talk I pay better then my competitors. I go out of my way to make everyday interesting and fun. I repeatedly invest in my products and advertise in various ways which keeps my customer flow healthy. And I always make sure that our products are delivered in a manner that exceeds our customers expectations. Do I have employees leave from time to time? Of course I do. But they are always replaced quickly by people just as good or better. I do

WHO’S PROTECTING YOUR PROPERTY AFTER HOURS?

Secure your property now for as low as $3.99/day No contract and $0 upfront options available

We saved our customers

$10,000,000

last year in potential theft Intelligent, live video monitoring is the future of dealership security 888.675.6555

www.nvmcsecurity.com ADVERTISEMENT

not fear nor do I care what my competitors are doing in their workplace. I feel I have the absolute best work environment in my niche of the market and go out of my way to make it so. I walk in everyday to my place of work with that attitude and demeanor. It rubs off on my coworkers. My co-workers are smart. They know a good thing when they see it. If you deliver to your co-workers, they will see it too. If what you offer is the best opportunity, they will see it and will go nowhere.

use automated text messaging to boost my marketing program and for other purposes, such as sending service and appointment reminders. Are there legal requirements I need to follow? -Harold, Tampa, FL

A: Joe Holahan,

an attorney at Morris, Manning & Martin in Washington, D.C., and a member of the firm’s Insurance and Privacy Practices:

Yes, federal law requires that you obtain the consumer’s consent before sending an automated text message for any purpose. If the text message is sent for marketing purposes,

written consent containing certain disclosures must be obtained. State law also may impose certain requirements. Tread carefully in this area. There has been an explosion of class action lawsuits alleging violations of federal law by businesses using automated text messaging, some of which have resulted in large settlements.

ecently I’ve had several people come in looking at cars for their clients. Should I work with them? What are the pros and cons of working with a sales consultant for a person and does it affect how I negotiate with them?

The simple answer is to work with the consultant the same way you would with a customer. This includes providing compelling reasons to buy from your dealership, a compelling presentation that meets their vehicle needs and their financial needs and insight into how they will be treated after the sale. Don’t forget to sell your service center, and let the consultant know what makes your dealership stand out from the competition. Bottom line: I would treat the consultant exactly how I would treat a customer.

-Sheila P., Chattanooga, TN:

A: Anne Fleming, president of WomanDrivers.com:

The world is changing and we must change with it. Darwin said “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable

to change.” So, if a customer prefers to work through a consultant to buy a car…we must adapt.

APRIL 2016

CAR BIZ TODAY

CBTNews.com

DEALER-FX:

TABLET-BASED SOLUTION

Dealer-FX is transforming the future of the service lane by integrating AutoAlert’s trade cycle

ustomer retention is a buzzword in service departments of franchise dealerships across the nation. Driving customer loyalty not only reduces defection to independent repair facilities, but most importantly enhances the customer experience, which results in an increased likelihood that the customer will repurchase from that dealership. In principle, it all makes sense, but there are factors that may interrupt the customer purchase decision process, and that is a concern for the dealership. Those may include: geographical proximity, lack of brand loyalty, peer influences, self-directed research, and promotions, to name but a few. So what is the dealership to do, and what intelligence can it leverage to better protect their investment in retaining their customers? Dealer-FX is known for its tablet-based solution that engages with customers at their vehicle and provides an exceptional experience on the service drive, enabling service advisors to build rapport and serve as relationship builders, rather than just order takers. Dealer-FX’s proprietary One Solution software suite is fast becoming the unchallenged leader in the service lane. It promotes best practices

CBTNews.com

CAR BIZ TODAY APRIL 2016

among advisors, driving key metrics including service maintenance penetration, dollars per repair order, customer satisfaction and, yes, customer retention. Dealership sales departments can create an environment of uneasiness for consumers who have become savvier, and may be suspect of upselling by service advisors and technicians. In contrast, if you’ve developed trust between your service advisors and your customers, presenting an offer within the service lane presents a great opportunity to deliver a compelling opportunity to your customer. Now, what if you had intelligence identifying which customers were approaching the end of their warranty or vehicle lifecycle? And what if you could pre-empt their decision making process by engaging them with a valuable upgrade offer? That is just what Dealer-FX is delivering in tandem with strategic partner AutoAlert, a leader in trade cycle equity management. By presenting targeted upgrade purchase or lease renewal offers from the service drive and integrating that capability into the service write-up process in the lane, Dealer-FX is changing the game.

