Car Biz Today Magazine June 2015 Issue

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

June 2015

Volume 2, Issue 3

Entire contents ©2015 Car Biz Today. All Rights Reserved.

ONLINE

CAN WE GET SOME LOVE FOR

PHONE SKILLS?

REVIEWS

GRANT CARDONE ... see PAGE 11

The last thing your dealership can afford is to let a bad customer review linger on the web, without trying to correct the problem and flip it to a positive write-up.

DON’T LET YOUR

SALES FUNNEL

LEAK LIFETIME CUSTOMERS

... see PAGE 14

CHUCK DE MARTIGNY ... see PAGE 30

GRADE YOURSELF ON

EMPOWERING YOUR MANAGERS TOM KUKLA

... see PAGE 19

MARKETING TOOLS

YOU SHOULD EXPECT FROM AN AGENCY

AMY FARLEY

A PHOENIX-LIKE RECOVERY FOR CARDINALE GROUP The West Coast company was reeling a few years ago but has recovered nicely, with a laser focus on fundamentals and digital marketing ... see PAGE 16

... see PAGE 22

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

RISING VALUES

CBT NEWS 5 Concourse Parkway Suite 100 Atlanta, GA 30328

Dealership prices are high and climbing, which is good news for owners. Exact valuation is a complex process, but there are some basic approaches dealers can use to keep track. ... see PAGE 6

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Analyze Your Market

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Got screwed lately?

Seems that some lead generators out there are putting their own interests over the interests of their dealers.

Not Autobytel.

Autobytel is your true dealer partner. We’re all about your success. That’s why we never get between you and your customer. We never dictate your price. And we never put our brand above yours.

Plus, in our history, we’ve delivered over 50 million leads to dealer partners just like you, helping to sell millions and millions of vehicles. And with a cost per sale of around $275, Autobytel consumer connections will make you money.

Contact us today. Because a lead program that doesn’t support your brand is pretty screwed up.

Text or Call Autobytel

And sell more cars.

1-877-261-4575 Data Sources: Sales number from IHS Automotive/Autobytel Collaborative Study based on consumers that submitted a lead through the Autobytel network. IHS Automotive is part of IHS Inc. IHS acquired R.L. Polk in 2013. "Over 50 million" leads number from Autobytel internal lead totals from 1997 - 2014. "$275 cost per sale" number based on $22 lead price and estimated average 8% conversion rate. © 2015 Autobytel Inc. All rights reserved.

DEALERS, IF YOU COULD INVEST $2,000/MONTH TO MAKE AN ADDITIONAL $1,260,000 A YEAR, WOULD YOU DO IT? After your sales consultants complete 3 No Pressure Selling new vehicle sales focused courses, expect them to sell 5 additional vehicles per month with a 50% average front end gross profit improvement.

50% PROFIT IMPROVEMENT happens when sales consultants sell at full advertised price by helping buyers move up to the package that delivers the logical and emotional benefits they desire most.

600 ADDITIONAL VEHICLES PER YEAR happens when 10 graduates use the Most Wanted List to help customers sell themselves and the Wheel of Value to show the 4 exclusive benefits you have, buyers want and your competition can’t provide.

$1.26M ADDITIONAL GROSS PROFIT happens when current gross improves 50% then is multiplied by 600 additional vehicles.

Example front end gross: $1,400 x 1.5 = $2,100 x 600 = $1,260,000

Grow your gross by selling the way your customers want to buy. Call 800-515-0034 or go to EvaluateNPS.com to take a complementary test drive today!

CAR BIZ TODAY M

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Letter from the editor

CAR BIZ TODAY MAGAZINE Email

newsroom@cbtnews.com Phone

678.221.2955 President and Publisher Jim Fitzpatrick Vice President / COO Bridget Everett

Dear readers,

Managing Editor Jon McKenna

Customers appreciate clarity and transparency from an auto dealership, and most of us can handle being told “No” if it’s clear why.

Associate Editor Russell Brown

I was thinking about those truisms recently when my wife’s car needed some fairly substantial engine work.

The dealership service department had to keep the car overnight and gave her a courtesy vehicle.

Creative Director Simone Tieber

As it happened, she also had to drop off her car overnight at the same service department about a year earlier, when the repair bill was to be several hundred dollars less. At that time she was told sorry, the dealership policy was to provide no courtesy cars to service customers.

Designer Betsy Alvarez

I checked the dealership’s website, and it says not a word about any loaner car policy. Contrast that with BMW of Sterling, Va., whose website explains quite clearly that courtesy vehicles are offered if repair services will take more than two hours, as long as the customer has scheduled an appointment in advance and is at least 21 with a valid driver’s license.

Dealerships have become much more forthright in recent years in posting their prices and policies, given how many sales of cars and repairs start with online research. But, it never hurts to inspect your website for gaps in the information your customers expect.

Production Manager Jason Lowsy Creative Director - Digital Keith Tuggle Marketing Associate Roxanne Luhr Subscription Manager Tom Domagalski

JON MCKENNA Managing Editor

Advertising Director of Sales Jane Howard jhoward@cbtnews.com d 678.221.2964 c 404.452.9551

In this Issue 5 Association News 6 Back-of-envelope approaches track rising dealer valuations

By Jon McKenna

8 Poor phone skills can foil a smart customer lead strategy

By Mike Haeg, Century Interactive

11 Digital marketing still works hand-in-hand with phones

By Grant Cardone, entrepreneur and speaker

14 Panned by a nasty online review? Take direct action

19 Do you really let your managers shine? Test your willingness

By Tom Kukla, Credere Leadership

20 Buyers still crave personal relationships in a smart phone world

By Glenn Pasch, PCG Digital Marketing

22 Expect any marketing agency to utilize latest digital platforms

By Amy Farley, Force Marketing

24 The blame game is endemic in the industry, more’s the pity

By Jeff Cowan, Jeff Cowan Pro Talk Inc.

By Mary Welch

16 Cardinale Group feels prepared for future market downturns

26 Foreign models’ market shares are shown for each U.S. state

By Jon McKenna

By Jon McKenna

27 Refusal to make excuses is a great dealer habit to develop

By David Lewis, David Lewis & Associates

30 Slip-ups in the service drive will cost you future car sales

By Chuck de Martigny, Jungle Cat Marketing Inc.

33 Industry News 35 Ask the Pros 36 Customer retention focus bolsters sales of repair services

By Don Reed, DealerPro Training

39 On the Set With CBT Automotive Network

ONLINE FEATURES Visit www.CBTNews.com

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Sales Assistant Alex Branam abranam@cbtnews.com

Customer Service info@cbtnews.com

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Permission to reprint or quote excerpts granted only upon written request.

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News ASSOCIATION

Guinta PLAN TO STOP BARGAINING ON CAR LOAN APRS DRAWS NADA’S WRATH

The National Automobile Dealers Association is up in arms about a proposal to limit dealers’ ability to discount the APR in order to land a customer’s financing business, and pushing congressional intervention.

In 2013, the Consumer Financial Protection Bureau issued guidance recommending that dealership F&I departments be prevented from negotiating on the APR for customers who are ready to finance a vehicle purchase. Instead, the CFPB recommends a policy under which lenders would compensate dealerships with a flat fee that they could not discount.

The CFPB (a federal agency created in 2010 following the national crisis with financial markets) feels bargaining on APR ultimately leads to risky auto loans.

However, NADA and its allies complain the CFPB’s analytical methodology is flawed, and the Bureau is ignoring legitimate business reasons to negotiate on interest rates.

On April 15, 2015, U.S. representatives Frank Guinta, R-N.H., and Ed Perlmutter, D-Colo., introduced H.R. 1737, also known as the Reforming CFPB Indirect Auto Financing Guidance Act. The legislation would force the CFPB to rescind its 2013 guidance, utilize public comments and hearings on any newly issued guidance, and evaluate other alternatives than flat fees.

For more information about the NADA campaign against the CFPB plan, go to www.nada.org/LegislativeAffairs/_ Pages/Issue-Briefs/CFPB-Auto-FinanceGuidance-Reform/.

RESEARCHERS TO ASK WHY CAR OWNERS TURN DOWN FREE RECALL REPAIRS

Why would a car owner decide not to have free repairs or parts replacements performed in a vehicle recall? The

Alliance of Automobile Manufacturers on April 28, 2015 said it would undertake the first truly detailed, coordinated research project asking why consumers do or don’t get recalled vehicles repaired.

“We know that vehicle age seems to be an important factor, but little research has been conducted on consumer attitudes to recalls,” said Mitch Bainwol, president and CEO of the Alliance. “We can only speculate on why consumers who receive multiple notices do not repair their vehicles for free.”

The average passenger vehicle recall completion rate is about 75%, although it is 83% for newer cars vs. 44% for those 5 to 10 years old, according to AAM. The research will be conducted by the Public Opinion Strategies firm, with results expected by this summer.

Washington-based AAM represents a dozen major car and light truck manufacturers.

NADA Infographic On Car Financing Issue

DEALERSHIP ASSNS. AGAIN EAGERLY ADD VOICES TO ESTATE TAX REPEAL

Getting rid of any federal tax is an uphill climb akin to scaling Mount Everest, but NADA and the American International Automobile Dealers Association in Washington are adding their support to a bid to eliminate the estate tax, aka the “death tax.”

In recent weeks, the U.S. House passed H.R. 1105, or the Death Tax Repeal Act of 2015. The legislation would axe the 40% tax rate on estates valued at more than $5.4 million, and is awaiting Senate committee action.

Such a move would, of course, greatly benefit many family owned dealerships whose net worth is skewed toward the business’ land and buildings rather than cash. Keep in mind, however, that opponents have been trying to eliminate the death tax for more than a decade with no success.

DEALERS CAN HELP SET AGENDA FOR NEXT NADA ANNUAL CONVENTION

The NADA is inviting proposals for workshop topics for its March 31-April 3, 2016 annual Convention and Expo in Las Vegas.

Dealers can submit ideas for new workshops in the areas of executive issues, digital and traditional marketing, staff recruitment, fixedops departments and variable ops (sales/business office/F&I) at www.nadaconvention.org.

The deadline for submissions is June 26, 2015.

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LEADERSHIP

KEEPING TABS ON WHAT

Your Dealership Might Be Worth Today Owners can try their own valuation calculations to estimate possible price tag in a hot deal market. BY JON MCKENNA

A

s any exec in the industry knows if he hasn’t been hiding out in a Montana survivalist camp, this is a seller’s market for auto dealerships. Warren Buffett’s major investment in car retailing adds a steroid-fueled dose of excitement, but his decision is really the result of high interest in dealerships and not a precursor.

“We’re seeing a lot more activity in buying dealerships, and more dealership owners considering selling in this bubble,” noted Lance Hall, the Dallas-based president of the FMV Opinions valuation consulting firm. “The blue sky component [to intangible values] has picked up a bit, particularly in the luxury car segment like Lexis, Audi and Porsche.

“Pent-up demand is there, consumers have confidence to go out and buy cars, and lenders are cooperating. And, the publicly traded dealership companies are looking for avenues for growth and getting more excited about it, because we have this phenomenally low-interest-rate environment.”

When dealership owners get serious about marketing their business, they need to hire a valuation

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consultant or accounting firm and live with the fees. The current methodologies are incredibly detailed and arcane to the layman (adjusted book value approach, discounted cash flow approach, market approach just to name a few), but that is how buyers and sellers come to terms over the true current value of a busy dealership.

What about in the meantime, though, for a dealership that isn’t ready to sell? Keeping tabs on at least a rough estimate of the business’ current market worth is fun and an ego boost to the owners right now, but it’s also a sound business habit. It’s useful for an owner and general manager to know how to directionally estimate the dealership’s value by diving into the financial statements and performing a few minutes of online research.

We asked several valuation consultants to suggest very basic, back-of-the-envelope approaches that dealership leaders can use to peg the worth of their business – while recognizing the inherent limitations of any calculation that rudimentary.

