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CRM TECHNOLOGY vs. CRM MINDSET Page 13

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MANAGEMENT GAMEPLAN

BY SCOTT BERGERON

CRM TECHNOLOGY vs.

CRM MINDSET It’s a Tool, Not a Crutch

Have you ever wondered how dealerships sold in volume before CRMs, before the Internet, before websites and Internet leads?

I consider myself an old-school car guy who knows how to use technology. I still believe there’s a place in this business for pen, paper and all the high-tech programs that make our lives easier.

CR

I started my career in the 80s and was lucky enough to work for a top 100 nationally-ranked dealership. We sold 500 vehicles, both new and used, per month.

We did it directing our focus on advertising, ordering correctly, training, and a CRM mindset. In other words, we wanted all the information and we collected as much as we could. It wasn’t efficient compared to the tools we have now, but it worked because everyone was on the same playing field.

Technology today works like a champ, when it’s used as a tool and not a crutch.

There are more ways than ever for potential customers to connect with a dealership. Online shopping is, by all estimations, the starting line for over 80 percent of all transactions.

In the dealership, the CRM software is used to track, assess, notify and persuade consumers. It also lets you track the steps of the sale as well as who’s performing on your sales floor, and who needs help.

We’ve all heard the phrase “garbage in, garbage out.” Technology is only as good as the information that goes in, and the process to get the information back out to reconnect with is where most dealerships lose deals.

I’ve been in dealerships where their CRM reported a 100 percent closing ratio. They must have some pretty great salespeople, or they’re only entering their sales into their CRM, and forgetting about the other 80 percent of unsold prospects. And even if the leads automatically populate into the CRM, it doesn’t do any good unless someone is following up.

CRM technology is limited without a common sense process within the dealership to make sure everyone gets touched, whether they’re Internet leads or face-to-face prospects. One thousand online leads and 300 visits in a month should show as 1,300 prospects, less the conversions to sales, which likely won’t show a 100 percent closing ratio. I’ll take bad news that’s accurate any day over grossly inflated closing ratios.

An article on Adexchanger.com elaborates on the importance of dealership CRM as an all-encompassing relationship tool, not just technology, concept. Headlined “CRM: A Philosophy That Goes Beyond Data, Technology and Channel,” the article by digital specialist Mayur Gupta notes, “CRM software is not enough… Establishing a lifelong customer relationship and loyalty is not just a technology problem.

Marketers need to bring the strategy, data and technology together to establish and operationalize a CRM capability. To do this, they must establish a customer relationship and experience strategy.”

In the dealership, it’s as simple as asking, “What’s happening to my customers? Is my CRM helping me make more deals, or is our process breaking down?”

So how does a dealer combine technology with a selling mindset that provides customers your undivided attention and connection before they say yes?

2 DEALER UPDATES / SEPTEMBER/OCTOBER 2016

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RM How much tech is too much tech?

How do you feel when someone is talking to you, but texting? How would you feel in a selling environment if your salesperson was entering data into their phone while they were showing you a vehicle? Probably not very good. But it’s reality in many dealerships that have invested fortunes in high tech, thinking it will “revolutionize their sales process.”

Most customers aren’t buying it. No matter what a salesperson is doing on their phone, a vast majority of customers think they’re being ignored. In my opinion, when a salesperson is in front of a customer, their eyes need to be up and directed toward their customer. Look down at your phone and you’re likely to lose a deal.

So the challenge really is how much technology do we need, and when is it best to use good old-fashioned rapport building and eyeball-to-eyeball selling?

Old school or new school – It’s all good, if it’s done right.

Once the sales force has learned (or relearned) the more traditional side of relationship-building and management, it’s time to show how mindset and technology together can forge a highly successful sales program. Technology can be a catalyst to help build traditional relationships to reach more people in more ways. When done right, it results in more deals.

Used properly, tools such as Internet Lead Modules and CRMs can prime the pump efficiently. Using prospect and customer information, a smart CRM can store critical information about a prospect’s wants and needs, as well as timeline and budget.

Technology does the heavy lifting, while customer engagement closes the deal.