The AutoAlert solution is a proven retention tool and has been shown to effectively reduce the trade cycle from an average of 68 months to 36 months. The dealership opportunity is substantial given that an estimated 10%-15% of customers entering the service drive meet the upgrade target criteria. When you consider that 30%-50% of all service customers have never purchased or leased from their servicing dealer, the upside is even greater. New technologies and business models are changing customer expectations such that the old ways of buying and selling at the dealership have been turned on their head. Customers are looking for engagement and transparency. The service department is evolving and advisors are fostering trust with customers by coming out from behind their computer terminals. With these changes come new ways of doing business. Dealer-FX is transforming the future of the service lane by integrating AutoAlert’s trade cycle management intelligence so dealerships can monetize profitable opportunities with customers who were previously underserved.

LEADERSHIP & MANAGEMENT

CUT THE RISK

WHEN

There are Ways to Limit Your Vulnerability to Employee Theft BY CHUCK SUJANSKY

mployers in every industry are increasingly becoming victimized by theft of goods and services from once-trusted employees. How widespread is the problem? Ninety-five percent of employers are believed to be victims of theft and 75 percent of employees who steal from employers do so repeatedly. The U.S. Chamber of Commerce estimates that theft by employees costs American companies $20 to $40 billion a year. To pay for it, every man and woman working in America today contributes more than $400 per year.

DEALERSHIPS NOT IMMUNE TO EMPLOYEE THEFT

compared to an average of $100,000 for companies with 1,000 to 10,000 employees.1

These estimates don’t take into account losses from employee theft that may harder to measure. Acts of theft and fraud committed by employees can also rob a dealer of invaluable intangibles, such as lost time, damaged trust, ruined relationships and ruined reputations. While organizations of every size and in every industry may fall victim to employee theft, the damage can hit smaller employers the hardest. A report by the Association of Certified Fraud Examiners found that organizations with fewer than 100 employees lost an average of $147,000 through occupational fraud,

Consider a few examples from within the automotive retail industry: A dealership accountant issued checks made out to cash with her 17-digit credit card account number listed on the memo line of the checks. Instead of depositing the checks in the dealership’s account she used it to pay off gambling debts. A dealer’s General Manager eventually pled guilty to fraud charges for altering lease

APRIL 2016

CAR BIZ TODAY

CBTNews.com

Practical Tips For Preventing Employee Theft and Fraud PERSONNEL MANAGEMENT AND TRAINING

Conduct thoroughgoing interviews of all applicants and conduct detailed background checks, with pre-employment screening and drug testing. Ensure that all new employees understand their job duties and responsibilities, especially with regards to safety and security. Conduct regular security reviews and training sessions to bring all employees up-to-date as well as to review ongoing operations and procedures. SYSTEMS AND PROCEDURES

Make sure that all procedures in place for all departments - sales, service, parts, finance and accounting – are airtight and meticulously followed by all employees. Conduct frequent audits, refresher training, and procedure reviews for all employees. SECURITY TECHNOLOGY

Install surveillance cameras and enhanced lighting in all areas of the dealership, especially covering blind spots Conduct regular reviews of surveillance footage to ensure nothing suspicious is taking place. Invest in state-of-the-art locks and access control in areas where theft of valuables (cash, credit cards, checks, merchandise, parts, etc.) are most likely to occur. Install alarms as necessary and conduct regular tests to assure they are functioning.

documents to increase his commission by altering signed lease documents adding dealer-installed accessories that never existed. An Assistant Parts Manager was fired after altering sales documentation by recording sales as a “quote only” then pocketing the cash. The losses were found when the parts department performed their annual inventory. The parts manager at a Nissan dealer was convicted of scamming more than $165,000 from his dealership by submitting false warranty repair claims, as well as stealing inventory, voiding bills that had been paid by customers and using a debit machine to transfer money into his own accounts. An employee at a Honda dealership in Arkansas was caught skimming $25,000 from sales of parts on eBay.2