Here are their thoughts:

FROM LANCE HALL: 1. First, add the dealership’s cash on hand to the value of its vehicle inventory, accounts receivable, pre-paid expenses and certain other assets. Then, deduct certain liabilities such as accounts payable and accrued expenses.

2. Next, look at the combined carrying value of buildings, land and improvements and decide whether it needs to be adjusted due to age

and market conditions. For example, you might decide it is worth 10% to 20% less. Back out the value of any land and/or buildings that are not directly owned by the dealership, e.g. they are leased from a partnership. Subtract the current amount of any debt that tied to those buildings and land.

3. Add the result from 1) above to the revised, net figure for fixed assets. This gives you a number for net tangible book value.

4. Then, adjust the dealership’s pre-tax income if you feel any land or building lease terms aren’t really at fair market value because the lessor is a related partnership. Then, apply the appropriate blue sky multiple for that auto manufacturer to the dealership’s adjusted pre-tax income. Perhaps the best known, most easily available multiples come from Kerrigan Advisors’ quarterly “Blue Sky Report”; founder Erin Kerrigan used to work at Presidio Group and help publish its “Automotive Retail Buy-Sell Report.”

The resulting number is a blue sky figure for intangible assets.

5. Add net tangible book value to the blue sky number to roughly estimate the current market value of the dealership.

FROM BRYCE ERICKSON:

Managing director of the Dallas-based Erickson Partners valuation consulting firm

1. Go into the dealership’s balance sheet and subtract total current liabilities from total current assets. This yields a working capital figure.

2. Also dive into the balance sheet for a combined book value of fixed assets (real estate and buildings) and consider whether to discount it for age and market conditions. Subtract the current value of any debts tied to those fixed assets.

3. Apply the Kerrigan Advisors’ blue sky multiple for that auto manufacturer to pretax income. This gives an estimated value of intangible assets.

“Balance sheet plus blue sky is honestly the simplest and easiest approach for a dealer to understand.”

— Bryce Erickson

4. Finally, add the numbers for working capital, net fixed assets and intangible assets to get the estimated current value of the dealership’s equity.

FROM THE VALUADDER BUSINESS VALUATION TOOLS COMPANY: In blogs, ValuAdder, a valuation software provider based in West Linn, Ore., suggested two basic approaches to valuing dealerships. First:

1. Calculate the business’ enterprise value by adding

1. Calculate the business’ enterprise value by adding the market

2. Divide the enterprise value by the dealership’s net sales

2. Divide the enterprise value by net sales in order to get a

the market value of owner’s equity to total debt, and subtracting cash and equivalents. in order to get a multiplier.

value of owner’s equity to total debt, and subtracting cash and equivalents.

Or:

multiplier.

3. Apply that multiplier to the dealership’s annual revenue.

3. Apply that multiplier to the dealership’s EBITDA.

4. Add the value of vehicle inventory to the result in C

4. Add the value of vehicle inventory to the result in C above.

above.

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SALES

It’s Impossible For Dealers To Manage

Phone Performance Too Aggressively CRISP principles for using the phone can easily be taught in-house, and their specific goals are really helpful

BY MIKE HAEG

Y

our dealership has spent a ton of money on marketing. After all, more marketing is supposed to mean more leads, and more leads means your dealership moves metal. With so much going on, you even start to lose track of all the online and print campaigns that your dealership is running. Yet, it never seems like enough.

Then it happens: The phone rings. Repeatedly.

How does your sales team respond when they move from face-to-face interaction to the phone? How do your managers feel about the phone skills among the teams in sales, F&I and elsewhere? How do you feel, knowing the dealership spent the big bucks on advertising designed to drive phone leads, yet quantifying phone performance feels impossible?

ANSWERING TO THE PHONE MASTER

It’s easy to start feeling like the phone owns you. It’s unfortunately all too common for a dealer to constantly worry about his store’s phone performance. Sure, you know it’s important, but where do you start when trying to get your people better on the phone?

How do you even quantify the entire store’s performance? Maybe your veteran sales agent is killing 8

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it on every call, but your new guy has no clue what to do. The truth is, you just really aren’t sure.

This is what we call “Phonxiety.”

Anxiety about the phone leads a surprising number of dealers toward some unnecessary, expensive options. Many general managers think if they blindly throw more money into marketing, they can ignore botched phone opportunities because lead volume is up. When those marketing efforts lead to more calls, the sales team may not be able to handle them. They’ll need phone training to be prepared.

Training doesn’t have to be expensive. It can start today with the CRISP technique, which is composed of the four key points of a call that should lead to a successful appointment: Connect, request and invite, set and pursue. All sales managers should know CRISP and manage their sales team by its principles — the CRISP technique is the best way to be thorough on every phone opportunity. Seventy-seven percent of all calls are from new customers, and if you’re not handling them properly, you’re just not going to get people through the doors.

CRISP DEVOTION IS A BEST PRACTICE

The best dealerships follow CRISP principles. Your

team and you should set goals for every phone call based on CRISP, and measure growth in terms of how often your sales team implements these tactics. These goals could include having your team dedicate time solely to picking up calls, or using the end of the day to call back customers who were missed. Creating a checklist for every metric also helps define clear goals.

It is vital for the dealership to connect the customer quickly to a friendly agent who is qualified to help (and that means more than just answering the phone!). A lot of shoppers are looking for an excuse to rule dealerships out of their car-buying process. If they can’t even reach a salesperson, they’ll simply call a competitor down the street.

Customers who don’t have to wait long to accomplish their shopping mission are happier and more willing to do business with you. The best dealerships connect callers to someone who can actually help on at least 75% of their calls; anything below 60% and you’re in trouble.

Request the appointment by inviting the caller into the dealership. What’s the point of spending the big bucks on advertising if you don’t ask customers to take a look around the lot? Every single sales call should have an appointment request, no exceptions!

“THE BEST DEALERSHIPS CONNECT CALLERS TO SOMEONE WHO CAN ACTUALLY HELP ON AT LEAST 75% OF THEIR CALLS; ANYTHING BELOW 60% AND YOU’RE IN TROUBLE.”

GET THAT APPOINTMENT!

A common tactic for an appointment request would unfold something like this: A customer calls and asks about a specific vehicle. The best practice here is to say, “Let me look that specific vehicle up. If we could find you a similar vehicle that would save you some money, would you be interested in coming in to see it?” This establishes trust with the customer and allows you to subtly request the appointment.

If your team is requesting appointments at least 80 percent of the time, they’re really playing with the big boys, but the ultimate goal is requesting during every call.

Set the appointment for a firm date and time, with clear expectations. It’s important that you know when your customers are visiting so you can give them your undivided attention. Customers who make firm appointments are much more likely to show up; wishywashy customers are just trying to get your sales guys off the phone.

It’s easy to get stuck with a soft acceptance when a customer agrees to come in “this afternoon” or worse, “sometime later this week.” Don’t accept that from your sales team. Any more than 40 percent soft acceptances, and you’re losing money and time.

TO SEE MORE FROM MIKE HAEG GO TO CBTNEWS.COM

DON’T NEGLECT OUTBOUND CALLS

MIKE HAEG Director of Business Development at Century Interactive

Finally, pursue the missed opportunities that didn’t connect. Everyone makes mistakes, but the highestperforming dealerships don’t let them stay mistakes.

Make sure your sales team pursues customers by making outbound calls and reaching out to those interested customers whose needs were not met, such as those who didn’t reach the person for whom they were looking.

Many dealerships don’t place as much emphasis on outbound connections over inbound, but the best ones pursue at least 70 percent of missed opportunities.

If you’ve been using the wrong phone processes and don’t know how to properly answer and handle every call, alarm bells should sound: You’re not handling business correctly! Put your efforts where they matter most and educate your team on CRISP.

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

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REVEAL THE PRINCE ON

YOUR USED CAR LOT.

Learn how to certify your Other Makes & Models at: motortrendcertified.com/royal or call 888.965.2924

©2015 Automobile Protection Corporation-APCO. EasyCare is a registered trademark of Automobile Protection Corporation – APCO. MOTOR TREND® is a registered trademark of TEN: The Enthusiast Network Magazines, LLC.

SALES

PHONE SKILLS REMAIN CRITICAL

In An Era Of Digital Marketing And Online Leads Dealerships cannot fail to strategize phone connections with customers and prospects, or to follow key rules. BY GRANT CARDONE

W

e all know about instantaneous connection of the planet via the Internet. Social media like Twitter, Facebook, Google+, YouTube and LinkedIn – plus new streaming content like Meerkat (I am No. 9 in the world!) and Twitter’s Periscope (I am on their “star” list) command eyeballs at dealerships and their customers.

Yet, there remains one device more powerful and influential than any of these social media destinations or streaming apps for the dealership industry – the phone. It also has more clout than CRM, desking tools and even the Internet, and may outperform all of them combined.

Let me explain. Even after your customer performs an average of 600 minutes of online research, typically he or she still will pick up the phone to verify where your business is situated, if you have a desired make or model in stock, and if you will honor offer terms currently on your website or a competitor’s.

Even in this mega-digitized economy, in any career you still must learn how to use the phone effectively to reach the right person, close the sale, follow up with a customer, fill up your calendar, set an appointment or handle a customer’s questions. Show me a top performing salesperson and I will show you someone who knows how to use the phone to close. Show me a great manager and I will show you someone who knows how to teach others how to control the phone and keep their calendars full.

PHONE PENETRATION: INESCAPABLE REALITY Here are a few interesting facts: 1) The planet is home to more cell phones than people, an estimated 7.8 billion devices; 2) The average person has his or her phone within 36 inches most of the day; 3) In

the U.S. alone, nearly 1 trillion phone calls are made each year.

You spend more time with your phone than any other device, and most of the time it stays closer than your kids or your lover. The same holds true for your prospects and customers. The phone is money, and everyone has one. But to master it, you must learn techniques to control communication with others over a distance.

Before you dismiss this all as obvious, let me warn you that most salespeople never fully understand the phone’s power or how to use it to close sales. That lack of understanding is probably the single-biggest reason why 87% of all salespeople miss their quotas.

Now, do I have your attention?

WORKING IN TANDEM WITH ONLINE RESEARCH Salesforce.com suggests that 92 percent of all customers continue to use their phones before making a purchase, and 85 percent are dissatisfied with the interactions. Once your dealership places ads on TV, radio, Google or social media. When your dealership starts buying ads on TV, radio, Google or social media, the phones are going to ring. If your people are good on the phone, then the doors are going to swing.

When your salespeople or other staff start taking these calls, they need to know the new rules of the game:

1)

Answer the call before the second ring. No one wants to wait for service and no one wants to wait to spend money.

2)

Greetings should be brief. “Thank you for calling.

About what can I get you information?”

3)

pleasure.” Then, proceed to offer even more information as a way to qualify. This is a very smart and effective technique that we use in competitive industries such as insurance and service business. Feel free to call my office at (310) 777-0255 to get more information on this technique.

4)

Offer texting data during the call. This has been shown to improve your appointment ratio multi-fold.

5)

Have and know the scripts available for the five types of calls. (Yes, my firm has scripted all 32 types of phone calls your sales team or BDC will ever receive, with exact and scripted-out responses that can be printed or read from your CRM.

6)

Teach your people how to lock in appointments and create urgency. They shouldn’t just ask for appointments.

SCRIPT EVERY PHONE INTERACTION And, all of this is just for incoming calls. Other skills are needed for your people to effectively follow up with sold and unsold customers by phone.

Dealership managers MUST do a better job of transferring skills, providing salespeople with scripts and corrections during the day, and most importantly SHOWING them how to effectively use the phone.

If you are anything like me, you have been made to believe during your career that you couldn’t sell the company’s products or services by phone. Well, that may have been true once but not anymore. Given the choice of face-to-face interaction with the customer or phone communication, clearly I would prefer in-person. But some customers will never give you that chance.