High Tech & High Touch High tech allows your sales team to be efficient. High touch, or client engagement, is what’s required to be effective. In other words, it doesn’t matter how efficient I am at auto responding to prospects if they don’t show up and buy. Most of us still want to do business with people we like, respect and trust – and that requires one-on-one interaction.

For the best and most effective results, brainstorm about how best to use/blend the two – high tech and high touch. Then, test it

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in your next sales training session.

Here’s one scenario using email as the springboard: Do what the others don’t. Instead of canned auto-responders for inbound leads, try a catchy, clever and, most importantly, personalized email that will spur a visit or at least put you higher up on the radar than the other guys.

Try a subject line like, “Scott, I’ve been waiting for you to email me!” Most prospects shop online because they fear entering a dealership. They don’t want some pushy salesman. But, knowing you were low-key and fun to work with could help start a dialogue.

Today’s customers don’t want the old sales gimmicks, but they also don’t

want to be ignored, or feel like they’re going through a line at Walmart to buy a car. This is a huge buying decision. They deserve your attention, your personality and the best experience you can provide.

Remember, they can go anywhere in the world to buy their vehicle. Give them every reason to buy from you.

Ultimately, it’s CRM technology and a selling mindset together that make customer relationship management work effectively in today’s auto sales world.

Former dealer executive Scott Bergeron is the founder and principal at Daily Gameplan.com - a sales team performance company. Scott can be reached at 303.918.3169 or scott@ dailygameplan.com.

SEPTEMBER/OCTOBER 2016 / DEALER UPDATES 3

COMPLIANCE OVERDRIVE

BY CHIP ZYVOLOSKI

AVOID THE “ONE SIZE FITS ALL” RETAIL SALES CONTRACT MINDSET Address Your Specific Terms

Avoid compliance violations and potential fines by setting aside time to review your retail sales contracts. Wait, aren’t all forms “one size fits all?”

Your credit documents need to address the specific terms of credit you offer – matched with state and federal disclosures and provisions. Mismatching your credit terms and contract provisions could cost you thousands of dollars in fines, damages and legal fees as well as harm your business reputation.

Here are a few features you should review to make sure your retail sales contracts match the credit terms you offer.

Type of Property Sold Motorcycles, autocycles, off-road vehicles, RV’s and other motorized vehicles may not be “motor vehicles” under your state’s retail sales laws.

Required contract and disclosure terms can vary depending on whether you are selling a “motor vehicle” as defined in your state’s retail sales laws.

With the variety of motorized vehicle types available, make sure the contract you are using is designed for the type of personal property you sell. The same is true of your license to sell motor vehicles.

Make sure your dealer’s license covers the property you sell.

Cash Down Payments Usually, the cash down payment is received at closing, but dealers sometimes allow buyers to make one or more down payments after closing. Under the Truthin-Lending Act and Regulation Z of the act, these “deferred down payments” or “pickup payments” must be made no later than the due date of the second regularly scheduled payment. They also cannot be subject to a finance charge.

It’s helpful to have a contract provision with buyer’s promise to make deferred down payments. It must also be a line item in the Itemization of Amount Financed, which treats it as a credit even though it hasn’t been received yet.

Although it’s not required, dealers should include the date and amount of a deferred down payment in the Fed Box Payment Schedule. If you allow deferred down payments, be sure your contracts support them or are flexible enough to handle them. Note: some states do not allow deferred down payments or require them to be paid sooner than under Reg. Z.

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Negative Equity Trade-Ins Under Reg. Z, a down payment in the itemization can never be less than zero. As a result, negative equity trade-ins require special handling.

Reg. Z allows two methods of calculating the down payment. One way is to net all the cash and other credits against the negative equity in the trade-in (“netting”). Another way is to add all credits but not subtract any negative equity in the trade-in (“nonnetting”).

The method used will affect the calculated down payment and the amount of a separate line financing the balance owed on the negative equity trade-in. You may not have much choice in selecting a contract with your preferred netting or non-netting method, but it’s important to understand which method your contract uses so you can explain it to buyers.

Equal Installments. Balloon Payments.

Equal monthly payments are a common payment frequency. Changing to more or less frequent equal payments can sometimes require changes to contract terminology and disclosures. Be sure to review your documentation and completion tools carefully if you require equal periodic payments other than monthly.

Balloon payments are generally structured as a final payment that is more than twice as large as the average periodic payment.