CAN YOU AFFORD TO GAMBLE WHEN HIRING NEW EMPLOYEES? What if you knew in advance that hiring the wrong job candidate could cost your organization thousands of wasted and lost dollars? Would you change your hiring processes? Would you invest in better screening methods? Most employers don’t realize that: 30% of job applications contain false information. 20% of workplace death is linked to alcohol or drug use. Negligent hiring cases against employers have resulted in verdicts of up to $40 million. The average settlement of a negligent hiring lawsuit is nearly $1 million.3

DEALING WITH WORKERS WITH SUBSTANCE PROBLEMS One of the biggest challenges facing most employers today is dealing with workers that struggle over drug and alcohol problems. These employees are the most likely to lie, steal, cause accidents and create innumerable other problems for employers. According to the 2014 National Household Survey on Drug Abuse (NHSDA) 27.0 million Americans age 12 or older admit to illicit drug use in the last 30 days.

Take the time to conduct through interviews and background checks on potential employees.

CBTNews.com

CAR BIZ TODAY APRIL 2016

16.3 million Americans age 12 and older and 12.4 million adults admit to “heavy” drinking (5 or more drinks on at least 5 or more occasions in the past month).4

These workers are involved in 55% more workplace accidents and sustain 85% more on-the-job injuries than other workers. In addition the National Safety Council reports that 80% of those injured in “serious” drug-related accidents at work are not the drug abusing employees but non-using co-workers and others. Finally, the US Navy estimates that each drug user costs his or her employer an average of $6,600 more than non-substance abusing co-workers each year.5 Fortunately there are instruments available to help employers make the right hiring decision the first time. These tools represent a small investment that can pay big dividends to employers that wish to avoid problems with employee theft, substance abuse, criminal record, performance problems, and related issues:

BACKGROUND CHECKS Comprehensive and timely criminal background check services provide employers with the information necessary to make an informed decision when hiring an applicant Pre-employment screening refers to the process of investigating the backgrounds of potential employees and is commonly used to verify the accuracy of an applicant’s claims as well as to discover any possible criminal history, workers compensation claims, sex offender list, aliases, address history, governmental watch lists, motor vehicle records, and legal working status. Background checks cost about $20 to $50 depending on how extensive the research i

DRUG TESTING Standard urine drug testing panels range from five to 10 drugs. Specimen validity testing is available to detect adulterants or specimen substitution resulting from a donor’s attempts to mask drug use. The use of an independent Medical Review Officer (MRO) to review all non-negative test results is recommended. Drug testing costs range from a low of $28 per drug test to a high of $42 per applicant. 77% of surveyed employers said that since implementing drug testing they were receiving a much better caliber of job applicants simply by telling applicants they require drug screenings.

THE STEP ONE SURVEY The pre-employment Step One survey is used as a screening tool early in the candidate selection process. The survey, which can be completed by employees online, assesses work-related values such as employee background, employment history, integrity, personal reliability, and work ethic.

DON’T MISS THE SIGNALS Most employers, whether inside the automotive industry or outside of it, probably tend to trust that their employees are for the most part honest and trustworthy. They don’t anticipate employee fraud and often miss the signals that all may not be as it seems when it comes to employee honesty and trustfulness. But within the Automotive Industry the ramifications for employee theft and fraud are enormous. As a 2015 National Automobile Dealers Association report explained:

Employers can reduce the potential for employee problems and avoid unnecessary expenses. More than 1.05 million people were employed at U.S. new-car dealerships in 2014, which is higher than any other auto-related industry. New-car dealers, on average, employed 64 people per dealership. Wages at new-car dealerships have increased an average of 3.3 percent since 2011, with employees, on average, earning more than $55,000 a year. Annual payroll at new-car dealerships was more than $58.1 billion in 2014, an average of $3.5 million per dealership. Total dealership revenue, which included new-car and used-car sales (as well as parts and service sales) reached an all-time high of $806 billion in 2014, an increase of 8.6 percent from 2013.6 When auto dealerships and related businesses bring new workers aboard their managers don’t have access to a “crystal ball” that can help identify which employees might be prone to steal, lie or

commit fraud sometime in the future. But, by following the strategies and recommendations above employers should be able to reduce the potential for employee problems and avoid unnecessary expenses.