Story continues on page 12

Answer all inquiries with “I am happy to” or “My

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THREE WAYS TO GET MORE MILEAGE FROM THE PHONE Incoming calls and outbound follow-up calls represent your best opportunities to keep your appointments calendar full and hit your quota. Here are three tips to get more mileage from, and a dominant advantage on, the phone:

1) Time is a killer. You cannot devote time to small talk and chatting with prospects. That’s the old-school mentality. You must get in and get out. You may only have 2 minutes to get an appointment, find out whom the decision-maker is and find out that person’s needs. Use your time accordingly.

2) It’s not just what you say, it’s how you say it. Speak with authority, confidence

and attitude. Project confidence in the call with the words and phrases you use.

Check out a presentation I gave on millionsonthephone.com to see how I do this with a live audience.

3) Words matter. One wrong word on the phone can blow your call. You can no longer say things like “I can’t do that,” “I don’t know” or “Can you hold, please?”

Dealerships should quit spending money on advertising if they aren’t going to train their people how to effectively handle the phone calls that result. The ad’s purpose was to drive traffic, and if you don’t prepare your people every day to handle specific types of anticipated calls, then you are throwing money away.

Other than your commitment and attitude about success, the telephone itself will continue to be one of the single most important tools you use in building your brand, your company and your revenue.

GRANT CARDONE Entrepreneur and New York Times Grant, a national speaker and motivator, is a respected, highly regarded master salesperson whose passion is to teach people how to sell themselves, their products and services regardless of economic climate. His books, audio packages and seminars provide people of all professional backgrounds with the practical tools necessary to achieve high levels of success. Follow him on Twitter @grantcardone.

TO SEE MORE FROM GRANT CARDONE GO TO CBTNEWS.COM

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MARKETING

Blowing Off Bad Online Reviews:

A HABIT YOU CAN’T AFFORD Customers may volunteer to change them once a problem is fixed, but if they don’t, dealerships must be assertive.

BY MARY WELCH

W

hen dealing with haters on social media, dealerships should not take pop star Taylor Swift’s advice and simply “shake it off.” It is critical to reach out to that unhappy customer and try to make things right and then get a negative online review rewritten – even if you have to come out and directly ask for that favor.

“My name is on the business,” said Jim Arrigo, owner of Arrigo Dodge Chrysler Jeep Ram in West Palm Beach, Fla. “You can say negative reviews are just part of business, but let me tell you, it’s personal.

We’re family owned. It’s a reflection of my business, me, my father, the rest of my family and my people.”

“With so many dealerships fighting for smaller and smaller profit margins, one of the key differentiators is the powerful customer experience,” added Aaron Wirtz, marketing and media manager for the Ride Auto Group in Wichita, Kan. “Handling a bad review properly can turn an angry customer into a lifelong customer, and we have that power.”

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INVESTIGATE THE PROBLEM BEFORE YOU REACT While the prospect of asking a customer to pull or rewrite a bad review may unsettle some dealership professionals, the ones we spoke with recently find it no more ticklish than asking a potential buyer what it will take to close the sale – especially if they already reached out to the unhappy customer, listened to him or her and fixed the situation.

Before even discussing a bad review on Yelp, Angie’s List or other site with the dissatisfied customer, dealerships must investigate the source of unhappiness. “We make sure that all upper-level management knows about the review and then we go to the people involved, whether it was a technician, receptionist, salesperson, whoever and show them the post and get their side of the story,” said Andy DiFeo, general manager of Hyundai of St. Augustine (Fla.). The person who ultimately gets in touch with the customer needs to have decision-making authority.

More often than not, the customer just wants to vent, according to Jason Stum, digital marketing manager at LaFontaine Automotive Group in Highland, Mich. “They’re just blowing off steam and they feel a bit sheepish talking about it afterward to someone who cares and wants to fix it and make it better.”

Be that as it may, going the extra mile is important at this stage. If a customer is upset over the length of time needed for an oil change, “I’ll tell them that the next time they come in for an oil change, we’ll do a complimentary full car detail,” said Jordan Knettles, social media director for Steve Rayman Chevrolet in Smyrna, Ga. CUSTOMER’S ANGER MAY NOT BE THAT DEEP Arrigo has found most inflammatory online reviews arise from a genuine misunderstanding between what the dealership said and the customer heard, and the Internet as it so often does encourages strident complaining. After a call from the dealership, that seemingly irate customer may be quite happy – but that negative review is still online for everyone to see.

The goal should be for the now-satisfied customer to voluntarily change the review, and several

Why You Should Be Jumpy About Critical Online Reviews

86% of respondents who remembered

DEFT HANDLING OF A REVIEW CAN LEAD TO LIFETIME CUSTOMERS. – Aaron Wirtz, marketing and media manager for the Ride Auto Group

dealerships said they find that goal very attainable – indeed, a natural result of their efforts to cure the problem.

Although every situation is different, Wirtz said he usually brings up the negative review after the discussion in hopes the customer will be the one to suggest he or she should change it. “We never ... say that we’ll fix the car if you give us a good review. Sometimes, a customer will just refuse to do it. Sometimes we can get a one-star review up to a three-star, and we realize that’s as good as it’s going to get.”

“We never ... say that we’ll fix the car if you give us a good review. Sometimes, a customer will just refuse to do it. Sometimes we can get a one-star review up to a three-star, and we realize that’s as good as it’s going to get.”

– Aaron Wirtz, marketing and media manager for the Ride Auto Group

reading online reviews said negative reviews influenced a buying decision ...

90%

... almost as many as the influenced by a positive write-up.

41% of respondents remembered

reading a negative review from an online review site ...

44% from Facebook and ...24% from Yelp. ...

Source: Dimensional Research 2013 survey

DOES THE REVIEW STILL REFLECT THEIR MOOD? Knettles routinely asks whether customers are now completely satisfied; if they answer yes, then he will ask if the negative post still reflects their opinion. “Usually they’ll say no and say they’ll post a new one. “If they don’t [volunteer], we’ll pursue it a bit more and say that thousands of people go on that site, and we’ll ask them to either take it down or write something new. We’ve never had anyone refuse.”

If a customer doesn’t volunteer to write a revised review for Arrigo, he will at least “ask them to put it

on the post that Mr. Arrigo reached out and fixed the problem.”

And, if a customer won’t be mollified or refuses to amend his or her post, then dealerships should consider posting their own side on the site’s comment section, as long as investigation leads them to believe they acted reasonably.

AT SOME POINT, GO PUBLIC YOURSELF “First off, it shows anyone reading the negative post that I’m passionate about customer service,” DiFeo explained. Plus, having a few negative reviews is not all bad anyway. “If all our reviews are positive, people may not believe it because, logically, stuff goes wrong. I think people are less swayed by a negative review as long as they can read that the problem was resolved or the dealership tried to make it right.”

Review sites have differing rules about how they deal with negative reviews and how the vendor can respond to them, so dealership marketing specialists must stay current on the policies for the most widely followed sites. Wirtz starts his day perusing various review sites. Other dealerships use services like Prime Response that send e-mail alerts when the dealership is mentioned online.

Plus, Facebook, Yelp and Google are among media sites that will notify a business directly.

“We get a range of reviews and one of the biggest challenges is to figure out which platform you want to concentrate on,” Wirtz added. “Every city, every location has a different personality.

“In Wichita, some [customers] use Yelp but not nearly in the amount that it’s used in other cities.”

Some sites, like dealer.com, notify the dealership about a negative post and extend a two-week grace reconciliation period that starts when a negative comment is submitted and ends when it is actually posted. “A lot of times in those two weeks, we can fix the issue before the review goes live. I wish more review platforms were like that,” he said.

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DEALERSHIP PROFILE

Cardinale COO Erich Gail

A Smarter Cardinale Group Emerges From Disaster Its execs are confident that devotion to key metrics and sophisticated digital marketing will help company thrive

breathtaking clip “will go and buy more stores,” Gail asserted.

BY JON MCKENNA

REFUSAL TO BLAME FATE, MARKETPLACE One might question just how extensively Cardinale, a 30-year-old company at the time, needed to be reengineered after the 2009 disasters. After all, at the time bankruptcy filings were soaring in California, and dealerships were closing in every corner of the state. Cardinale wasn’t making mistakes that its customers weren’t making.

But founder and president Joe Cardinale and the rest of top company management went into several days of retreat meetings and emerged resolved never to blame market conditions or any other party for the group’s woes – in 2009 or ever, according to Gail.

“As an industry, we were all fat, rich and good looking” at that time. “For us as a company, we had bloated inventory, bloated advertising and marketing budgets, too many staff not doing enough.

“We as an industry love to play the victim card, but we as an organization don’t allow the victim card, okay? If the market changes, we are 100% responsible to have anticipated it and for having a fortress balance sheet to carry us through it.

“What came out of that time was the development of a management-driven culture, which is the

C

ardinale Automotive Group has carved a reputation as among the dealership industry’s most innovative with digital marketing and among its most unswerving in devotion to its core management principles. But flash back six years and the company’s image was anything but lofty.

Within a 60-day period, the reeling group run from Seaside, Calif. (near Monterey on the central coast) was forced to close six of its 15 dealerships, including a huge Buick-Pontiac-GMC lot in Scottsdale, Ariz. More than 300 employees became jobless.

Cardinale was insolvent and the only reason it didn’t file for bankruptcy protection was doing so would violate dealer franchise agreements.

“It was the grace of God that allowed us to survive,” said Erich Gail, the group’s COO and 25-year industry veteran who was brought aboard in 2011 to help Cardinale continue ascending from the ashes. “We came away with the understanding that we would never let this happen again. Never again would we be so ill prepared for a downturn and irresponsible.”

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BUILDING SALES BACK UP Cardinale certainly looks like a prepared company today, with 15 new and two used auto and motorcycle dealerships in California and Arizona representing numerous manufacturers such as Audi, BMW, Harley-Davidson, Mazda and Nissan.

Its lots sell more than 11,100 new and used vehicles per year and generate north of $300 million in revenue, meaning the group flirts with the WardsAuto “Megadealer 100” list. Three of its dealerships rank on the WardsAuto “Dealer 500” list for sales.

But those are more traditional measures of success. What really inspires Gail is that Cardinale sold 7,342 of its new and used vehicles online last year, ranking the group No. 5 on the WardsAuto “E-Dealer 100.” All of the company’s marketing is now digital, and Gail also serves as CEO of its ZMOT Automotive Digital Velocity subsidiary, which strategizes sophisticated and targeted campaigns for Cardinale dealerships and more than 200 external clients.

“I can tell you this. When the market turns,” the group that six years ago was shuttering lots at a

DEALERSHIP PROFILE

opposite of market-driven. We have profit expectations and goals, and those don’t change if the market goes up or down, if unit sales in a category are above or below the norm. We remind ourselves every day that we are not in the unit business.”

KEEPING EYE ON FUNDAMENTALS In Cardinale’s lexicon, “management-driven” translates into absolute devotion to certain metrics, such as a ratio of 20 percent net income to gross revenue and having 100% of group expenses absorbed by fixed operations. A few Cardinale stores have not yet met either metric, he conceded, “but we are dangerously close.”

The company culture also is fixated upon making smart use of the CRM system, high-velocity management of inventory, mastering phone skills, reading select business books and principles of a Christian business culture favored by Joe Cardinale. In fact, Gail’s phone beeps throughout the day with results of an employee’s phone scores.

What really attracts his rapt attention, however, is the ZMOT subsidiary (the acronym stands for zero moment of truth). Apart from representing Cardinale’s decision to market dealerships only digitally, it also is the tool used to invest those marketing dollars only to reach customers who have decided on a make and model and are ready to pick a seller – not on stimulating people who are still researching a car.

TARGETING BUYERS WHO ARE READY “In 2007 through 2009, the way we as an industry digitally marketed ourself was with a website, AutoTrader, Cars.com and third-party lead providers.

Just let me spray my brand wherever I can, spend however much I have to be wherever I think we need to be,” Gail argued. “That’s really not a strategy and it’s extremely expensive.”

