CBT Magazine June 2014 by CBTNews

The Official News Source of The Retail Automotive Industry

CAR BIZ TODAY CBTNews.com

JUNE 2014

ISSUE 4

6 TRAITS YOUR EMPLOYEES AND NEW HIRES MUST HAVE Dave Anderson

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SMALL MARKET BIG MARKET SHARE

YOUR DEALERSHIP NEEDS A PETE ROSE JOE WEBB President of Dealer Knows

MISTAKES THAT ARE COSTING DEALERS THOUSANDS Paul Potratz

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Despite your opinion of Pete Rose the “man,”

it’s hard to question his greatness as an athlete. Rose was one of those rare players that not only excelled on the diamond, but he also stepped up as a true leader of the Cincinnati Reds. That ability to play, as well as coach, has earned him a spot as one of the greatest athletes in baseball history.

IT COULD HAPPEN TO YOU AND YOUR SERVICE DEPARTMENT Jeff Cowan Epage

AVOID THE ZERO Tony Dupaquier

PRSRT STD US POSTAGE PAID Permit No. 915 Woodstock, IL

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Every dealership could benefit by having a player-coach – someone who cannot only shine in the showroom, but also take on the additional role as a leader for other employees. As the manager, it’s your responsibility to find your leader – that person who is willing to train others and lead by example. Who is your Pete Rose?

Holm Automotive Center operates in a small market in Abilene, Kan., but Tim Holm, dealer principal, doesn’t use that as an excuse not to bring in big numbers. By being committed to training and providing outstanding customer service, Holm and his team manage to capture a significant percentage of the market share in that area. As the recipient of DealerRater’s highest honor in Kansas for three years straight, Holm has established a loyal customer base. In fact, many of the customers drive many miles just to do business with the dealership. Many other small-market dealers could learn a lot about raising the bar for their sales teams. And dealers in larger markets, who might take their traffic flow for granted, can learn a lot about making the most of every opportunity. see PAGE 20

see PAGE 26

DRIVING STRONGER DEALERSHIP PROFITS

The CFPB has raised awareness of the importance of F&I income and the role it plays in a dealership’s bottom line. The need to partner with a vendor who can help you in those efforts has never been greater. We interviewed Larry Dorfman, the highly-respected CEO of the extended service contracts company, EasyCare. The company has enjoyed three decades of helping dealers drive profits in F&I, sales and service.

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Larry Dorfman: Chairman and CEO of EasyCare see PAGE 14

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She could be a customer for life. It’s never about a single sale. At VinSolutions, we want every sale to turn into more opportunities — from service to shopping for that next vehicle. That’s why our CRM manages the entire buying and ownership cycle, and pushes powerful customer insight across your whole dealership. With VinSolutions, you stay connected to your constantly changing customers, and keep them coming back.

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CAR BIZ TODAY MAGAZINE Email

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678.600.8407 President and Publisher

Jim Fitzpatrick

Vice President / COO

Bridget Everett

Letter from the Editor

Managing Editor

Carol White

Associate Editor

Russell Brown

Assistant Editors Father’s Day always makes me pause and think about my father who passed away six years ago. One of my fondest memories is of him and his 1966 powder blue step side Chevy pickup. He was so proud of that truck and held onto it for more than 30 years. He finally sold it to a gentleman who spent a great deal of time restoring it. (See photos) Riding in the back of that truck – probably not recommended these days – was one of my favorite things to do as a child. It’s a wonder my brothers and I ever made it past childhood with so little regard for safety! My dad would drive slowly with me standing up and holding onto the roof, carefree, wind rushing through my hair, a few bugs in my teeth. Those were the days! (And yes, that is me posing in the back of that truck.) I had to laugh when I saw the original bill of sale (pictured). Contracts are a little more complicated these days, don’t you think? Back then, deals were made with a handshake and a promise. That’s not common these days, but Scott Smith of Sonic Automotive Inc., and Larry Dorfman of EasyCare still do business the oldfashioned way. See the EasyCare story on page 14. With Father’s Day on my mind, I asked Scott about the best advice his father, Bruton Smith, had ever given him. “He’s given me so much good advice,” he said. “But I’d say ‘always do the right thing’ was probably the best advice.” Doing the right thing isn’t always the easiest path to take, but it’s certainly worth the effort when it comes to running your dealership. Making sure your dealership is compliant in its operations is no small task. On page 12. Jim Radogna explains why you shouldn’t be complacent when it comes to compliance. Dealers should focus on training employees to be compliant and ethical so as not to wind up in hot water. As always, let me know your opinions of these and the other stories in this month’s issue of Car Biz Today Magazine. You can email me at cwhite@cbtnews.com. We want to hear from you. Have the best June ever!

Carol White Carol White | Managing Editor cwhite@cbtnews.com

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ARE YOUR MARKETING EFFORTS UNIFIED... OR STUCK IN MARKETING

SILOS?

Too often I hear dealers and agencies talking about the marketing efforts in terms of traditional marketing and digital marketing. What that has done is create different messages and confusion because one team - or silo - does not know what the other is doing. I have been working on changing the marketing-silo mentality in automotive digital marketing circles to get people to focus on their marketing efforts as a whole.

WHAT ARE MARKETING SILOS? I spoke to a digital marketing manager for a mid-size dealer group the other day. We were discussing how to reallocate some of his marketing dollars and immediately the marketing silo language came out. We were discussing the benefits of video pre-roll and possibly moving some of his marketing budget from cable over to this online video marketing product. When I asked him what cable spots he was running and how often were they running, he said that he did not know. He was not privy to that. This brief exchange reinforced a symptom of marketing in automotive dealerships in general. I have seen a great many disjointed marketing efforts because offline is not in tune with online. Too many times marketing silos rule decisions. I believe this was an outgrowth of leadership having an ad agency that handled all their marketing needs previously and as digital marketing began to grow, it was not something this ad agency could handle. This led to hiring a new agency to market online or worse, just getting products and spending money without having a strategic partner to guide the marketing spend. Thus two marketing silos were created and no one exchanged information.

WHAT IS A UNIFIED MARKETING APPROACH? My goal is to change this dialogue and get people to focus on unified marketing efforts by looking at their marketing in terms of offline and online efforts.

As my friend Darren Haygood of Dealer.com said, “What is the goal of almost all of your offline marketing today? To drive the viewer to your website where you have all of your online marketing efforts. So if both of your marketing teams are not communicating, then between offline and online, how will that union work?” I agree. As I said to this manager, where is the “traditional” marketing silo sending the clicks? What is the message they are sharing? If it is not unified with your online efforts then the customer will receive a disjointed experience and you will lose potential sales.

WHAT SHOULD A UNIFIED MARKETING PROCESS LOOK LIKE? Think of the shopper path from stimulus (offline) and how/where it will drive interest online (website, research etc.). Messaging of all marketing efforts should match in color and feel.

When a customer takes the journey from offline, to online and now onsite, does everything match? Too many times the onsite marketing is left in the hands of someone who just hangs the banners that the OEM sends. I hardly ever see any personality or something that ties into what the customer sees online and so this creates another wedge into the consumer’s mind that causes some confusion. Find ways to promote your “why am I different” message onsite. Make sure the banners or offers you have online are visible onsite. A few simple visible or tangible marketing pieces onsite will complete the journey for the customer’s purchase. What needs to happen beginning today is that all marketing partners have to have a seat at the unified marketing table. All three areas - offline, online and onsite - have to be unified because there is no other option for marketing success today. Take down the marketing silos or you will wonder next year why you are losing customers and revenue. CBT

If offline marketing efforts are sending them to a specific page on the website or asking them to use a specific number to call, be sure you can track the interaction back to the offline asset.

Glenn Pasch CEO of PCG Digital Marketing

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

Leadership has to treat both groups as a part of the whole marketing message. So if the path is offline (TV, radio, print) to online (website, etc.) to onsite (banners, signs, posters) then you have a consistent path for the consumer to follow in order to do business with you.

THE FINAL PIECE: ONSITE MARKETING The last piece to the unified marketing process that many dealers miss is what they are doing onsite. June

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The Meaning of

SUCCESS Success magazine recently released a list of the 25 books that the editors consider to be the most important ones written on the topic of success. There were really few surprises on the list for those who keep themselves motivated and educated on what it takes to become successful. “Think and Grow Rich,” “How to Win Friends and Influence People,” “The Seven Habits of Highly Effective People” are just a few that made it onto the list. But what is success? What is it that makes people successful in their lives, in their careers and in the eyes of other people? Is it the accumulation of wealth and power as some would define it? Is it fame or popularity or great accomplishment? There are several definitions in the dictionary about what success is, but in my mind there is none better than this simple one: success is the accomplishment of an aim or a purpose. I like that definition because it is something that can be measured and it is available to all those who care enough about their life and their future to not leave it to luck or chance. Of course, there is always the J. Paul Getty formula for how to become successful: “Rise early, work hard and strike oil.” That certainly is a great piece of wisdom for anyone who is hoping to become rich, especially if you live in Texas or North Dakota. But you had better make sure you

are drilling in the right place before you make plans of how you’re going to spend all that money. The great thing about being in the retail automotive business is that there is something for everyone. If you like people and have a desire to help others, it is a great career to meet new and interesting people every day, and help them achieve something that can be very important for their life and well being. If you like the potential to earn good money and develop a growing and loyal clientele, you can certainly do that in this business, as well. Selling cars for a living is one career that gives back in direct proportion to what you put into it. For those who consider the idea of going up the ladder to leadership in management, there is always room at the top for strong leaders in this business. Eventually, you may even decide that you want to start or buy your own dealership. That too, is available for those who want to make the effort and sacrifice what it takes to become a dealer. Truthfully though, the meaning of success is what it means to you. Whatever that may be, you are not likely to achieve it until you define it first in your mind and then determine the cost of achieving it. Until you know what you are trying to accomplish, you probably won’t know how to go about it or even whether you have

done it or not once it is said and done. You may spend your whole life being frustrated at your lack of success because you never really took the time to find out what success means to you. Of course, you can always count on confidence to make a big difference in your ability to succeed. The founder of our industry, Henry Ford, is often quoted as saying, “If you think you can or you think you can’t, you’re right.” If you don’t think you can succeed, you had better tackle that problem first before launching off into the actual process of making it happen. Until you believe in yourself, you are not likely to get anyone else other than your mother to believe in you. And that’s not really a bad place to start. A little encouragement from Mom usually comes in handy when you’re looking for a boost of confidence.

Map Out a Plan Once you have decided that you believe in yourself, step one for finding success is to decide what it is you want to accomplish in life. Then make a plan on how you are going to do that in increments that can be defined and worked out in short-, mediumand long-term goals. Success is only really definable when you have an ultimate goal that can be accomplished by breaking it into smaller measureable goals and by working hard to accomplish those goals step by step, day by day and year after year. When you are ready to do this, there is a very high probability that you will know success in your life.

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David Lewis President of David Lewis & Associates Since 1986 David has been training dealers, general managers, sales managers, F&I managers and salespeople on the “Art of Inspirational Selling.” His unique ideas have helped thousands of dealerships nationwide achieve their sales and management goals. David is the author of “The secrets of Inspirational Selling,” “The Leadership Factor” and “Understanding Your Customer.” Visit his website at www.davidlewis.com

Educate Yourself The next thing I recommend is that you educate yourself in the business and continue to do so every chance you get. Try to find out what it takes to be successful in retail automotive and don’t just read about it, act on what you learn. There are a lot of great training materials that so many have to offer you. Don’t expect to have a big return on a small investment when it comes to your career. Dedicate yourself to the process of learning and growing and you will gain confidence which will pay off, not only in your career, but in every area of your life.

Learn From Others Third on my list for success is to keep your eye on others who are successful, and learn from what they do. If you are familiar with my training materials you will notice that I often mention the people I’ve met along the way who have made a lasting impression on me. There are plenty of people in this business you definitely don’t want to emulate, but there are real winners who know what it means to be successful and who stay at the top of their game year in and year out. Often in life, the people you associate with can make all the difference in how your life will turn out. Make the right choices when it comes to

who you listen to and who you decide is worth following. Remember what the real key to success is in a business like ours. It is our customers that really define whether we are successful or not. Without satisfied customers, there is little chance of having a respectable career in this or any other business. Focusing our efforts on doing the best we can for the people we serve will usually allow the rest to take care of itself. Learn to have a winwin approach with your customers and I assure you, you won’t regret it.