Notes: 1. "Association of Certified Fraud Examiners - 2012 Report to the Nations - Key Findings and Highlights." Association of Certified Fraud Examiners - 2012 Report to the Nations Key Findings and Highlights. Association of Certified Fraud Examiners, 2013. Web. 15 Mar. 2016. <http://www.acfe.com/ rttn-highlights.aspx>. 2. "Stories of Employee Theft and Lies - DealershipForum.

com." Stories of Employee Theft and Lies - DealershipForum. com. DealershipForum.com, 1 Apr. 2008. Web. 15 Mar. 2016. 3. "Experience the Employee Background Checks." Experience the Employee Background Checks. Profiles International, 2015. Web. 15 Mar. 2016. 4. Hedden, Sarra L., Joel Kennet, Rachel Lipari, Grace Medley, Peter Tice, Elizabeth A. P. Copello, and Larry A. Kroutil. "Behavioral Health Trends in the United States: Results from the 2014 National Survey on Drug Use and Health." Samhsa.gov. Substance Abuse and Mental Health Services Administration, Sept. 2015. Web. 15 Mar. 2016. <http://www. samhsa.gov/data/sites/default/files/NSDUH-FRR1-2014/NSDUH-FRR1-2014.pdf>. 5. "Marijuana Fact Sheet: What Is The Truth?" http://www. ndwa.org. National Drug Free Workplace Alliance. Web. <http://www.ndwa.org/pdf/Marijuana Fact Sheet 111913.pdf>. Web. 15 Mar. 2016.

6. "NADA Data 2015 Report." NADA Data. National Auto Dealers Association. Web. 15 Mar. 2016.

CHUCK SUJANSKY

CEO of KEY Group/Applied Behaviorial Insights Key Group/Applied Behaviorial Insights is a Pittsburgh based human resources consulting, assessment and training company. Chuck consults to clients across many types of industries, including automotive, retail, financial and health care. Questions or comments can be sent to csujansky@keygroupconsulting.com

TO SEE MORE FROM MARK TEWART GO TO CBTNEWS.COM

APRIL 2016

CAR BIZ TODAY

CBTNews.com

ASSOCIATIONnews NADA SUPPORTS TRANSPARENCY LEGISLATION The National Automobile Dealers Association (NADA) commended Sen. Jerry Moran (R-Kan.) for introducing legislation in the U.S. Senate to protect consumers by bringing transparency and accountability to the Consumer Financial Protection Bureau’s (CFPB) regulation of the auto finance market. Moran, a member of the Senate Banking, Housing and Urban Affairs Committee, introduced S. 2663, the “Reforming CFPB Indirect Auto Financing Guidance Act,” which would require the CFPB to withdraw the guidance that attempts to eliminate a dealer’s ability to discount auto financing for consumers. Nothing in the bill would restrict the CFPB’s ability to enforce fair credit laws in auto financing, the NADA says. The bill is identical to legislation introduced by Reps. Frank Guinta (R-N.H.) and Ed Perlmutter (D-Colo.), which passed the House in November of 2015 by an overwhelmingly bipartisan vote of 332-96. The Guinta-Perlmutter bill (H.R. 1737) won the support of 244 Republicans and 88 Democrats. Consumers have access to multiple lenders when financing through a local dealership, and dealers can discount loans to meet or beat competitive offers, but the CFPB policy aims to end loan discounting. The Wall Street Journal estimated that the CFPB’s campaign to eliminate dealer discounts would cost some consumers nearly $600 on a typical new-car loan.