A balloon payment schedule can lower periodic payments, but the buyer might have problems paying the balloon.

Dealers and lenders sometimes provide options for buyers who can’t pay the balloon amount. Those options may be included in the contract, especially if they are required by law. For example, one option is to allow a buyer to pay the balloon amount plus interest in installments, usually in an amount no greater than the prior installments.

States sometimes require additional disclosures to warn the consumer of the final payment amount. Be sure to review your documentation if you offer balloon payment features.

Arbitration Not all contracts include an arbitration provision. You should review your contract to confirm it has one if you want it.

The CFPB has proposed a regulation that would preserve the buyer’s ability to join a class action lawsuit even if the dealer/ creditor has a contract right to require arbitration. If the CFPB’s proposal becomes final, you will want to review your decision to include an arbitration provision and either update or remove it.

Conditional Delivery – Spot Delivery Is your retail sales contract conditioned on your ability to sell the completed contract to an assignee? If so, your retail sales contract should include a provision telling the buyer about it.

If you do conditional deliveries, it can be risky to use a retail contract that doesn’t include a spot delivery provision or specifically cross-reference a separate spot

delivery agreement. In that case, someone reading the retail contract alone will not know it’s subject to another agreement.

(The same concept also applies to arbitration provisions.) If spot delivery is an important element of your credit programs, make sure your contract addresses it in some way.

Note: some states do not allow conditional delivery provisions.

Fees and Charges Your retail sales contract probably has blank lines in the itemization and in other places. That does not mean you can put anything you want in the blank lines, especially fees.

In many states, only specific fees with specific names are allowed. You should review your retail contracts to determine if they have any required disclosures or contract provisions for the specific fees you charge.

What if there isn’t a contract provision or disclosure for your fee and it only appears on a blank line in the itemization? That may be okay for some fees in some states. The point is that you should research your state to determine what fee information is required and to confirm your retail contract has it.

Like the seasons, your credit programs and terms can change over time. Now is a good time to review your credit documentation to make sure it is up to date.

Chip Zyvoloski is a senior attorney for Indirect Lending at Wolters Kluwer. For more information, please visit www.wolterskluwerfs. com/indirect.

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SOCIAL MEDIA

BY KATHI KRUSE

10 STRATEGIC WAYS TO DRIVE LEADS WITH SOCIAL MEDIA Leveraging the Power

One of the most overlooked and underutilized practices in digital marketing is leveraging the power of social media to drive leads and sales. There are a lot of obstacles for dealers to overcome, including a true appreciation of the value, a lack of skills, and certain business cultures that don’t lend themselves to being social. However, if a dealer can eliminate the stumbling blocks, there are strategic, lucrative ways to drive leads with social media.

Unfortunately, many dealers and GMs think of social media as an afterthought.

Many believe its only value is in creating interest in the dealer’s brand. If this is your mindset then listen up because you’re leaving money on the table.

Social media is a quickly evolving beast.

Forty percent of marketers believe social media has become increasingly difficult in the past 12 months. Platforms are constantly changing algorithms, releasing new features and “changing the rules.”

This requires dealership marketers to think on their feet and quickly adapt their approach at the drop of a hat.

The landscape to grow your business with social media has never been more fertile: • 70 percent of the U.S. population has at least one social networking profile.

(Statistica) • 52 percent of online adults now use two or more social media sites. (Pew Research) • In 2015, Facebook influenced 52 percent of consumers’ online and offline purchases, up from 36 percent in 2014.

(The Drum) Laying the required groundwork is the key to driving leads with social media.

Listening to understand your customers improves marketing success. Leveraging social media to engage people before you try to sell them something keeps customers coming back.

You save big money because you laser-focus on interested buyers instead of blasting unwanted messages to strangers.

Groundwork produces seedlings and the opportunities become plentiful. The next steps are to enact strategies to drive leads with social media. Be open to the possibilities here. Your level of willingness to adapt to the new ways of reaching customers has a direct effect on your results.

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10 STRATEGIC WAYS TO DRIVE LEADS WITH SOCIAL MEDIA 1. Begin with a good plan.

So many dealers admit they don’t have a marketing plan. They know how valuable marketing is in general, and make some marketing efforts, but inevitably they feel like they need to spend all their time on operations and sales.

