CBT Magazine January/Feb 2014 by CBTNews

CAR BIZ TODAY THE CUSTOMER EXPERIENCE IS YOUR MOMENT OF VALIDATION DAVID KAIN

CBTNews.com

JANUARY/FEBRUARY 2014

pg. 26

PREMIERE ISSUE

LEADING YOUR TEAM TO SUCCESS

IN 2014 Dave Anderson, president of Learn to Lead®, an international sales and leadership training and consulting company, tells you how to prepare your sales and management staff for the year ahead. His step by step approach is based on real world experiences. Dave is a frequent guest on CBTNews.com where his training videos are among the highest viewed by dealers and personnel. EPage

Dave Anderson

CBT NEWS.COM LAUNCHES CAR BIZ TODAY MAGAZINE DEALERS NOW HAVE THEIR OWN NEWS NETWORK With the launch of CBTNews.com, the nation’s dealer community gained a new venue for news, information and education. Featuring a daily newscast, in-depth interviews with industry leaders and a host of tools for helping dealers run their dealerships better, the site is quickly becoming the leading news source for the retail automotive industry. CBT News just celebrated a year with the website and newscast, so producing a print publication was the next logical step in the building of what founder Jim Fitzpatrick calls a unified source geared to the needs and challenges facing today’s auto dealer. “During our first year the reception has been outstanding,” he explains. “Everybody wants to be on it or view it, depending

whether they’re a vender or a dealer.” Auto industry veteran Fitzpatrick, who was himself a dealer, brings an insider’s understanding of the auto sales business to this new platform. His tenure in the business includes AutoNation, JM&A Group and Southeast Toyota Distributors. He founded Force Marketing and Fitzpatrick Advertising to provide at full range of TV, radio, outdoor, and print advertising, as well as turnkey marketing and digital services. ECont. on Page 18

INSIDE CAR BIZ TODAY

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David Westcott

GRANT CARDONE’S

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NEWS.COM

CAR BIZ TODAY MAGAZINE Email

newsroom@cbtnews.com Phone

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EDITORIAL STAFF President and Publisher

Jim Fitzpatrick

Letter from the

Editor A

s Managing Editor of CBT News, I am very excited, that after a year and more than 300 newscasts, we are launching Car Biz Today Magazine. The magazine will provide the retail automotive industry with news, information, training tips and interviews with top executives in the industry. If this is your first experience with CBT, I encourage you to check out our online daily newscast at CBTNews.com. CBT News and Car Biz Today Magazine were founded and based on one principle; to deliver news and information that will help you run your dealership better. With that said, I’d like to hear from you. Share your questions … share your experiences … share your expertise … let me know what you would like to see on CBT News and on the pages of Car Biz Today Magazine, and I will make sure that we continually deliver content that will have a positive impact on your business. 2014 will be a phenomenal year in our industry with sales continuing to push closer to 17 million units. I am looking forward to the next year where my team and I will continue to bring you content that is valuable and relevant to you.

Managing Editor

Bridget Everett

Associate Editors

Victoria Rodgers Russell Brown

Assistant Editors

Jessie Coffield Amy Ottman Art Director

Casey Edwards Associate Art Directors

Andrew Goodman Yueying Zhang

Contributing Writer

Randy Southerland Photography

Derek Wintermute Sara Hanna

ADVERTISING Director of Sales

Jane Howard jhoward@cbtnews.com 678.679.1268 404.452.9551

CUSTOMER SERVICE info@cbtnews.com

Bridget Everett | Managing Editor beverett@cbtnews.com

Bridget Everett | Managing Editor CAR BIZ TODAY MAGAZINE CBTNEWS.COM

SUBSCRIPTIONS To subscribe electronically, log onto 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, 5955 Shiloh Road East, Suite 204, Atlanta, GA 30005. Please send address changes to the above email or mailing address. Permission to reprint or quote excerpts granted only upon written request. Advertising rates are provided upon request.

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TO ALL OUR OF OUR ADVERTISERS THAT SUPPORTED US IN LAUNCHING CBT NEWS.COM AND CAR BIZ TODAY MAGAZINE.

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Fix the Roof While

the Sun is Shinin Decades ago, John F. Kennedy declared that the best time to fix the roof is when the sun is shining. His philosophy wasn’t intended for business, but it fits quite well, especially after what has been a big year for most dealerships.

t’ll be interesting to see which dealerships coming off a big 2013 will survive their success and stretch to new levels in 2014, and which will lose their hunger, become complacent, shift into neutral and start playing not to lose. There are three natural forces at work that portend many will fall into the second category: • Prosperity can drain urgency, intensity, work ethic and drive. • Just like in physics, things naturally wind down rather than up unless outside energy is applied. • As Jim Collins pointed out, “the enemy of great is good: the reason so few businesses become great is because they get good and stop doing much of what made them successful in the first place.” Since momentum is easier to steer than to restart, following are three suggested actions you can take to leverage your recent success, pull people past the natural tendency to maintain or let up, and stretch your dealership to a new level this year.

expectations goes beyond a monthly or yearly forecast. It includes the following: • They are in writing • There are daily activity objectives, not just outcome goals

• There are consequences for failing to meet a standard

• The team standards are introduced to the group as a whole, then gone over one-onone as you relate each individual’s required contribution to the total team effort • The expectations become part of the conversation: in meetings, during private coaching sessions, and at performance reviews If you’re not sure whether or not your current expectations are clear enough or high enough, they’re probably not. Make a practice to present new performance expectations in a positive, rather than a high-handed or threatening manner with a script similar to this:

Team, we’re in a great position to build on last year’s 1. Redefine performance success, but in order for us to reach our potential I expectations know I need to do a better job of defining exactly what I expect from each of you on a daily, weekly and There’s no better time to redefine performance monthly basis. In this meeting I want to get us on the expectations in each department and from each same page and give you some clearer targets to shoot team member than the beginning of a new year. for that will get us on the same page and help you Effectively defining or redefining performance become more successful. If we all step up we can make something very special happen here this year.

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Incidentally, if your performance expectations aren’t clear enough, it will be extremely difficult for you to hold anyone accountable, because the question becomes, “Accountable for what?” This brings us the next suggested step to fix the roof while the sun is shining.

2. Remove the dead weight During tough times, removing dead weight isn’t normally a problem, but the temptation during robust business periods is to learn to live with, work around, or rationalize performers operating at levels unworthy of your standards. Departmental deadweight enabled by lack of accountability breaks momentum, lowers morale, hurts the customer experience, and can destroy your personal credibility as a leader. If you’ve set clear expectations, have consistently invested in the development of a team member, offer honest and fast feedback to eliminate gray areas and blind spots, and still have no grounds for believing tomorrow’s performance will be any better than today, you must either transfer the non-performer to a position where he or she is better suited, or remove them. Don’t wait for a bad month, bad quarter, or for the next recession to do what’s right. Leadership has never been about doing what is easy, cheap, popular or convenient. It’s about putting what’s best for the team overall before your personal likes, preferences or comfort zone.

Dave Anderson

Dave is president of Dave Anderson’s Learn To Lead®, an international sales and leadership training and consulting company. Prior to beginning Learn To Lead®, Dave enjoyed an extensive and successful career in the automotive retail industry. Dave has given over 1,000 workshops and speeches over the past decade on sales and leadership development and has spoken in 14 countries. Dave is the author of 12 books, including the TKO Business Series, Up Your Business, If You Don’t Make Waves You’ll Drown, How to Run Your Business by THE BOOK, and How to Lead by THE BOOK.

3. Don’t over-manage and under-lead When everything seems to be rocking and under control it’s tempting to disengage and spend less time in the trenches and more in your office; engaging more in paperwork than in peoplework, substituting rules for relationships; talking like a leader but acting like an anchor. Continue leading on a daily basis by focusing on simple disciplines like these: • Commit to daily wander-arounds where you get into the trenches with your people, give feedback, seek out feedback, catch people doing things right and quickly correcting them when they’re off track. • Schedule one-on-one coaching sessions with team members so you formally and systematically grow them to new levels. • Take your training program up a notch. Devise weekly training themes, assign tasks for people to work on inbetween your training meetings, require action plans from attendees, and then follow up during one-on-ones to help them implement what they committed to. In the upcoming year, don’t wait for the roof to leak or cave in before you commit to basic disciplines like the three presented. Execute them consistently so they become credible, high-impact components of your culture. It should encourage you that none of this is rocket science. It is, however, hard work. But it’s harder if you don’t execute now, while the sun is shining, and then react and engage in damage control after your “roof ” caves in. CBT

ETo learn more go to

Fulfills Its Promise

President of Dave Anderson’s Learn To Lead ®

Cfor the auto industry is a tall order, but

laiming to be the Best Training Day Ever

The key to a successful training day starts with landing dynamic presenters, who are experts in their industry and can provide a wealth of information geared to higher performance and sales. The day-long event includes first class touches like ice sculptures, food and a live band.

the nearly 300 attendees of this day-long “edutainment” event say it delivers on that promise. With top industry speakers such as Jeff Cowan, Jeremy Anspach, Joe Verde, David Spisak and Dave Anderson on stage, the “perfecting the path to the purchase” event has become the event not to miss.