Find a Balance Finally, I think balance is a good thing to remember if you truly want to be successful. Learning how to balance things like family, career, relationships, work and recreation is extremely important for real achievement in life. You’ll never see a U-Haul behind a hearse, so I don’t recommend working yourself to death at breakneck speed in order to fill your office with awards and commendations or to just put more money in the bank. Stop and smell the roses once in a while. If you don’t you will eventually wish you had. Someone once said that success is the ability to take care of yourself and your family, and to have some left over to help those around you. I like that and it makes

sense when you think about it. Success is not the end of the story and neither is failure. It is what you do along the way that truly defines whether you are successful or not. We all have our ups and downs and we learn to live with it and keep going. Sir Winston Churchill said it well when he wrote, “Success is not final, failure is not fatal: it is the courage to continue that counts.” Wherever you are today on your pathway to success just remember to keep your head up and start every day believing in who you are and what you can do. Who knows what you can achieve if you just stay in the game. Sometimes the key to great victory is just around the next corner. CBT

ETo see more from David Lewis go to CBTNews.com

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6 Traits Your Employees And New Hires Must Have

Dave Anderson President of Learn to Lead

One of the most helpful lessons I’ve learned, applied and taught clients concerning developing others is this: I can help make you more of what you are, but I can’t make you something you’re not. There are key and critical success factors you cannot change about others; nor can you teach them to others. If you have people on your team lacking these traits, the time, training and motivational efforts you invest in them will bring little or no return. Thus, it’s essential that you hire people who bring these assets to the table. There are six traits to look for when hiring someone into your organization. They are also a useful template to assess the growth potential of those already cashing your paychecks. First, the good news: There are two key things you can teach others – skills and knowledge. In fact, the definition of teach is “to impart a skill or knowledge.” You can teach technical skills, closing skills, knowledge of a product or system and the like.

Dave is president of Dave Anderson’s Learn To Lead, an international sales and leadership training and consulting company. Prior to beginning Learn To Lead, Dave enjoyed an extensive and successful career in the automotive retail industry. He has presented more than 1,000 workshops and speeches over the past decade on sales and leadership development and has spoken in 15 countries. Visit his website at www. learntolead.com

Now, the not-so-good-news: The following six traits are factors you cannot change about someone, put inside someone or even effectively teach to someone. To maximize performance these traits must be inherent and then developed with consistent coaching, and within a strong culture.

1. talent \ˈta-lənt\

A special or natural ability or aptitude

The hard truth is that, regardless how hard you try, you can’t teach talent; you must hire it in and develop it. In fact, you can’t make yourself talented either, which is why anyone wanting to excel must pursue the talents they have, not the talents they want. Without question, everyone has a talent for something. What’s essential is that an employee has a talent for what you’re paying him or her to do. While it’s also true that talent is never a guarantee of performance, it does provide a great head start towards excellence. In fact, excellence is impossible without talent. This is why training an untalented person longer, harder and faster won’t make that person great in a position where there is no natural ability or aptitude. The best you can hope is to make those employees less bad. Not very inspiring, to say the least.

2. Drive \ˈdrīv\

An innate, biologically determined urge to attain a goal or satisfy a need

You can’t teach what’s innate, nor can you “make” anyone driven. Drive is an inside job. In fact, drive is like talent, in that you cannot put inside of someone what’s not there, you can only draw out what exists. You may certainly be able to temporarily change someone’s drive level with a deadline, incentive or threat; but without genuine internal drive, as soon as the external stimuli disappears so does the drive.

3. attitude \ˈa-tə-ˌtüd, -ˌtyüd\

A settled way of thinking or feeling about someone or something reflected in one’s behavior

Most would admit it’s hard enough to change your own “settled way of thinking” and thus, the chances of changing someone else’s prevailing outlook on life are remote. Of course, you can temporarily change someone else’s mood based on how you treat them, but their natural attitude—good or bad—will eventually wiggle its way back out.

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At the end of the day, each of us is responsible for choosing our own attitude. While we can’t choose what happens to us, we do have the power to choose how we respond; and negative, “can’t do” people have a long history of making the wrong choices in this regard. Can someone change? Yes! Can you change them? No way!

4. CHARACTER \ˈker-ik-tər, ˈka-rik-\

The aggregate of moral and ethical traits that form the individual nature of a person

Chances are good that we’ve all tried to influence someone’s character with a good example, words of wisdom or a diatribe on ethics. But despite heroic efforts, we mortal beings remain incapable of changing the individual nature of another human being. Again, the question is, can they change? Yes! Can you change them? The answer remains: absolutely not! Much like attitude, character results from the choices people make and the values they embrace. You can’t make those choices for them. When you peel character back to the core, it becomes clear that many character flaws are rooted in the desire for instant gratification; shortcuts that take one away from pain and into pleasure without consideration of the consequences. Highly-talented people often fall into the trap of making poor decisions, reinforcing the principle that character protects talent.

5. ENERGY \ˈe-nər-jē\

The strength and vitality required for sustained physical or mental activity

6. PASSION \ˈpa-shən\

A strong feeling of excitement or enthusiasm for something, or about doing something

Neither drive nor energy compensates for a lack of passion. Many people have high drive and energy levels, but lack excitement or enthusiasm for what they do. As a result, they often feel frustrated and misemployed. Passion, like drive, can lie dormant in someone and may be aroused by a compelling vision, The most effective way to assess whether or not a potential employee has these six traits is during the interview. Rigorous, in-depth interviews, anchored in highly-effective questions, will help uncover the existence—or lack—of these traits within someone. After all, when you dig into a job candidate’s life these six factors will either show up or not; success leaves clues and so does failure. And while you can’t expect to find perfect people—anyone can get off track from time to time—the “off track” tendencies must, by far, be the exception rather than the rule. The same reasoning applies when you’re evaluating those currently on your team for future performance potential. Knowing that you’ll have a limited ability to impact any current team members without these six traits, you should be able to more accurately assess their ability to contribute to your organization in the future. The bottom line is your life and business gets easier when you really, really, REALLY get the fact that some people won’t change no matter what you do. CBT

Some folks have a strong internal drive and start the day with a flash, but run out of gas by midafternoon, or become overwhelmed when required to demonstrate the mental vitality to juggle multiple tasks simultaneously. You, nor I, can teach anyone the strength and vitality required for sustained physical and mental activity. While energy, like drive, can be affected by external forces, it isn’t sustainable through such means.

ETo see more from Dave Anderson go to CBTNews.com

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AVOID THE

ZERO With front-end gross profit being reduced by the factories and the competitiveness of today’s market, dealerships are grasping for every available dollar. More dealerships are relying on the skills and efforts of the business manager to help maintain the profitability of the front end of the dealership. One area many dealerships are diving into is the high mileage pre-own market. In the past, these vehicles would be wholesaled out of the dealership for those “other used car stores” to sell. However with today’s pre-owned vehicle values out of the book, many dealerships are keeping and retailing these vehicles. And that can present a special challenge for even the most tenured business manager.

In too many cases, these vehicles are highmileage and unable to be financed by any traditional finance source. Due to the age of the vehicle, they may be ineligible for a service contract or the service contract may be 50-plus percent the price of the vehicle - and that is for only 24 months. Our traditional finance profitability is not available on these vehicles, so most look at this deal as a zero and go on to the next one. Avoid the zero. Most business managers look at and take into consideration their averages and have a great deal of pride in their average. Every time you have a zero deal, it kills your average. You know it. You hate it. Avoid it. You must look into your ancillary products. In most cases, you have an opportunity to avoid the zero by justifying one of your smaller products. I know these do not have the higher profitability you all desire, however at the end of the month, if you can sell something to only half of these customers and only average

ETo see more from Tony Dupaquier go to CBTNews.com

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$200 on these deals, how much did it add to your department? I work with an upper level volume Asian import dealer who started selling this type of vehicle at the first of the year. It was detrimental to the F&I numbers at first because the business managers all looked at them as zeros. Sign them up and get them out. We put together a special menu format for these vehicles, did some additional training and even put a little note up that said, “Avoid the zero.” Last month he sold 61 of these “cash” vehicles and sold additional products on 47 of them. The dealership averaged $276 on the 47 vehicles for an additional profit to the department of $12,972. Free money - by avoiding the zero. The focus was on the products they could sell, road hazard, key replacement and windshield. Of course, not all vehicles were eligible for

all the products, however most everything is eligible for road hazard.

Please remember, these products are not to be used for vehicle reconditioning after the sale. In addition, many of the administrators of these products are looking for claims shortly after the contract has been sold. In some cases, the customers have told the administrator that they were told to “give it 30 days and call in a claim that you lost a key and they will get you a new one.” This is the type of situation that could be very costly to the relationship between the dealership and the administrator. A simple way to generate some need for your products is a light trial close after disclosing the As-Is Buyers Guide. After explaining that the vehicle is being sold “as-is” with no implied or written warranty, and after reviewing the back of the guide of the components that may break during ownership, ask the customer to sign the Buyers Guide. When you separate the owner’s copy, just say, “Wouldn’t it be nice to have some type of coverage?” Most will reply with some form of agreement answer. Why are the customers purchasing a lower-price vehicle for cash? Did they save up? Is it all the money they have? Did they listen to a radio host who suggested it? Ask the customer. If there is an opportunity to offer them another vehicle and finance it, go for it. If not, regardless of most customers’

THE OFFICIAL NEWS SOURCE OF THE RETAIL AUTOMOTIVE INDUSTRY

Tony Dupaquier

Director of Training for F&I University American Financial & Automotive Services Inc.

Tony began his retail automotive career in 1990 as a salesperson and went on to hold positions including business manager, ﬂeet sales manager, sales manager and general manager. Today he is responsible for the content, direction and marketing for the F&I University’s training curriculum. Tony conducts various F&I and Advanced F&I workshops throughout the year in locations nationwide. He has presented to 20 groups and state, national and international dealer associations. Visit the website at www.afasinc.com

GO TO CBTNEWS.COM answers, the money they are spending on the vehicle will exhaust their cash. This is great information to know to justify your additional products. Present your menu. There is a good chance you may need to tell the customer the vehicle is ineligible for a service contract, however if it is eligible, make sure you do a strong presentation. I am finding your road-hazard program to have the highest results. This may also be due to the lack of two keys, and a windshield with a star or a crack already. Focus on what you have available and what you can justify. If the customer is spending the majority of his cash to purchase this vehicle, what would happen if he has a flat or destroys a wheel due to a road hazard? Drive on the spare for several months? With the road-hazard program, your tires and wheels are covered against a road hazard for up to five years and it even has a road-side assistance program. “Is it better to spend a few extra dollars than you planned, instead of spending less than you should if you blow out a tire and bend a rim due to road hazard?” We are in the best selling season we have seen in years. These cash high-mileage vehicles are being sold and if you are not selling them at your dealership yet, be on the lookout. There is profit for the business manager in those vehicles. Just focus on avoiding the zero. CBT

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Jim Radogna Director of Compliance The Lloyd Andersen Group of Companies Inc. and its whollyowned subsidiary, The College of Automotive Management Before joining LAGC, Jim spent 15 years in dealership management as a sales manager, F&I director, GM, training director and compliance ofﬁcer. He was the founder and president of Dealer Compliance Consultants Inc., a national automotive compliance resources and training ﬁrm. Jim has used his knowledge and industry experience to develop unique, no-nonsense compliance and reputation management solutions for automobile dealerships of all sizes. Jim is a sought-after speaker and frequent contributor to several automotive industry publications. Visit the company’s website at collegeofautomotive.com.