I totally understand how the day-to-day activities involved in running a store can make you wish there were more hours in a day. The irony is you can actually save time with a marketing plan because you’re operating more proactively rather than being in reactive mode. Mapping out a plan also means you can more easily hand off the work of implementing it to somebody else.

Better time management is just one perk of a marketing plan and here are six additional ways a marketing plan can benefit your business: • Reinforces your brand.

•P ositions your company in the marketplace.

• Nurture current customers.

• Attract new customers.

• Prepares company for growth.

• Helps to analyze what works.

2. Publish useful, high-quality, original content.

Content strategy means getting the right messages to the right customers at the right time. This involves everything from your website content, blog, social media, and social advertising. High-quality content does not happen without a content strategy.

Here are some benefits of developing a content strategy: • Influences buying decisions.

• Improves brand equity and reputation.

• Earns customer loyalty.

• Attracts more of the right buyers.

• Competitive advantage.

• Increased leads and sales.

3. Be social. Always genuinely engage with your audience.

Yes, you really do need to be social on social media.

Instead of broadcasting the “benefits” of products and services to strangers, add the steps to attract interested buyers by engaging with them on social media.

• 71 percent of those who receive positive social care are likely to recommend your brand to others.

• Only 19 percent of those who don’t get any response are likely to recommend that brand.

When comments show up, respond.

When online reviews are posted, respond.

Be more accessible and you’ll notice more customers engaging.

4. Incorporate social selling tactics within your sales process.

Social selling is the act of developing referrals, leads and sales using social media. Seventy-nine percent of salespeople who use social media in the sales process outperform those who don’t.

Social selling is just like any other sales process. Salespeople build a network (online or offline) to increase referrals and leverage relationships to create warmer leads.

Talented sales professionals already have an offline network they’ve nurtured for years. Savvy social salespeople have already been working social media to develop leads. But these individuals are your top performers. What will you do to engage the bottom 90 percent of your team?

To attract, engage and sell to today’s hyper-connected buyers, dealers need to build a social selling process within their organization.

5. Leverage the awesome power of Facebook ads.

No matter what your Facebook marketing goals are – grow page likes, boost reach and engagement, drive leads, etc. – Facebook ads will help achieve those goals.

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Facebook ads are by far the most powerful way to advertise your business on social media.

6. Use well-designed landing pages to capture leads.

When a shopper is in the final stages of their research and ready to take action, strategic landing pages guide them further down your sales funnel.

Capture their attention through Facebook ads and convert buyers with actionable, urgent offers they can’t resist.

Don’t forget the all-important call-toaction and include a lead form to track and follow up.

7. Re-market to people who visit your website with Facebook ads.

The more advanced Facebook ads strategies are difficult to master but the results are hard to ignore.

Perhaps one of the most powerful tools Facebook has to offer is the ability to serve personalized ads to people who have visited your site.

Use the targeting option “Custom Audience – Website Traffic” to re-market to people who have visited your site within a set time frame. Once you’ve placed a Facebook pixel on your site (a piece of code that tracks visitors), you can set up specific audiences with filters based on pages they’ve visited.

8. Leverage the power of LinkedIn. If you’re a salesperson, there is no reason not to use LinkedIn to build your network as one of the ways to drive leads with social media.

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Make sure you have a 100 percent complete profile – no “lazy bones jones” on this one. People want to know about you and a well-constructed profile with a nice picture says, “Hey, I’m here to help.”

Don’t waste time trying to connect with “everyone.” Be deliberate and thoughtful about who you’d like to know and who can introduce you or recommend you.

Pro tip: write and publish a weekly article on LinkedIn that displays your knowledge and expertise. It will develop your “personal brand” as a thought leader and trusted resource.

9. Use Twitter for prospecting.

To many companies and their salespeople, it seems like Twitter is a huge waste of time. And sometimes it is – if you’re just messing around on the social network and pitching folks to get on a demo, it probably won’t be that helpful to you.

Why? Because the goal of using Twitter isn’t to sell something at the very second you tweet.

By using Twitter wisely, you can be part of the most relevant conversations as they happen. Spot opportunities first, build relationships, deepen customer trust and make a name for yourself.