The 2014 line up of topics include: • Jeff Cowan of Jeff Cowan’s PRO TALK, Inc. “Increasing Your Service Drive Sales, Profit and Retention”

The January 24 event, which will be held at the Roosevelt Hotel in New Orleans, is the brainchild of Automotive Protection Corp. CEO Larry Dorfman. His goal was to create educational sessions that not only gave information on improving a dealer’s business, but provided motivation and entertainment as well.

• Alan Ram of Proactive Training Solutions “90 Days to 100 Cars Proven Strategies to Supercharge Your Business” • Joe Verde of the Joe Verde Group “Selling in 2014, The 5 Biggest Changes You Need To Make”

This year, a member of the Google Automotive team will appear as a featured speaker during the event, as well as during breakfast and the cocktail hour. They’ll also be available at the PureCars booth to explain how attendees can supercharge their online strategies, attract more customers and make more sales. “I’m excited that Google Autos will present how important search relevancy is in the digital world,” said Jeremy Anspach, President/CEO of PureCars. “Dealers will gain valuable information from the presentation and have time to ask questions. This is a great chance to put their strategy in a great place for 2014.”

• Dave Anderson of Dave Anderson’s Learn to Lead® “How to Find the Best People to Ensure Your Success!” • Jeremy Anspach of PureCars® “How to ‘Win the Click’ in a Digital World.” Make your vehicles stand out and engage more online consumers. For more information or to register, visit the Best Training Day Ever webpage at www.thebesttrainingdayever.com. CBT

TRAINERS FOR THE EVENT

CBTNews.com David Spisak ReverseRisk

Joe Verde

The Joe Verde Group

Jeff Cowan

Jeremy Anspach

Alan Ram

Dave Anderson

Jeff Cowan’s PRO TALK, Inc.

Proactive Training Solutions, Inc. JANUARY/FEBRUARY

Pure Cars

Learn to Lead

CAR BIZ TODAY

CBTNews.com

rethinking

“THE RACE to the BOTTOM” In New and Used Vehicles I

f I were still a dealer, here’s how I would address the “race to the bottom” that every dealer complains about these days. First, I’d recognize the “race” as an inevitable outcome of two converging forces—the vehicle buyer’s desire to get the best deal, using every technique and technology to know the market for a specific car; and the dealer’s desire to acquire more customers and sell more vehicles. Second, I’d regard the “race” as a now-permanent and highly challenging feature of the automotive retail marketplace. Over time, consumers aren’t going to want less transparency in their quest to find the best deals, and dealers aren’t going to stop selling cars. I would come to terms with the reality that easy money in the car business is pretty much gone, and the business itself is quickly shifting from highly to hyper-competitive.

PROPER PRICING

Finally, I’d get hyper-competitive myself. I would do everything in my power to do a better job of selling cars and making money than the guy down the street—with the ultimate goal of stopping the “race” at my showroom doors. I would work long and hard to perfect a retailing model that ensures I get the cars consumers want, and retail them in a more customer-friendly, efficient and marginminded fashion than the competition.

An even smaller group of dealers seem to have crafted a recipe for success. In fact, they thrive in this new retail environment, selling more cars for more money as they’ve embraced new terms of engagement. For them, there is no “race to the bottom.” That’s yesterday’s news. Rather, they understand success goes to the dealer who wins the “race to the consumer.” This “race” entails offering the right cars at the right prices, and delivering the right inThe problem for many dealers, however, is that the dealership experience to earn a fair profit and seed “race to the bottom” remains a frequent target of long-term loyalty. complaints rather than a call to action. Not all of these dealers approach the “race to Some dealers refuse to accept the new market the consumer” in exactly the same way. However, realities, believing in a version of the car business their business plans feature four pillars that are that has arguably faded away. Other dealers are fundamental to winning the “race.” more aware of the “race” and its symptoms, but they haven’t yet figured out the operational strategy and Perhaps the best news for dealers is that the “race processes that help them acquire more customers to the consumer” is a relatively new contest. It’s still and sell more new/used vehicles in a more profit- the same racetrack, but the conditions and course are healthy manner. different—which means the most adaptable dealers are the first to find the winner’s circle. CBT

These dealers don’t expect to make $3,000 to $4,000 front-end gross profits on new/used vehicles unless the market validates such expectations. The challenge then becomes understanding how to assess and act upon market supply, demand and pricing data to determine each car’s pricing and profit “sweet spot” in the market— from the day it’s purchased to the day it sells. Proper pricing doesn’t mean pricing vehicles at the “bottom,” it means pricing/repricing vehicles to fit what the consumer views as the “market” for the vehicle. To this end, dealers have increasingly aligned their pricing decisions to Vehicle Details Page (VDP) data, given it offers a clear, up-to-the-minute read on each vehicle’s current pricing appeal to potential buyers.

Dale Pollack Founder of V-Auto

Best-selling author on used car sales in his book Velocity. Dale Pollak is the chairman and founder of vAuto, Inc., a company that provides retail automotive dealerships with a better way to appraise, manage and price their pre-owned vehicle inventory. In addition to serving as vAuto’s spokesperson, Dale is responsible for strategic planning and development.

Every new or used vehicle deserves the best shot to attract a potential buyer—an indisputable page from Car Retailing 101. But, in today’s environment, consumers are looking to validate more than just “the car” and “the price.” They want to validate you as a place where they can buy with confidence and, for some, even a degree of pride. This is now an important third leg of online merchandising that remains a challenge for dealers who find it difficult to arm every vehicle with its own compelling descriptions and photos, much less place the vehicle to maximize its visibility to potential buyers.

ETo read more from Dale Pollack go to 8

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PROPER PROMOTION

CBTNews.com

PROPER PURCHASING

For my money, this pillar is “ground zero” for winning today’s “race to the consumer.” In new or used vehicles, it’s imperative that dealers do all they can to purchase the vehicles consumers want, and do so for the least investment. I would submit that dealers are more astute about the proper purchasing of used vehicles than new vehicles. The chief reason? It’s currently easier to tell what consumers want and to readily see (and account for) what’s on the ground in the market. Over time, dealers will gain similar competitive insights into the new vehicle market that helps them purchase and retail more in-demand vehicles at a faster pace—essentially a new vehicle inventory profile that drives operational velocity and vitality.

PROPER PROCESSES

Successful dealers today have worked hard to transform their dealership cultures and reputations to help them win the “race to the consumer.” They take pains to ensure in-store sales processes consistently reflect the market-based pricing transparency and customer experience they promote online. In the end, these dealers find that customers will pay more for a superior experience— and they’ll tell their friends.

JOE VERDE

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How Are You Doing so Far ?

Win ? At various times throughout the year, many businesses are taking stock of their progress. Many are hoping they having a good year, wanting to end the next month or quarter strong, and are wishing that the next month/quarter would build on the current one. Are you noticing the language I am using? Hoping. Wanting. Wishing.

Stop Wishing and Focus on Doing Did anyone focus on what ACTIONS did or did not take place? I work with many businesses and individuals and this is one of the first things we address: Results are caused by actions, not by hopes or wishes. Change is not easy. Anyone who tells you it is easy is not being honest with you. Habits take time to change but without a plan, broken out into small actionable steps, nothing will get changed. Ever try to eat a whole cake at once? Canâ&#x20AC;&#x2122;t do it. We slice it down. We eat one piece and then move on to the next slice. If we try to eat it all in one sitting we end up sick. So what should you be doing this month to review the current results and plan for the future? If you have been keeping track of your goals and progress, sit down and review what the status is. What results did you get? Remember do not judge yourself. Emotions do not help at this point.

Measure Your Successes and Plan to Continue Them If you got the results you wanted, focus on what

lose ? you did to achieve them. If you understand in detail the behavior you employed to achieve a goal, then it will be easy to continue and adjust as you set your goals higher. This also keeps you focused on breaking down your projected goals into actionable steps you or your team will follow and be held accountable to. So for your business this year, what have you done well and why? Did you hit your sales goals? Did revenue exceed expectations? If so, what did you do? Have daily meetings to review results? Was reporting easy to track and follow so everyone was aware of progress? Was there ongoing training to make sure everyone had the tools to succeed?

Measure Your Failures and Plan to Improve Them If you did not achieve the results you wanted, again focus on the behavior that happened. What got in the way of you being able to achieve the goal? Was it lack of follow-up or accountability? Was it a lack of clear instructions or directions? Were there other things that you allowed to be more important? One important task is to reassess the priority that this goal has in your life. The goal may not be worded in a way that inspires you to achieve it. The reward for achieving it may not have an emotional impact on you, or the repercussions of not achieving it may not be impactful enough. Goals without a strong emotional tie usually do not get accomplished. If losing weight has no real impact on your health other than you want to do it, you may be able to pass it off. However, if your

ETo read more from Glenn Pasch on achieving success CBTNews.com go to

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no idea? doctor tells you that if you do not lose weight you will die, well then you will be invested in the goal. Are you seeing a pattern? Goals only are accomplished if YOU are involved each day.