How ZMOT enables its clients to hit buyers at the dealer-selection stage, and evaluate success, is based on complex processes. But it hinges on multiple channels of social media, “emotionally stimulating” video, chat and blog content in addition to merchandising and pricing tactics. Cardinale started out a couple of years ago buying that expertise from different vendors but decided the information it

Employees at a Cardinale Automotive dealership handle customers.

“In 2007 through 2009, the way we as an industry digitally marketed ourself was with a website, AutoTrader, Cars.com and third-party lead providers. Just let me spray my brand wherever I can, spend however much I have to be wherever I think we need to be. That’s really not a strategy and it’s extremely expensive.” – Erich Gail, Cardinale COO received wasn’t integrated enough.

Gail doesn’t reveal specific details about investment in and headcount at ZMOT, but he says it has staff across North America and Canada. Other dealers who hire the marketing group are guaranteed that no other competitor within 50 miles will be a client.

He believes sophisticated marketing and buyer insights will help Cardinale better ride out the next

market downturn. When that happens, he vowed, the dealerships will be selling less expensive vehicles and moving trade-ins wholesale, not taking trade-ins and trying to persuade customers to buy costly new cars.

“We are building a retail operation that will provide a specific service. The buyers will always be there. But, if the units [they desire] change, we will not be flatfooted.”

Cardinale Automotive Group At A Glance Number of dealerships: 15 new, two used Manufacturers represented: Audi, BMW, GMC, Harley-Davidson, Hyundai, Mazda, Nissan, Toyota, Volkswagen Other business units: Cardinale AG Vehicle Supply, ZMOT Automotive Digital Velocity Total revenue: $377.6 million Vehicle sales revenue: $339.7 million Service revenue: $16.4 million Parts revenue: $21.3 million Vehicles sold online: 7,342

Gail and ZMOT Chief Performance Officer Robert Powell

Source: WardsAuto rankings, Cardinale. All numbers are for 2014. Revenue numbers may not add up exactly due to rounding.

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RDE SAL VE ES

YEARS OF EXCELLENCE 1985–2015

198 5 – 2015

C.

E

3 30

AINING,I TR N

JO

The #1 Training Company In The Car Business

AG MAN EMEN T

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JOE VERDE #1 TRAINING WORKSHOPS Sales Workshops

Management Workshops

n How To Sell A Car & Close The Sale Aren’t you tired of explaining why you don’t sell more? Sign up now.

n Team Leadership This is the critical class managers never got on “Sales Management.” Attend this workshop first.

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n Negotiating & Desking Improve your sales and gross with this easy ‘customer friendly’ 3-Pass Desking Process and increase Satisfaction Scores at the same time.

And Negotiate Get solid buying commitments, more deliveries and higher gross. n Internet / Phone Business Development You’re only missing 8 out of 9 deliveries from your lead sources. We fix that.

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JVTN® – #1 ONLINE TRAINING “We’re up 50 units and $200,000 per month!”

There is no such thing as a ‘one man band’ to grow or improve things in your dealership. So follow these 6 steps and turn every day problems into more sales and profit.

“We implemented Joe’s training and processes about 2 years ago and we have increased our units from 80 per month to 130 per month, and our gross profit is up $200,000 per month.

1. Get every manager on board and on the same page when you discuss problems, set goals and make your plans.

2. Select one area for your team to focus on for 90 days (like the selling process, ROI, or good gross vs. bad gross) and set a realistic group goal.

We are training online with JVTN® on Monday-Wednesday-Friday and are targeting specific skills we need. It’s just done amazing things for us!”

3. Have each manager talk about the topic and then do the math on it, to see how you’ll pull it off.

4. Work with your salespeople on that topic every day. It doesn’t have to be an hour meeting – just get everyone talking about what they’re doing, their success and where they need more help.

5. Track everything involved in that particular goal activity. If it’s making the sale – track total ups, demos, write ups (both committed and non-committed write ups), deliveries, gross, the manager who worked the deal, and then source every result accurately.

6. Schedule your plans and training for 30 days at a time, and stay focused on that solution until you reach your goal.

At the end of every 30 days, review your progress, adapt and adjust your plan as needed, and focus on the next 30 days.

Growth is easy with teamwork.

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

n Train The Trainer You train to improve & grow. If you don’t train, you don’t & you won’t! Sign up today.

– Ben Gonzalez, Sales Manager, Pitre Buick GMC, Albuquerque, NM

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hat is JVTN®? It’s simply the most powerful online automotive sales training in the world!

Over 10 million chapters of our courses have been taken by salespeople and managers who get immediate results by developing the critical skills we cover that most would never learn otherwise. What would Joe Verde teach our salespeople? The complete sales process...

How to sell a car today. No salesperson will be left behind, not knowing what to say or do when they get a customer.

Word for word – we’ll show them what to say from the greeting to the delivery!

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Again, word for word on everything they need to say and do to build your future business. JVTN® even includes a powerful, easy to use mini-CRM built just for salespeople.

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LEADERSHIP

Test Your Willingness To Help Others Lead A self-exam that takes only minutes can reveal your inclinations as an ‘empowering leader.’ BY TOM KUKLA

3

A

  

mong the important questions that successful leaders should frequently ask themselves is, Am I helping others develop their potential as a leader? Leadership is all about bringing your people up around you, and leaders who neglect to empower others tend to be insecure.

With that in mind, below is a quick test for your to self-assess your willingness to be an empowering leader, along with a key to interpret your score and decide how to follow up.

Rate yourself on each question on a 1 to 10 scale, with 1 being Never and 10 being Always. Add the ratings for all questions to get your total empowering leadership score. A perfect score would be 100.

If you scored 100, congratulations!

You are an empowering leader.

LEADERSHIP COACHING TIP: Commit yourself to developing leaders who empower others, as opposed to only developing followers

1.

2.

Do I feel that team leadership can accomplish more than individual leadership?

3.

Do I look for potential leaders and quickly assimilate them into the organization?

4.

5.

6.

7.

8.

9.

10.

Assess their leadership talents and learning style preferences Develop a plan for their growth

3

If you scored 90 to 99, give yourself a pat on the back.

You are well on your way to becoming an empowering leader.

LEADERSHIP COACHING TIP: Focus on your weakest area of development



Do I believe in people and feel they are an organization’s most appreciable asset?

Identify potential leaders

Develop a plan addressing only that skill set. Include: • Reading leadership articles/books specific to your area of development • Keep a journal of weekly activity toward improvement • Work with a mentor



Reassess your rating in six months

3

If you scored 75 to 90, you have built the foundation of effective leadership. Examine areas where you need to strengthen.

LEADERSHIP COACHING TIP: Focus on your two weakest areas of development plus one area of strength



Do I desire to raise others above my own level of leadership?

Develop a growth plan for each of the three areas, with specific milestones, to include: • Selected readings focused on leadership and growth • Three activities per week in which you specifically address each of the three areas

Do I invest time developing people who have leadership potential?

Do I enjoy watching others get credit for what I taught them?

Do I allow others the freedom of personality and process, or do I have to be in control?

Do I give my influence publicly to potential leaders as much as possible?

• Meeting with a mentor monthly, to keep you accountable to your growth plan



Reassess your rating in three months

3

If you scored 50 to 74, you are doing okay as a leader, but you have the potential to do much better.

LEADERSHIP COACHING TIP: Focus on two strength areas plus one of your areas of development



Develop a growth plan, with the help of your supervisor, for each of the three areas that includes: • Selected readings on leadership and growth • Three activities per week in which you specifically address each of the three areas

Do I plan to have others take my present position?

Do I hand the leadership baton off to a teammate and truly root for him or her?

TOM KUKLA Principal and Founder of Tom Kukla Credere Leadership Tom is a highly experienced Leadership coach, speaker and trainer. Prior to founding Credere Leadership, Tom spent 38 years in retail and medical sales, sales management and management and leadership development. He developed a world-class management-training program from the ground up in the highly competitive pharmaceutical industry that served hundreds of sales and marketing colleagues. As a John Maxwell certified coach, teacher and speaker, Tom offers organizations management and leadership workshops, seminars, training and coaching in order to guide the personal and professional growth of managers of all levels and tenure. You can reach Tom at tom@credereleadership.com.

TO SEE MORE FROM TOM KULKA GO TO CBTNEWS.COM

• Meeting with your supervisor weekly to assess your progress and keep you accountable to your growth plan



Reassess your rating in three months

3

If you scored below 50, you have a lot of work to do as a leader. The good news is, you can practice these skills at work, at home and in the community.

LEADERSHIP COACHING TIP: Identify your career aspirations and determine where you want to be in the next 12 to 36 months.



Do your aspirations include a role as a single contributor or a leadership position?



Develop a career development plan with your supervisor that is focused on your career aspirations



Reassess your rating in 12 months

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19

SALES

High-Tech, High-Speed, Lo

Aren’t the Only Kinds Of Con That your Customers Crave Dealerships must refocus on personal attention in order to cement customer relationships. BY GLENN PASCH

I

f you stay current reading about business in general or marketing specifically, you cannot avoid the pundits discussing the “new face of business.” Technology! Connectivity! Speed! Customization!

The on-demand economy is most obvious when it comes to media such as Netflix, Hulu, HBOGo and other channels that now offer their content that way.

But, other industries also are edging into the next generation of on-demand, which I call the “customization economy.” With services like AirBNB, Open Table, car configurators, customized training programs, and so on, there’s concierge service for all! Everyone gets to feel special by designing his or her own experience.

So, in a world where technology is taking over so much of the interaction between automotive dealerships and customers in the name of customization, how can dealerships retain a critical and more personal connection?

Don’t Get Lazy About Keeping Up With Customers

My point is, dealerships tend to do a poor job staying connected with customers after the sale or work, because they know a new group of leads is coming next week or month. Despite the demand for technology and DIY applications, you still must strike a balance between expedient, high tech interactions and the personal touch that will always be important in a dealership transaction.

Consumers still need human interaction in their car buying experience, especially when something goes amiss or they need help with implementation. If a dealership wants to keep a customer for the long term, then service will be the deciding factor, not your ability to make their finance form work on an iPad.

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CAR BIZ TODAY JUNE 2015

w-Cost

nections

4

Ways To Enhance Connections Now

Here are some ways to humanize the technological tether:

1) Ask each customer his or her preferred communication. Make an entry of such in the customer record. Connecting with your customers in the way they prefer helps cement your image of helpfulness.

DON’T FORGET TO ASK IF THAT CUSTOMER WANTS TEXTS. Many of us now text more often than we call. But, remember to check with your legal counsel about the rules regarding commercial texting, so your dealership stays compliant.

2) Salespeople should never abandon a customer anytime during the process. Too often, they walk away if the customer is starting to talk with the F&I staff or with a manager about a trade-in. If a salesperson is really serious about helping a customer decide on a vehicle, stay personally connected during the whole exchange.

3) Stay connected online with customers after the sale or repair. Do your sales and service teams send LinkedIn invitations and congratulatory messages about birthdays, job changes, etc.?

Now, before you think I have lost my mind or am a stalker, I am talking about those customers you have serviced and rely on, not potential customers.

4) Share helpful information with your customers that based on their previous purchase. When was the last time your staff e-mailed a useful article to a past client? Maybe the vehicle that customer bought two months ago just received an award for safety. Maybe you found a great blog about taking car of their car during winter or summer, or a video service tip. That is connecting.

Leverage Personal Attention To The Maximum

What customers really need is access to the dealership team. Taking my point a step further, the team also needs to consistently check in with the customer. But, too often, internal departmental silos prevent this from happening.

Remember that the individual dealership is not product-driven anymore; customers can get your product or service from a variety of places. Therefore, anything your team does to support your “Why buy from me” message can be a game changer. You can use technology to connect, but ultimately it’s the person on the your end of the transaction who is your most important tool.

Now, if the only time customers hear from you is when you have something new to sell, they won’t take your call or will delete your message. If you contact customers just to check in (and not only on birthdays), you come across as a dealership rep who cares about them and their success. That is connecting in a way that sending a Facebook friend request doesn’t convey.