However, just having a presence on Twitter doesn’t lead to conversions. It’s how you use it that makes the difference between tweeting into the void and generating leads. Spend the time and effort to:

• Find prospects.

• Discover buying signals.

• Gain insight on companies.

• Accelerate deals with conversation.

• Build your following.

• Build relationships with influencers.

10. Show another side of you on Instagram.

Instagram is a great place to promote your company’s personality. Spend 10-15 minutes each day engaging with other users. I know a dealership that has gotten leads via their Instagram content.

Ready to convert leads? Instagram now has more advertisers than Twitter.

Facebook (who owns Instagram) allows ad creation and publication through the Facebook Ads Manager platform.

Are you ready?

These 10 strategic ways to drive leads with social media make it possible to eliminate the obstacles to converting your fans into customers.

If you’re ready to take it to the next level, Kruse Control helps companies just like yours navigate the social media landscape. Please email me at kathi@ krusecontrolinc.com.

Kathi Kruse is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc. Kruse Control coaches, trains & delivers webinars focused on integrating social media and online reputation management into dealership operations.

SEPTEMBER/OCTOBER 2016 / DEALER UPDATES 7

MARKET WATCH

AMERICANS DRIVING FLOOD DAMAGED CARS New Carfax Research

Hundreds of thousands of previously flooded vehicles are believed to be in driveways, on the road or up for sale around the country right now, according to new research from Carfax. The data suggests more than 271,000 cars reported as flood damaged by a state’s department of motor vehicles, insurance companies and more are back in use. It’s a nearly 30 percent increase from 2013.

While waterlogged wrecks have made their way to every state, these 10 states have the most:

1. Texas: 43,000

2. Pennsylvania: 20,000 3. Florida: 17,000

4. Kentucky: 14,000

5. Illinois: 13,000

6. South Carolina: 11,000

7. Michigan: 11,000

8. New Jersey: 10,000

9. New York: 9,000 10. Louisiana: 9,000

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“Flooded cars are a buyer’s worst nightmare,” said Carfax communications director Larry Gamache. “They’re ticking time bombs because when you least expect it, the electrical, mechanical or safety systems on these cars will fail, often without warning. Consumers everywhere need to be vigilant about checking a vehicle’s history for flood damage and getting a pre-purchase inspection to avoid buying cars that rot from the inside out.”

Increasingly powerful storms and historic flooding in major areas are creating more opportunities for professional con men to clean up and resell flooded vehicles. Demonstrations show it takes only a few hours to restore them cosmetically, at a minimal cost to the criminals. However, buying one of these dangerous cars costs unsuspecting consumers thousands.

“A customer was requesting a loan on a used car, so we ran a Carfax Report as part of our underwriting procedures,” said PriorityOne Bank in Mississippi president Willie Macko. “We discovered that the car had been a total loss and the title was branded as a flood vehicle.

By using Carfax, we were able to save both our bank and our customer a lot of money.”

As a service to consumers, Carfax lets you check for flood damage free of charge at carfax.com/flood.

SAFETY WATCH

MAZDA RECALLS CARS FOR AIR BAG ISSUES Moisture May Damage Unit

Mazda North American Operations is recalling 41,918 model year 200910 Mazda6 vehicles manufactured Feb. 4, 2008, to Dec. 3, 2009. The protective coating may not have been properly applied to the air bag control unit and, as a result, moisture may damage the unit causing it to malfunction.

Failure of the ACU would illuminate the air bag warning light and prevent the air bags from deploying in the event of a crash, increasing the risk of injury.

Mazda dealers will replace the ACU, free of charge. Parts, however, are not currently available. Mazda will send interim notifications to owners beginning Oct. 3 and will mail a second notice when remedy parts are available.

Mazda’s number for this recall is 9816H.

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MANAGEMENT MATTERS

BY KENNY ATCHESON

PLANNING FOR 2017 Make Necessary Adjustments

“If you always do what you’ve always done, you’ll always get what you’ve always got,” said Henry Ford. Albert Einstein said, “The definition of insanity is doing the same thing over again and expecting a different result.”

Now is the time to plan what you will do differently next year to succeed.