Are you in good hands? A common rationalization used by some dealers to be less than diligent in their compliance efforts is, “My insurance will cover any claim.” Well, that theory took a serious hit recently when a federal judge agreed with two insurance companies that denied coverage in lawsuits against a large public auto group. The court found that since the dealerships’ employees intentionally misled customers, the insurers were within their rights in refusing to cover the claims. A little history is in order. The auto group had been named as a defendant in at least three lawsuits concerning its sales to consumers of window etch. The suits alleged that the dealerships had failed to disclose that the price of the etch product was included in the amount of financing they obtained and that employees told purchasers and lessees that they had to purchase etch in order to obtain financing. In addition, plaintiffs alleged that the dealers provided them with forms with blank prices and the prices were not disclosed in any of the transaction documents. The insurance companies had issued the dealer group at least three separate liability policies and each of the policies included an Auto Dealer Enhancement Package that provided liability coverage for sums an “insured legally must pay as damages arising from an occurrence because of an alleged or actual negligent act or error or omission by an insured resulting from a violation of truth-inlending laws.” The dealer group alleged that the types of claims and allegations made in the underlying suits fell within the scope of coverage provided in the Auto Dealer Enhancement Package. The insurance companies disagreed. Here’s why: liability policies typically cover only the negligence of the insured, and will not apply to results of willful or intentional acts by the insured. Common exclusions from insurance policy coverage can include: • Intentional wrongful acts • Illegal or dishonest acts • Intentional or knowing violation of any law, regulation, statute or ordinance • Gaining of any profit or advantage to which you are not legally entitled • Claims arising out of false advertising or misrepresentation in advertising • Antitrust, unfair competition, restraint of trade, unfair or deceptive business practices, or violations 12

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of any consumer protection laws • Claims against you that are brought by or on behalf of any federal, state or local government agency • Claims arising out of any wrongful act committed with the knowledge that it was a wrongful act • Claims arising out of the same wrongful act or series of continuous, repeated or related wrongful acts, alleging the same or similar facts In finding for the insurance companies, the court stated, “Fraudulent misrepresentations and nondisclosures were done intentionally with the full knowledge of and at the direction of the principals of the dealer as a ‘pattern and practice’ of doing business.” Ouch. Now when you think about it, there are any number of compliance missteps that may be considered “intentional” under the above guidelines. A few that come to mind are payment packing, bait and switch advertising, price gouging, failure to sell at advertised price, falsifying credit applications – you get the picture. Here’s the bigger picture: By training employees to operate compliantly and ethically, the dealership’s exposure will be greatly limited, but more importantly, customers will be happier and sales will increase. I recently read this comment from a student enrolled in Automotive Career Training at the College of Auto Management that really hit the nail on the head:

“

First allow me to say that this course is definitely essential to the growth of the automotive industry as a whole! I am in my sixth year in the industry. In that time I have been a sales consultant, floor manager and an internet manager but at no point in time was I approached or sat down and discussed the ethics laws of how to rest assured that my practice was legal or law abiding. This leads you to believe that all is fair as long as the customer agrees and consents - whether they understand or not is not really my problem or concern. “Personally this course helped me draw the line between a great salesman and a crafty con artist per se. Just because you can get customers to say yes doesn’t mean you did a good job selling them a vehicle. You could have done a great job of deceiving them during the whole process. After going through this course, I realized that a lot of practices that I thought were “the car business” actually are not. As a person who prides himself on honesty and

integrity, this course has opened my eyes to true accountability on what is legal and what is not legal (since the customer most likely doesn’t know and the dealership may not teach you). “Also I know that this course will separate me from other candidates who do not have the knowledge. I know that I am an asset to a company and their practices in the case of an audit or any accusations that may face them knowing that me, as an employee, on any level, am well familiar with the laws and legal practices of the industry. So they can rest assured that I will not put their dealership on “the 6 o’clock news.” “I plan to take this knowledge and use it how it should be used! Help build trust for my dealership, build stronger relationships with customers, and advance my career the right way. Learn how to sell opposed to mislead.

”

Thank you for offering this knowledge.

So I ask this simple question: Is it better for dealers to spend their time worrying about whether their insurance company will pay a claim if they get caught up in a compliance lawsuit, or train their people to think like the gentleman above? It seems to me that the answer is obvious. In my humble opinion, the “good hands people” dealers should be focused on is not an insurance company - but the people who serve their customers every day. The rest will take care of itself. CBT

Build Your Business

Create Your Own Floor Trafﬁc

Joe Verde President of Joe Verde Sales & Management Training Inc. Joe has been in the car business since 1973. He has been the “eightcar guy” and the 38-car sales professional, a manager and dealer principal. His company was founded in 1985, and under his leadership, was rated the number-one training company again this year. Joe is a frequent speaker at NADA conventions and is in constant demand to speak around the world to automotive groups. Visit his website at www.joeverde.com

On average, how many people per day do you talk to on the lot who even casually want to look at a vehicle? One to three? Three to five? Five or more? Before you answer, don’t just think about the slow days, include the busy days, too. And don’t just think about the ups you get, think about the other types of people you’ve also sold in the past, and count them, too. For example, have you ever had a service customer come up front and say, “Don’t waste your time with me, I’m just having my oil changed,” then two hours later sent them home in a new car? Of course, we all have. How about the “lookers” on their lunch hour? Same thing, we’ve all sold some of them a vehicle before. So count the ones you call ups and don’t forget to count the service customers, the lunch crowd and the kid on the skateboard, too, because some buy and it’s important to understand your true opportunity to increase sales. If you are like the average salesperson in our classes and the 3,355 in our surveys – and you’re actually counting all of the opportunities you have to present and try to close – you’re talking to three to five people on the lot on an average day. Do the math. If you’re working about 25 days per month and talking to three people per day, that means you’re in front of 75 potential buyers each month. If you’re talking to four per day, that’s 100 opportunities per month, five means 125 per month. Is this a highball total? No, the only ball bouncing around is the lowball totals you put on the tracking sheet each month. The average salesperson freely admits to only logging 45 or 50, maybe 57 people per month – not everyone. Why does that happen? Maybe they forgot that service customers buy also. Perhaps they would get chastised for only closing 10 percent. But mostly because if they log 50 and sell 10, it makes them feel better thinking they have a 20 percent closing to delivery ratio.

If you log all 100 though, you’re stuck with your real closing average of just 10 percent. If you don’t log all opportunities, that’s too bad, because not counting everyone actually keeps you from getting better. The more accurately you track and the more you know about every selling activity and opportunity, the easier it is for you to improve. As our survey pointed out, you definitely want more floor traffic. But even more importantly, you want the “best” floor traffic so you can make more sales.

#1 DO YOU WANT MORE FLOOR TRAFFIC? #2 DO YOU WANT TO MAKE MORE SALES FROM THAT TRAFFIC? #3 DO YOU WANT YOUR DEALER TO ADVERTISE MORE?

I’m betting you said “yes” to every question – and that’s the problem. Why? Because if you compare the prospects your dealer can put on the lot with more advertising to the prospects you can put there with a few short and smart phone calls, #3 will actually make it tougher for you to increase sales. You can deliver either one out of five – or two to three out of four. Take another quick look at the facts that matter to understand why it is so important for you to take the lead in your own career instead of waiting for your dealer to buy you another price-shopping, tough-toclose walk-in customer. Then convert the facts into the real opportunity you have to sell more. Keep an open mind here and you will see how some salespeople really are doubling their sales and gross while most of their competition are still selling only one out of every five.

Facts: - 78 percent of the people who look at a new or used vehicle end up buying, and 90 percent buy within one week. - 71 percent buy because they like their salesperson. Ninety nine percent won’t buy without a demonstration. - 50 percent buy on the spot when they do get a good, targeted presentation and demonstration. - 20 percent is the average closing to delivery ratio with ups. - 60-80 percent is the average closing ratio with a repeat or referral customer you bring into the dealership.

Translation based on what’s happening now: 100 x .78 = 78 – 10 = 68

people per month percent who will buy buyers per month/per salesperson sales per month on average (10 percent) lost sales per month

Translation based on what you could be doing instead: 30 x. 70 = 21

repeat and referrals per month on the lot percent that will buy deliveries per month

So talk to 100 and close 10 – or pretend you’re only talking to two per day and give yourself a 20-percent closing ratio. Dig in and learn how to ask questions and then learn how to develop your own business with people you have sold in the past, their friends, your service customers and the orphan owners in your dealership. These are the easy sales. There is nothing tough about building your business. In fact, you can learn how in your spare time between those ups you’re getting now. You can make your contacts in that down time, too. When you make the switch, you will: • Spend a career talking to the friendliest people • Deliver more units and earn larger commissions • Put in fewer hours selling 20 or more than the eight you are now selling • Have a lot more fun selling cars – so just do it! Why even think about it? Just do it so you can sell more.

CBT

#4 DO YOU WANT TO MAKE TWO EXTRA SALES THIS WEEK?

ETo see more from Joe Verde go to CBTNews.com

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VENDOR PROFILE

3 DECADES OF HELPING

DEALERS DRIVE THEIR F&I PROFIT

hree decades ago, Larry Dorfman didn’t know a whole lot about the auto dealership business. But the one thing he knew all too well was the extremely uncomfortable feeling he got every time he and his car wound up in the service department of a dealership or a repair center. Rewind to 1984. It’s safe to say that, at the time, there might have been a certain level of mistrust among consumers when it came to having their car serviced. “Back then, I was uncomfortable taking my car in to a dealership or repair shop,” said Larry Dorfman, CEO of EasyCare. First of all, you’re scared to death of what the problem is, especially if you have to have your car towed, he explained. Then you wait for the phone call telling you what the problem is, and find out there are other problems you didn’t even know you had. That sneaking suspicion that the repair technician might have sabotaged the car to wrangle another repair was always there. Then there’s the cost of repair. It’s a vehicle owner’s nightmare. LARRY DORFMAN, CHAIRMAN AND CEO OF EASYCARE

Dorfman saw a golden opportunity to turn that perception around, and build a level of trust among consumers that had been missing in the industry. This year, with a shelf full of industry awards, more than five million customers served and $2.6 billion in claims paid to date, EasyCare is celebrating its 30th anniversary. An acquaintance introduced Dorfman to the idea of extended service contracts, which was a relatively new concept at the time. A consumer at heart, he recognized a solution to the fear and uneasiness associated with taking a car in for service. “I saw an opportunity to put knowledgeable technicians in front of customers. As a consumer advocate, our motivation was to help them get the repair done at a reasonable price.” In 1984, under the Automobile Protection Corp., brand, Easy Care – with the leadership of Dorfman, his wife Cathy and partner Martin Blank – hung its shingle and started offering vehicle service contracts directly to consumers. Today, combined with their sister company GWC Warranty with which they merged in early 2013, the company works with 1,800 new franchised and 3,000 independent dealers in providing their customers with a wide array of award-winning benefits. Some of those are DriverCare (coverage for leased cars), Guaranteed Asset Protection (GAP), Dent Repair, KeyCare (key replacement) and two new benefits – EasyCare Pre-Paid Maintenance and EasyCare Select Plus, a product that combines four to six different benefits into one bundled package. Four years after its inception, EasyCare completed a highly successful IPO and in 1999 was acquired by Ford Motor Co. Under the Ford umbrella, EasyCare became financially stronger and tripled in size, but still managed to maintain its entrepreneurial and innovative focus. “We learned a tremendous amount from Ford about how to become a bigger company, but with a small-company mentality. We never lost

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our entrepreneurial and innovative focus,” said Dorfman. Ford’s financial woes in those days led Dorfman to pursue a management buyout of EasyCare. “I have to give credit to (Ford’s CEO) Alan Mulally who came on board in 2006 and wanted to get back to the core business of making and selling cars.” In 2007, in a partnership with the equity firm Stone Point Capital, Dorfman and his management team purchased the company back from Ford. “We had a fantastic relationship with Ford and we always look very favorably on our years with them.” With the company back in the hands of its original founders, EasyCare continues to thrive. Its outstanding customer service and top-notch benefits have secured its title as the only vehicle service contract company on the Motor Trend Recommended Best Buy list. “EasyCare products are easy to sell because customers recognize the Motor Trend brand,” said John Bommarito, president of Missouri’s largest dealership group, Bommarito Automotive Group. “They stand behind their products. And even though they are a very large company, they offer very personalized support across all levels of the organization.” That personalized support is what separates EasyCare from the rest of the pack, according to Dorfman. “The same people who founded the company still run it.” Even after 30 years, his business card still has his home phone number on it. “We don’t even have a written contract with them,” said Scott Smith, president, chief strategic officer and director of Sonic Automotive Inc. “We have been doing business with them for so long that it’s just a gentlemen’s agreement. Anytime that we’ve ever had any situation to come up, we just pick up the phone. Larry has a very can-do attitude and always tries to find a way to make things work.” Dorfman gives credit for his company’s success to its employees. In fact, EasyCare was named one of the Achievers 50 Most Engaged Workplaces in the U.S. for the past three years. This annual award recognizes top employers that display leadership and innovation towards engaging their employees, and are truly committed to creating positive, thriving work environments. The average tenure of its employees is around 13 years, which says a lot about their commitment to reaching company goals. “Of the many areas in which a company can be awarded for excellence, employee engagement is the one we most value,” said Dorfman. EasyCare was also recognized as one of the top diverse, multicultural businesses in Georgia by DiversityBusiness.com. With more than 400 employees and 120 independent reps, training is not something the company takes lightly. EasyCare runs at a rapid pace and its leaders are always on the lookout for the very best people in the industry. “We don’t bring new hires in and give them a day of training and send them out on the road or sit them down at a desk. Our training process is extensive, comprehensive and engaging,” explained Dorfman. “We are very clear on what our goals