Plan for Success and Execute! There are many good books out there that talk about setting goals and deciding on your action plan, such as The 10X Rule by Grant Cardone and Making Ideas Happen by Scott Belsky. What these books have in common is that they focus on you, the reader, helping to break down your goals into actionable steps. Grant Cardone explains in his book that every day, in the morning and in the evening, he reviews his goals. It keeps him focused on what he has to do that day to move a step closer to achieving them. Scott Belsky and his team have created the Action Method tool online. With it, you can track your projects/goals and then create the next step in order to move it forward. You can even check on your phone each day to see if you did what needed to happen. All of these tools keep us focused on ACTION. Take a moment and take stock of where you are and what you want to achieve. Then map out what has to happen in order to get there. Hoping change happens is never an option. So as you review this year and plan for next, understand that a plan is only CEO of PCG Digital Marketing effective if there is Glenn is a trainer at heart. He is a set of actions that a highly sought after speaker, are implemented writer, coach and operations CBT to execute it. strategist as well as a customer

Glenn Pasch

service fanatic. He has spoken throughout the US and Canada, educating audiences on a variety of topics that cover business leadership, change management, digital marketing and the impact of this new technology on culture, business and society.

the nation’S #1 ServiCe adviSor SaleS training What do tablets, express/quick service centers, price comparison boards, multi-point inspection sheets, software programs, menu boards, social media, alignment testers, battery testers, websites, etc., all have in common?

Not one of these things can look a customer in the eye and ask them for the sale! I will teach your service team not only how to professionally ask for the sale and substantially increase your Profits, but I will also show them how to substantially increase your Customer Retention and Survey Scores simultaneously. “Pro Talk was a well worth investment. The increases we have seen in our service departments was far beyond our expectations. What we found is that within 90 days, quicker than anticipated, there was an average increase in our ELR of $15.00. We had an increase of average hours per R.O. of .5. There was an increase of $80.00 per repair order. We also saw an increase in our monthly CSI scores.” John Cloninger

Cloninger ford toyota Scion Service director of fixed operations

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the Creator of the Modern day walk around and Selling proCeSSeS for ServiCe departMentS eveywhere

what MakeS our training different

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Call to find out how: (800) 248-2931 www.automotiveServicetraining.com

Dealers

Embrace a Shorter

SALES PROCESS

Grant Cardone New York Times Best Seller Author Grant Cardone is an international business and sales expert. His early work in automotive sales led to his creation of Information Assisted Selling (TM), a method that offers a non-confrontational approach with emphasis on presenting solutions based on full understanding of customer needs. Cardone offers sales training tools, audio books, training seminars and other speaking events to htelp sales professionals achieve high levels of success. As a New York Times best selling and Axiom award winning author, Grant is often tapped by national media to comment on various topics affecting the American middle class, business and leadership.

You’ve heard the saying “time is money.” Well when it comes to selling cars, time spent with your customer absolutely is money and more time is not always better.

or years it was believed that the more time spent with the customer, the better your chances of closing the deal and making money. Today, spending too much time kills any chance of making a profit and eliminates any chance of a positive customer experience. The average customer is said to invest up to 10 hours shopping on the internet before contacting your store. In 2005, the average car buyer shopped six stores and that has dropped to less than 1.3 stores today. While the number of stores shopped has dropped by 75 percent, the time spent buying the car has not changed. A recent project we conducted with two major manufacturers and hundreds of dealerships demonstrated that the amount of time the customer spent in the dealership is the number one cause of lower customer satisfaction scores and lower profits (see attached). With over 248,000 transactions, the results were revealing and impressive, making it clear that the sales process must be shortened in order to improve the customer experience and have any chance of being profitable. Because of this, more and more dealerships are moving toward a shorter sales process.

ETo Read more from Grant Cardone on sales, management, & motivation go to

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Notice when the negotiation time went from 12 minutes to 53 minutes, gross profits were reduced by 50 percent. When negotiations exceeded the sixty-minute mark, the gross profits dropped to one-third. With information freely available from so many sources; TrueCar, Auto Trader, Kelly, Edmunds, credit unions, manufacturers and your website, an increasing number of your showroom and phone traffic is fully armed pre-dealership visit. Common sense would suggest that some percentage of your traffic already decided on the car, determined a fair price, calculated their payments and know what you have in stock. The idea that a dealer would require a fully armed customer to experience the same process as an uninformed one is costing you money and the customer a positive experience.

While you would expect me to suggest that you need to do a better job training your people, that is not the first thing you need to do. Step one is to shorten your sales process. The second step is to re-educate your management team on a shorter process. The last thing you need to do is train your sales people, internet department and BDC on how to execute the shorter, simpler sales process. The ultimate test to determine whether or not your sales process is acceptable to the customer is through how it can be advertised. Can you imagine a TV spot that says, “Our sales people are required to take you through 12 steps in order for you to buy a car here and it could take up to four hours to accomplish this?” I clearly understand that buying a car is a complex purchase but that does not mean it should require four to five hours. CBT

5 THE

STEP SALES PROCESS

Below is a sales process that we have fully vetted and validated to get results with hundreds of dealers insistent on delivering a positive customer experience while limiting time spent in the dealership. By reducing the selling process to only the most vital and necessary steps, and then forcing time targets to each of these, we limit the time the customer spends in the store. STEP ONE Greet the customer – The greeting should take no more than two minutes. “Welcome to our dealership, what can we get you information on?” Contrary to popular belief, this is not the time when the salesperson should try to get on common ground with the customer. The customer is not coming to get to know the salesperson they are coming to get information about a car. STEP TWO Pre-Appraisal –The customer’s last purchase or current vehicle contains everything you want to know about your customer and determines what to show them, how to present it and how to make sense of the purchase. This is not an overstatement. EVERYTHING you want to know about a customer is in their present vehicle. The appraisal process starts with the salesperson offering, “can we get you figures on your car?” Then the salesperson spends

a few moments asking basic questions about the car and only admiring the customers trade before it is turned over to the used car manager or appraiser who will gain access to the car and take it for a physical appraisal. This should be done with every customer, no exception, and nothing negative should ever be mentioned or suggested about the customer’s current transportation. STEP THREE Select and demo – While the used car manager or appraiser takes the current transportation, the sales person will then suggest, “while they get figures on your car, let’s pick out the vehicle that will most improve your situation and best fit your needs.” This step should not take more than 15 minutes. When the salesperson returns from the test drive, the appraisal would have been called in and numbers provided to the desk manager. The salesperson is now prepared to move into a proposal.

STEP FOUR Present proposal - This is a critical step that by itself can increase the number of vehicles you sell. Management must be re-educated on this vital step that should be entered by the 40-minute mark. Over 70 percent of all customers visiting car dealerships today are not being offered a proposal. It is recommended that you offer proposal numbers to every customer, despite where they are in the buying process.

STEP FIVE Close or exit - With competition so fierce and margins compressed so tightly, more time negotiating only penalizes you and your customer. By restricting the amount of time of each step (especially spent negotiating), your management team is more inclined to get involved early. Reduced time in the negotiations forces management to stay engaged and determine whether the customer closes today or should be left to exit the store still feeling good about the dealership. CBT

Average Negotiation Time Number of Passes

Number of Deals

Percentage Average of Total Negotiation Time

Average Commissionable Gross

115,261

46.44%

12.07

1,140.09

63,731

25.57%

23.64

958.30

34,370

13.85%

32.96

813.98

17,722

7.14%

41.43

710.58

8,964

3.61%

48.22

602.00

4,588

1.85%

53.41

547.56

2,325

0.94%

57.72

507.78

1,247

0.50%

61.21

388.81

248,208

100%

22.77

977.51

TOTALS

3.07

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Your Customer Wants

It’s The American Way! How to Grow Your Service and Parts Customer Pay Business While Increasing Retention

ut on your consumer hat and let’s go shopping at Kroger, Walgreen’s, Target, Wal-Mart or Macy’s. Stroll the aisles and you’ll quickly see what they all have in common – plenty of brand and line extension choices for customers. There’s a lesson here for your Fixed Operations department.

need to make an informed decision, based on what you want and what you’re able to afford at this time.

“As we previously discussed and I demonstrated to you, your vehicle is in need of new front brake pads. As you can see from this service menu, we offer three different choices when it comes to servicing your brakes. For your driving On the product supplier side, consumer packaged goods habits I would recommend option B. Which option package companies like Procter & Gamble have long figured out that are you interested in?” we all want options, even within the same product category. That’s why they don’t just market Tide. Instead, you have This type of dialogue allows customers to feel more in your choice of Tide HE, Tide with Bleach, Tide Coldwater, charge and confident of their buying decision, and helps Tide to Go and countless others. them understand the value of their decision. Offer choices, but add a recommendation. In most cases, since your service Why offer consumers so many options? Retailers and their advisor is considered an expert, the customer will follow the supplier partners want to empower consumers to choose recommendation. the products or services that best fit their wants and needs. Choice is what drives the free market economy. Without One turnkey way of expanding your service business clear choices, the consumer can feel trapped – which isn’t is through integration of an additional parts source that conducive to making an informed and educated buying complements your existing factory program and inventory. decision. Yet, most dealerships seem content with offering The benefits can include a larger share of the overall available only factory parts and service. service and parts market in your area, including customers who left for quick service centers and other competitors. It’s the wrong approach. A growing number of dealers are doing just that, such as Balise Auto Group, one of the largest retailers of new and used automobiles in New England with facilities throughout Massachusetts and Rhode Island. Dan Elmer, Director of Consider These Facts: Fixed Operations, told me: “Offering our customer a choice • Service customer retention is low. Industry retention has improved our retention, customer satisfaction and our numbers for customers coming back to the dealership for bottom line.” non-warranty work range from 30 to 40 percent. That’s a At Rothrock Motor Sales in Allentown, Pa., Ron Carl, whole lot of lost revenue. Director of Operations, also took on the task of increasing • Returning customers buy more cars. If a customer customer pay business and customer retention. “We were comes back to the dealership for service on a regular basis, not retaining enough of our out-of-warranty customers and there is an 85 percent chance they will purchase another pre-owned buyers, so we started to market to our entire new and pre-owned owner base that we service all makes and vehicle from the dealership. Acquisition cost? None. models. We now offer service menu choices like our Mighty • No service loyalty means lost profits. If a consumer oil change and brake specials. Once we did that, we’ve been never or rarely comes back to the dealership for service, watching our customer pay and retention numbers rise that number drops to 10 percent. You can try to recapture consistently every month.” the attention of these past customers, but with the current average cost of advertising per vehicle at $621, it’s a hefty When selecting an additional parts supplier, add these price tag. criteria to your evaluation list. Your partner should offer: Dealerships obviously have plenty of motivation to improve retention rates, and there are no shortages of tools available, including CRM software to stay in contact with customers and send service reminders, radio frequency identification technology (RFID), vehicle inspection applications, training, loyalty purchase incentive programs and the list goes on. These are all excellent options. Yet, one of the simplest and most cost effective tools is to offer your customers a choice when they enter your service drive. Choice puts customers into the comfort zone. It also allows your service advisor to move away from asking a closedended question that forces either a yes or no response, to an opened-ended question. How would the following type of dialogue improve your retention rate and bottom line?