I’ve had conversations with dealers who spend from $5,000 to $120,000 per month in advertising. I have discovered that regardless of the budget, there are some people who are so afraid of change they choose to continue getting mediocre results in lieu of making any adjustments.

The resistance to change is not budget specific, but it is success specific. In other words, most successful dealers are ready to make a change at a moment’s notice as long as there is evidence there is a need for it.

An interviewer asked Lee Iacocca what order he used to make changes when saving Chrysler. Iacocca said, “Order? We did everything at the same time.”

Iacocca made lots of changes at the same time. It’s a good practice when necessary.

In his book, Power to Change, Jim Jackson explains how some people only make

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changes after a crisis. According to Jackson, “You are right where you have chosen to be.”

If you sell 40 cars or 240 cars per month, you have chosen how many cars you are going to sell. You may “desire” to sell 15 percent more cars, but that requires the decision to make changes.

I’m not saying you should chase every shiny object you hear about from media agencies, a Twenty Group meeting or an article. Invest in consultations with an expert who will give you the bold truth.

Don’t approach someone at an ad agency and ask what they have for sale.

Carl Sewell, author of Customers for Life and owner of Sewell Automotive with dealerships located throughout the country, wrote about how important consultants have been to him. He doesn’t always take their advice, but at least he knows he is getting the opinion of an expert rather than a sales pitch for services.

Another advantage to professional consultation before investing in new strategies and media is you get “outside eyes” diagnosing and analyzing your strategies and tactics. Outside eyes are typically free from bias. They are not emotionally tied to anything in particular.

Let me explain what I mean by “emotionally tied.” I’ve consulted for dealers who have done something one way for up to 88 years. They are emotionally invested in a particular method. It is what got them where they are. It may be

Now is the time to plan what you will do differently next year to succeed.

something that lifted them from poverty to riches. That creates an emotional attachment.

It took an outside set of eyes, a different angle and explanation of a new strategy, to get them to realize it was time for some tweaks.

Your existing strategy and plans may be good, and only require minor tweaks to be great. Find out.

Kenny Atcheson is the president of Dealer Profit Pros and author of Marketing Battleground: How to Deploy an Army to Battle for Your Business. Kenny teaches workshops, speaks at conventions and 20 Groups, and his company offers several marketing and advertising programs. His website is www.

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SEPTEMBER/OCTOBER 2016 / DEALER UPDATES 9

SALES MATTERS

BY JOHN CHAPIN

WHAT LEADERSHIP NEEDS TO KNOW ABOUT SALES Four Facts about Sales

In a leadership role, you probably already get that sales is the primary key to massive success and prosperity. As you know, the most successful companies sell better and more than everyone else. Starbucks doesn’t have the best coffee, they’ve simply sold an enormous number of people on doing business with them. That said, to ensure colossal success for your company, here are the sales facts you want to ensure your company is living by.

Fact #1: Sales has to be at the top of the food chain.

Everything starts and stops with sales. Without sales, there is no service department, no installation department, and, in fact, no people because you’re out of business. Until a product is sold, nothing moves. No money goes into the bank account, trucks don’t move, customers aren’t helped, nothing gets installed or serviced, and economies stop.

Companies go out of business because they don’t sell enough at high enough prices. Companies thrive because they sell enough at the right prices to cover bills, payroll, growth and mistakes. If you want to thrive in good times and bad times, independent of the economy, the president, rules, regulations, and other factors, you do so with lots of sales.

Everyone and everything has to support sales first and foremost.

Note: This is not permission for the sales department to run roughshod over everyone, treat anyone like a second-class citizen, or break rules to sell something. All business must be clean and ethical, and all other departments treated with the utmost respect and professionalism. Also, don’t ever verbalize “sales department first” to other departments.

“Sales first” is an unwritten rule. I don’t want to see this in an e-ail or even scratched on a random notepad in bad handwriting. The other departments need to know and be told they are important.

The key point: when push comes to shove, sales comes first. When the receptionist says, “that’s not my job” to a simple, reasonable request from sales, the receptionist’s attitude is addressed, not the salesperson’s demands or expectations.

Fact #2: Your focus needs to be on attitude and activity within the sales department.

A sales team with superior attitude and activity levels will always outsell a sales team with superior skillset and products.