SOUTH DAKOTA HONORS DEALER Dennis Daugaard, governor of South Dakota, declared Jan. 25 Jenny Wegner Day. Jenny has been in the automobile dealer business since 1986 and following her father’s retirement in 1992, acquired Wegner Auto Company with her brother, Jim. Wagner Auto Co., has been a Buick dealer of 105 years and may be the oldest one in the world. She is active member and a board member of the South Dakota Automobile Dealer’s Association.

of the 381 dealers are locally-owned and operated by families for generations,” Missouri Automobile Dealer Association President and CEO Doug Smith said. “They invest millions of dollars in local communities, are among the state’s largest charitable contributors and generate hundreds of millions of dollars in tax revenue for the state’s road fund, parks and local schools.

GREATER N.Y. AUTOMOBILE DEALERS ASSOCIATION SHOW UNVEILS NEW LOGO The New York International Automobile Show today launched a new logo and brand strategy, marking the most dramatic change in its visual identity since 2000 when the existing logo was re-designed to mark the new millennium. The new logo is a vibrant new take on the New York Auto Show’s prior logo and was developed from the start to be easily animated for the Show’s digital media platforms, the GNYADA said.. There will be nearly 1,000 cars and trucks on display at North America’s first and largest attended auto show. The iconic 116-year-old New York City event dates back to 1900.

MINNESOTA AUTO DEALERS ASSOCIATION EXPANDS KIDS CAMP Last year, MADA’s Service, Parts & Collision Council helped launch NitroX, a week-long summer camp where 16 middle-schoolers (including 5 girls) got exposed to the automotive industry. The students worked on remote controlled, gas powered vehicles and were all to design, decal and paint their own cars. The camp was met with such resounding success that the Council is expanding it to three locations this summer, thanks to the financial support of the Transportation Center of Excellence In addition to the program at St. Cloud Technical & Community College, Central Lakes College in Brainerd and Hibbing Community College have been chosen to host NitroX camps in 2016.

LEHIGH VALLEY AUTO DEALERS PLEDGES $100,000 TO CHILDREN’S HOSPITAL

MINNESOTA AUTO DEALERS ASSOCIATION EXPANDS KIDS CAMP

The Greater Lehigh Valley Auto Dealers Association announced a multi-year pledge of $100,000 for the Children’s Hospital at Lehigh Valley Hospital. The Lehigh Valley Health Network said it will use the donation to support the transfer of the pediatric cancer and infusion center from Lehigh Valley Hospital-Muhlenberg to the network’s Cedar Crest Boulevard.

Last year, MADA’s Service, Parts & Collision Council helped launch NitroX, a weeklong summer camp where 16 middle-schoolers (including 5 girls) got exposed to the automotive industry. The students worked on remote controlled, gas powered vehicles and were all to design, decal and paint their own cars.

MISSOURI AUTOMOBILE DEALERS ASSOCIATION UNVEILS NEW AD ‘HEART OF MISSOURI’ The Missouri Automobile Dealers Association released its new ad ‘Heart of Missouri’ highlighting the firm place new car and truck dealers have in Missouri’s automobile industry. With over 20,000 employees at locally owned dealerships across the state, new car and truck dealers are one of the state’s largest employers. The ad points out that there are 381 new car and truck dealerships in the state and in 2013 Missouri’s new car and truck dealers paid $237 million in taxes in the local, state and federal levels. “Missouri’s new car and truck dealers are classic examples of small business. The majority

CBTNews.com

CAR BIZ TODAY MARCH 2016

The camp was met with such resounding success that the Council is expanding it to three locations this summer, thanks to the financial support of the Transportation Center of Excellence In addition to the program at St. Cloud Technical & Community College, Central Lakes College in Brainerd and Hibbing Community College have been chosen to host NitroX camps in 2016.

Over

118,000

automotive professional

subscribers

and growing!

Visit CBTNews.com for the latest news, information, best practices, training tips from the nationâ&#x20AC;&#x2122;s top automotive trainers, in-depth interviews with industry experts and more! CHECK OUT OUR WEEKLY PROGRAMMING

DAVID LEWIS | Straight Talk

DAVID KAIN | Kain & Co.