• Products designed and engineered to meet or exceed OE specifications • Extensive year, make and model coverage • Inventory management • Obsolescence protection • Sales and product training • Electronic cataloging • Consumer and technician incentives • Point of purchase materials • Local and nationwide warranty coverage • Measurement and monitoring of sales performance

“Here at XYZ Motors we like to provide our customers Service customer retention plus expansion into nonchoices when it comes to preventive maintenance needs. We primary brands equals a stronger bottom line all around. believe this approach provides you with the information you Make sure you find the right partner to help you take full advantage. CBT

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CMY

Dave Raphael Director of Marketing and Dealership Sales for Mighty Auto Parts Dave Raphael is the Director of Marketing and Dealership Sales for Mighty Auto Parts, a Norcross, GA based franchisor of sales and service in aftermarket auto parts that oversees 110 distributors in 43 states. Dave’s strategic direction, leadership and hands-on expertise have led to significant sales growth in the company’s dealership sales channel. Prior to Mighty, he was with Ford Motor Company for 16 years holding numerous sales and marketing leadership positions and was Vice President of National Accounts for AutoTrader.com. Dave can be reached at: dave.raphael@mightyautoparts. com.

10 Essential Steps to Successful Facebook Ads L

et’s talk about the unique challenges today for dealers when it comes to social media. Many still believe Facebook marketing is “free.” I don’t have to remind you that nothing in life or business is ever free. Facebook marketing takes time and money just like other forms of marketing and advertising do, but with the added layer of a new social skill set and the manpower to master it. Facebook is the main spoke in your social marketing hub. Every successful house stands on a strong foundation. A successful Facebook marketing strategy combines these seven elements into a strong foundation that builds relationships, fosters trust, and generates leads and sales: 1. Clear Objectives – Set goals. Measure your results and tie that back to your goals. That’s how you measure return on investment 2. Great Design – Always make sure your design is attractive and consistent 3. Solid Content Strategy – What you post on your page and why 4. Promotion Strategy – How to continually increase your fan base 5. Engagement Strategy – How to respond to fans and build community 6. Conversion Strategy – How you’ll turn your fans into customers 7. Measure and Analyze – Tie your results back to your goals Facebook ads promote your page and grow likes, and they can often turn fans into customers. There are so many opportunities now that Facebook has enhanced their ads manager platform. Your Facebook content stimulates engagement. Facebook ads amplify your reach and increase leads and sales. Done right, Facebook ads can be very effective at lasertargeting those you want to reach most. The following 10 steps will help you understand how it all works, and if you need any further assistance, hire a social strategy expert to guide you.

Kathi Kruse President of Kruse Control Inc.

Kathi Kruse is an Automotive Social Media Marketing Expert, Blogger, Speaker, Coach, Author and Founder of Kruse Control Inc. Born in the heart of Los Angeles to a family of “car people”, Kathi’s passion for the car business spans a 30-year career managing successful dealerships in Southern California. Kathi is the author of “Automotive Social Business – How to Captivate Your Customers, Sell More Cars & Be Generally Remarkable on Social Media”. Her Kruse Control Blog is the leading Automotive Social Media blog in the US and Canada.

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1. Identify Your Goals

used in tandem with Facebook ads, Facebook landing pages give you an Do you want to grow your fan base? opportunity to create more value and Are you promoting an event? Are carry visitors further down the sales you ready to make Facebook ads a funnel. significant source of leads for your store? Define your goals first. You must have clear goals so you can measure your ad’s effectiveness later!

2. Remember: Facebook is Local

5. Target the Right People

your fans or not. Identify what kind of connection users have to your page so you can reach your optimal audience.

8. Location Here’s where you can laser target your surrounding community. Choose your city and don’t forget to include the 10, 25 or 50-mile radius to reach your surrounding market area.

Who do you want to reach? Let’s say that the buyer demographic you want to reach is women aged 35-54. Facebook is where you build an What are the interests of this group? online community that mirrors your Perhaps topics relating to family, offline community. Whether you’re work/life balance…shoes? A wellPage Like ads build audience building your page or your business, designed Facebook ad allows you to make sure your ads target your local choose specific audience interests size. Page Post ads drive deeper in-market area only. and target those people who are most engagement. External website ads drive traffic to your site. Your choice likely to buy. governs whether you’ll pay per 1,000 impressions (CPM) or per click (CPC). CPM, according to Facebook, is the cost per 1000 times your ad is It’s best to start slow. Get yourself displayed. In the past, impressions traction by doing ads to grow were not always effective. Now, with your page likes. You want a solid You’ll need a catchy headline, Timeline stats showing higher page foundation from which to build, and marketing language for the body of engagement, I’m seeing good results this tactic will get you off on the right the ad (including a call to action) with optimized CPM. and a compelling photo or graphic. foot. I’ve talked about the misconception Grow Page Likes that since Facebook provides free Grow likes from your local area real estate to build your community, External Website Ad everything else is free and easy. Drive prospects to your website or No dice. Facebook ads take skill, landing page Set a maximum amount you want to training and money to develop and Page Post Ad design. Facebook is a new medium, pay each day and start off slow. Five Increase the visibility of your posts but the age-old components of to ten dollars is plenty. A daily limit successful marketing and advertising guarantees you’ll never spend more Sponsored Story Ads to friends of your fans showing are still very much alive and kicking. than you want to on any campaign. social proof Facebook ads are the most timeIf you’re not sure, get help. consuming ads you’ll ever run so set Facebook Offer time aside everyday. You must review Specific offer redeemed by the user at least twice daily to make sure your budget is spent wisely. Create one It’s important to note that Facebook campaign and design a handful of ads are social. Ads can be customized ads. Test, test and retest to see which to reach people who are already ones are working for you. connected with you or not at all A staple of internet marketing, connected with you. You choose landing pages drive visitors to do whether you want to reach friends of what you want them to do. When

9. Objective

3. Know the Type of Ad You Want to Run 6. Design an Engaging Ad

10. Monitor and Manage Your Budget

4. Utilize Facebook Landing Pages

7. Connections

In the past, we designed newspaper and TV ads, launched them and hoped that they produced results. By the time you determined whether you got the results or not, it was too late to do anything about the money you may have wasted. Facebook ads produce results, they’re economical and you get to see your results in real time. While it’s true that successful Facebook ad campaigns only happen with skill, expertise and knowledge, don’t miss your chance to leverage the power of Facebook ads. Figure out what needs to happen at your store and take action now! CBT

ETo read more from Kathi Kruse on social marketing go to CBTNews.com

CAR BIZ TODAY

NEWS.COM

Cont. from Page 01 The advertising company was ranked in the top 25 agencies in Georgia by the Atlanta Business Chronicle. After spinning off the Force side of the business under the leadership of his son, John Fitzpatrick, he focused his attention on CBTNew.com and the new array of services it could provide the dealer community. Jim Fitzpatrick also sees the website, newscast, and now print magazine as the foundation for all areas of a dealership – from owners to sales personnel as well as employees in every department of the enterprise. Along with in-depth coverage of the news, trends and developments that affect the industry every day, the site has also become a forum for the thought leaders, authors and newsmakers that are shaping the business of retail auto sales.

“When you look at the automotive media it’s heavily skewed toward the OEMs and doesn’t provide much content that is directly related to the dealer,” he explains. “We wanted to develop a source of news, information and education designed specifically for new car dealers.” 18

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Daily News for Dealers The centerpiece of CBTNews.com is the daily newscast, which Fitzpatrick says was developed to become “the CNBC of the retail car business. There’s never been anything like it before.” The newscast, which features award winning anchors Bridget Everett and Russell Brown, has been a daily new source for dealerships.

“Many people watch every day, but we’ve found that at a number of dealerships, managers will bring their teams together to watch as a group,” says Everett. The overriding goal of each day’s show is to provide a takeaway that the viewer can use in the operation of their business.