From left, John Marks, CFO; John Lee, president; Larry Dorfman, chairman and CEO; and Mike Curran, COO

and core values are. Our mission is to help others succeed.” EasyCare’s core values: fair, friendly, responsive, focused and engaged – took its leaders many hours of meetings to create. “Defining who we are and what we do creates consistency. All our employees know how to make decisions based on our core values. You can ask anyone in our building what our purpose is and they can tell you. There is no gray area. Happy employees make happy customers.” Joe Serra, president of Serra Automotive, one of the nation’s top-10 privately-held automotive groups, has been an EasyCare client for more than 15 years. “Larry and his organization are always looking for ways to help the dealer. Their products are on-point, just what the consumers are looking for,” he said. “They are a joy to do business with. If you have a question, you’ll get an answer. They are very responsive.” EasyCare’s service to its dealers and customers doesn’t stop with just offering vehicle coverage and benefits. It takes it a step further by offering training in all areas of dealership management including marketing, risk management and underwriting, to name a few. “F&I managers in the company’s network are well-versed in the EasyCare story, and why it’s the best product on the market,” said Dorfman. In addition to offering in-dealership training on service, sales, management and leadership, the company offers an online training program, EasyCare VT, which reinforces the live training. Not only does EasyCare employ its own team of trainers to work in the stores, it has also partnered with some of the industry’s top trainers to provide additional support for any department within a dealership. “Dave Anderson of Learn to Lead, Jeff Cowan with Jeff Cowan’s Pro Talk and Alan Ram are the very best trainers in the business,” said Dorfman. “We can help dealerships identify what area they want to improve, and bring the right partner into the game.” EasyCare’s desire to provide top-notch training to its dealers led to the creation of the “Best Training Day Ever” seminar, which was first presented prior to the 2012 NADA Convention. “We wanted to collaborate and bring even more to our dealers,” said Dorfman. “We created it, we sponsor it (along with several other companies),

we staff it – it’s really an amazing labor of love. We’ve gotten rave reviews on the last two. The 2015 event in San Francisco is going to be spectacular,” he promised. This level of commitment extends to customers, also. For the past three years, EasyCare was the winner of the Torch Awards from the Better Business Bureau of Greater Atlanta for community service. In 2010 the company also won highest honors for customer service, and in 2011 it was runner up for marketplace ethics. Its customer care center was designed for its customer service representatives to communicate with contract holders on the dealers’ behalf. Follow-up with renewal customers and those who did not purchase coverage at the dealer is an added benefit for the dealers. Many service and F&I departments are not prepared to perform follow-up efforts, said Dorfman. “We’re getting contracts into customers’ hands and turning customers back to their dealerships.”

consumers showcases all that is great about the business in response to all the negative press that has been out there over the years. EasyCare’s mission to provide a fair, friendly fast and fun experience to every driver has helped the industry come a long way from the early days of mistrust at the dealership. And it will most likely be the driving force for the next 30 years. CBT

According to Dorfman, one of the more challenging problems dealers face these days comes from those companies that don’t have the customers’ best interest at heart. Those companies send false renewal notices and sell the least amount of coverage for the most money. “Many times, the customer thinks the dealer or the factory sent the notice to them. So they show up with a service contract that covers practically nothing,” said Dorfman. “Our philosophy is to protect the EasyCare customers by letting them know their contract is expiring and give them the opportunity to purchase a renewal. Many times the customer will say ‘I’ve had my car for four and a half years. I think I’m just going to look into buying a new one.’ We have an entire process in place for giving that lead to our dealer to sell.” As EasyCare saw significant changes in the business, and the huge contributions dealers are making to their local economies and communities, the leaders decided it was time to tell what is truly remarkable about the car business and created www.lovethecarbusiness.com. This collection of real-life stories from industry leaders, dealers and

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3 SECRETS OF PSYCHOLOGY AND BODY LANGUAGE

Psychology is like electricity. It’s everywhere, whether you see it, know it or know what to do with it. But it only becomes a powerful tool once you understand how to harness and use it. The psychology of selling impacts your salespeople – whether they know it or not. We all know that there are many customers that don’t make it to the test drive, the write up or even a turn over because the sale was lost in the first five minutes. This is due in large part because the salesperson failed to read the customer’s body language when they walked onto the lot. Knowing body language allows your salespeople to have a greater impact from the meet and greet. “Welcome to our dealership, my name is ... and you are?” This is the typical professional greeting – accompanied by a firm handshake, a welcoming smile and a positive attitude – that many salespeople use. Sounds all well and good, but managers and salespeople share with me that the greeting is usually met with at least one of the following challenges.

SECRET

THERE ARE THREE COMMON CHALLENGES WITH THE TRADITIONAL MEET AND GREET

1. The customer has weak body language such as a weak handshake, bad eye contact and cold-shoulder treatment. 2. We lose the customer’s name (almost immediately) after the greeting – easy come, easy go. We often forget the customer’s name within minutes of the greeting. 3. We get dismissed by the customer. “I’m just looking,” “I’m not buying today,” “This is our first stop,” and “I just want your best price” are all typical responses in the greeting. Unfortunately these challenges are all too common and give the typical salesperson enough resistance to cause them to potentially lose momentum in the sales process. What many do not know is that these could have been prevented if the message the customer was sending through their body language was understood by the salesperson before either of them opened their mouths.

SECRET

LOOK AT THE FEET TO KNOW HOW TO GREET Salespeople need to stop guessing, winging it or simply greeting out of habit when the customer is telling them exactly how to greet them through their body language. Remember, “Look at the feet to know how to greet” and the feet (body language) will tell the salesperson in advance how to approach the customer. There are only four possible postures a customer can have with their feet:

1. Facing you - like a statue 2. Turned away - looking over the shoulder at you – the side statue 3. Moving towards you 4. Moving away from you Each one of these is a non-verbal indication of the customer’s state of mind. They each mean something different and therefore need their own unique approach. The beauty of this insight is that it immediately empowers an approaching salesperson to make an adjustment to the greeting by simply seeing what the customer’s feet do when they see the oncoming salesperson.

THE “STATUE” customer represents the majority of customers on a dealership’s lot. This is the customer who freezes like a statue when they see the salesperson approaching. The distance could be 30 feet or 30 yards - they aren’t taking a step, the salesperson does all the walking. Their torso and feet are facing towards the salesperson, they just wait. The non-verbal message is simply, “I am willing to hear what you have to say.”

ETo see more from Jonathan Dawson go to CBTNews.com

THE “SIDE-STATUE” customer is similar to its cousin the “Statue” in that the customer is not moving. However the difference is in the position of the body and the direction of the feet. In this case, the torso and feet are pointing away from the oncoming salesperson and the customer is simply looking over his shoulder waiting for the approaching salesperson. The nonverbal message is, “I would rather not hear what you have to say.” The next two are straight forward once you think about it.

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THE “TOWARDS” customer is someone who moves towards the salesperson once they see them and is clearly saying, “I want to talk to you and I want to hear what you have to say.” THE “AWAY” customer sees the salesperson, starts walking away from them and is clearly saying, “I don’t want to hear what you have to say right now.” If body language is in fact language, then shouldn’t we be teaching our people how to speak it effectively? What is the take away from this insight into body language and non-verbal selling? Is it possible that the vast majority of objections – whether spoken (just looking, no time, don’t need help) or unspoken (bad eye contact, forgotten names, bad body language) – your salespeople struggle with are somehow related to this disconnect and miscommunication that starts before they even say, “Hello”?

SECRET

THERE ARE THREE SOLUTIONS TO MAXIMIZE THE FIRST IMPRESSION

If the customer can only have four possible postures with their feet then maybe we should be teaching our salespeople four possible greetings. Each of the customers – the statue, side-statue, towards and away – need a unique greeting to match the message from the customer. Consider how this simple and practical truth can impact your bottom-line.

SOLUTION #1 RESPECT THE SPACE OF YOUR CUSTOMERS. Practically speaking this means stop shaking hands with customers who are “Statues,” “Side statues,” and “Moving away” from you when you walk out to them. The customer “Moving towards” is wanting to talk, so shake their hand.

SOLUTION #2 WAIT FOR THE NAME. This means that salespeople need to stop exchanging names in the beginning of the sale unless the customer initiates. Rather, they should wait anywhere from two to five minutes to allow their mind and heart to stop racing and allow for some rapport. Then they will get the name and remember it. SOLUTION #3 THINK LIKE YOUR CUSTOMER. Salespeople need to start saying the very things the customer would normally use to dismiss them. Take the very thoughts and wording of the customer and introduce them so you don’t have to overcome them. “Hi folks, welcome to the dealership. Are you out doing some looking and shopping today?” “Good evening, welcome to our dealership. Are you doing some research and comparing options today?” Give them space, wait for the name and think like them. CBT

Jonathan W. Dawson President of LITE Consulting Inc. For more than a decade, Jonathan has been “trying to save the world one salesman at a time.” By teaching people how to use psychology in sales, he helps dealership salespeople and management understand the “why” behind the sale. His methods teach how to anticipate a customer’s questions and concerns and then address them before they come up. For more examples of selling through psychology, visit his website at www.WhyCarGuy.com

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WHAT DEALERSHIPS CAN DO NOW TO

PREPARE THEIR FUTURE

REPAIR TECHNICIANS W

ith more than 80 percent of high school and post-secondary collisionschool instructors reporting that their programs are underfunded, now is an opportune time for dealerships to connect with and invest in local programs. The advanced technologies and materials for today’s – and future – vehicles require a well-trained, skilled workforce to repair them safely, efficiently and to vehicle manufacturer safety standards. There has never been a time in history when school budgets have been under such exceptional pressure. Unfortunately, programs like collision repair usually bear the brunt of funding cuts. The Collision Repair Education Foundation, the collision industry’s 501c3 not-forprofit organization, is helping to mold the collision repair technicians of tomorrow by enhancing the educational opportunities for collision students of today – creating a link between collision repair schools and businesses. The grants distributed enhance the education experience for collision students and better prepare them to understand the new technology and retain the skills necessary to be a successful collision-repair industry member. Through donors and supporters, collision industry businesses are able to hire these well-trained students as productive, efficient and capable employees. There are roughly 1,110 high school and post-secondary collision-school programs nationwide which equates to roughly 60,000 students. The foundation’s ability to help develop productive collision-repair professionals and dealership’s future fixed-ops staff technicians depends on the generosity of the entire industry. The organization began its philanthropic focus in 2008, providing $300,000 initial support. Through industry supporters, more than $20 million in both in-kind and monetary support has been raised since then. Whether these students work for a dealership group, repair facility, insurance, paint, tool/equipment, or other company within our industry, the end goal is that these students are efficient and capable members of the collision industry from day one on the job. They should be able to help return consumer’s collision-damaged vehicles to pre-accident condition the moment they are hired. This is only possible through the support of our industry with in-kind product and monetary tax-deductible donations.

HOW CAN YOUR DEALERSHIP HELP? Crossing your fingers and hoping that these students are qualified and skilled entrylevel workers is a gamble that your dealership can’t afford to take. You can start taking an active role within these collision-school programs to ensure that the skills you desire from an entry-level student are being taught. This will result in less re-training on your part in the future. There are many different ways for your dealership to get involved.

to practice on current model vehicles. Your “trash” is “gold” to instructors. Start saving your bumpers, fenders and body panels to donate to a local school.

