A Division of IPD
VOL. 8 | ISSUE 2 | FEBRUARY 2015
Moving the AUTOMOTIVE INDUSTRY
FORWARD with
Tony Rimas
PG: 8
10X YOUR
RESOLUTION Part One PG: 10
Inside Feature
Principal’s Office with
Corina Diehl
PG: 14
PASSION as a
Sales Tool PG: 18
FIVE STEPS
to make Each Day
a MASTERPIECE PG 22
2
Call: 813.630.5888 x512 or Visit: www.ipdmail.com/evolution
3
CONTENTS Editor-In-Chief Michael Oquendo Editor David Villa Creative Director Austin Janowsky Marketing Director Jason Yamnitz 4
Featured In This Issue... Articles
7. An Informed Customer Is NOT a Sold Customer By Clint Burns 8. Moving the Auto Industry Forward By Tony Rimas 10. 10X Your Resolution Part One By Grant Cardone 13. Want a Wildly Successful Personal Brand? Show Yourself Some Love By Laura Madison 14. THE PRINCIPAL’S OFFICE with Corina Diehl By Michael Oquendo 16. The Myths of Writing Service Part 2 By Jeff Cowan 18. Passion As A Sales Tool By David VIlla 20. Giving Yourself A Raise By Tim Byrd 22. 5 Steps To Make Each Day A Masterpiece By Dave Anderson 24. Money An Echo Of Value By Bob Burg 26. Winning Demonstrations By Tom Hopkins
27.
31.
Stay Out of the Financial Danger Zone of “FALSE POSITIVE” By Matt Manero
When Implied Permission is NOT GRANTED By Don O’Neill
Authors Jeff Cowan DavidContributing Villa Clint Burns
Tim Byrd
Tony Rimas
Dave Anderson
Grant Cardone
Bob Burg
Laura Madison
Tom Hopkins
Michael Oquendo
Matt Manero
Copyright ©2015 all rights reserved. Reproduction in whole or part is prohibited unless expressly authorized by editor or publisher. The views expressed in the articles or advertisements are those of the authors and do not necessarily represent the views of the magazine or its staff. Editorial inquiries, questions or comments can be made to the Editor-In-Chief at moquendo@ipdmail.com Advertising Sales: Please call 813-630-5888 ext 523 or 561 or email moquendo@ipdmail.com
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An Informed
Customer Is NOT a
Sold Customer
By Clint Burns
It’s time to get over the 2014 Hangover. It’s February and we need to get moving! Let’s move forward with the basics of building value for customers. How many times has a customer displayed a bit of knowledge about a car that they are interested in purchasing? Perhaps they ask for something specific, so they must be sold on what they want right? Not exactly. It isn’t always that simple. The obvious trend to anyone who visits a dealership as a customer seems to be that most salespeople are no longer doing a good job of building value for customers. In some cases there appears to be an underlying assumption that, because some customers are so well informed about car buying from more transparent forms of disclosure from dealers, there is no need to build value. They have done it for themselves! Why waste time, right? Well it’s time to stop being passive, feeling undermined and shortcutting. Things change, now it’s time to get creative and figure out a solution. Let me pose this question: What is it that customers CAN’T get from researching online? The ability to feel it, touch it, smell it, and most importantly drive it. Sure a customer can watch videos of people driving a car online. Anyone can listen to reviews, read magazine articles, or tune in to the latest episode of Top Gear to see if that Fiesta really can outmaneuver a Corvette in a car chase through a shopping mall. To an extent, some value can be built there. The problem is that it doesn’t really matter what someone else says about the car that a customer wants. Ultimately, they must perceive value.