“We want to give our viewers information and tips that will help them run their dealerships more effectively,” she explains. “We want to help dealers move forward in their business.” For Everett a successful newscast is one that offers news and information to a variety of departments – For example, a news story aimed at how sales are trending, followed by training tips for fixed ops and the F&I departments. The most popular shows have featured interviews with high profile industry figures such as Craig Monaghan, CEO of Asbury Auto Group and David Westcott, Chairman of the National Automotive Dealers Association. The program recently presented a two part interview with Seth Berkowitz, president and CEO of Edmunds.com — the premier resource for car shopping and automotive information.

The Official News Source of The Retail Automotive Industry

the industry including Joe Verde, Dave Anderson, Grant Cardone and more. Other features include The Book of the Week and the Daily Quote – both designed to provide a quick shot of inspiration to readers.

“With each newscast we do our best to cover what is most relevant to the retail automotive industry.” says Everett.

providing in-depth coverage and interviews. The CBT News operation will also be expanding this year with the construction of new state-of-the art studios located in the Perimeter area of Atlanta , one of the metro area’s leading business hubs.

The news program is not just a studio based operation. This month the anchors and production crew are going on the road to the NADA Convention & Expo 2014 in New Orleans. They will board the CBTNews Express – a 1 million dollar motor home outfitted as a traveling studio – and travel across the country making stops at select dealerships in Montgomery, Ala., Biloxi, Miss. and New Orleans, La. At each location the show will be taking a look at how the auto industry is faring locally, while continuing to report on the breaking news of each day.

What the Web has to Offer

Once in New Orleans, CBT News will cover the day-long Best Training Day Ever and the NADA Convention. At the convention the show will set up operations at the Force Marketing booth while

The site is also a convenient source for topnotch education through a series of Training Tips on Sales, Marketing and Fixed Ops. This section features all of the top trainers and consultants in

Along with the newscast, visitors to the website can also access a rich variety of services and information. There are links to stories covered on each show under “News from Around the Web,” along with individual videos of specific stories. The prices of automotive stocks are continuously updated giving readers a clear view of how the business is trending on Wall Street.

“The auto industry is constantly evolving and always has been in one way or another,” says Fitzpatrick. “Dealers are open to learning, to becoming better in their job and business. Helping them do that is the primary purpose of this website, the newscast and the magazine.” Car Biz Today Magazine is just one step in CBT News’ continuing evolution. In the months to come, the company will be rolling out new innovations for dealers including webinars, a national conference and even an online networking service that will become a “LinkedIn for dealers,” says Fitzpatrick. CBT

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DEALER PROFILE

STEVE EWING

SEES THE FIRST 30 YEARS IN THE BUSINESS AS JUST THE BEGINNING

ade Ford in Smyrna, Ga. was a well-established brand with a long and storied history, when Steve Ewing acquired the franchise in 2002. Since then he has built it into one of the automaker’s top performing stores that is consistently ranked in the top 10 percent of all Ford franchises and the largest African American owned dealership in the country. A multi-year Ford Motor Co. President’s Award winner for market share and customer service, Wade registered $250 million in companywide sales including more than 1,600 retail and 5,000 fleet car and truck sales during 2013. Sales of new cars rose 30 percent, while used car sales increased by 20 percent.

In the years since then auto sales have rebounded rising more than 30 percent during 2013 in a highly competitive work, so I took a job selling cars and fell market. To distinguish his brand, Ewing in love with the business. With the help has moved aggressively to improve the of my parents, Ford Motors and a lot of customer experience. hard work, I got a chance to be one of the few people in the world to own one He became the first dealer to enroll in of their franchises.” the Motor Trend® Certified Vehicles, an exclusive pre-owned vehicle In 1989 he was a successful sales certification program created for Motor manager of a large Chevy dealership Trend and driven by EasyCare. Along in northern New Jersey. By then Ford with Ford’s own program, he can had launched a program to promote certify all brands that qualify under the diversity within its dealer ranks. With program. Sales of used vehicles have the help of family, he took advantage climbed by 20 percent since instating of a company financing opportunity to the program – from around 70 to more buy a company dealership. than 100 a month.

At 29 he was the owner of a dealership in East Orange, New Jersey. He soon found that growing a franchise in a depressed and crime-plagued inner city neighborhood was an insurmountable challenge. Ultimately Ford decided to close the franchise, but Ewing was left with a burning desire to prove what he This success has evolved from a clear could do. commitment to customer service and a strong management philosophy He got a second opportunity at being that sets clear goals for the team and a franchise general manager and this rewards those who meet the standards, time he demonstrated what he could according to Ewing. accomplish. Since then he has run dealerships in Maine, Massachusetts, “I want to pay top dollar for the and Pennsylvania. best employees and then hold them accountable for their performance,” That’s when he heard about Atlanta. he says. “Some people say ‘wow, your compensation is very high,’ but my “I knew that dealers in the South and demand is quite high as well. I’ve found particularly Atlanta had been doing that the less I tolerate of what I don’t very well,” he recalls. ‘I knew it was a want, the more I get of what I do want.” metro market and it was going to be a better environment for my family than A former collegiate football standout rural Pennsylvania.” at Delaware State University, Ewing likes to use sport imagery in describing He was impressed by the financials, his approach to management. His top history and brand awareness offered goal is to make sure every employee by Wade Ford – which first opened in “knows what a touchdown looks like” downtown Atlanta in 1933. and what goals he expects them to achieve during a month or year. His approach to the business was also profoundly affected by the employees To be successful, he and his team set he met at Wade. Some had been there performance goals for each department almost 50 years. Where workers at in the dealership annually and then other dealerships he had owned had adjust those numbers depending on jobs, those at Wade had careers, he market conditions. recalls.

“Between the Ford brand and the Motor Trend standalone facility across from my Ford store, it’s given me a marketing edge and separated me from other dealers within the Atlanta market,” says Ewing. Wade Ford is also in the process of investing more than $2 million into an upgrade of its physical facilities. These renovation efforts, which are being partially matched by incentives from Ford, will provide customers with an enhanced experience at all customer touch points. More than just new looks, finishes and furniture, the effort will enhance service for auto buyers with what Ewing calls a customer fact department. “Part of my renovation is to provide customers who are still in a shopping mode with the ability to go online and show our competitors pricing side-byside with our products,” he explains. . This feature is recognition that customers are better informed than ever before – largely through the web – and Wade Ford is using the Internet and other technology to communicate with potential buyers. Drawing information from its data management system, the dealership tailors emails and other communications, such as special offers and service reminders to specific customers. A technology called Covideo allows the company to send video emails and even communicate directly with customers online.

While technology is important, Ewing still sees selling cars as primarily a high touch relationship business. Buyers want to sit in the car, take it for a test drive and then be able to hold someone accountable when there’s a problem. “We let people take cars home overnight,” he explains. “We want to make sure you like it. We’re not in a rush and we’re going to patiently show you the value of Wade Ford.” Ewing sees himself as not just the owner of a car store, but as a dealer within a proud and storied organization. He’s actively involved in the larger industry through service on the Ford Motor Credit Dealer Advisory Board and Marketing Dealer Advisory Board, where he plays a role in guiding Ford’s national marketing efforts. He’s also served on the board of the Southeast Ford Dealer Advertising Association, which allows him to be actively involved in advertising and promoting Ford products through partnerships with charitable organizations. After nearly three decades in the industry, Ewing is proud of what he has accomplished with Ford and grateful for the opopournities it has given him to be successful. CBT

“That way nobody has to ask if they’re After getting off to a strong start, doing a good job,” he explains. the dealership took a beating with the recession. As sales fell, Ewing and his Ewing’s current success has been staff were faced with cutting nearly achieved over a long career that includes $10,000 a month from operating some rough lessons in the pitfalls of expenses. That meant reducing budgets running a dealership. for every department from advertising “It’s about communicating, but not to inventory. He renegotiated pricing over-communicating. It’s the way that He went into auto sales soon after on everything the business purchased customers want to be communicated graduating from college. “I’m an auto including entrance way floor mats. with,” says Ewing. dealer with an English degree,” he says. The franchise realized big savings from “Early on I realized that getting a job restructuring the store’s mortgage. ESTEVE EWING, PRESIDENT/OWNER OF WADE FORD as a media writer was going to be very difficult in New York City. I needed to 20

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After an extensive research and vetting process, we chose ELEAD1ONE as our all-inclusive CRM system to manage all 12 dealerships. ELEAD1ONE has superior software actually developed by 'car guys', first-class training processes and 24/7 support. By outsourcing our customer phone interaction to ELEAD Virtual BDC, we have seen a steady rise in the number of sales and service appointments, better follow up and a true advantage over the competition. We are thrilled with ELEAD1ONE and their entire team of automotive retail experts! Steve Hoggle, General Manager Honda of Ocala Morgan Auto Group

ELEAD1ONE provides the industry's most advanced dealership management platform that helps dealers achieve unmatched results in increased sales and profit, lead generation, communication, sales processes and complete lifecycle management. The company’s automotive-only virtual BDC and CRM are the foundation of their unique and successful profit-building strategies. No other company in the automotive industry has ELEAD1ONE's resources or ability to be 100% focused on training, teaching and support after the sale.