Technology is great thing, but you go too far down the path and assume automotive customers are fully self-sufficient at your peril. Dealership teams need to be ready with information and to offer services, when applicable, to customers in a connected way. Then, you will really be an on-demand resource for your customers.

GLENN PASCH CEO of PCG Digital Marketing

Good afternoon. Did you catch the consumer review about your car model?

TO SEE MORE FROM GLENN PASCH GO TO CBTNEWS.COM

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

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21

MARKETING

Evaluate A Marketing Agency’s

TECHNOLOGY PLATFORMS Be sure marketers are adept with the latest tools to sharpen a dealer’s SEM, social media and other strategies. BY AMY FARLEY

W

ork smarter, not harder. It’s an aphorism that has been around for nearly 100 years, and for good reason.

People in all industries, but particularly in the fast-paced world of automotive, can benefit from working more efficiently. That’s one reason why it’s such an exciting time to be in the business: Technology available today is helping dealers and their marketing teams be more effective than ever before.

However, dealers can’t always afford or justify purchasing marketing programs and platforms, so many choose to work with marketing agencies.

Since an agency can provide tools that a single dealer or even dealer group may not be able to access on their own, it can be both efficient and cost effective to employ one. But before hiring an agency, you first need to evaluate its marketing tool belt and how smartly its people use those tools.

With that prudence in mind, here are a few ways you should expect that an automotive marketing agency could enhance effectiveness of your marketing campaigns and strategy: 22

CBTNews.com

CAR BIZ TODAY JUNE 2015

STREAMLINE YOUR SEM STRATEGIES Bid management systems like Marin and Kenshoo make search engine marketing easier. It’s still possible to manage paid search campaigns directly through Google AdWords or Bing Ads, but most savvy marketers and agencies opt to use these platforms to monitor bids and adjust them as necessary.

The marketer maintains control of the overall strategy by setting parameters and goals within the platform. However, the technology lets these programs manage large campaigns containing thousands of keywords with a much smaller risk of human error. They also allow marketers to more effectively keep up in the competitive arena of paid search.

Among the other benefits of these management tools are programmatic bidding to achieve a predetermined goal, advanced keyword-level tracking for more intelligent optimizations, automated A/B testing reports to give the manager extra insights into underperforming creative, and automated budgeting distribution that is aligned with the most effective times to serve your ads.

When your marketing team uses a bid management platform for your account, it saves them time that is better spent crafting a detailed and customized strategy for your dealership.

SIMPLIFY YOUR SOCIAL MEDIA OUTREACH Programs like Hootsuite and Buffer let dealers manage their social media presence in a streamlined way. These tools enable a marketing team to monitor online mentions of a dealership, respond to comments from customers, and schedule social content to be posted periodically throughout the day or month to better align your messaging with other advertising efforts.

For instance, manually posting to Facebook or Twitter leading up to and during a dealership event can be time-consuming and hastily done. With these social programs, a marketer can schedule the posts in advance, saving time and letting the dealership and agency undertake a more comprehensive social strategy.

FordDirect and Research Now recently found that 56% of car buyers who contacted a dealer based on social media advertising wound up making a purchase. So, it’s clear that dealers must take full advantage of social media. Through the use of these tools, that’s a task that’s become easier than ever.

MANAGE YOUR PRESENCE ACROSS WEB Many dealerships are tasked with the complex process of ensuring that their listings across all 300-plus, popular online directory sites contain consistent information. If you have ever attempted to claim your listings, you know it is not an easy task.

In order to build a loyal customer base, though, you must enable car shoppers to easily find your dealership online. That’s where programs like VendAsta, Yext and others come in.

These programs provide “presence builder”

“FORDDIRECT AND RESEARCH NOW RECENTLY FOUND THAT OF CAR BUYERS WHO CONTACTED A DEALER BASED ON SOCIAL MEDIA ADVERTISING WOUND UP MAKING A PURCHASE.”

56%

tools that let dealers be well represented across the Internet. A marketing team can use them to update listings on websites like Yelp, Yahoo and Yellow Pages. These tools are automated and connect to those websites via API to keep your information current, meaning your marketing team need only update your address, phone number and other details in one place.

Having accurate and up-to-date listings spanning the web isn’t just crucial for letting customers locate your showroom. It’s valuable for SEO as well.

Google takes directory listings into consideration when determining a website’s page rank, and so the more correct listings a dealership has, the better for its search engine rankings.

Just as with bid management and social media management platforms, this frees your marketing team to devote more time to other aspects of your account.

ALIGN ONLINE, OFFLINE STRATEGIES Here are a few marketing questions dealers should ask themselves: How do your traditional media buys, like television and radio, align with your digital campaigns? Are you outlining a consumer path-to-purchase that connects all channels of your marketing strategy, or do you leave it up to customers to decide how and when they interact

with your dealership?

Do you have unique selling propositions, such as a “tires for life” program or other customer guarantee? If so, do you promote those USPs with streamlined messaging across all your marketing channels?

There is a huge disconnect in your strategy if you send out a vehicle exchange program mail campaign, but customers find nothing about that branding and term when they visit your website.

While some shoppers may call the number associated with the campaign or visit your showroom, many more will simply type your dealership name and the phrase “vehicle exchange program” into Google.

Will your site come up, either through paid or organic rankings? If you aren’t buying those keywords or enacting an SEO strategy that will help you rank organically, then those customers will be unable to find the information they need. Potential leads will be lost. What’s efficient about that?

If you aren’t comfortable with the answers to these questions, you’re not alone. Many dealers are dissatisfied with the overall efficiency of their marketing efforts. In an upcoming article, I will highlight a technology enabled, multi-channel marketing program that Force Marketing created to address the online-to-offline disconnect.

AMY FARLEY Media and Communications Manager at Force Marketing Amy is a skilled writer and editor with a keen interest in digital trends and topics in the automotive industry. She utilizes her knowledge of what is new in retail automotive marketing to help Force, an automotive digital, direct mail and email marketing firm based in Atlanta, Ga., evolve the dealer-tocustomer shopping experience. Visit the website at Forcemktg.com.

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FIXED OPS

STOP PLAYING IN THE BLAME GAME Ducking responsibility is widespread in dealerships, but ending this bad habit is critical to success.

BY JEFF COWAN

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I

n my work, I constantly observe a “What can you do for me?” attitude, and it is not just generational.

I encounter leaders who place the responsibility for success solely upon their staffs, with a “You owe me” attitude. I see employees who feel their leaders and business owners owe them; after all, “I show up on time every day and work my shift. Don’t you owe me a promotion, a better opportunity, a raise?”

This wrongheaded thinking and warped perspectives have contributed to a state of mediocrity, and in no other area is it more evident than in the service side of the automotive business. Closing ratios and up-sell penetration have been stagnating for more than a decade. Undeterred, we keep waiting for the other guy – the dealer, the managers or the other employees – to deliver.

We struggle with the “quick services” in which so many businesses have invested. They deliver losses that would drive dealership service departments out of business were they an independent repair shop or a chain like Jiffy Lube. But still, we wait.

We struggle with customer retention, but rather than generate fresh ideas we slap a fresh face on the same level of service, hoping for different results. We deceive ourselves with false justifications: “The dealer will figure it out; my manager will figure it out; if I pay my employees enough, then they can figure it out.” Simple solutions that take good old-fashioned elbow grease to execute are ignored in the meantime.

Enough is enough. It is time for dealerships to stop talking, hoping and blaming. It is time for everyone on his or her staff to step up and take responsibility not only to succeed but, more importantly, to exceed. Here are some ways I believe it can be done:

STEP 1:

Stop waiting and blaming. Dealers and managers, pay close attention here.

Every time I meet with service advisors and their support staffs, I try to drive home the following message: Your leaders did their job. They secured the land, built the building and stocked it with many millions of dollars of inventory. They then hired a sales staff, trained that staff to close deals and monitored their successes. They set up an F&I department and trained the staff to sell accessories and extended warranties that would tie the customer to the service department. They hired a service manager who developed a plan to get customers in the door, and the customers came. Your leaders did their job.

Where I see dealership leaders fail, and continue to fail, is by stopping a few thousand dollars short and not training their service staffs to succeed.

They somehow believe the service groups either will figure things out for themselves or they take the easy road by picking the most popular training class in the marketplace.

In doing that, they fail their businesses, their staffs and themselves. They let a few thousand dollars and simple accountability deny success that is right in front of them. If they want staffs to succeed, the most important tool they can provide is training in how to handle customers.

STEP 2:

Stop waiting and blaming. Service advisors and support staff, pay close attention here.

Your dealer, managers and leaders may owe you the tools you need to be successful, but you owe them your loyalty and dedication to use those tools to the fullest. First, let’s look at the immediate areas you need to focus on: Survey scores, customer retention, effective labor rate, customer paid repair order averages and total dollars sold. Do you know what the national, regional and district averages are for the brand you represent?

How do you stack up – above or below average, and how much? Do you know what metrics the top 10 percent are turning in, and what they do to reach and maintain that level?

You can go online and have answers to all of these questions within minutes. You then can create solutions to put you within the top 10 percent, again within minutes. It is up to you to seek out this information and create solutions. Your dealer, managers and leaders have put you in a position to make an income that will put you firmly in the top 25 percent to 30% of earners in the country, an income that will deliver a lifestyle that many will envy. To squander that opportunity is lazy, ungrateful and selfish. If you don’t want to work at being the best, then step aside and make room for those who do.

STEP 3:

STEP 4:

STEP 5:

Three tendencies that hold back many service departments are: 1) They have no training program – initial, ongoing or other – that clearly defines expectations; 2) They look to the wrong people (factory training and product vendors) for advice; and 3) They let their managers run the shop as they see fit, with little or no guidance from above.

You must train, get advice from those who truly know, and lead your managers. They need your leadership and to be pushed and pointed in the right direction. Even if they push back, you need to assert your knowledge and get what you pay for.

If you have employees that who cannot or will not produce, then cut them from the team. If you have employees who fight you at every turn when you try to implement change, then let them go. Let’s assume one of your service advisors is the problem. Which is worse – temporarily taking in fewer vehicles for a few weeks until you find the right person, or keeping the wrong person, letting him handle 15 customers a day in a sub-par manner, wrecking any chance you have to meet targeted numbers and, worst, costing you customers?

If you have four service advisors on your drive and one has a 2.5 customer paid repair order average, one has 2.3, one has 2.2 and one has 1.5, what do we know about your drive? It will do 2.5.

We also know that whenever the advisor who carries the 1.5 average talks to a customer, it costs 1.0 – that is, 1.0 times 15 customers per day, times 5 days a week, times four weeks a month. That is 300 hours a month, 3m600 hours a year this advisor costs you, not to mention the hit to your survey scores and retention.

Failing at this step keeps more service departments from achieving peak performance than any other. Everything in service starts with the simple retail transaction of an oil change; everything above an oil change is an up-sell. Either you can get the up-sell or you cannot. Either you can wow the customer enough to get a great survey score, or you cannot.

Accountability will be part of the winning formula. In achieving the trifecta of high sales, retention and survey scores, you need a manager who clearly understands both the art of selling and customer service. You need to show this manager what you want to achieve and how you plan to achieve it, and hold him accountable to those processes and results. He in turn should hold each of his employees accountable.

Stop doing things that don’t work.

“WE KEEP WAITING FOR THE OTHER GUY – THE DEALER, THE MANAGERS OR THE OTHER EMPLOYEES – TO DELIVER.”

Do not fear turnover. Embrace it.

Embrace accountability.

JEFF COWAN President of Jeff Cowan’s Pro Talk Inc. Jeff, in his 28th year of training, is recognized as the creator of the modern-day walk around and selling processes for service departments. Currently partnered with NADA, EasyCare, NCM, MPi and other vendors and manufacturers, Jeff is the nation’s authority when it comes to training service advisors and service support staff. Visit his website at AutomotiveServiceTraining.com and sign up for free, weekly training.