PROVIDE A FOUNDATION OF PROFESSIONALISM – To help these

programs look and feel professional, many need help in their appearance. Your dealership can take an active role in adopting the collision program and providing a professional appearance for both the instructional facility and the students.

Brandon Eckenrode

Director of Development for the Collision Repair Education Foundation Brandon has worked within the collision industry for more than 10 years. Before joining the Collision Repair Education Foundation, he worked with I-CAR, the international nonproﬁt repair training organization. The Collision Repair Education Foudation is a 501c3 charitable organization that provides support to high school and post-secondary collision school programs nationwide. Visit the website at CollisionEducationFoundation.org.

Work with the school to find out if they are willing to meet you halfway in having their floors grinded and prepped for the addition of a sponsored new epoxy floor coating. Something as little as a freshly-painted floor and/or walls can make a collision-school program look brand new and give the students a newfound respect for their technical learning environment. Through the foundation, your dealership can sponsor full uniforms and safety kits for local students to ensure that they look professional in their learning environments. Instead of wearing street clothes, these students look as if they are working in a live production facility and will carry themselves with a new sense of pride and professionalism. To find a local collision-school program, contact the Collision Repair Education Foundation. These instructors need the industry’s help now more than ever to help ensure that the graduating collision students are ready for entry-level employment within your fixed-operations centers. CBT PROVIDING PROFESSIONAL UNIFORMS, THROUGH THE COLLISION REPAIR EDUCATION FOUNDATION, TO HIGH SCHOOL AND SECONDARYSCHOOL COLLISION REPAIR PROGRAMS GIVES STUDENTS A SENSE OF PRIDE AND PROFESSIONALISM. PHOTO COURTESY OF THE COLLISION REPAIR EDUCATION FOUNDATION

INTRODUCTION – Meet with the instructor and see the collision program firsthand to ensure it’s a program worth investing your time and effort. A “hobby shop” program that is not seriously committed to providing an up-to-date collision-repair curriculum is not one with which you want to get involved. Review what the instructor is teaching, see what type of equipment and tools they are using, and be sure to visit with the school administration to show that local businesses are looking to invest time and potentially funds in the school’s program. SUPPORT – By seeing the tools, equipment, supplies and shop area with which a collision school program is currently working can be a quick indicator of where an instructor might need help. Many of these instructors are working on shoestring budgets so it’s important not to judge a book by its cover. They might be getting by the best they can with the support they are provided. STUDENT SCHOLARSHIPS – You can help encourage and work with students to apply for scholarships and tool grants that are available from the Collision Repair Education Foundation or other organizations. Help them take advantage of all opportunities available to them. SCHOOL GRANTS – Work with the instructors to ensure that they are taking full advantage of help available to them through school tool and equipment grants. ADVISORY BOARD – A well-organized program should already have an advisory board made up of local industry members who provide guidance and support to the collision program and instructor. If your local school doesn’t have an advisory board, it might be in your best interest to help the instructor create one. Help gather other industry businesses and vendors that can collaborate to help the program. SCRAPPED BODY PARTS – The parts that your dealership is scrapping make for great donations to a school’s collision program by providing students the opportunity 18

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DISCARDED AUTO PARTS DONATED TO THE TOPEKA, KAN., WASHBURN TECH INSTITUTE OF TECHNOLOGY’S COLLISION REPAIR PROGRAM ALLOWS STUDENTS TO TRAIN USING THE LATEST TECHNOLOGY. PHOTO COURTESY OF THE COLLISION REPAIR EDUCATION FOUNDATION.

MORE APPOINTMENTS SET. MORE UNITS DELIVERED.

ONSITE TRAINING

PROBLEM :

MYSTERY SHOP

Your salespeople fail to set an acceptable number of appointments with the shoppers that call or email your store. There is little or no training for your sales, service or parts staff. Your staff does not take these opportunities as seriously as they would a walk-in customer. These problems could cost your dealership over a million dollars in lost gross profit.

PHONE COACHING

SOLUTION : Phone Ninjas is a nationwide company that works with over 400 new car dealer groups to ensure your dealership is maximizing every opportunity that calls, clicks or walks in. We will train your staff on the techniques necessary for setting appointments with every caller or visitor to your site.

PHONE SCRIPTS

ONLINE TRAINING

phoneninjas.com sales@phoneninjas.com (866) 993-6966

We are a focused and determined company passionately striving for success. Our success comes from helping others achieve their goals. We accomplish this mission with a positive can do attitude, creative motivational techniques and by taking action when required. We have a serious desire to improve the bottom line of every business we engage.

JERRY THIBEAU

CEO

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DEALER PROFILE

SMALL MARKET

TIM HOLM

BIG MARKET S Tim Holm remembers, as a young man in 1983, lying in bed at night wondering if the new dealership his father had just acquired was going to make it. “That was very instrumental in my development because my dad had put everything on the line,” he said. “He sold his house, mortgaged his furniture. He and I were living in an old efficiency hotel with shag carpet, sleeping in the same bed trying to save some money. And it was a life-changing event.” Thirty-one years later, Holm Automotive Center not only survived, but has posted numbers of which others in small markets would be envious. Located in Abilene, Kan., home of the Dwight D. Eisenhower Presidential Library, the dealership has earned the highest award in that state from DealerRater for the past two years. In addition to being named Dealer of the Year for all three of its brands, it has also maintained a superior rating from Chevrolet, Cadillac and Buick. That’s not bad for a dealership located in a town of less than 7,000 people. Under the direction of Tim, the dealership sold 1,450 new and used vehicles last year and is set to sell even more in 2014. Part of the reason for the dealership’s success is its high volume of leases. “It’s not unusual for us to lease 30 percent of new retail sales,” said Tim. “We do that with the idea of getting people on a shorter trade cycle. The term is really the enemy of the dealership, so we try to manage the term if we can. And it’s an opportunity for some trade ins.” Holm’s used-car volume also contributes substantially to the bottom line, with 90 of the 125 vehicles sold in April being used. Holm’s career in retail automotive began during his childhood working at his father’s dealership in Ellsworth, Kan. His summers and Saturdays were spent washing cars and sweeping floors at the dealership that, according to Tim, was in a state of decline and might have sold one car a month before his father, George Holm, acquired it in 1969. The younger Holm always thought he would follow in his father’s footsteps. “I grew up knowing that I liked the overall atmosphere of the dealership,” he said. “I’m a people person. I like selling.” But after graduating from the University of Illinois, a job offer in another field – and in a larger city – almost sidetracked his automotive career. Having grown up

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in a town of 2,500 people then attending a college with an enrollment of about 33,000 students, Holm found the idea of living in a larger city appealing. But his loyalty to the family business (and a good dose of guilt) kicked in. “I got to feeling pretty guilty, so I rescinded my acceptance of the job offer,” he said. “My dad and I had a close relationship, and he expected me to come home and work for him. I never told him I didn’t want to come home. But it has worked out terrific and I’ve been blessed in a lot of ways. I feel like my path has been laid out for me.” In 1983, George Holm had the opportunity to acquire the dealership in Abilene. So he packed up the family and moved. “It was a rough go at the time and I can tell you it did not make my mother happy!” said Tim. “When you buy a corporation, you buy the good and the bad. And unfortunately, there wasn’t a whole lot of good.” The previous owner had financed many of the contracts, and with the economy in the grip of the recession, Holm Automotive was left to make good on many of them. “In addition to that, there was a poor work ethic and a poor reputation, so it took a lot of work to get it turned around,” Tim said. “It was a mess,” he said of the dealership, which was originally located downtown. The showroom window was right on the curb. There was nowhere to park or display cars. Used cars were behind the building and across the alley, and new cars were half a block away. “People had to really want to do business with you to find you.” And they did. Tim took care of the variable end of the business, his father handled the business office and fixed ops until George suffered a career-ending stroke in 1989. At that time, Tim took over the entire business and eventually acquired it in 1993. George Holm died in 2012. In 1994, Tim closed the downtown store and moved, with about 25 employees, to its current location on the north end of Abilene near I-70. Holm Automotive Center houses all three of its brands under one roof. The company just completed a remodel and expansion and has gotten a lot of compliments about the new environment. “I was concerned that people would think it was a little overdone for a small farming community,” said Tim. “It’s bigger. It’s more open. It’s brighter, and

SHARE everybody who comes in loves it. I’m glad we did it.” While Tim is proud of his new showroom, there is one thing of which he is even more proud. That’s the five-star customer reviews that flood the dealership’s website. In the past 24 months, the dealership has received 126 new car reviews, 149 used and 132 service department reviews. “A long time ago, we realized the service department was a fertile place to build relationships,” he said. A recent review read:

”

I’ll never take my vehicle to anyone but Holm Automotive Center. I live in (a town about 20 miles away). It’s worth the miles to see a friendly face. And get awesome service.

”

Only 25 percent of the dealership’s customers are local. The other 75 percent have to drive by another dealer to get to Holm Automotive Center, explained Tim. “It’s all about the relationship. I know it’s [a phrase that’s] a bit overused, but it is. We work really hard at making people feel good when they walk in here. We try to take care of the customers, and the money takes care of itself. We have a long-term outlook and recognize how much they can invest in us. I tell my salespeople, ‘If you get the relationship right the transaction will take care of itself.’ “We’ve been here for 31 years. We have worked hard and kept our nose to the grindstone, and I know it sounds kind of cliché, but we try to operate by the Golden Rule and take a long-term approach with our customers. For a long time, we’ve understood the value of loyal customers. “Retention is the hot buzz word now, but we latched onto it 12 or 13 years ago. We knew with this market being small, if we wanted to exercise our ability to grow, it had to be able to draw from customers from outside the area.” The reason customers come from miles to do business with Holm is the treatment they get from the employees. Many of the 50 on staff at Holm have been with the company for 10, 15 or 20 years. Many live at least 20 miles away, and one even

drives 60 miles daily. Tim attributes the longevity and loyalty of his employees to a combination of things including the knowledge that they work for an honorable company that is well-regarded in the area. “Not trying to sound arrogant, I believe we are one of the cream-of-the-crop dealers in the area.” That loyalty is a two-way street between Tim and the staff. “My goal is, that by the time they retire, I’d like them to be millionaires – in one way or another, said Tim. “If they commit to me then we’ll commit to them. That’s my goal. I want to make sure the rest of the staff is taken care of. They’ve committed their lives to the dealership. They’ve missed lots of dinners and kids ball games, a few school programs – even though we try to be conscious of that. The fact is this is the car business and you miss things.” Being in a small market presents its own problems when recruiting. Tim and his managers use a hiring process they call CADET, which stands for character, attitude, drive, energy and talent. They want employees who can meet all five of those requirements, and the small market sometimes makes it difficult to find people who can pass the CADET test. Once on board, however, Tim makes sure the employees receive constant training. He estimates that he spends 3 percent of gross profit on training, which he says is easily twice as much as the average dealer spends. But to him, it makes sense. “When you have long-term employees you have to be sure they continue to grow. That’s something we learned from Dave (Anderson). He really emphasizes the need to create an ‘earn and deserve’ culture with an eye on compassion. The biggest problem I see is that once people get good they quit working on themselves. Then complacency settles in and all of a sudden, you’ve lost your momentum, and it’s hard to get the eye of the tiger back. My job really is to stir the pot to keep people moving forward.” So does Tim have his eye on acquiring other dealerships? “Yes,” he said. “We have looked but there’s not a whole lot available close by. Things don’t change hands too often in Kansas. But we are actively searching now. We just haven’t found the right situation. We think we have all the understanding, the parts and the pieces to operate in a much larger market than we are. We hope at some time we’ll get that opportunity.” CBT

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GETTING WOMEN TO WRITE DEALER REVIEWS

IS CRITICAL TO BOOST SALES

In the last 10 years, the auto industry has not only experienced a dramatic shift in the car-buying target market, but also in the way cars are purchased. According to NADA Data and CNW Marketing Research, an estimated 55 million cars were sold last year at new-car-dealership and used-car lots in the U.S. More than 50 percent of those were purchased by women. Put another way, this powerful buying segment is purchasing roughly 525,000 each week or 75,000 a day.

Why Women Rely on Car Dealer Reviews

To attract women buyers it is important to understand how they shop for cars. According to the Women-Drivers.com’s 2014 Women Car Buying Report, women customers spend less time shopping at dealerships. In fact, they visit two prior to buying a vehicle. Conversely, they are spending more time online researching car dealers and utilizing review websites. Interestingly, an Ipsos “Socialogue” poll reported that women buyers are 50 percent more likely to rely on online reviews than men – and in the process, leave higher scoring reviews.