JEFF COWAN | Weekly Tune-up

F & I Today

BRIAN PASCH | Auto Marketing Now

Saturday Morning Sales Meeting

FIXED OPS

NOW IS THE TIME

TO MAKE FIXED-OPS PROFITABLE Stop Waiting, Help is not coming!

BY JEFF COWAN

There is no doubt that the past year has been very tough on the auto industry. I understand that when auto sales are down the manufacturers have to do everything they can to turn it around, and so far, I would give the effort shown a C+ to B-.

re you having your best Fixed Operations year ever or at least one of your best years? You should be. Think about it. If people are not buying new cars then they are keeping the ones that they have, putting more miles on them, needing more services, needing bigger repairs and looking for someone to help them with both.

CBTNews.com

CAR BIZ TODAY APRIL 2016

What I do not understand, is if everyone knows and agrees that Fixed Operations is the true backbone of the car dealer and one of the few places left where a substantial profit can be made and where true customer retention is gained, then why is no one doing anything with Fixed Operations on a large scale to grow that side of the business?

NOW WOULD BE THE TIME Now would be the time to mount an effort to take on

the aftermarket sector and win back the millions of customers who do business with them. Now would be the time to reevaluate how Service Departments are run and eliminate old practices that have never worked and replace them with those that do. Now would be the time to create a training and certification program for all who work in key roles in Fixed Operations to insure a consistent level of competence throughout dealerships nationwide. Now would be the time to create ad campaigns that advertise the benefits of doing service business with your local Dealer. Now would be the time to teach your staffs how to flat-out sell. Why wouldn’t manufacturers do these types of things when most of the top 10 to 15% of the most profitable dealerships

“If people are not buying new cars then they are keeping the ones that they have, putting more miles on them, needing more services, needing bigger repairs and looking for someone to help them with both.” do part or all of these items? The sad news is that no one is doing any of this and to the best of my knowledge, I know of no one planning to do any of it on a large scale. As a matter of fact, I have been in contact with several manufacturers recently and not one of them has plans that would do any of what I have described above. Instead, they seem to be intent on doing the same thing they have done for years – work to get vehicle sales to return, sell a lot of vehicles to a lot of people and hope they come back for a lot of service. You can go along with this plan (or non-plan) if you choose and history tells us things will eventually turn around and you will have another 8 to 10 year run before a sad economy zaps you again. Or, you can do like the top 10 to 15% of the Dealerships and take the mission on yourself.

DRIVE YOUR OWN FUTURE It is clear, you have a few options to combat what is going on and to stop and change forever your future path. Your options are: 1. Self-analyze your current situation and make the appropriate changes to make you a top Dealer. 2. Visit several of the highly successful Dealerships and see exactly how they have accomplished these feats. I have found that the most successful Dealerships are usually very willing to allow others to see what and how they do things. 3. Hire someone full-time who can do this for you. There has never been another time

when so much talent was available that specializes in these areas. 4. Get outside help from a person or firm that has experience in this area and can quickly and efficiently help you make and execute a plan that makes you a top 10 to 15% Dealership (My firm can do that). 5. Sit back, wait, do nothing and wait for the manufacturers to come up with a plan. I would be willing to bet that the many of the Dealers who were recently forced to close would love to have these options. I would also bet that if they had it to do over they would select one of the first four.

JEFF COWAN

President of Jeff Cowan’s PRO TALK Inc. In his 28th year of training, Jeff is recognized as the creator of the modern-day walk-around and selling processes for service departments. Currently partnered with NADA, EasyCare, NCM, MPi and other vendors and manufacturers, he¬ is the nation’s authority when it comes to training service advisors and service support staff. Visit his website at AutomotiveServiceTraining.com and sign up for free, weekly training. There are steps to take to make Fixed Ops more profitable and give a better customer experience.

TO SEE MORE FROM JEFF COWAN GO TO CBTNEWS.COM

APRIL 2016

CAR BIZ TODAY

CBTNews.com

MARKETING

Dealers & Co-Op:

USAGE, ATTITUDES, OBSTACLES There’s a Place for Digital Marketing in Co-op Advertising BY GARY GALLOWAY

between the dealers and OEMs on ways to carry out these co-op advertising programs. Dealers are becoming increasingly frustrated with the relationship with OEMs when preferences don’t match up.