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25

Foreign Models Account For 50%-Plus Of Vehicle Sales In 2/3 Of States TOTAL RETAIL VEHICLE SALES

INTERNATIONAL MANUFACTURER RETAIL SALES

INTERNATIONAL SHARE

54,107

43,481

80%

California

1,635,172

1,246,637

Connecticut

166,340

120,743

Massachusetts

322,670

New Jersey

STATE Hawaii

Florida

BY JON MCKENNA

I

n which states have dealerships selling foreign cars grabbed the greatest share of the marketplace? In Hawaii, California, Connecticut, Massachusetts, New Jersey and Florida, international automakers enjoy 70 percent or more of total retail unit sales. This comes as no shock, but foreign manufacturers have had precious little luck appealing to buyers in Michigan.

Meanwhile, buyers are turning to foreign makes of green vehicles (hybrid, electric, fuel cell and natural gas) most often in Georgia, Hawaii, Utah and Maine. In fact, international manufacturers get at least three out of every four sales of green vehicles in every state but Michigan.

The recently released “The Redefined American Auto Industry” report for 2015, co-sponsored by the American International Automobile Dealers Association and Association of Global Automakers, offers interesting per-state data about penetration rates of foreign vehicles.

TOTAL GREEN VEHICLE SALES

INTERNATIONAL MANUFACTURER GREEN VEHICLE SALES

INTERNATIONAL SHARE

Georgia

19,224

17,145

89%

76%

Hawaii

3,643

3,170

87%

73%

Utah

3,839

3,323

87%

232,428

72%

Maine

2,025

1,738

86%

502,561

356,217

71%

Arkansas

2,207

1,881

85%

1,445

1,234

85%

916

778

85%

STATE

1,021,484

713,888

70%

Mississippi

Rhode Island

45,672

31,715

69%

Montana

Washington

233,543

160,674

69%

South Carolina

5,018

4,283

85%

Maryland

260,517

177,188

68%

Alabama

3,195

2,690

84%

Nevada

116,966

77,787

67%

Louisiana

2,145

1,804

84%

Oregon

129,124

86,747

67%

Massachusetts

11,589

9,750

84%

Virginia

328,528

221,196

67%

New Hampshire

2,450

2,061

84%

New York

902,911

591,428

66%

New York

23,813

19,979

84%

Utah

90,150

56,961

63%

Kentucky

3,578

2,979

83%

Colorado

202,017

125,709

62%

North Carolina

12,575

10,444

83%

North Carolina

373,032

231,587

62%

Rhode Island

1,213

1,008

83%

Georgia

366,174

223,909

61%

South Dakota

637

527

83%

South Carolina

181,185

110,399

61%

Tennessee

5,587

4,656

83%

Arizona

265,441

159,441

60%

Connecticut

4,821

3,941

82%

Vermont

40,700

24,376

60%

Idaho

1,541

1,257

82%

Delaware

45,259

26,681

59%

New Mexico

2,356

1,931

82%

Maine

60,115

35,206

59%

Oregon

9,217

7,594

82%

Pennsylvania

589,983

345,549

59%

Washington

17,186

14,041

82%

Tennessee

204,324

117,586

58%

Kansas

2,836

2,310

81%

Alabama

172,746

97,562

56%

Maryland

10,134

8,209

81%

Illinois

526,522

292,291

56%

Nevada

3,940

3,204

81%

New Hampshire

84,108

54,206

54%

Virginia

13,298

10,713

81%

Mississippi

90,120

47,736

53%

West Virginia

1,241

1,010

81%

Kentucky

129,916

67,010

52%

Wisconsin

6,474

5,214

81%

Texas

1,326,417

693,541

52%

Alaska

461

370

80%

Idaho

50,179

25,337

50%

Colorado

7,781

6,248

80%

Ohio

528,234

263,402

50%

Minnesota

5,616

4,477

80%

Louisiana

201,164

99,143

49%

North Dakota

429

343

80%

New Mexico

81,111

39,861

49%

Texas

26,627

21,278

80%

Kansas

95,098

45,796

48%

Vermont

1,388

1,115

80%

Minnesota

214,161

101,145

47%

Arizona

10,848

8,558

79%

West Virginia

82,235

38,810

47%

California

165,782

131,015

79%

Alaska

24,006

11,050

46%

Florida

30,061

23,620

79%

Wisconsin

226,190

103,006

46%

Illinois

17,850

14,175

79%

Missouri

207,783

92,826

45%

New Jersey

10,879

8,593

79%

Arkansas

120,772

52,967

44%

Oklahoma

2,928

2,307

79%

Indiana

217,301

95,340

44%

Pennsylvania

13,723

10,850

79%

Oklahoma

156,194

65,532

42%

Iowa

2,985

2,343

78%

Nebraska

74,546

29,699

40%

Nebraska

1,727

1,344

78%

Montana

41,892

16,293

39%

Delaware

1,414

1,092

77%

Iowa

121,266

45,109

37%

Indiana

6,381

4,918

77%

South Dakota

36,710

12,873

35%

Missouri

5,891

4,543

77%

Wyoming

25,611

9,043

35%

Wyoming

394

304

77%

North Dakota

39,651

12,468

31%

Ohio

11,879

9,044

76%

Michigan

532,193

96,748

18%

Michigan

10,448

4,640

44%

Source: “The Redefined American Auto Industry” report from the AIADA and Association of Global Automakers

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LEADERSHIP

TRAIN YOURSELF TO

STOP USING

EXCUSES

FOR SETBACKS AT YOUR DEALERSHIP Until you start to view obstacles as inevitable and deal with them directly, your business will not go far. BY DAVID LEWIS

“99%

OF THE FAILURES COME FROM PEOPLE WHO HAVE THE HABIT OF MAKING EXCUSES.�

T

his observation came from peanut butter creator George Washington Carver, and if anyone ever had a good excuse to fail, it was Carver. He was born into slavery on a Missouri plantation in 1861 yet forged a scientific career in which he developed more than 100 major uses for the peanut plant. Carver is considered one of the great success stories of the 19th and 20th centuries.

Successful people, Carver would also probably note, are unafraid of failures. Rather, they treat challenges and temporary failures as steps along a clear path to success, as natural roadblocks that will only make them stronger as they press on to the ultimate goal.

The lesson for dealership managers: Successful people make themselves into problem-solvers and avoid becoming additional sources of negativity. Negativity breeds more negativity, and once that starts to occur, you will never solve a problem.

Story continues on page 28

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Be Like The Second Guy Here

Let me give you alternative ways that two different dealership representatives might portray a challenge: Dealer/GM who is an excuse-maker: “Our sales are down because the economy in our area has not rebounded like it has elsewhere.”

Dealer/GM who does not make excuses: “Our economy has not rebounded like it has elsewhere, which means we have to look for other areas within the dealership to improve opportunities and profits.”

Sales manager who is an excuse-maker: “Our Internet leads are horrible.”

Sales manager who does not make excuses: “Based on the lack of production from our Internet leads, I am going to personally spend some time in the marketing department over the next four weeks learning the process and helping them develop some ideas and strategies to improve our rate of success from leads.”

To a winner, excuses are traps to avoid at all costs.

They can pull you down into self-pity, cause you to compare the difficulty of your path with others’, and blame other people and circumstances for their own failures.

can only provide you with reasons why you can’t succeed.

Take my word for it, there are plenty of people out there who will provide you with those reasons, if you let them.

Don’t buy it! People win because they want what winning brings to their lives and are willing to step out and accept the risks that accompany success.

I observe some people approach learning and success like a man who has been lost in the desert wilderness and suddenly discovers a pool of cool, fresh water. They soak up the guidance we provide as though they’ve craved it all their lives, absorbing everything and practicing, practicing, practicing until they start to develop a new persona. They quickly rise to the top in their dealership and eagerly look forward to the next training session, unafraid to ask questions or admit they don’t know something.

Excuses are the bedrock upon which failure sits. Until a person stops making excuses for his failures, he will never know true success. If, somehow, he does fall into good fortune, he probably will spend his time boasting about his achievements and comparing himself to his peers. Often, he will rule his staff rather than develop their leadership abilities and individual successes.

Blaming Others Is The Road To Failure

If These Two Can Make It …

As a success and performance consultant, I get to hear a lot of excuses for poor results from people in the car business. Even though automotive sales have rebounded over the past several years and we are experiencing a great time of economic recovery, it is not unusual for a dealer or GM to tell me his business is down because of this or that.

Success truly begins the moment you take personal responsibility for the outcome of your life. Blaming others

property. John and Greg Rice never accepted their size as a hindrance or let it stand in the way of tremendous business success and great personal wealth.

We could all learn a lot from those two. If you find yourself looking for reasons to fail, just remember the obstacles the Rice brothers must have faced on their way to the top and stop the excuses! Whatever your particular battles, I doubt they compare to what the Rices faced day in and day out. When I was growing up, there was a popular phrase used to deal with people who made excuses for their failures and challenges: “Quit your bellyaching.”

If you want to be successful, get out there and do it.

Quit looking for reasons why you cannot do great things, and start finding ways to accomplish your dreams. Quit blaming customers for not buying from you. Quit blaming the dealership for a pay plan that holds you back.

Quit blaming the manager for passing all the good deals to a salesperson he likes more. The sooner you do, the sooner you will start to see things change from the inside out.

Maybe you have heard of the Rice twins, John and Greg, from South Florida. Both afflicted with dwarfism and abandoned by their natural parents at birth, a hospital eventually found them an adoptive home. As high school seniors, they sold personal care and cleaning products door-to-door. They eventually became a major force in real estate sales, famous for their late night infomercials teaching people how to buy and sell

“QUIT LOOKING FOR REASONS WHY YOU CANNOT DO GREAT THINGS, AND START FINDING WAYS TO ACCOMPLISH YOUR DREAMS. QUIT BLAMING CUSTOMERS FOR NOT BUYING FROM YOU. QUIT BLAMING THE DEALERSHIP FOR A PAY PLAN THAT HOLDS YOU BACK. QUIT BLAMING THE MANAGER FOR PASSING ALL THE GOOD DEALS TO A SALESPERSON HE LIKES MORE.”

DAVID LEWIS President of David Lewis & Associates David Lewis is the president of David Lewis & Associates Inc., a national training and consulting company that specializes in the retail automotive industry. He is also the author of four industry-related books, The Secrets of Inspirational Selling, The Leadership Factor, Understanding Your Customer and The Common Mistakes Automotive Salespeople Make. Visit his website at DavidLewis.com.

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FIXED OPS

Losing Work In The Service Drive

Costs You Double In Future Car Sales Investing in a memorable service department experience helps create a profitable, lifetime customer BY CHUCK DE MARTIGNY

Y

our dealership spends considerable time, effort and money to attract customers and close the sale. According to NADA data, in 2014 advertising expenditures alone were $606 per vehicle.

Even though prospects remain strong for unit sales, the marketplace appears even more competitive than last year, putting further pressure on margin. No wonder dealership management is fixated on the sales funnel, i.e. all the factors that influence a consumer’s buying decision. But, are you really looking at the whole picture?

The same customers to whom you’ve devoted all of the energy and resources on the new vehicle increasingly go elsewhere for service as the vehicles age and the warranty expires. NADA data for 2014 show that OEM car dealerships generate $45.4 million of customer pay service and parts revenue, which is only 21% of a $215 billion consumer market. This means that 79% of the service work is going somewhere else.

With only a 21 percent share of service revenue, dealers are losing more than half their customers in the first three years of ownership. The 8 percent share of replacement tires means only 17.4 percent of OEM dealer customers buy replacement tires at the dealership.

A key trigger to service defections is purchases of replacement tires, and auto dealerships only enjoyed 8.0 percent of that U.S. market last year, according to Modern Tire Dealer. In contrast, independent tire dealers had 60.5 percent of sales.

Even warehouse retailers outperformed dealerships, with 9.0 percent. Compare the numbers of the replacement tire market with the total service market. A large percentage of your customers leave to buy tires, and most of them never come back.