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FACTS & myths

the Jeff Cowan

President of Jeff Cowan’s Pro Talk Inc. Jeff is generally recognized as the creator of the modern day walk around and selling processes for service departments. For 28 years Jeff Cowan’s Pro Talk, Inc. has been recognized as the nation’s number one service advisor training company and enjoys strategic partnerships with the NADA, NCM and Associates, EasyCare and MPi.

of Express, Quick

s you will see over the next few issues, I will be writing a series of articles loosely titled “The

Facts and Myths about...” In each issue I will discuss a product, process, idea, or plan that I am regularly asked about when making presentations at Dealer 20 meetings, conventions and workshops. The topic I choose to write about will be based solely on the interest level it receives at the events where I present. It is important to note that the articles I write will be strictly based on the experience that myself and my elite trainers have gained through the hundreds of service drives we have visited. Many of these opinions may be the exact opposite of what you have heard

and Lite Service Centers

or may conflict with the advice of a vendor, manufacturer or other good intentioned person. That said, the information that I will share is what we see as actually working, tested and proven. In this issue, I have chosen to discuss “Express, quick, and/or lite services,” since that is a topic that never fails to be brought up at my meetings. The reason for this is simple: many dealerships have been encouraged to open departments and sometimes start new businesses that offer “lite” or “quick” services, such as oil changes, tire rotations, filter changes, and the like. Most of these dealers have invested a great amount of time and resources into these ventures and have seen little or no profit. In addition, they see customer survey scores plummet. Sadly, this is exactly the opposite of what they were told was going to happen. As a matter of fact, most of these operations bleed a great deal of money and resources on a monthly basis. The question is: What went wrong? I will tell you.

MYTH: You should open an

express or quick service center for the sole purpose of it being a convenience for your customers — to allow them to be in and out of your shop within thirty minutes at a cheap price.

FACT: You should open an

express or quick service center so that you appear to be a onestop shop and to increase profits.

customer in and out fast and at the best value price possible” (actually told to an audience at a manufacturers meeting by a vice president in charge of the lite services division).

you build a business on one of these facets and not on all three, your path to ultimate failure is guaranteed.

FACT: That mind-set will

Anyone can get high retention by simply being fast and cheap, but what good is that if your survey scores suffer and you are not profitable? The truly successful know that retention is pointless if you are not increasing survey scores and profiting. As a matter of fact, we here at Pro Talk will not install a word track, process, or a technique that does not employ all three principles simultaneously.

deliver no profit, no long-term retention and no survey scores to brag about. If your goal is to be fast and cheap, it may appear that you are getting retention, and you are.

By standing on hundreds of service drives But the problem is you are retaining all across the United States of America and Convenience is when your customer comes customers who are cheap and who do not Canada, I have come to firmly believe that one in for an oil change and you FULLY inspect want to spend any money. of the most important things to a customer their vehicle, make them aware of other is their trust in you as a professional. When items they need, and do the work while they Fast and cheap will only get you so far. You you hand them their keys and tell them that may get your customer in and out quickly, they are good to go, they believe and trust are there. but if they leave only to discover that they that their vehicle is in one-hundred percent This saves your customer a trip back to need windshield wipers, have bald tires, or running order. They trust that there will your shop or a trip to your competitor. have a battery that is on its last leg, it forces be no problems between now and their next Convenience is not getting your customer them to return for services that could have scheduled maintenance appointment. in and out in less than thirty minutes, been performed during the initial visit. How allowing them to leave with no walk around is that going to retain your customer long- If you have fully inspected their vehicle and or inspection being done. That’s not term? It’s not. know for a fact that it is one-hundred percent convenience, that’s missed opportunity. operable, then you are covered. You will have By taking control, executing a walk- high customer retention. You will have high around and a full technician inspection, and customer satisfaction scores and you will presenting a “report card” to your customer, have long-term profitability. Conversely, if you are showing them the state of their you did not fully inspect the vehicle and you There is not enough vehicle. It demonstrates that you are more do not know it to be a fact that the vehicle is than just fast and cheap — you are proving in perfect running order, you are misleading time to do a walk-around and that you are a quality shop. You are showing your customer, destroying their trust and perform an inspection in the your customer that you care more, you offer inviting big problems. Fast and cheap with express or lite service business. more, and you do more. That approach no inspection creates dissatisfied customers. will attract a quality-minded customer that you will retain long-term, that will rate you So to recap, here is what I am telling you. If Yes there is. If you highly on surveys and that is more than you are not in the top twenty percent of the properly set the customer up for willing to invest in their vehicle. Quality nation with your survey scores in express or what you are going to do, why customers are not as concerned about fast quick services and you are not consistently and cheap as they are about a vehicle that delivering at least 1.5 hours repair order you are going to do it and the is reliable, efficient, economically sound, and average in that department, you are doing many benefits it delivers, there is safe. If they were really only concerned about something wrong. What you are doing wrong plenty of time. fast and cheap, wouldn’t they just go to Jiffy is listening to the wrong people on why you Lube? Your customers come to your service should have ventured into this service in the departments because they expect more from first place and how the department should a factory service department, so give them be run. The people that helped you set up what they want. this line of service are making more money Any quick or express service business that because they are simply selling more parts. does not include a process that features a full If you are not making more money and you walk around and technician inspection is a are not increasing your survey scores, then surefire way to guarantee being stuck at .7 you will not retain your customers over a Quick, express and hours per repair order and bleeding money. long term.

MYTH:

FACT:

MYTH:

MYTH: You should not up-

sell in the express or quick service department. “You can only slaughter a lamb once, but you can shear one forever. The goal in lite service is to get the

lite service departments are there to increase retention.

FACT: There are three facets

to running any business: high customer satisfaction, profit, and customer retention. Any time

If you are not doing any of these things, then what’s the point? Myth is always interesting in storytelling, but rarely is myth profitable in business. CBT

ETo read more from Jeff Cowan on increasing service revenue go to CBTNews.com

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The Customer Experience is Your...

David Kain

he Customer Experience starts on the first click and follows the customer all the way to the showroom and back home again for the ownership cycle. It’s the where, when and how you deliver it during the online and offline automotive shopping process that will provide the moment of validation for car buyers.

President of Kain Automtive David has a unique background that includes automotive retail, OEM executive leadership and digital sales training and consulting. During his 20 years in retail he served in various positions in sales and service at Jack Kain Ford, where he remains a partner today. His internet experience includes developing his own dealership internet operation and co-founding FordDirect.com, the dealer/ factory owned joint venture that is the internet lead provider to Ford and Lincoln dealers, where he served as the Chief Operating Officer until he developed KainAutomotive.com in 2003.

Google identified the Zero Moment of Truth, which we all recognize as the all-important point when a vehicle shopper first responds to a stimulus to engage with a product online. This “game on” moment occurs once the customer starts to click, and how your dealership shows up next determines whether you ultimately have an opportunity to deliver your customer experience. If you win the zero moments of truth and get the chance to deliver your experience, take every opportunity to win the moment of validation. Your moment of validation – when you demonstrate whether you care and can be trusted - is THE CUSTOMER EXPERIENCE and it can start in a number of different ways. With the internet it typically starts as a request from your website or landing page but it can also start as a third party new vehicle lead, an inbound call from an online classified ad, or even a walk-in. In any case, your preparation, planning and dealershipwide coordination on how you deliver your customer experience will define your moment of validation. To understand how important this moment of validation is, you should read the latest Gallup poll on “Professions ranked on ethics” from November 26 – 29, 2012, that ranks car salespeople at the bottom, below members of Congress, stockbrokers, senators and lawyers. The question asked of respondents was “Please tell me how you would rate the honesty and ethical standards of people in these different fields — very high, high, average, low, or very low.” We may crack a joke about this ranking but the reality is we either validate this ranking when our moment of validation comes along or we dispel it. Given the year government has had, my hope is we can climb a few spots when the survey is conducted this year. Note that nurses are ranked number one and they have been for as long as I’ve been reading these polls.

...“Mom Valid

Nurses gain this ranking because they are generally regarded as caring and capable in helping people get well. I have found that the greatest car salespeople are exactly the same. My father used to tell me when I was selling cars that the customer can read you instantly and you better deliver the best experience from the moment the customer sees you. Before the internet, this meant things like not wearing sun glasses while you walked up to the customer, or not hanging out in front of the dealership and putting out a cigarette just before you shake the approaching customer’s hand. As a dealership sales manager I coached on these subtleties every day, and not surprisingly, they made a big difference in how our sales team members were received by our customers.

The Checklist: A Simple List of Questions You Can Ask Yourself About the Lead Z

Where did the lead come from? This matters because every site provides a different experience and defines a unique customer expectation. In time, and with proper coaching, your team members will be able to quickly assess the source and know what the expectations are.

Z Do you know the customer? This matters because loyal customers deserve gratitude and new customers deserve extra

attention. A quick check of the history in the Customer Relationship Management tool will provide all the background you need to deliver the proper experience based on whether they’ve done business with your dealership or they are a new prospect.

What are they looking for? This depends on the source of the lead and will make a huge difference in how to respond. If the request came from your website on a VIN specific vehicle, the response will be different than if it came from a third party lead with the expectations of the lowest possible price.

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Your team needs coaching on this when it comes to delivering the electronic version of the customer experience in responding to internet inquiries, chats or telephone calls. Remembering that the vehicle sale is typically won or lost during this crucial moment of validation will provide you the validity you need to have your team’s attention as you coach on the best approaches. The preparation, planning and dealership-wide coordination referred to earlier is how you ensure your win. Let’s talk preparation. We’ve worked with clients to create dealership- specific lead source response guides that explain in detail how and why automotive shoppers use the variety of different websites to shop for vehicles, and how you should respond. This extra effort in preparation makes all the difference in your results. Your team must understand what the stimulus was, by source, that motivated a customer to fill out a form, start a chat or pick up the phone and call. Couple this orientation with electronic field trips where you demonstrate to your team in a live environment how a lead becomes a lead. A few clicks on the websites where you receive your leads will give you insight you can greatly benefit from when you think like your prospects.

ment of dation!”