Women prefer to visit dealership review websites for several reasons:

1. Women trust other women’s reviews and prefer reading other buyer’s experiences and reviews. This helps them narrow down dealership choices to locate the best ones. 2. Most women have full-time jobs and others are stay-at-home moms. To save time, they go online via their smart phones, tablets or laptops. 3. Millennial car buyers are tech savvy. Studies show 94 percent of these buyers gather information online and it’s estimated that 40 percent of new-car purchases in the next decade will be made by this demographic. In a nutshell, it is easy to see that women give more weight to browsing the internet before they decide which dealership to walk into. This is a relevant piece of information for dealerships looking to boost their auto sales and who still haven’t tapped the digital universe to their full advantage.

Market Your Reviews Traditionally, Socially and Digitally

Since potential buyers like to read dealer reviews, this is what dealerships need to focus on – then market and showcase those reviews in their digital and traditional advertising. Not just on the website, but on television spots and classified ads. Distinguish your stores from the pack. After every successful sale or service visit, it is advisable to ask a customer for a review of their experience. By getting these reviews indexed, dealers can promote their business to potential customers who can learn about their customers’ experiences, thereby influencing their car dealership selection. We hear from some dealers who say, “We’ve tried but we can’t get our customers to write reviews.” Maybe it’s not your customers – it might be your approach. J.D. Power reported that women are more generous and leave higher-scoring dealer reviews compared to men. When asked for their experience, women inherently feel comfortable, enthusiastic and happy to provide open and honest feedback. It’s the opportunity to voice and share their experience – what

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most women never had the opportunity to do prior to five or six years ago. So, it’s a winwin.

Best Practices to Accelerate Customer Reviews 1. Assign a champion at your store to be responsible and accountable for reviews. 2. Get listed with reliable and reputable dealership review and rating sites. 3. Get your dealership review page created where your customers can post reviews easily about their experience at your store. 4. Have women at your dealership submit reviews. The best way to do this is to ask, ask, ask. 5. Hand out “Review Us” cards to easily direct women to your dealer review page. 6. Add postscripts to outbound emails saying “Share your experience with us. Click here to write a review” and link your dealer review page to the email. 7. Ask women with smartphones to write reviews while waiting at the dealership. Under no circumstances should she interface or use a dealership’s laptop or desktop. Capitalize on the downtime she has in your store waiting in the service drive or for F&I to complete the paperwork. 8. Acknowledge all reviews - both negative and positive - in a timely manner. After all, your customer took time to write a review. 9. Remember, a negative review from a customer is OK; let them be visible to your potential customers. A perfect score appears phony and future visitors will doubt your authenticity. Have these be a learning experience. Do you think Apple, Nordstrom or Target get all “fives”? No, they do not. Your company is in the people business and you have thousands of customers. It is unrealistic to think they will all be happy and satisfied all the time. 10. Target 20 percent of all visitors to convert to reviews. If one hundred cars are sold a month, an estimated 20 reviews are to be written each month. So, today – with the next customer that walks into your dealership—especially a woman, remember to ask for a review. It is really not just about SEO; it’s the future of expanding and growing your business. CBT

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

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YOUR DEALERSHIP Pete Rose, for all of his shortcomings and misdeeds, is still a heck of a role model when it comes to dedication, tenacity and hustle in one’s job. Pete Rose the “man” had flaws, as many of us in our industry do. Pete Rose the “athlete” had very few. How many salespeople reside on your showroom floor with the same highlevel qualities that Rose brought to the baseball diamond? You need to find your dealership’s Pete Rose. You cannot be lucky enough to have a salesperson be an all-time hit leader in sales. Those come once in a lifetime. You can only hope they take a lot of swings, make good contact with the customers and consistently improve their batting average. Without making this a “Moneyball” analogy (which has been beaten to death) there really is a benefit to having sales members focus on making contact every play, every call attempt, every text sent and every email shot out. It’s about finding people willing to be consistent during every at-bat versus those only looking for that one grand-slam a month. Salespeople don’t need to be home-run kings. This is 2014 and that mindset is exactly what online shoppers are trying to avoid. If you have people sitting on your bench that think they are Barry Bonds, trying to swing for the fences on every customer, you’ll see your customer satisfaction index tank, and your negative reviews skyrocket. Customers will see a big swinger coming a mile away in our industry. Pitchers didn’t expect the 5-foot-11-inch, 200-pound, switch-hitting scrapper with a bowl

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cut to end up being the all-time leader in triples. As dealers, we need to fill our sales team with the type of consultants willing to consider every single opportunity they are given as a potential base hit. Your dealership needs salespeople who try to turn singles into doubles with nothing more than extra effort. We need employees who are willing to slide headfirst – to bowl people over for the run, not with strength, but with will power – not with the intent to smash customers, but with the intent to win them over. Rose won Rookie of the Year. We know sales greatness from year one. If newer hires haven’t been dominant early in their careers, it is unlikely they’ll ever be the best later. Rose won two gold gloves. The ball just seemed to roll to him. Which hustler on your floor sees previously sold customers coming back, again and again? An individual’s customer retention rate shows a lot about versatility and commitment to all aspects of a career. Rose played five different positions on the field. You need to find a salesperson who can wear many hats, perform multiple tasks and become more than what the job description entails. He won three batting titles, one most valuable player award, three World Series rings and made 17 appearances in the All-Star games. Who is your sales volume leader year to year? Who is the individual you’re scared to take off the floor? If you’re going to keep salespeople with unbridled talent in the minors, I have a suggestion: Change up their pay plans, update their job responsibilities and turn them into your own Pete Roses. Growing up in Cincinnati, Ohio, as I did, we kids looked at the man they called Charlie Hustle

as a god. He was born and raised in Cincinnati and was the city’s chosen son. What made Pete Rose exceptional, though, had nothing to do with stats. He proved his greatness when he had the willingness, ability and skill level to become a player-coach. We rarely see it in professional sports, and we seem to be seeing it even less in our dealerships. Your store needs a player-coach: someone willing to not just walk the walk, but talk the talk; someone who cannot just greet customers properly, appraise vehicles, tailor vehicle presentations, desk deals and close customers, but who can teach others those skills as well. Do you have a salesperson on your ﬂoor good enough to be a Charlie Hustle? Might that person have the desire to take on the daunting task of being a leader of others, yet retain superstardom on the ﬂoor? You need someone able to set an example with actions, as well as willing to train others. A sales manager who actively trains staff is important to have, too. All

Joe Webb Founder of DealerKnows Consulting As founder of the Internet sales and marketing training ﬁrm, Joe has been called “the funniest guy in the car business” and passionately consults nationwide, showing dealerships success by instilling proven Internet marketing practices. He writes for multiple publications and industry resource sites, and is a regular top-rated speaker at industry conferences. As a true “dealer guy” with a history of retail success, Joe is best known for blending the lines between entertainment and education. Visit his website at dealerknows.com.

NEEDS A PETE ROSE sales managers should be training regularly. (If they don’t, rethink your current sales managers). A player-coach, on the other hand, influences others due to respect rather than authority. A player-coach can have an outstanding impact on the morale of the team. You’ll see your sales team mimic the hustle, mirror the determination and learn from the movements of a Pete Rose. While in retail, another salesperson and I (even back as an internet sales manager) took it upon ourselves to round up our coworkers and walk them through product-knowledge training and process training on a bi-weekly basis. We became Pete Roses. It was in us. If you don’t have someone already assuming that role, you need to help mold that person. Salespeople get a bad rap. Pete Rose got one as well. Some choices he made cost him a love of a game that few in this world share. Days after Pete Rose was banned from baseball, I accidentally bumped into him as he walked out of a downtown Cincinnati hotel. Even though I was young, to this day I remember the look on his face. It was if his entire soul had been yanked out of him and his world had been stolen. He loved his sport that much. We need to champion our best salespeople. We must celebrate those that are role models for others. Pinpoint who the hustler is on your team and allow that person the opportunity to flourish as a player-coach. Reward your leader for it – financially and with added authority. Finding the Pete Rose at your dealership has the potential to elevate your entire team to perennial playoffcaliber all-stars. CBT

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News from International Nameplate Dealers Engage Lawmakers in Washington On May 7 and 8, international brand nameplate dealers traveled to Washington, D.C., for AIADA’s 8th Annual International Auto Industry Summit. The two-day event drew dealers from across the U.S. who came to learn about the legislative, policy and industry issues shaping their businesses in 2014. Speakers included political analyst Charlie Cook, Congressional Management Foundation CEO Brad Fitch, viral ideas expert and bestselling author Jonah Berger, former Budget Director Jim Nussle, and former vice presidential candidate Rep. Paul Ryan of Wisconsin. The event kicked off with a reception for AIADA’s Rising Dealers Network, a program that provides young, up-and-coming dealers and general managers with opportunities to network and plug into AIADA. Young dealers who attended the reception had the opportunity to meet with AIADA board members and industry leaders and learn more about AIADA’s mission. AIADA President Cody Lusk opened the program by thanking dealers and highlighting the necessary role they play in AIADA’s advocacy efforts. “Although AIADA works vigilantly to represent your interests here inside the beltway, we believe effective advocacy really starts with each of you,” Lusk said. “You see the challenges to your business every day from legislation and federal red tape. You know the taxes you pay to support your local community. And you know what it takes to maintain a positive workplace for your employees.”

“The positive economic ripple effect created by our industry doesn’t end after the vehicles are designed, built and distributed to dealerships nationwide,” said Lusk. “The impact only grows, as thousands of international dealership franchises staffed by hundreds of thousands of Americans then begin the work of selling and servicing some of the most popular vehicles in the United States.” “For over 50 years, international automakers have invested billions of dollars in the U.S. and have revitalized local economies, created tens of thousands of jobs, and expanded the local tax base,” said Bozzella. “As the data demonstrates, the old perceptions of foreign versus domestic in the U.S. don’t fit the reality anymore.”

PENNSYLVANIA DEALER MATT STUCKEY, LEFT, DISCUSSED TRADE AND HEALTHCARE WITH REP. BILL SHUSTER OF PENNSYLVANIA, PA. Fitch shared some of the challenges lawmakers face as they represent constituents in Washington. He went on to explain to Summit attendees why their input is so valuable and how they can build and maximize their relationships with legislators. Berger, the author of “Contagious: Why Things Catch On,” opened the morning’s general session with a look at how word-of-mouth marketing extends well beyond social media, and can help dealers succeed. According to Berger, only 7 percent of word-of-mouth advertising is found online. Nussle took the stage providing an insightful look at the federal budget including how and where the federal government spends its money.

AIADA CHAIRMAN LARRY KULL, LEFT, PRESENTED THE 2014 GRASSROOTS ADVOCACY AWARD TO DEALER JOHN ROBERTS OF TENNESSEE. AIADA Chairman Larry Kull then took the stage to brief dealers on summit events and introduced the recipient of the 2014 Legislative Action Network Grassroots Advocacy Award. The award recognizes a dealer who has made outstanding efforts to advocate about the benefits and contributions of the international nameplate auto industry with his or her elected official. This year’s recipient, Nissan and Toyota dealer John Roberts, was commended by Kull for his “unparalleled commitment to advocating for international nameplate dealers with his member of Congress, as well as in his local community.”

The automaker panel discussion, moderated by Automotive News editor Rick Johnson, featured American Honda Motor Co., Executive Vice President John Mendel, and Hyundai Motor America President and CEO Dave Zuchowski. Both panelists commented on the importance of dealer involvement in the legislative and political process and their companies’ investment in the U.S. Rep. Paul Ryan concluded the program by offering his take on current budget issues, as well as trade issues that are vital to international nameplate dealers. “If the U.S. doesn’t engage and lead on free trade, other countries will,” he said.