ADVERTISING & MARKETING

SALES

CUSTOMERS SERVICE Year 2 Year 4 Year 6 Year 8

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STATS DON’T LIE ABOUT SERVICE CLIENTS

Apart from service revenue’s importance to your bottom line, these customers also represent your best prospects for future new vehicle purchases. Jim Phillips, director of custom education delivery at the NADA Dealer Academy, shared one major manufacturer’s survey at a presentation at this year’s NADA convention that correlates the frequency of service visits with repeat purchases:

SERVICE VISITS

REPEAT BUYERS

Regular

86%

Occasional

46%

Seldom

19%

Never

9%

So, what do all these numbers have to do with the sales funnel? Every two service customers you lose cost you a car sale! At an average customer acquisition cost of $606, it will cost you $303 to replace each customer you lose. Plus, each customer you lose also costs you $1,400 in lost service revenue!

According to a recent Omnibus, Harris Interactive Survey on behalf of Cars.com, 64 percent of in-market buyers indicate that a service department’s reputation is a factor when choosing where to buy. Furthermore, the research revealed that 57 percent of shoppers sought out a dealership’s service department reviews before purchasing a car.

SERVICE DRIVE NEEDS INNOVATION

Bottom line: it’s time to invest in your service department. With the focus on new car sales, dealerships are not spending the time and money to make the service department a destination with compelling point-of-sale displays, exciting product selections, up-to-date signage, and all the other retail accouterments that today’s savvy shopper expects – especially women, who represent more than 50 percent of the clientele. Is it any wonder that a significant number of new customers don’t even turn up for their first service appointment?

This is only the tip of a huge iceberg, representing either a potential disaster or a huge opportunity. Happy customers write good reviews and build reputation.

Lost customers don’t.

With that said, here are some approaches to consider that can help transform your service drive from drudgery for the customer into a destination:

1. UPDATE THE SERVICE DRIVE – YOU ONLY HAVE ONE CHANCE TO MAKE A GOOD FIRST IMPRESSION • Add tire displays, posters and signage • Add electronic wheel alignment diagnostics • Add express service or a quick lane, if you don’t have one

2. UPDATE THE INTERIOR SERVICE AREA TO SHOW FRIENDLY, INVITING AND PROFESSIONAL SERVICE • Add point-of-sale posters and signage • Add CSI reminders • Equip service advisors with iPads

3. UPDATE THE PARTS COUNTER; THINK LIKE A HIGH-END RETAIL STORE Add a gift boutique and accessories center Improve product selection, with an eye toward women shoppers Add professional store displays Hire a merchandiser, preferably a woman with merchandising experience

4. UPDATE THE CUSTOMER LOUNGE; THINK LIKE A HIGH-END HOTEL • • • • • •

Make it part of the boutique Add high-end refreshments and snacks Add quality magazines, brochures and gift catalogs Provide kid-friendly play spaces in close proximity Offer Wi-Fi access and movies Add point-of-sale signage

5. HIRE A HOSTESS/CONCIERGE/GUEST SERVICES COORDINATOR • Introduce the hostess as part of the sales/service hand-off • Use the hostess to manage service appointments, the customer shuttle and social events for the service department • Have the hostess take special orders for the gift shop

6. UPDATE THE SHUTTLE SERVICE; IT SHOULD BE MORE LIKE A CHAUFFEUR, NOT TAXI, SERVICE • Vehicles should be clean and late-model; vans should be comfortable • Have pick-ups and drop-offs by appointment • Offer service to local malls

7. PLAN ONGOING EVENTS THAT ARE REALLY WORTH ATTENDING • • • •

Hair and nail day Spa day Technical clinic Defensive driving course – skid course

8. ADD A PARTS AND SERVICE LOYALTY REWARDS PROGRAM • • • •

Special offers Incentives Tickets to events Club membership

9. PHOTOGRAPH EVERYTHING AND EVERYONE • • • •

Make a professional brochure to give to every customer Post all photos to your website Add the service department to your social media campaigns Send photo postcards to every customer from the last 10 years

Rethinking and reinventing your service experience is a daunting task. It can’t and won’t happen overnight. Nonetheless, it is worth doing. So, take the first step.

CHUCK DE MARTIGNY CEO and Founder of Jungle Cat Marketing Inc. As the CEO and founder of Jungle Cat Marketing, Chuck helps OEMs and dealerships boost profits with innovative point-of-sales marketing initiatives. His extensive consumer marketing and retail merchandising background includes major consumer product marketing launches for companies such as Cabbage Patch Kids, Coleco, Donkey Kong and the Grolier CD-ROM Encyclopedia. His focus on tire merchandising allows dealers and manufacturers to achieve extraordinary sales growth and increased customer retention through replacement tire sales. To learn more visit www.TireMerchandising.com.

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News INDUSTRY

Host Of Vendors To Industry Land Magazine’s Dealers’ Choice Awards

A

uto Dealer Monthly on May 13, 2015 announced winners of its 11th annual Dealers’ Choice Awards, in which dealerships and personnel vote on the best providers of products and services. Two new categories (compliance training and F&I technology) were added this year, bringing the total to 29.

In Auto Dealer Monthly’s methodology, each voter writes in the name of its/his provider in each category, where applicable; and scores that provider on the product or service, customer support and value. Providers must score above the category average to qualify for Diamond (first place), Platinum (second place) or Gold (third place) status.

This year’s Diamond winners include: Autotrader in new vehicle leads and used vehicle leads; DealerLink in special finance leads; eBizAutos in digital marketing, mobile media and online inventory listing management; Dealer. com in website and internet training; ActivEngage in chat; Naked Lime in social media management; Dominion Dealer Solutions in reputation management; and ProMax Unlimited in direct mail and F&I desking software.

Also, Dealertrack in inventory management and DMS; Ziegler SuperSystems in sales training; Compli in compliance training; United Development Systems in F&I training; IAS in F&I products; CAN National in service contracts; Portfolio in reinsurance; and MenuVantage in F&I technology.

Plus, ELEAD1ONE in CRM; Smart Auction in online auction; Manheim in traditional auction; GM Financial in captive finance company; Ally in non-captive finance company; Wells Fargo in subprime finance company; and U.S. Equity Advantage in biweekly payments.

Mercedes Chief Bangs Gong For Customer Service Standards

C

ustomer satisfaction is a bit of an oxymoron,” said Steve Cannon, president and CEO of Mercedes-Benz USA, at a recent Atlanta event. “’Satisfaction’ doesn’t cut it in a competitive marketplace.”

Mercedes is in the process of moving its C-suite and administrative headquarters from New Jersey to Atlanta, where it expects to host 1,000 to 1,100 total jobs over the next few years. Cannon spoke to a packed room of journalists, industry execs and vendors in a relaxed Q-and-A format at the event sponsored by the Atlanta Press Club.

Without giving specifics, Cannon replied to a question about how Mercedes can improve the buying experience at a dealership by saying he likes dealer incentives tailored to take better care of customers.

“Customer experience is the new marketing” in an ever-more-digital buying arena where “one positive experience reported on Yelp affects 1,000 people,” he added. “ … It’s all about the customer experience, about having employees who are engaged, great environments store by store.”

TrueCar Faces Another Court Tussle With Irritated Car Dealers

D

ealer critics are going after TrueCar Inc. again in court, this time in California.

In late May, the California New Car Dealers Association sued pricing service Santa Monica, Calif.-based TrueCar, which it claims is effectively acting as a vehicle dealer and broker given its network of certified dealers.

The dealer group wants the Los Angeles Superior Court in Santa Monica to make TrueCar comply with state dealer licensing, brokering, advertising and disclosure laws.

The Sacramento-based association argues TrueCar must obtain a dealer’s or broker’s license and that both consumers and dealers are not being sufficiently protected if the company’s business practices continue unchecked.

In a prepared statement, TrueCar said it is “confident (we) can demonstrate the compliance of our business model with California law.” In fact, as recently as last October, company representatives met with the California Department of Motor Vehicles and were told they did not need to change their business practices in the state, TrueCar said.

It is ironic, according to the statement, that the association is protesting when “approximately half of” its dealer members have a relationship with TrueCar.

Self-Driven Cars Will Inevitably Pull Down Total Vehicle Sales: Report

D

o you agree that driverless cars could take the dealership industry down the road to doom?

While it hinges upon a number of debatable assumptions, a recently released research report titled “Disruptive Mobility” by Barclays analyst Brian A. Johnson envisions vehicle sales sliding by 40% and U.S. auto ownership tumbling by 50%, in a society that could be dominated by self-driving cars within 25 years.

Johnson’s analysis warns that the impact of driverless cars could drive annual U.S. unit sales below 9.5 million, substantially worse even than in the terrible market of 2009.

Why? So many car trips needed by your average American household don’t overlap and are for school or work commutes. If families can reserve a trip from a fleet of self-driving cars, their need for three vehicles in the family garage obviously diminishes, Johnson reasons.

This was the latest in a batch of futuristic studies released by various think tanks and industry analysts that point to more auto-piloted vehicles and fewer cars on the road. It would be an extremely hostile landscape for the OEMs, so just imagine the consolidation that future would unleash upon dealerships.

JUNE 2015

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AUTOMOTIVE NETWORK ANNOUNCES

SERVICE DRIVE

Jeff Cowan

TODAY.COM

Don Reed

Lee Harkins

Online Daily Newscast

Anne Fleming

CBT AUTOMOTIVE NETWORK IS PROUD TO ANNOUNCE TWO NEW VENTURES IN RETAIL AUTOMOTIVE! ServiceDriveToday.com, an online news source, and Service Drive Magazine, a monthly print publication, brings Dealers, GMs, Service Directors and Fixed Ops personnel the news, information, trends and training tips they need to operate a smooth and profitable service department.

Brian Pasch

ServiceDriveToday.com reaches more than 50,000 Servi service personnel each day, while Service Drive Today magazine is delivered to more than 17,000 Fixed Ops Directors and Service Managers in the U.S. and Canada. Access to the industry’s top Fixed Ops Trainers and Consultants is now just a click away.

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ServiceDriveToday.com is a member of the CBT Automotive Network

ASK THE ?

PROS

A

t CBT News, we are fortunate to partner with the best trainers in the industry.

Whether it’s information on sales,

F&I, marketing, management or fixed ops, our contributors are the go-to professionals for reliable, relevant advice for dealership personnel.

You have access to the foremost authorities in the retail automotive industry. Need a new closing technique? Wondering what’s the best way to increase sales in the service lane? Send us your questions at AskThePros@cbtnews.com. We’ll forward your inquiries to our ensemble of experts.

Q

BASED ON MY CONVERSATIONS WITH OTHER DEALERS, BDCS ARE REALLY UNDERPERFORMING RIGHT NOW. WHY ARE SO MANY LEADS LANGUISHING IN SO MANY BDCS? –Karl T., Toledo, Ohio

A

Bill Wittenmyer, Partner, ELEAD1ONE: There are a few reasons, in my opinion. First, they are not specialized. Dealers are trying to form a specialized department, but in reality, most BDCs are not defined

completely.

A BDC’s primary function should be to develop business. What ends up happening is the BDC and its staff are tasked with handling multiple communications strategies and fail to become specialized. Eventually, the BDC becomes only a BFC (a business follow-up center).

Secondly, dealers generally take the bulk of the entire store’s lead opportunities (let’s say, leads from 10 to 20 salespeople) and attempt to have three or four people do all the work. Further, dealers ask this small team to make dials without the assistance of custom contact software. A lot of time is wasted; it is no one’s fault, but dealers are paying for the time spent on unconnected calls.

Additionally, what are your hours of operation for the BDC department? During the day only or retail hours? The BDC may not even be attempting to reach customers at the right time, depending on the phone numbers gathered. Gather at least two numbers and re-try unsuccessful calls at different times of the day. Be sure to get a work number – everyone loves to talk on the phone and act busy at work!

Finally, what about inbound calls to the dealership? Inbound call-handling is the largest area of needed improvement in most stores, for both sales and service. But, if your BDC is answering calls, then who is calling to follow up on opportunities or create new ones?