A customer that shops and generates a lead on a third party site is considerably different than one that shops and submits a request on your dealership website. A Dealix lead is quite different from a Costco lead and a TrueCar lead. Your team’s understanding that every lead is different is a critical first step in delivering on an exceptional customer experience. You likely understand that the experience depends on the expectations. If a website has provided me orientation that my experience will be one thing, and the delivery of the experience is actually quite different, then the moment of validation is lost. By showing your team what the expectations are after an automotive shopper visits a site and submits a request, you can convince them why the experience must at the very least match the expectations. By providing your team a broad base orientation with a lead source response guide, you now have the foundation to take it to the next level. We recommend a two minute pause when your dealership team member receives an internet request to work through a “PreContact Checklist.” The pre-contact checklist is a simple list of questions you can ask yourself about the lead. It affords your team member the opportunity to think through what was going on in the mind of the prospect before they hit click. You don’t have this advantage with live chat or inbound calls, so be sure you work aggressively to prepare your team with how to respond to those “instant response required” activities. Consider creating your own pre-contact checklist for your dealership team. It will help them build the confidence to prepare for their daily “moments of validation” which will ensure they always exceed customer expectations and and deliver an exceptional Customer Experience. CBT

Can you answer their questions? The typical question is the price, and how your dealership responds right off the bat can separate you dramatically from your competitors. However, we often miss the real questions because we think only of the price response. Be careful and strive to answer the real questions.

ETo read more from David Kain on internet sales and BDC go to CBTNews.com

What objections should you plan for? That’s easy—all of them. By being ready to respond to all the objections, you can prepare your team to remove as many as possible with the right script. The book “Spin Selling” convinced me that building a Value Stack and making your product so valuable before you give the price is the best of all approaches. Pick up the book if you get a chance. I think you’ll enjoy it as a sales professional. By addressing all the key objections beforehand you typically earn the answer you wanted from the prospect.

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President of Joe Verde Sales & Management Training, Inc. (JVSMT) Joe has been in the car business since 1973. He’s been the ‘8-car guy’ and the 38-car sales professional, a manager and dealer principal. In 1985, he founded JVSMT and is the leader in dealer, management and sales training worldwide. Joe can be reached at: info@joeverde.com

MAKE 201

A RECORD YEA Get Rid Of The Limits You’ve Set

uestion for dealers and managers: What is the maximum number of units a salesperson can realistically expect to average at your dealership? Seriously, before you keep reading, answer this question: Realistically, I think a consistent ___ unit average is about tops at our dealership. We ask that question in every management class, because we’ve all heard, “What you see is what you get,” “Whether you think you can or can’t, you’re right,” (Henry Ford) and “When you can see it and believe it, you can achieve it,” (Napoleon Hill). Those are all very accurate statements because when a person can’t see reaching a goal, they don’t even try – they just explain why they can’t. So what’s the common answer from dealers and managers to the “maximum units” they actually

expect? I normally hear answers of from eight to 10 units, a few up to 15 and sometimes 20 units. The top end is usually 20 or 25 units max, and when a dealer or manager does pick those higher numbers, they usually come with a disclaimer about why that particular individual can sell so many vehicles, and why hardly anybody else can, or even tries.

“

Joe Verde

If you don’t have role models in sales who are high achievers, your salespeople can’t see themselves becoming high achievers either. How could they, when nobody else is doing it?

Whatever number you picked means the consensus among managers and salespeople at your dealership is that for whatever reasons (product, weather, economy, location, etc.). No one realistically expects your sales team to sell more units than that - consistently. And if you say that’s “tops,” it means you don’t expect or believe that the other 80 percent of your salespeople can even come close to that. Big Problem That Affects Your Vision: If you don’t have role models in sales who are high achievers, your salespeople can’t see themselves becoming high achievers either. How could they, when nobody else is doing it?

If you’re like most dealerships, you’ve actually had role models who regularly hit 15-20-25, and you were probably one of them. But as soon as a salesperson hits big numbers, most dealerships yank them off the floor quick and turn them into managers – hoping they’ll figure out how to get everyone else in sales to do what they did. The problem is that without the management training they need to develop other salespeople, you usually end up losing those 15 to 25 sales per month they made when you promoted your top salespeople to management. Every person you’ve promoted had good intentions. But too many dealers confuse good selling skills, good desking skills and other good car skills with performance building skills. That’s not the same as being taught how to show other salespeople how to duplicate what they did. You need managers who have learned how to hire, train, coach, manage, and keep your team motivated to become high achievers. When they do, everyone in the dealership continues to grow, every year. The critical skills we just listed that your managers may lack are developed through training, not experience. You’re familiar with the 80/20 rule? Actually it’s not 80/20, it’s really a 20/60/20 rule. 20 percent of your salespeople are at the top, 20 percent at the bottom, and 60 percent are inbetween. The good news/bad news is that the majority of your salespeople will follow your lead – so you have to be careful where you put your focus. By that I mean if you’re training daily and really focused on developing high achievers, more of the 60 percent in the middle will follow suit. However, when you explain why you don’t train and why sales are off to justify your low achievers, the 60 percent in the middle will trend downward with that bottom 20 percent. Most sales teams are filled with non-producers. And after one of our classes, one of our dealers started training right away, cleaned out those people and kept only the positive salespeople and managers who could see the potential and wanted to grow. He cut staff by 27 percent and increased his units and his gross by 25 percent. (Read that again; he cut staff and increased production and profit.) Before training, with 55 salespeople he was turning over 30 percent plus every month, and his top salespeople were selling about 12 units and making under

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$4,000 per month. After the changes he made, his higher achievers immediately started hitting 25 and 30 plus units and earning $12,000 - $15,000 per month – and his entire sales staff trended up.

How about spiffs and bonuses? Does your bonus program create limits? If it stops at 12 units, what have you told your salespeople? Exactly, 12 is the most we expect, so we don’t have a bonus for 15 units.

UNDERACHIEVERS – DEAD WEIGHT – ANCHORS – NEGATIVE PEOPLE

We all know 10 is average, which makes everything below 10 below average. So what message are you sending when you put up a bonus at seven units? Exactly, you’ve just implied seven is good, not below average. Pay another bonus at 10 and now you’ve said they’re really good. If you want to improve in sales, you have to stop paying people extra for being below average.

Growth, or lack of growth, always starts at the top. Management’s attitude is critical to growth because all change starts at the top (you already know that). It’s just that we forget that negatives from management hit the huddle before you complete a sentence and have a huge impact on your salespeople’s confidence and performance. What do I mean? How many of you have said things to your salespeople like... “Winter’s coming – better save some money.” “I hope the game doesn’t hurt us too bad this weekend.” “With all this commotion in Washington – I can feel it slowing down.” Those aren’t as bad as negative statements like, “I’ll bet we don’t even get 20 people on the lot this weekend,” or “How does the factory expect us to make any money when they’re focused on lower margins?” But they all turn salespeople’s heads the wrong way.

it happen, too. Then just get your managers to teach your salespeople something each day, work with them (coaching) to keep them focused and then manage their daily sales activities, and you’ll immediately see some of your salespeople double or triple their production almost overnight. You’re sitting on a gold mine – you just need to stop sitting and start training and managing. CBT

ETo read more from Joe Verde on sales and management training go to CBTNews.com

Quick Fact: Your average 10-car salesperson talks to 50 prospects a month (actually closer to 70— they just don’t log or count them all). Of those 50, 40 are buyers, which means if he or she sells 10, you miss 30 sales per average salesperson. That means you have incredible realistic potential to increase sales overnight. But it won’t come from your salespeople taking initiative on their own. Your improvement will always start at the top and flow downhill from there. Train your managers first to help them see the real potential, and to show them how to make it happen. At the same time, train your salespeople so they can see the real potential and how to make

I’m sure we’ve all heard managers tell an applicant during an interview, “Don’t expect to sell many units right off the bat, it takes time to learn the business.” Sure, it was to avoid getting a probable sales ‘anchor’ overly excited, but those words can also stop future superstars in their tracks and turn them into six-car guys before they even greet a customer.

UNITS PER MO.

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Is the best way to describe the team at the nation’s leading DIGITAL and DIRECT Marketing Company

dvertising and marketing’s Holy Grail has always been reaching the right customer with the right message at the right time to produce a purchase. Bringing that level of precision to dealer automotive advertising has long been more of a dream than a reality. At least until now, says John Fitzpatrick, president of Force Marketing. Using direct mail and digital marketing solutions, the Atlanta-based company creates data driven platforms that enable dealerships to locate and cultivate qualified customers while eliminating wasted dollars on contacting those not ready to buy.