The person in the online review might find that new Challenger to be “just stunning,” but what if the customer drives it and thinks the suspension is too stiff. Maybe it feels too heavy for them, or it just doesn’t quite feel like they had hoped. They will never find out until they hop in for a test drive, and they may never hop into a test drive if a salesperson skips it. Statistics show that closing ratios drastically increase after a test drive becomes part of the process, and it clearly builds a unique value for the customer. Why are some managers not making this a priority? Perhaps it is due to the general ambiguity surrounding the current process for taking a test drive. As it stands, a manager may or may not know if and when a salesperson is taking a test drive. They certainly don’t have any informative statistics about the effectiveness of their test drives, what route is being taken, how long the test drive takes, etc… No dealer would feel comfortable not knowing anything about his or her sales or internet teams’ performance. To put it simply, no one wants to be in the dark. It can be a bit terrifying, and in the face of fear lays inaction. No longer ignore our problems, let’s face them. Just as there are modern tools for managing a sales, BDC, or marketing team, there are also modern solutions to ensuring the test drive.
Clint Burns is the CEO/Chairman of theNextUp. For specific questions contact him via - twitter:@@TheNextUp or by e-mail at clint@dealersolutions.info.
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Moving the Auto Industry
Forward by Tony Rimas
I’m truly thankful to be both employed and partnered with one of the top dealers in the country, Marsha McCombs Shields. Her father, Red McCombs, hired me in the early 2000s to work with Rad Weaver with one focus in mind: “sell more cars via the Internet.” What I have since learned was that the request wasn’t just to “sell more cars via the internet,” but it was to push the envelope to make sure our stores and the industry kept moving forward. Rad and I learned quickly that the Internet was going to empower the consumer almost 10x faster than dealers (not to mention the OEM’s). Therefore, we needed to have a laserlike focus on efficiency to service this ever-evolving demand. Thankfully, we work for a very savvy family, which allowed us to make key investments in companies like WholesaleClicks, which provided additional online traffic. Actual online inventory became a real-time requirement; therefore, we invested and partnered with Homenet. The dealership website also became their low-funnel shopper storefront, and we did the same with Clickmotive. I’m proud to say that each of these companies helped us sell more vehicles online and became market-leading vendors. Furthermore, their services are used by thousands of dealers today to accomplish similar efforts. What started out as “just selling
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cars online” became a passion for helping to move the industry forward by making key partnerships that would allow dealers to continue to thrive in an ever competitive market. Now you might be wondering how exactly my partner and I found these companies, and then decided they were promising enough to invest with confidence in an abundant return. Quite simply, we bet on the person first. By that I mean, we looked to see if the owner of the company has had any previous success. Have they funneled their entire life into the business (including their finances)? Do they have FOCUS? Then take a look at their team to see who is driving their success on a daily basis. Really give thought to the viability of the concept behind their product, and ask yourself “how does this help?” Here at Fraser McCombs Capital we have a saying that goes “We want to be leading edge, but not bleeding edge.” For instance, driverless cars that are being developed are bleeding edge. They are very exciting new products, companies or services, but it’s certainly not a guaranteed investment. Very few people can consistently succeed with this sort of extreme change. However, it is much more likely for a company that creates a unique process to somehow streamline moving mobile users to delivery to succeed. That’s what we want.
Tony Rimas, Managing Partner at Fraser McCombs Capital, also serves as the Director of Operations for the McCombs Automotive Group the 52nd largest dealer group in the United States. With an extensive and successful track record working in the entrepreneurial and automotive sectors, He was a natural fit to join Fraser McCombs Capital as Managing Partner. Fraser McCombs Capital, launched in late 2011 by Chase Fraser and Red McCombs, focuses on early-stage technology companies making products for the automotive industry. Fraser McCombs raised $37 million from 35 high-net-worth individual investors, and topped a national list of new venture funds in terms of capital attracted in the first quarter. The fact that there is limited traditional venture capital funding in the industry, combined with Tony and Chase’s decades of work with auto manufacturers and distributors, creates a unique combination for success. With the first fund fully deployed, they are currently focused on launching a second, even larger fund in 2015.