LEVELS OF PARTICIPATION IN CO-OP In last month’s article, I discussed the dealership surveys, interviews with brand managers and analysis of trends in automotive advertising that was part of our research. For this third installment, I will explain dealers’ participation in co-op programs and the obstacles that they face in these programs.

EMs have budgeted $6.5 billion this year for co-op programs, up from $6.3 billion in 2014. Very little is left on the table because co-op is vital to dealers in two ways: It subsidizes nearly one-third of their ad budgets, and it helps dealers maintain new-car inventories (since manufacturers typically reimburse in store credit). However, although participation in these programs is relatively high, there is a disconnect

CBTNews.com

CAR BIZ TODAY APRIL 2016

When we asked brand managers about co-op programs for new car advertising, they confirmed high participation rates. “We audit for spending, and we find that 80 percent are using 100 percent of the funds. The other 20 percent don’t use it all, mostly because they’re in smaller markets and don’t need or want to advertise as much,” one brand manager told us. Another said, “For the most part we have

strong utilization of co-op. I’d say that 99 percent of our dealers participate. There are only a very few who don’t.” There was somewhat lesser participation reported from dealers when we asked about co-op funding for fixed-operations service offerings. Only 72 percent of the participating dealers said they utilized co-op for service offerings. This would seem to be a fairly large missed opportunity, considering the fact that, according to NADA, Fixed Ops is a $310 billion business with dealerships capturing slightly more than one-fourth of the market. Service and

“Despite the popularity of mobile and video,

search and display advertising still yield big results.”

Parts make up 54 percent of the average dealership's net profits, yet typically receives a minuscule (3 percent) share of voice on its website, according to NADA. This oversight is costing dealerships billions of dollars in lost market share each year. Though participation is high overall, co-op programs are not without frustrations. More than half the dealers surveyed checked off “too many rules/ restrictions” when asked to identify obstacles they face. That’s a common complaint for any co-op program, not just automotive. Nearly one-third noted “too much paper work.” Only 10 percent said the programs didn’t hold enough value. When we offered four words that might describe that relationship – cooperative, rewarding, frustrating and insignificant – dealers overwhelmingly agreed with “cooperative.” But about two-thirds also agreed that it was both “rewarding” and “complex,” and two in five participants considered the relationship “frustrating.” This feedback provides some insight on how dealers are feeling about these large, important co-op programs.

CO-OP USAGE OF DIGITAL MEDIA Auto dealers are second only to real estate agents when it comes to the share of ad budgets they devote to digital media. They’re currently averaging two-thirds of their expenditures on digital media, compared with an average of less than one-third for all other advertisers. That digital preference translates to co-op programs as well. When we compared how other small and medium-size businesses (SMBs) were utilizing co-op funds, we found that far more auto dealers were participating in online programs. Even though digital usage is high, OEMs may start driving it even higher. One national automotive manufacturer told its franchise dealerships that,

98% of dealers surveyed say search and display marketing is effective in driving customers.

TO SEE MORE FROM GARY GALLOWAY GO TO CBTNEWS.COM

to participate in its co-op programs, at least half of their ad spending had to be in digital media by midyear 2014. While we foresee OEMs continuing to increase their digital co-op offerings, we also see an opportunity to misfire. Usage trends clearly point to high growth in digital video and mobile platforms, but marketing in the digital video environment may be interpreted as a 15-second pre-roll commercial on YouTube, and mobile advertising could be seen as a banner ad on a mobile site. That’s not what dealers need. Here’s our recommendation on what OEMs and dealers need: OEMs should initiate support for mobile-optimized dealer websites. Our research indicates that nearly one-quarter of dealerships don’t have a mobile-friendly website. This is borderline horrific, considering the massive shift to mobile platforms. Optimization extends not only to design and usability, but the ability to be found in mobile search, too. OEMs, dealer associations and dealerships should coordinate digital video marketing. There is obviously a disconnect when two-thirds of dealers use digital video marketing, two-thirds of them say their OEMs aren’t supporting it, and dealer associations are barely using digital video (let alone search and display advertising) at all. The industry’s longstanding love affair with TV commercials is threatened by one simple, “sit-upand-pay-attention” result: One-third of the dealers surveyed believe that digital video is more powerful than TV advertising, and one-third believe that TV and digital combined are more powerful. The shift