While skillset and product are important,

10 DEALER UPDATES / SEPTEMBER/OCTOBER 2016

the actual acts of going out and connecting with a high number of people are paramount. The most important factors are how motivated the sales team is and how many people they talk to and connect with.

When you’re hiring salespeople, you’re hiring attitude. You can’t teach drive and work ethic. You’re looking for people who are hungry, with a blue-collar mentality, and a thick skin. You’re also looking for people who are extremely persistent and resilient. They need to follow through and follow up, and follow up, and follow up.

Next, what is the activity level? Are they coming in early and leaving late, are they working on the weekends? Are they working on the right things? Are they selling anything? If you aren’t sure of their activity, check.

Bottom line: hire attitude, set expectations around activity level, and hold people accountable. And remember, at the end of the day it’s all about production.

They are either paying their way and getting the job done, or they’re not.

Fact #3: You must invest in your sales team.

A highly effective sales team needs tools, resources, training and support. Your goal is to have them spending as much time as possible prospecting, presenting and closing. This is going to take 1) support people to do paperwork, order entry, and other non-sales related items; 2) tools and resources such as CRMs, computer systems, and other technology and 3) systems and processes that standardize operations and remove all guess work.

Among other items, you should have a selling system in place complete with scripts, competitive information and anything else a salesperson could possibly need during an interaction with a prospect or customer.

Next, invest in the development of sales skills. While attitude and activity are most important, a sales team that also has great sales skills is lethal. Invest in learning tools such as books, CDs, DVDs, classes and seminars.

Salespeople should be continually practicing, drilling and rehearsing sales skills in sales meetings, in the car, with you and other salespeople, and even with friends and family members. You should also be throwing objections at them when you simply walk by them in the office.

Preparation and knowing exactly what to say are critical.

Fact #4: Everyone and everything affects sales.

Everyone affects sales at your company, from the receptionist – who is the first person people come in contact with – to the janitor – who runs into people walking in and out of your building – to your truckers, your customer service people, and your salespeople. All make an impression, good or bad, and that impression helps determine whether people do business with you.

Taking it a step further, it’s my belief

that because selling is your company’s most important activity, everyone should be directly involved in sales. Everyone knows people and they should all be looking for possible prospects for your product or service. Yes, even the janitor and receptionist. If they pass on a name to the sales department and a sale is made, they should be rewarded with money, a gift, or something else of value, but all employees should be sold on your product and looking for people to help.

Everything counts. From clean floors, to correct shipments, to properly spelled names, to all employees interacting with customers with caring and enthusiasm – everything sends a message as to whether your company is one people should do business with. Even the smallest item can affect a sale.

On that note, you should be shopping your company. Call and see how the phone is answered. Ask for information. Is it sent?

Does someone follow up? How and when?

If they’ll know it’s you calling, have a friend or family member call.

John Chapin is a sales and motivational speaker and trainer. He has over 27 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. For more information, visit www.completeselling.com or email johnchapin@ completeselling.com.

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COMPLIANCE MATTERS

BY DANIEL J. DOMAN

TACKLING COMPLIANCE Best Practices to Keep Consistent Standards

Process, by definition, means “a series of actions or steps taken in order to achieve a particular end.” Think about that for a moment, and then think about your dealership’s compliance strategy. Does it follow a regimented process that helps ensure your dealership’s employees are taking the necessary actions on every deal to meet your dealership’s compliance requirements?

Managing your dealership’s compliance requirements can be daunting. Regardless of the size or complexity of your dealership, ignorance is not an excuse. Adverse action, privacy policies, identity verification, risk-based pricing – there is a lot to comprehend and consider implementing on every deal. Below is a list of key compliance items your dealership should fully understand and some best practices for implementing them on every deal.

Privacy Policy According to the FTC website, “auto dealers that extend credit, arrange financing or leasing, or give financial advice must notify customers about the information they collect, who they share it with, and how they protect it.” Any personal information you collect to provide the above-mentioned services is covered by the Privacy Rule. Personal information includes “name, address, phone number, or other information that could be used to identify them individually.”

Your privacy policy should be offered at any point of entry when gathering consumer data, including both your online credit application and in-store experience.