The same goes for your dealership. You want to partner with companies that are fundamentally sound, and have leading edge products, but aren’t necessarily looking to sell you on taking a driverless car onto your lot in 2015. These are simple, practical companies that help by solving fundamental problems that dealers face every day. Now that you have narrowed your horizons to quality businesses, do you prioritize spending for tools or advertising? If you haven’t already, tools should come first. I say that simply because tools help you take better care of your customer. Why would you even want to reach more customers if you can’t properly take care of the few you have now? You will want the proper tools to be in place for top customer retention and satisfaction. Once you have all the necessary tools in place, and have chosen to partner with a company for advertising, keep in mind that attribution is paramount. Can you tie every expense back to an action? Does the company that you have chosen to do business with detail what actions that they will be taking? Think of it like this, you want to spend X amount per action, not spend X amount per campaign. To be successful you will have to hold your vendors accountable. This does not mean that you have to become
an irritable cynic, assuming that everyone is looking to ruin you. It only means that you ask for an ROI. Now you’re set. You can actually manage your dealership. After all, you can’t manage something that you do not control. It’s only once you brought all of these outside influences under control that you will find yourself able to focus intently on ways to be more successful. For us, our main focus today is on mobile platforms and process-based solutions. As the customer becomes more sophisticated, dealers will need better tools to help them engage their customer. We believe these will be customer facing tools (mobile) as well as efficiency tools to help sell more cars in the same or shorter periods of time. We also remain very interested in the “connected car” movement and how it could help us retain customers during vehicle ownership. Bottom line, we will continue to look for great technology and people who can make the automotive retail industry better. Tony Rimas is the Managing Partner at Fraser McCombs Capital Inc. For specific questions contact him via - twitter:@tonyrimas or by e-mail at tony@dealersolutions.info.
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10X Your Resolution Part One
By Grant Cardone
I believe that one of the major reasons why people don’t stick to their goals and fail to accomplish them is because they fail to set them high enough from the beginning. I have read many books on goal setting and have even been to seminars on the topic, and I constantly see people set goals that either never get started or they bail on them quickly. Frequently most of us have been warned against setting goals ‘too high’. The reality is that if you start small, you are probably going to go small. People’s failure to think big enough usually means they will never act big enough, often enough, or persistently enough! After all, who gets excited about so-called realistic goals? And who can stay excited about anything with an—at best—average payoff? To maintain your enthusiasm, you have to make your goals substantial enough that they keep your attention. Indeed, most people are so apathetic about their goals that they only write them down once a year. As far as I’m concerned, nothing worth doing is done only once or twice a year. The things upon which your life depends most are based on the actions you take daily. That is why I make sure to always do two things: 1) I write my goals down every day; and 2) I choose objectives that are just out of reach. This opens me up to my full potential, which I use to fuel my actions each day. Some people suggest that setting improbable goals might cause a person to become disappointed and lose interest. But if your goals are so small that you don’t even need to consider them on a daily basis, then you are going to lose interest!
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Set 10X Goals: A good idea is to word your goals as though you’ve already accomplished them. I keep a legal pad next to my bed so that I can record my goals first thing each morning and right before I go to bed at night. I also keep one in my office on which I record new and improved objectives. The following are examples of some of the goals I am currently working on and how I write them down. Notice that I word them as though I have already achieved each of them (when I have yet to do so). • I own 5,000+ apartments that return over 12% positive cash flow. • I am in perfect health and physical condition. • My net worth is over $100 million. • I have written and published 12 or more best-selling books. • My marriage is alive and healthy and a positive model for others. Keep in mind that these are some of my goals and are only being used to give you an example of how I word them. Average goal setting cannot and will not fuel massive 10X actions. The bigger and more unrealistic your goals are—and the more aligned they are to your purpose and duty—the more they’ll energize and fuel your actions. Grant Cardone is a Best Selling Author & CEO of Grant Cardone Enterprises. For specific questions contact him via - twitter:@grantcardone or by e-mail at grant@dealersolutions.info.
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12
Want a
Wildly
Successful Personal Brand?