Political analyst Cook concluded the evening by educating dealers on the political landscape heading into the 2014 midterm elections, as well as on what to expect as the 2016 presidential race takes shape. As one of Washington, D.C.’s most trusted political sources, his authoritative look at the political climate helped dealers understand how to better engage their elected officials on the issues that matter most to their dealerships. Thursday morning’s program started with the presentation of a new economic impact report by Lusk and John Bozzella, the president and CEO of the Association of Global Automakers. The report, titled “Redefining the Domestic Auto Industry,” sheds light on the manufacturing, R&D, dealership and sales operations that mark the international auto industry’s operations here in the U.S. The report indicates that there are nearly 10,000 international nameplate dealership franchises in operation in the U.S. today. Together, they employ more than 500,000 Americans, resulting in a total combined average payroll of $4.8 billion.

REPRESENTATIVES FROM MUNGENAST AUTOMOTIVE GROUP IN ST. LOUIS, MO., MET WITH SEN. ROY BLUNT. FROM LEFT ARE PATRICK SANDERS, CORPORATE COUNSEL; TINA YEAGER, DIRECTOR OF Dealers who missed the summit can still get involved in educating and advocating on behalf of their businesses. A key way to do this is by hosting your member of Congress at your dealership through AIADA’s Dealer Visit Program. Visit AIADA.org to learn more. CBT

PHOTOS COURTESY OF AIADA 28

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Don’t Go to Work

WITHOUT YOUR PASSION The vast majority of the American workforce does not feel passionate about what they do and does not feel inspired by their bosses. You can be a different kind of leader, one that inspires passion in your dealership. How far will you go for something you are passionate about? How far will you drive to watch your favorite sports teams? How nice of a diamond necklace will you purchase for your wife or gold watch for your husband? How much cash will you throw down for the newest and greatest golf clubs? We talk about passion all the time, but few of us apply it to our job. Shouldn’t we, though? We spend almost as much time with our colleagues at work as we do with our families (and in some sad cases even more). Out of each 24-hour period, we sleep for around eight hours, commute to work, put in at least another eight hours on the job, journey home and enjoy what little time remains with our spouse and children. Many of us make a definite distinction between home and work. We would die to protect our family. We feel this passion without even questioning its depth. But the other part of our lives, the working part, can be something else altogether. We want to do well because it means promotion and a pay increase, and this makes life better for our family, but many of us are not really passionate about it or about the colleagues with whom we spend so much of our days. We should be. Without passion for this integral part of our lives, we are sleepwalking through our days for the sake of the paycheck we receive. But with passion, our selfrespect and sense of self-worth grow, and we have more to give both at work and at home. Here are a few key reasons why passion in the workplace is so important according to best-selling authors Drs. Kevin and Jackie Freiberg:

Passion intensifies our focus. Passion enables innovation and creativity. Passion provides the drive to persevere, to avoid cutting corners, and to pursue excellence. Passion creates energy among colleagues that allows work to be completed more quickly. Passion helps people deal with fear. Passion makes employees want to stay in their jobs and contribute, even when they’re not feeling their best.

I travel full time speaking to companies and organizations all over the U.S. and around the world. Before I speak to an audience, I always remind myself of an important rule: Be a novel, not a newspaper. Newspapers are usually thrown away the next day. Novels may be reread and cherished for years. When I speak, people want more than newspaper headlines. They desire to know more than the basic facts on leadership. They want stories that touch their five senses and emotions. They want to experience what I’m saying. They want passion. If you are a leader, the same is true of your staff. If you want them to understand and catch your passion, you’ve got to give them more than the facts. Tell them the story behind your excitement and show them how much you care. Describe your vision. Take time to explain exactly how goals can be reached. Your team needs to see clearly how this can be done. You want your team to begin to think as one, with each member having input. When everyone is utilizing their passion by sharing their ideas, brainstorming, seizing on thoughts and theories and conceiving ways to put them into practice, you will have succeeded. CBT

Jeremy Kingsley Speaker, Author and President of OneLife Leadership

Jeremy Kingsley is a best-selling author, leadership expert and one of the most sought-after speakers in the country. He has been featured in or on CNBC, CBS, Fox, Fox Business, Forbes, International Business Times and Wall Street Business. Jeremy has authored four books including his latest titled, “Inspired People Produce Results” (McGraw Hill 2013). Visit his website at www.jeremykingsley.com

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MISTAKES THAT ARE COSTING D

THOU$AND I was recently visiting a friend who is a fellow business owner. During our visit, he asked me to join him for the marketing meeting with his agency. I agreed, interested to see what a traditional agency outside of automotive would present as a strategy. We were 30 minutes into the meeting and it was like I was listening to any other marketing pitch. They were touting how they negotiated extremely low rates and also received a lot of “added value” from media partners. I was sitting there thinking, “Wow is this what every agency focuses on?” when I saw my friend grinning. After the meeting, he asked me what I thought about the presentation. I told him I wanted to hear his thoughts first. I am happy to say we were both thinking the same thing about the presentation. We agreed that when rates are low and added value is high, the only thing that can result is “low value,” but for many, this type of presentation would have seemed like a positive report due to all the low-cost media and free add-ons.

Paul Potratz COO of Potratz

Paul and his team specialize in all aspects of internet marketing. He has been featured in The New York Times, The Wall Street Journal, the New York Post and on CBS. Paul has also been a featured speaker for NADA, Driving Sales, Auto Dealer People, Dealer Elite and Automotive Digital Marketing. Visit his website at www. exclusivelyautomotive.com

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We live in an era where we measure practically everything on abundance. If 10 is good, then 100 is better, and 500 is great. But more doesn’t always mean better. This has been the mindset for automotive marketing for many years. Think about the last time you watched TV without TIVO or DVR. The commercials took up more than half of a 30-minute time slot which, in turn, inspired new technologies like TIVO and DVR. The strategy of super-high frequency in media is a short-term gain with a long-term loss. People will tune you out with technology or just ignore your message. The strategy of high frequency is being utilized in email marketing, TV, radio, direct mail, video SEO and even in paid search. Several companies tout the fact they use hundreds or even thousands of keywords to drive traffic to a website. The strategy of keyword stuffing is expensive and drastically reduces the return on a marketing investment. Since business owners are spending tens of thousands of dollars to keyword stuff their paid-search campaigns, they’re not seeing a return. Business owners are starting to doubt the effectiveness of search advertising and it’s due to companies pushing quantity over quality. So what steps can a business owner or marketer take to be competitive when the competition believes in excess advertising? Simply follow this strategy.

DEALERS

D$ SKYROCKET YOUR TRAFFIC FOR PENNIES

We have been taught that everything is a number’s game, even for our pay-per-click campaigns. So when we see ads promoting “Get thousands of new visitors for pennies” or “Get 100,000 retargeting ads for $500” it’s hard to pass up. It’s time to start passing these so-called opportunities up. This inexpensive traffic is not converting to leads and it’s wasting your Internet team’s time. It’s imperative that you are tracking all lead sources through the entire process including the point of sale and gross profit of sale. Often the lead sources that come in mass amounts are the least profitable, so it’s time to find out which ones are the most profitable.

START EARLIER AND INCREASE PROFITS

When marketers want to sell a specific vehicle, product or service, they offer a loss leader of that item to drive interest. I am not saying you have to change this tactic, but I want you to add another strategy that involves reaching a shopper earlier in the process. I want you to create a list of the different scenarios that drive one to shop. Think of some popular questions you are asked in the shopping process, for example those relating to fuel efficiency, safety, insurance cost, technology, dependability, resell value, performance, etc. The questions shoppers are asking you are also being searched online in your market. In fact, the searches for questions like these are much more frequent than those for a specific vehicle or its price. The goal here is to get shoppers searching online to your website when they are searching for answers to these questions. This process is very time consuming and takes a high level of expertise in landing page creation, capture form creation, next logical step marketing, and alpha beta testing. This will provide the highest return on marketing investment and once you have a landing page converting, it will convert for months and years afterwards. I cannot stress enough how important it is to build qualitylanding pages and then send qualified traffic to these pages; anything else is a “Spray and Pray” strategy. Despite the labor involved, these strategies provide the most opportunities to double, triple or quadruple leads.

I FEEL LIKE SOMEBODY’S WATCHING ME

The old song from Rockwell is relevant when it comes to today’s technology. Never before have we been able to segment and target individuals the way

we can now. Now that you have a handful of landing pages built, it’s time to target and segment the individuals that would have a true interest in the page. This is the easy part given your options via Google and Facebook. I suggest “interest targeting campaigns” with these two platforms, where you can target individuals by their online and oﬄine behavior. In other words, if you want to target individuals based on credit card purchases or the context of emails they have written, it can be done with ease. Once these campaigns are built it’s important that you add strategies to the campaign and monitor how often you utilize the existing campaign. It will take 90 to 120 days to have trends in place to determine success and failures, so test a few options before pinpointing the perfect strategy for your campaign.

IF IT WAS EASY THEN…

You have heard that saying over and over. If it was easy everyone would be doing it. Yes, it’s easy to drive a lot of traffic to a website, run a lot of TV commercials, drop a lot of direct mail or blow up email inboxes to the point that your servers are being blacklisted and blocked. Is this the most efficient plan though? Of course not. We see very profitable dealers following the abundance strategy, but imagine if they developed a targeted strategy. If you want to increase your leads and profits then it’s time to get targeted and realize that more is not better when it comes to advertising. If the price is cheap and the added value is high, it’s for one reason only: That company could not sell it for a higher price since it has little to no value. My advice is to focus on where you are with leads and profits and develop a targeted strategy to grow your business. Most importantly, don’t pay attention to where the competition is. Build your own strategy and before you know it, competition will be trying to figure out what you did to take their market share. A digital advertising strategy that puts quality before irrelevant keywords, clicks and visitors involves more work, expertise and planning, but it remains sustainable for the long term. What kind of strategy are you using? At the end of the day, quality will always trump quantity. CBT

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DO YOU H

FIXED

SALES TE WITH THE AFTERMARKET COMPETITION TAKING MORE THAN 80 PERCENT OF THE PARTS AND SERVICE INDUSTRY SALES, NOW IS THE TIME TO IMPLEMENT A SALES APPROACH IN THE SERVICE LANE Last year NADA stated that the national average for service absorption was at 56 percent. With that said I would hope every dealer and fixed ops manager would make it their mission to put forward a plan to move aggressively toward achieving 100-percent absorption. In other words, start thinking BIG! Focusing on the retail service customer presents the greatest opportunity for increasing gross profit. It all begins with your perception of how the service and parts departments should be structured and managed. Do you have a culture of “administration” or a culture of “sales”? For example, do you employ service writers (administrative clerks) or service advisors (salespeople)? Do you have a high percentage of one-item repair orders (administration) or a low percentage of 15 percent or less (sales)? Are you experiencing a declining customer pay repair order count (administration) or is your customer base expanding (sales)? Is your customer satisfaction index rating stagnant (administration) or improving (sales)? Is this starting to make any sense?

Here is a comparison of these metrics for both departments:

GENERAL SALES MANAGER New and Used Gross per Retail Unit Salesperson’s Closing Ratio New and Used Inventory Turns New and Used Days Supply F&I Turnover Ratio F&I Finance Penetration F&I Gross Per Retail Unit F&I Extended Service Contract Penetration

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HAVE A

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EAM?