to video comes at a time when one million more Internet viewers will be watching digital video annually, says industry researchers from eMarketer. Be careful not to cram the old business model – well-polished TV spots – into the new technology. Utilization of digital video is growing phenomenally, but the new environment has different specifications. Advertising interruptions – even in the form of 15-second pre-roll – aren’t acceptable. More dealers believe that the best use of video is on their own websites than on other media sites like YouTube and Facebook. Co-op support for 90-second infomercial and instructional videos about new brands and features seem the best way to capitalize on this shift towards digital video. When adjusting co-op programs, don’t cannibalize “old” forms of digital for new ones. Despite the popularity of mobile and video, search and display advertising still yield big results. Not a single dealer in our survey said search and display wasn’t an important form of marketing; 75 percent said it was “very important” and 98 percent said it was effective in driving customers. With these recommendations in mind, OEMs and dealers can work out a co-op advertising program that is mutually beneficial. At the end of the day, attaining an optimal mix of advertising and promotions at the local level will lead to happy customers and ultimately, increased sales at your dealership.

GARY GALLOWAY

Automotive Digital Marketing Evangelist Gary Galloway recently joined Netsertive. He is a marketing executive with more than 17 years of experience implementing solutions with a high degree of customer satisfaction, success and profit. An adjunct professor at the UNC-Chapel Hill School of Journalism, Galloway teaches a class on media sales and management/digital marketing. Previously, he was the director of marketing & digital media at Crossroads Automotive Group, where he created and executed monthly interactive marketing campaigns for 19 different retail locations and 30 franchises.

APRIL 2016

CAR BIZ TODAY

CBTNews.com

ON THE SET WITH Jeff Skobin of Galpin Honda, 2016 “Dealer of the Year” by DealerRater

Sean Browning of American Financial and Automotive Services

Joe Gumm of CBT News with Kacey Gorringe of

Paul Faletti of NCM Joe Gumm of CBT News

David Lewis of CBT’s Straight Talk

Bruce Thompson of Pearl Solutions

Joe Gumm of CBT News with Scott Pechstein of Autobytel

John Giamalvo of Equifax

Nathan Usher of Dealer Socket

Mike Goicoechea of DealersLink

Doug Autstin of Strategic Source with Corinne Lillis of CBT News 38

CBTNews.com

CAR BIZ TODAY APRIL 2016

Damon Johnson of Kelley Blue Book

Adam Robinson of Hireology

Randy Fluharty of NCM with Joe Gumm of CBT News

Ian Cruikshank of Speed Shift Media

April Rain of Digital Rain with Joe Gumm of CBT News

The Winning Combination Unlocking Your Dealershipâ&#x20AC;&#x2122;s Profits

Dealership Development Partners in Profits Development Program State-of-the-Art Analytics and Reporting Dealer Participation Programs

Automotive Training Academy Leader in Sales and F&I Training Customized In-Dealership Training F&I University

Compliance Programs Compliance Management for All Areas of the Dealership Dedicated Program for Compliance Officers

MasterTechâ&#x201E;˘ F&I Products Vehicle Service Contracts Scheduled Maintenance Debt Protection Ancillary Products

800.967.3633 | www.AFASinc.com

DON’T SETTLE. IMPROVE.

NCM® Associates may be known for its industry-leading Benchmark® data, but our most important metric is your success. Don’t settle for the status quo. Join NCM and find partners as committed to your dealership as you are.

GET RESULTS WITH NCM

866.848.7911 ncmassociates.com/improve

20 GROUPS

CONSULTING

EDUCATION

BUSINESS INTELLIGENCE

TRAVEL SOLUTIONS