If you don’t already have a privacy policy in place, your credit application system can provide you with a complimentary privacy policy form builder you can tailor to your dealership’s policies and procedures through the use of the Federal Reserve Board’s Model Privacy Notice. If your dealership already has a privacy policy, it can be easily uploaded into your credit application system to be presented when gathering consumer information.

OFAC Checks Before conducting business with a potential purchaser, dealers must run a check with The Office of Foreign Asset Control to ensure they are not unintentionally conducting business with a specially designated national. These checks can be run for free online or you can set preferences to automatically run an OFAC check upon every credit application submission in your credit application system. Automation in this arena can help

12 DEALER UPDATES / SEPTEMBER/OCTOBER 2016

ensure your dealership’s employees are taking required actions and following your dealership’s compliance process.

Identity Verification Today, identity fraud is big business.

For example, a 2016 identity fraud study

by Javelin Strategy & Research, found $15 billion was stolen from 13.1 million U.S. consumers in 2015. Under the Red Flags Rule, “many businesses and organizations [must] implement a written identity theft prevention program designed to detect the ‘red flags’ of identity theft in their day-today operations, take steps to prevent the crime, and mitigate its damage.”

Help reduce your dealership’s risk by validating every consumer’s identity.

This is another step in your dealership’s process that can be automated with every credit bureau request. Choose an identity verification solution that has customizable settings and allows you to set tolerances for alerts to best suit your dealership’s risk strategy.

Credit Score Disclosure Notice (RiskBased Pricing) The Credit Score Disclosure Notice can be used as one process for complying with the Risk-Based Pricing Rule under the Fair Credit Reporting Act. The CSDN should be given to “all consumers who apply for credit and contains their credit score as a way to provide greater understanding of how they are evaluated during the lending decision process.”

CSDNs can automatically be generated in your credit application system by selecting your credit bureau(s) and risk model(s).

Once you have selected these settings, it can automatically generate a CSDN upon display of each credit bureau report.

Adverse Action Notice When using a consumer credit report to make a credit decision, you have legal obligations under the FCRA and Equal Credit Opportunity Act. In particular, “if you deny a consumer credit based on information in a consumer report, you must provide an ‘adverse action’ notice to the consumer.”

Generating an adverse action notice and manually printing is a complimentary feature in your credit application system.

However, to ensure adverse action notices are consistently generated for all deals necessary, you can additionally subscribe to a mailing service that will identify, generate, print and mail notices on your dealership’s behalf based on the compliance strategy your dealership selects. Again, automating these compliance activities can help ensure your process is consistently executed.

Fair Lending Due to recent political changes and resulting enforcement actions, your dealership may have decided to take actions to address its fair lending obligations under the ECOA by setting a standard dealer participation rate for all of your retail installment contracts. As a result, your credit application system

has provided you with the ability to set a standard dealer participation rate that will be applied to every deal. In the event your standard dealer participation rate is deviated from in a downward manner (only), completing a dealer rate exception form can document the good faith, competitive reason for the downward deviation from that standard.

Electronic Document Storage Now that you’ve generated several key compliance documents electronically, it only makes sense to securely store your documents so they can be easily accessed at any time. Credit applications, decision details, credit reports, disclosures, adverse action notices, identity verification documents, privacy policies, eContracts, and ancillary uploaded documents can all be electronically stored to create a complete audit trail for each customer.

It can all happen with the click of a button from your credit application system. There is the additional benefit of reducing your dealership’s risk of a security breach due to “physically” stored customer information in and around your dealership.

Whether perceived as a burden or not, your dealership’s back office needs to comply with federal and state regulations.

Set up and maintain a compliance process that best suits your strategy and make it as easy as possible for your staff to follow.

All of the actions listed above have the ability to take place within your credit application system, along with the ability to monitor if the actions were taken, not taken, or not needed. Most of these compliance actions can be set up to automatically run on every deal, by every user in your dealership. Automation is there to assist you and will help you control consistency in the series of actions needed to execute your dealership’s compliance process.

Dan Doman is Chief Legal and Privacy Officer for RouteOne, a joint venture between Ally Financial, Ford Motor Credit Company, TD Auto Finance, and Toyota Financial Services.

He is responsible for managing all RouteOne’s legal, governmental, privacy, and security affairs.

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