Every single one of these metrics requires some form of sales management for both managers. In working with many dealers across the country, I have found that most dealers do a fine job of devoting their time, resources and capital to support and evaluate the performance of their sales management team and hold them accountable for their results. Far too often, however, when it comes to doing the same for the fixed operations team there seems to be a different set of standards, usually attributed to a lack of accountability. So how about you service directors make the commitment right now to start measuring the performance metrics for your sales team? Get out of that administrative chair, get on your feet and focus your efforts on managing sales. Some ways you can start to foster a sales mentality in the service department are: ] Start each day with a brief 15-minute or less daily sales meeting with your service advisors, reviewing yesterday’s performance and today’s plan for reaching your goals on hours per repair order, profit margin on parts and labor, up sell penetrations, closing ratios, etc. ] Next, spend about 30 minutes in the service drive observing the customer reception process and maybe shake a few hands with a “Welcome to our dealership—I’m your service director—how can I assist you today?” ] Take a walk through the shop and observe a technician performing a 27-point courtesy inspection of your customer’s vehicle. Show those technicians that you care and thereby reinforce the notion that the inspection process is important to you and your customers. Do not tolerate pencil whipping the inspection process. Your technicians’ goal is to ensure that each and every customer leaves your dealership driving a safe and reliable vehicle. ] Evaluate and coach your advisors on their walk-arounds, their menu presentations and their customer communication skills. ] At the end of the day spend some time during the active delivery to observe your advisors’ review of the “Three Cs” (Concern, Cause and Correction) with each customer and ensure that the customer’s vehicle is always brought to them versus just sending them out the door to find it for themselves. Make sure those advisors are in fact scheduling the customer’s next appointment

FIXED OPERATIONS DIRECTOR Hours per Repair Order Service Advisor’s Closing Ratio Parts Inventory Turns Technician Parts Fill Rate Technician Inspection Ratio Advisor Menu Penetration Dollar Sales per Repair Order Labor & Parts Margin

before they leave this one. Maybe shaking a few hands with a “Thank you for your business” would be a great way to end your day. Showing your employees that you are a proactive leader will instill a sense of confidence in them, as well as a sense of accountability for their individual performance. Your customers will experience the “wow” factor that separates your service department from the competition. You must focus every day on managing sales opportunities that will benefit your customers. This of course, will increase gross profits and result in more net profit. Technicians must always be looking for sales opportunities by performing a complete and thorough vehicle health check with every repair order. Service advisors must always walk around the customers’ vehicles looking for sales opportunities and review the vehicle’s repair and maintenance history for other opportunities. Both of these processes result in recommendations for proper maintenance and or repairs. It’s important to note that you should never try to sell a customer anything that they don’t need. Fixed operations directors should, however, ensure that every customer is properly advised of their vehicles’ repair and maintenance needs. Remember it’s the customer’s vehicle and it’s their money so let them decide what they think is best for them and make sure your advisors are not making the decision for them by not presenting all of their technicians’ recommendations and maintenance requirements. This has to be your company policy – no exceptions. The same holds true for the sales department – right? When you give customers choices,

they then have the opportunity to make informed decisions, which ultimately results in more sales. Now, I am a firm believer that fixed operations directors, service managers, body shop managers and parts managers are hardworking individuals and face some tough challenges in our very competitive marketplace. The aftermarket competition is currently reaping more than 80 percent of the parts and service industry sales. That is some strong competition. Don’t you agree it’s time to do something about it? Establish your sales goals for all departments and outline your plan for implementation. Think big – be bold and measure everyone’s performance daily. You must lead, coach and train your team to remain focused on their goals and processes for achieving them so they can all become top performers. Most importantly—do not tolerate underachievers. You must replace them now with salespeople – not administrators. Achieving 100-percent service absorption might take a year or two or three but you will get there. It all starts by becoming a fixed ops sales team. CBT

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.

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IT COULD HAPPEN TO YOU…AND YOUR

SERVICE DEPARTMENT

I do not know how it happened and I don’t know when it happened. But it happened. I woke up January 2 to discover I weighed 30-plus pounds more than what is healthy for my height, according to my doctor. My wife had been telling me for months that I needed to lose weight, but I didn’t listen. My doctor, friends and family had been telling me for months, as well, but I didn’t listen. It wasn’t until the 4-year-old girl next door saw me out in the yard and asked my wife and me if I was pregnant, that I got the message. I had turned into a fat man! Having watched many friends on many diets over the years, I knew that there was a high chance of failure when dieting. I did not want to fail. With the Cowan bloodline history, it’s very simple: lose weight, live longer and live better—or die. I’m not ready to do the die thing just yet, so I decided to diet. I shopped around for the right diet and found that it is rarely the diet that fails, but rather, the dieter. While most dieters look for a silver bullet or quick fix, the bottom line is all based on what you eat (calories) and how many calories you burn through exercise. If you cut the calories or add in exercise where you did not before, you will lose a lot of weight—fast! Then, once you get to your ideal weight, you adjust the calories and/or exercise to fit that weight which will help you maintain it – all common-sense stuff. But it’s hard to do because of two key words: desire and discipline. By following a simple diet plan, I lost 20 pounds in the first four months and am still losing weight today. Reduce the calories, increase the exercise and lose the weight – It’s a mantra that everyone has heard many times in our health-crazed nation. I write about this because what I described above is what many service departments face in regards to productivity and profits. We start out slim and trim and do everything right. We get the numbers and maintain those numbers for years. Then somehow, someway, we wake up many years later and find that we are no longer as productive or profitable as we could and should be. We, like dieters, look for quick fixes and silver bullets where none exists. We 36

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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

do a walk around here, learn a new word track there or maybe bring in a new product. Like dieting, the results start instantly but we get sidetracked, fall into old habits and get the same old results—which turn us back into our same old fat selves. We jump from process to process, idea to idea, while yo-yoing up and down the productivity and profitability scale. Here is what I have learned: I have a choice, I can exercise more, eat more sensibly, live a higher quality of life and live longer. Or I can eat steaks, hamburgers and pizza like they are going out of style and deal with crappy health issues, have a lesser quality of life and die prematurely. Cowan medical history tells me this. From this point forward, there is no mystery, no questions and no silver bullets. It is do it or don’t do it—plain and simple. In your position it’s the same thing. There is no silver bullet. If you’ve read this very magazine, you have been exposed to some of the best in the business: trainers, consultants and writers that have delivered the best ideas in the industry – ideas that will make you meaner, leaner, more productive and more profitable. Some of the ideas are simple and easy. Others are not, but they all have had one thing in common: They take desire and discipline to make them happen. There are no excuses anymore. Do it and succeed or don’t and die. I won’t ever waste your time with what you should be doing and what you shouldn’t be doing. If you have sat in your chair for just six months, you know. You know that walking around a vehicle on a service drive sells more product. You know that the right word track at the right time will deliver more sales, higher customer-satisfaction survey scores and higher customer retention. You know that, like my good friend Brad Lea who owns LightSpeedVT likes to say, “Training is not something you did, it’s something you do.” You know that minimum production standards and firm policies work. You know that there is one of the highest unemployment rates in our country

in more than 30 years with plenty of out-of-work people out there that would give their right arm to deliver what your staff simply cannot.

“

I have made my choice. I am going to live a long time if for no other reason than to spend my kids’ inheritance.

”

I am not going to die over something I can prevent with a little desire and discipline. I will admit that I did not find this newfound fortitude from within. It came from a younger brother who, six years ago, was told by his doctor the same thing that I was told about weight and longevity. But he did not change a thing. He’s told me now that not one of the pizzas he ate was worth the pain he suffers today from not changing simple eating habits. I don’t know for sure, but I would bet that if you asked one of the hundreds of service managers and service advisors that lost their jobs last year due to slow business: If you had a second chance, what would you have done differently? They would tell you they would do what you already know is right to do. I may still die young, who knows? But if I do, it will not be because of diet. How about you? When your job comes to an end, will it be on your own terms because you had the desire and discipline to do what you know is right? Or will it be on a higher authority’s terms, because you didn’t? CBT

ETo see more from Jeff Cowan go to CBTNews.com

ASK THE PROS At CBT News, we are fortunate to work with some of the best trainers in the industry. Whether it’s information on sales, service, F&I, marketing, management or fixed ops, our contributors are the go-to professionals for reliable, relevant advice for dealership personnel. You can 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.

What should I tell a customer who says they want to get the repairs done but they just can’t afford it at this time? Jeremy R., Santa Monica, Calif.

JEFF COWAN

Most of the time when a customer says this they are testing you to see how much you believe what you are recommending really needs to be done. Discounting or pulling things from the list answers their question. Instead, stay firm and direct, and many times they will find the money. One of many options is, “I understand Mr. Customer. When things are tight my first reaction is to look for things to cut back on or put off until absolutely necessary. But one thing I would never cut back on or put off is the care and maintenance of my vehicle. Itʼs what gets me to work and makes everything else possible. You know what I mean?” When they answer yes, start typing.

How many hours of training should a new salesperson have before they take their first up and what should the training focus on? Susan J., Fort Worth, Texas

GRANT CARDONE

It shouldnʼt take more than three hours to train a new salesperson to confidently walk a customer through your sales process. Itʼs vital that the selling process is simplified to five steps. Your customer doesnʼt want 13 steps and your salespeople canʼt remember them. 1. Greet the customer (What information can I give you?) 2. Offer appraisal plus management intervention 3. Select and demonstrate (while the trade is being appraised) 4. Present numbers (Using electronic worksheet) 5. Ask for a decision (Is there any reason not to do this) If this takes longer than three hours to learn - where the salesperson can deliver the five steps comfortably - either the individual is not able to duplicate information, or your training is bad. The new salesperson must be tested and trained with ongoing fixes and correction. This is a missing piece in most training programs. The rookie gets a week of training and then is ignored. Technology allows me now to be with salespeople every day and with every customer challenge.

Should a salesperson have Twitter, YouTube and Facebook accounts to help them sell more cars? Robert B., Muskegon, Mich.

KATHI KRUSE

Yes, salespeople should use social media to sell more cars. When worked successfully, Twitter, YouTube and Facebook will help you build your network, stay in touch with repeat customers and welcomed referral business. Always pick a platform youʼre comfortable with and one where your ideal prospects spend their time. Be as helpful as you can and communicate why people buy from you - what makes you unique. Remember: People donʼt buy what you do; they buy why you do it. Attract prospects with useful content, engage them in conversations and guide them to the sale.

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STRESS HORMONES AND BELLY FAT HOW TO MANAGE YOUR BUSY CAR-BIZ LIFESTYLE FOR BETTER HEALTH AND A BETTER PHYSIQUE

There is a big, prominent problem that is extremely common among busy professionals. It holds the key to fat loss, but is very hard to control and effectively change. The old question of “I’m pretty lean everywhere else, but how many crunches do I have to do to get rid of this gut?” is a fairly common one.

Sounds dumb, but studies show that having meaningful, social relationships can help to lower cortisol levels. However, finding a smart way of doing so is important. Good example: an adult softball league. Bad example: drinking at a bar with your buds until 3 a.m. – for reasons aforementioned.

The answer has some good news and bad news. The good news? None. Obviously, this is contingent on you doing some other form of resistance training, but most fitness professionals agree that just doing tons of crunches does little or nothing in the way of losing your little pooch. The bad news? The real solution has a lot to do with stress, sleep and nutrition – the lifestyle factors that are the hardest to change. Ok I get the nutrition part, but stress and sleep? What does that have to do with belly fat? Hormones. That’s the answer. We can tell a lot about a person’s hormonal situation by looking at where the body stores fat. Fat stored around the umbilicus (belly button) correlates highly with the body’s stress hormone, cortisol. High cortisol levels cause fat storage around the gut. How do I eliminate stress? I own four dealerships and this industry is tough!

MEDITATION You don’t have to strike a lotus pose in the break room to effectively meditate. That would be really weird and I don’t recommend it. What I mean is that you should relax for a few minutes every day. There is strong evidence pointing toward the cortisol-lowering effects of sitting quietly, turning off your phone and maybe listening to music for 15 minutes during your workday. Why not try it.

It’s true that we can’t drastically change a lifestyle. Life won’t just stop and wait on you just because you have elevated cortisol, and I get that. But management is an option, so here are a few things that you can control:

ELIMINATING ‘CHRONIC CARDIO’ Doing long, intense endurance training sessions is a stressor. Not saying that endurance training is bad in all cases but for an individual with cortisol dysregulation issues, it compounds the problem. Try avoiding it until the other factors are under control.

SLEEP QUALITY More sleep isn’t always an option. We all have to make a living and people are waiting on us. So we have to focus on sleep quality. If this is an issue, you may want to consider limiting ambient light when you sleep and coming up with a pre-sleep routine. If neither of those works, supplementation is an option. Melatonin is an overthe-counter hormone which regulates sleep and wake cycles. It is naturally present in the body and can greatly influence the quality of sleep. You may also want to look into supplements which actually help to lower cortisol levels, such as Relora Plus by Thorne Labs. If you think supplementation may be the best option for you, ask your doctor or a fitness professional about it first.

I am not saying that if you stop doing ab work and replace it with a 15-minute nap, you will magically sprout a six-pack overnight. What I am saying is that paying some attention to your hormonal situation and addressing your lifestyle factors are a great way to set yourself up for success when it comes to your training and dietary intervention. I’m simply filling in a huge gap that is ignored in most fitness programs. CBT

Scott Patterson, CSCS Strength and Conditioning Specialist

For information on how to check your cortisol levels or on the supplements mentioned in this article, email Scott at srpatterson34@gmail.com.

SOCIALIZATION 38

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