Q

WHAT ARE A COUPLE OF STEPS I CAN TAKE NOW AS THE OWNER OF THE DEALERSHIP TO GET MY F&I OPERATION TO MOVE BUYERS THROUGH THEIR LENDER OPTIONS AND OUT OF THEIR OFFICE FASTER? - Mark J., Tacoma, Wash.

A

Tony Dupaquier, Director of F&I training, American Financial & Automotive Services Inc.: What a great question. It is something that is becoming more commonplace and a concern of many dealerships. I have three tips that will greatly reduce your transaction time.

Generally, the one thing that will speed up the entire F&I transaction is to have 100 percent of the information required to complete a transaction; and, more importantly, the information must be 100 percent accurate. This will involve training the sales team and the sales managers to ensure 100 percent accurate info 100 percent of the time.

1. In many dealerships I have worked with, they use a CRM system that will scan the customer’s driver’s license. Unfortunately, this information is not always accurate. When this happens, it will cause delays from the finance company to the in-dealership paperwork. Ask the customers for their current address!

2. Have all required documents and info in the deal, before they go to the business office.This would be the stock number, VIN of the new vehicle, miles on the new, DMV of the trade-in, VIN and miles of the trade, driver’s license and current insurance card. Your state may also require other documents for registrations; have these in the deal beforehand.

Too many times, the business manager is spending time chasing down basic documents that should be standard in every deal. If your dealership has a checklist, use it.

3. Have the sales managers load the basic information of the deal: Customer, new vehicle, trade vehicle, the agreed-upon price and trade allowance, tax rates, plates, etc. However, do not submit the deal to the finance companies. This will be detrimental to your profitability of the business office, unless your sales manager is a highly experienced previous business manager.

Before investing in any high-tech solutions or additional personnel, just train (and hold everyone accountable) the sales team and sales managers to have all the accurate information going into the business office. This will speed up the entire F&I process.

Q

ALL THINGS BEING EQUAL WITH KNOWLEDGE, ETC., HOW IMPORTANT IS IT TO PAIR A FEMALE SALES REPRESENTATIVE WITH A WOMAN CUSTOMER IN TERMS OF THE ODDS WE WILL CLOSE THAT SALE? - JoAnne T., Framingham, Mass.

A

Jody DeVere, CEO, AskPatty. com Inc.: There are no studies or statistical data of dealerships to date on closing ratios with men vs. women selling to women, although it would make a very interesting dealership study. However, in March 2015, a survey was conducted by the Women in Automotive Conference board members (www. womeninautomotive.com), and the findings were presented in April at the INSIGHT15 Customer Loyalty and Retention Conference in Orlando, Fla. Our anecdotal survey asked this question of women: • “When you visit a dealership, do you prefer to work with a man or a woman?” 20.5 percent said a woman, 18.2 percent said a man and 61.4 percent said they had no preference. When we asked the survey participants to elaborate and share their thoughts, here were some of their comments: • “Not being strong in this area tends to make you feel intimidated by men in sales.”

• “I prefer to work with people who are approachable, engaging and willing to negotiate a deal that works best for both parties.”

• “Definitely women but [women who have] authority and not going back to a male manager.”

• “As long as they’re respectful and acknowledge my presence and involve me, I could care less about their gender.”

• “It’s ALWAYS the salesperson’s attitude towards dealing with a female customer. Some men are fine. Some women are fine. Some of both have lousy attitudes. If I determine a salesperson’s attitude is lousy by my standards, I will either leave or ask to see somebody else.”

• “I want someone who will listen when I share what’s important to me about the car and directly answer my questions. ‘I don’t know’ or ‘Let me check on that’ are acceptable answers; just don’t BS me and/or pretend you know the answer when you don’t.”

• “Never worked with a woman, so I do not know the difference.”

• “Depends on the person, not gender.”

JUNE 2015

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35

FIXED OPS

OWNER RETENTION versus OWNER REPLACEMENT By focusing on and implementing these seven processes, your fixed operations department can increase its repair order counts. BY DON REED

A

s part of the fixed operations profit potential analysis that we conduct for our dealers, we prepare a trend analysis for the customer pay operations to track sales, gross profits, margins and repair order counts. This data is then downloaded into line graphs so the dealers can see at a glance where their retail service and parts operations are improving, holding steady or declining. One of the critical performance indicators in this exercise is, of course, the RO counts.

I find the results very disturbing for far too many dealerships since the vast majority of the dealers we analyzed had a total customer-pay RO count in 2014 that was about equal to or below that of 2013. In other words, retail traffic is stagnant or declining. Why? To begin with many dealers and managers are of the opinion that if their retail traffic is holding steady year over year, they are doing a good job in owner retention, when in reality they are simply replacing the customers they are losing each month with the new customers they are selling new and used vehicles to each month.

Consider the following scenario for a dealer selling 150 new and used per month and producing 1,000 retail ROs per month, on average, for last year:  One hundred and fifty units sold per month last year produces 1,800 service customers for this year.  Assuming this dealer has a repeat customer retention rate of 33 percent, the dealer has a net increase of 1,200 new customers into the service department.  This dealer writing 1,000 CP ROs per month would have a total of 12,000 CP ROs for last year.  If this dealer retains its customers from last year then the net increase in traffic this year should be no less than 1,200 new customers for an increase of 100 per month  This year’s traffic count should now be averaging 1,100 per month, right?

Do the math in your store and compare last year’s RO performance to this year’s. Is your traffic going up, going down or stagnant?

36

CBTNews.com

CAR BIZ TODAY JUNE 2015

Unfortunately in many stores, this dealer is still averaging about 1,000 ROs per month or less. Why? Because they are losing existing customers at about the same rate as they are adding new ones – owner replacement. Do the math in your store and compare last year’s RO performance to this year’s RO performance. Is your traffic going up, going down or stagnant?

If the answer is going down or stagnant then it is imperative that you determine why. Let’s take a look at some solutions to the possible conditions that may be causing your lack of retail customer growth:

1

THE APPOINTMENT PROCESS FOR INCOMING CALLS

Eighty percent of your ROs starts with a phone call while only about 20 percent are from walk-ins and the Internet. Have you had any phone training lately on how to sell appointments?

2

INFORMING CUSTOMERS OF PREVENTIVE MAINTENANCE

Many advisors are not training your customers on preventive maintenance. One hundred percent of your warranty and retail customers should be trained on the manufacturer’s maintenance requirements and recommendations for both severe and normal driving conditions. A recent AAA survey shows that more than 60 percent of customers are driving in severe conditions.

3

CONDUCTING AN ACTIVE DELIVERY

Your advisors may not be conducting an active delivery with the customer at their vehicle. Customers must be informed of the “Three Cs” for each service and repair made to build value in the cost of the RO. A thorough review of the features and benefits will go a long way toward building trust.

4

SETTING THE NEXT APPOINTMENT

5

PROCESSES TO HANDLE “NO SHOWS”

Advisors should be setting the next appointment for each customer at time of delivery. We do this based on time and mileage. Ever been to a dentist?

All “no shows” are not being called for a new appointment. People forget and/or get busy with other commitments but they still need the service or repair. Again, have you had any phone training lately?

6

THE CRM STRATEGY

Your CRM strategy, or lack thereof, might not be working. Why do dealers consistently spend 25 to 30 percent of their front-end gross in advertising to sell a car to a stranger but won’t spend 10 percent of back-end gross to retain a customer who already owns their product and will eventually buy another one?

7

THE DEALER’S OR GM’S ROLES

The dealer or GM might lack the appreciation of and/or understanding of how to lead and build their fixed operations to work toward achieving 100-percent fixed absorption. If working toward achieving 100-percent fixed absorption is not on your radar then the next recession might be your last.

TO SEE MORE FROM DON REED GO TO CBTNEWS.COM

There is nothing profound in what I’ve covered thus far and for many of you reading this article you might be thinking “Nothing new here!” Well here is a news flash – I agree so why are these seven processes not being followed? I believe the answers are quite simple: Lack of commitment and lack of accountability.

Your commitment starts with defining the primary mission of a service department, which is to ensure that every customer leaves your dealership driving a safe and reliable vehicle. In addition, you must ensure that you communicate effectively with every customer what is required to keep their vehicle in a safe and reliable condition. This is easily accomplished through complete and thorough multi-point inspections and professionally prepared maintenance menus along with an advisor who can communicate the benefits of following the technicians’ recommendations, as well as those of the OEM. In other words your advisors must advise.

Once your advisors know how to properly advise, your sales will increase, your CSI will go up and you will start growing owner retention versus treading water with owner replacement.

Once you get this commitment in place you now must be willing to make this your company policy and as such it is not optional. Policy is policy and should not be ignored by anyone. Those who do must be held

accountable for their unfortunate decision to ignore the dealer’s policy. For some strange reason many of you reading this have a difficult time with holding your fixed operations team accountable for their performance or lack thereof in the same way you do for your sales team.

For example, if you won’t tolerate a salesperson selling four cars a month then why would you tolerate an advisor selling an hour per RO? If your sales manager can only close 10 percent of the ups, I’m guessing you hope he goes to work for your competitor across town after you fire him. Okay, so how about a service director who averages 60-percent one-item ROs month after month?

Most likely he isn’t going anywhere any time soon.

Remember this very simple premise when you’re trying to make a decision with your heart as opposed to your brain regarding an underachieving employee: If an employee cannot perform at the level of a top performer, there are only two reasons for that. One, they don’t know how to or, two, they don’t want to. If they don’t know how to we can cure that with professional training but if they just don’t want to then wouldn’t you agree they have made the decision to “de-hire” themselves?

It’s time for you to get committed and start holding everyone accountable for their individual performance to get on track for making this your best ever in fixed operations.

“Once your advisors know how to properly advise, your sales will increase, your CSI will go up and you will start growing owner retention versus treading water with owner replacement.”

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

JUNE 2015

CAR BIZ TODAY

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37

SAVE THE

DATE

FEB 9-11

2016 O M N I AT

C N N

H OT E L C E N T E R

AT L A N TA

Attention Dealers, GMs, GSMs, Sales Managers, F&I Managers, Marketing Directors, Service Managers, Internet Managers, BDC Managers and Pre-Owned Managers CBT Automotive Network is proud to announce the 2016 CBT Automotive Sales, Service and Marketing Conference & Expo.

The retail automotive industry's top leaders and keynote speakers will come together to present more than 100 powerful sessions and thought-provoking panel discussions during this dynamic three-day event.

Mark your calendar now for February 9-11, 2016.

We'll see you in Atlanta!

Visit CBT Conference and Expo.com for more informaaon

ON THE SET WITH

AUTOMOTIVE NETWORK

CBT’s Russell Brown (left) moderating a panel discussion at the recent American International Automobile Dealers Association’s International Auto Industry Summit in Washington. Also shown are Hyundai Motor America president and CEO David Zuchowski (center) and Paul Holdridge, VP of sales for Toyota Motor Sales USA Inc.

Zach Klempf, CEO of Selly Automotive

Chris Collins of Chris Collins Inc.

Don Reed, CEO of DealerPro Training Solutions

Mike Allen, chief White House correspondent for Politico, at the AIADA International Auto Industry Summit

Mike Burgiss, founder of MakeMyDeal

Bill Wittenmyer, partner at ELEAD1ONE (left), and John Gottschalk, SVP of dealer relations for FordDirect (right)

Jason Dorsey, chief strategy officer at the Center for Generational Kinetics, appearing at the AIADA International Auto Industry Summit

Tim Barnett Jr., new car sales manager at Steve Rayman Chevrolet in Smyrna, Ga. (left), and CBT’s Russell Brown (right)

AIADA President Cody Lusk, addressing the recent AIADA International Auto Industry Summit in Washington

Jeff Cowan of Jeff Cowan’s Pro Talk Inc.

Brian Pasch, founder and CEO of PCG Consulting Inc.

JUNE 2015

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39

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