Seeking it’s Full Potential The company was founded as a full service traditional advertising agency. As the company grew, John and Jim Fitzpatrick decided the direct mail and digital services side needed to be independent in order to reach its full potential.

analytical. We report very specifically an ROI on every dollar to the purchase of the vehicle and then present an offer for a dealer spends with us. We can tell them how it performed the dealer that is consistent with what they’re searching for.” for him. With the metrics, we’re able to get very detailed Force uses this data to understand both the dealer’s information on who came in and bought cars.” customers and the markets in which they operate. They can In addition to their new Atlanta location, Force opened identity the most searched-for vehicles in a certain area and an office on Madison Avenue in New York City. Headed by provide accurate data on the other makes and models a buyer another Fitzpatrick – John’s sister Heather, the new location is considering. reflects the company’s rapid growth. “Knowing this information in real time allows us to create “Since we opened the office last year our footprint in the ads that are more relevant to customer searches,” he explains. Northeast has increased substantially, and we look forward “That way you have a better chance of converting that person to a very strong 2014,” says Heather Fitzpatrick who leads a into a potential buyer and getting them into the show room.” team of digital specialists, graphic artists and account service Force Marketing’s success – it boasts an 87 percent specialists. customer retention rate – comes from a deep understanding of the needs and the inner workings of the auto dealership. More than a third of the company’s employees are auto industry veterans with a knowledge of the challenges facing both regional groups and local dealers. They know that each client’s business is unique. Rather than presenting a formulated campaign, the company seeks first to understand the individual needs of the dealership and carefully analyzing the opportunities revealed by the market data.“You can then be very targeted in your approach,” says Fitzpatrick.

“I took over the digital marketing and direct mail company, while he handled the traditional advertising side,” said John Fitzpatrick. “That’s where our passions aligned. “ Today, Force Marketing provides integrated digital and direct mail programs to more than 700 dealers every month. The company partners with eight of the nation’s largest regional mail houses to produce nearly 10 million direct mail pieces each month. Its email and pay-per-click marketing efforts are highly integrated to ensure that customers are getting the same message whether they’re reading a mailer, an email message or visiting a website. Heather Fitzpatrick

Manager of FORCE MKTG/NYC Office

Clients will be able to see these The secret to getting results on advertising lies in using opportunities much clearer thanks to a new on-line portal data drawn from the dealer’s own CRM system, along with from which dealers can access data on the markets, the store, national data from Dataium, the world’s largest compiler of and the manufacturer to get true insight into the marketplace. online automotive shopping behavior. “We’ll enable our end user – the dealer and the marketing manager – to read off the same sheet of music we’re using,” Force has a unique he asserts. “We can come up with the same analysis and put relationship with Dataium, together a marketing strategy based on data that we both feel which follows more than 20 million automotive shoppers across over 10,000 automotive confident about using.” websites, and then aggregates, indexes and summarizes this This new service will transform customer relationships into data into intelligent insights. true partnerships, according to Randy Sieger, vice president of sales and operations.

“Our email marketing Complete Marketing Intelligence division goes hand-in-hand with direct mail,” explains Fitzpatrick. “Our philosophy is “We make sure they have a marketing mix that’s cohesive that every consumer has two mail boxes – one at home and across all media and has real depth,” explains John Fitzpatrick. the other on their computer or smartphone. We are very “We can dial into consumers that are showing they’re close

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“Instead of guessing when people are in-market, we can identify who is inmarket,” he explains. “We should be able to deliver a much higher ROI and more vehicle sales.” Through this data analysis, dealers are able to reallocate their existing ad budgets into more productive avenues. The goal is to reach customers with a timely message and specific offers that are geared to their particular wants.

Competition for Customers The company’s ability to not only use data, but also provide a high level of customer service, won Lindsay Automotive Group’s business. During a nine month competition with a rival marketing agency, Force was able to demonstrate that it could achieve better results for the client, says Jodi Onoffrey, chief marketing officer for Lindsay Automotive Group.

“Force outperformed the competition in terms of metrics, as well as customer service” Jodi Onoffrey

- Jodi Onoffrey

CMO for Lindsay Automotive Group

“Force outperformed them in terms of metrics, as well as customer service,” she relates. The company’s adept use of digital marketing, coupled with it’s

(from Left to Right) - Chuck Jones Southeast Regional Manager, Eric Mercado National Director of Sales, John Fitzpatrick President/CEO, Randy Sieger VP of Sales/Operations, John Franco National Sales Training Manager

willingness to share its data and methods with the customer were also part of their approach. “We needed someone who is transparent and willing to give us complete access to the platform they’re using versus pushing out reports – it makes a big difference,” says Onoffrey. “We reallocated our pay-per-click budget based on the Dataium data when we saw what was going on in the marketplace.” Force has also been able to respond to Lindsay’s efforts to use its data in new ways. “They’re dynamic, flexible and not entrenched,” she says. “They understand technology because they’re living technology and its second nature to them.” FORCE MARKETING Headquarters - Atlanta

This ability to please customers has driven rapid growth since Force Marketing launched as an separate company in 2010. It’s been listed on the INC 500 of fastest growing companies. Revenues increased from $20 million in 2012 to $32 million last year, and the company is on track to top $50 million in 2014. CBT

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got data?

Three Surprising Tips to Help You (Actually) Use Your Dealership’s Marketing Data

wo summers ago, my company welcomed five super smart interns with enormous brains to join our programming team for the summer. It was fun for the entire office. Eager personalities and challenging ideas are always good in a fast paced tech environment. Their metrics for success were fairly simple: show up, kick butt, and teach us something interesting.

As a technology company primarily invested in helping auto dealers use data to perform better on the phone, we thought he was probably on to something. It took me a couple years to realize how important this was though. What was my realization?

I became fond of one particular intern, let’s call him Ted. Ted’s finest quality? His overwhelming obsession with “The Data.”

A. Do not understand how to interpret it, and subsequently…

“I love the data!” “We must concentrate on the data!” “Let’s discuss the data!” “What do you think about the data?” “What does the data tell us?”

The harsh reality is that while dealers have access to more and better data than ever before, most:

B. Fail to drive actionable change because of it. If you find yourself in either or both of these categories, don’t feel bad. It’s hard. Maximizing the value and potential of all the data pouring into your dealership is tough. The good news is that you are just a few common sense ideas away from being able to wrangle the data you’re sitting on. KISS Your Data Don’t actually kiss your data. That would be weird. Instead, find the one or two metrics that drive change. Keep it simple stupid!

A speaker at a conference I recently What are the three things I can do attended droned on for over an hour right now to drive those metrics? about the dozens of vital digital • Inform my team I am tracking marketing analytics and reports appointments. everyone needs to focus on to have any • Hold weekly training on the success. importance of an appointment request on every single call. Page views, inventory views, bounce • Provide weekly feedback to each team rates, clicks, conversions, CPC, CPM, member on their performance. CTR, impressions, conversion ratios, phone calls, views, form fills, reviews, Did that work? Why or why not? likes, posts, Tweets, and chats. IT’S Yes. I’ve set 36 more appointments THAT EASY! since I started paying attention to the right data. A brave GM raised his hand and said “This is great, but can you please Lean On Your Vendors tell us what matters most? How can we actually use the stuff you’re talking There is a clear correlation between about to sell more cars?” KISSing your data and leaning on vendors who provide the data. Whoa! Shots fired! I admire the speaker’s in-depth research and Why? Because vendors should be your knowledge, but it is the GM who should best friend in understanding what data be admired for his realization that too matters most, how to manage it, and much data can be a bad thing when how to drive positive change because it’s not actionable. Dealerships that of it. identify and focus on the absolute most important metric in each marketing As a vendor myself, my worst segment almost always outperform nightmare is the dreaded cancellation dealers who float among the plethora of because “We just don’t really use the data they can’t comprehend. data.” To get started, ask yourself:

A fair reaction is “shame on us,” but it’s also “shame on you.”

• What metric do I want to improve? • What are the three things I can do Shame on you for not leaning on your right now to drive that metrics? vendor for more for guidance, strategy, • Did it work? and learning how to KISS your data. Take advantage of every opportunity Let’s use the phone as an example: you have! What metric do I want to improve? Paying for a vendor’s technology Number of appointments set on or services and not using them as a inbound phone calls. This drives shows, resource is like paying for a monthly demos, and units sold. gym membership but not going because you don’t know when they open and close.

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Ready. Set. Go. My Dad always told me “Many times it’s better to just do SOMETHING instead of NOTHING, even if it’s wrong!” When the most important data points are identified and you have utilized all your vendors as a resource, it’s time to take action. The execution stage is where many dealers come up short! Need some ideas? • Fire a vendor if the metrics show that they continually fail to meet or exceed your expectations or investments, or their promises. • Increase your spend on the vendors and marketing that actually works. Sound a little obvious? Absolutely, yet actually executing a databased decision like this is often where dealers derail the process. • Reward and acknowledge employees who buy into and improve the key performance metrics you’ve identified. Remember my inbound phone call example from above? The number one appointment setter should get an Amazon gift card and a warm reception from management. Too much of a good thing isn’t always good. The same goes for your dealership. Marketing data isn’t worth anything if it’s not driving decision. Are you a data driven marketer? CBT

ETo read more from Mike Haeg on using marketing data go to CBTNews.com

Mike Haeg Director of Business Devlopment for Century Interactive

Mike Haeg is the Director Business Development for Century Interactive, a technology company dedicated to helping businesses Own the Phone. He loves fusing technology and people to improve the bottom line. Outside the office, don’t be surprised to see Mike at a local music venue, jotting down his crazy ideas, or knee deep in a good book.

A staple of Internet marketing, landing pages drive visitors to do what you want them to do. When used SOURCE in tandem withOF THE OFFICIAL NEWS Facebook ads, Facebook landing pages THE RETAIL AUTOMOTIVE INDUSTRY give you an opportunity to create more value and carry visitors further down the sales funnel.

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