Show Yourself Some Love. By Laura Madison
February, a month of romance and expectations, is upon us. As some will be disappointed on Valentines Day, others will experience disappointment by the early failure of their 2015 resolutions. This year make February the month you do something instead of waiting until next January for another try at resolutions. This February, show yourself some damn love. What does self-compassion have to do with your brand? Only everything. Your brand is an extension of you. It exists, both online and in everyday life, whether you capitalize on it or not. Showing yourself, and thus your brand, some love can make an enormous difference in the rest of the year. Here are three ways you can get started: Define, or redefine, your value proposition. A strong value proposition is the key to a successful brand, but often, between monotonous video editing and seemingly endless amounts of social media scheduling, you may have lost sight of the value you were trying to provide. You may have even jumped into branding without ever properly defining that value. What is it that you’re offering customers? Spend some time with this question. It can be an incredibly powerful question to answer, or re-answer. The answer, that thing you offer, will remind you of your movement and act as a content compass for future social media topics and posts. Consider Image. How much love have you shown your brand and audience recently? Take a look at yourself and consider different elements of your brand like dress, attitude, and enthusiasm. What are you wearing to work every day? How are you communicating with customers and prospects? Are your product demonstrations engaging and enthusiastic?
If you notice you are dragging, treat yourself. Grab an ice cream cone or get a relaxing massage. Occupying a better mental place will improve your brand presence on the phone, over video, or in person.
“A moment of self-compassion can change your entire day. A string of such moments can change the course of your life.” ~ Christopher Germer
Feed it. Just like you feed your body with vegetables and protein, show your brand some love by feeding it healthy content and inspiration. Reach outside of your industry to find people who have mastered personal branding and take notes on what they are doing well. Consider hiring a coach to keep you motivated. Dig through social media to find helpful articles. There are so many ways to feed your brand and show it love! These are just a few tips. Other ways to show your brand some love this year include: • Replace self-defeat with self-love. • Do something you’re good at. • Reward yourself. • Allow yourself to dream big without contaminations of judgments or perceived limitations. So as you go shopping for chocolates and roses, remember to keep yourself and your brand in mind—it can make all the difference.
Watch a video of yourself or record a phone call. Look for tone of voice, facial expressions, and overall body language.
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THE PRINCIPAL’S OFFICE with
Corina Diehl
Understanding People to Understand Business By Michael Oquendo Everyone wants a great experience. Whether it’s for necessity, like visiting the grocery store, or for recreation, like going to the mall, is completely irrelevant. People just want to be treated in a personal, caring, genuine fashion. Contrary to popular belief, that does not mean that every customer is looking for a handout. This is not about offering gimmicks, so please don’t misunderstand. A customer experience isn’t about prizes, just as the beach isn’t about a beach ball. Sure a beach ball is fun, but who cares about that if the sand and water are terrible? A customer experience is just as simple, and just as important. That, quite simply, is why dealers across the country have been increasingly focused on creating the best customer experience that they can possibly imagine. The problem is, more seem to be failing than succeeding. Why? If it’s so simple, then why aren’t more people succeeding? Oddly enough, it seems to be because lots of dealers are overcomplicating their customer experience to “make it better.” Of course, they’re not purposely convoluting the situation, but lacking the appropriate priorities. For instance, instead of making the usual predictable decisions (by the way, always making predictable decisions is NOT good) expected of a Dealer Principal, in 2009 Corina Diehl decided to take a risk by doubling the size of her collision center when her dealerships were on the verge of failing. Corina was only able to make this decision because of her ability to make smart business decisions through empathy. She understood that customers in her region experience “a lot of deer accidents,” among other things, which would make a large collision center sensible for her dealership. In fact I would venture to say that, while some might see this as an extremely risky investment, it is only a huge risk to those that lack the vision. Further, anyone that might lack the vision that Corina had simply lacks empathy, which in the business world translates to the ability to utilize an understanding of the needs of your customer base to know what solutions make the most sense. Plus, Corina works to keep her team close. She has a very uplifting work hard, play hard mentality. In fact, she regularly organizes
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events for her team solely for fun. These aren’t business trips with a side of fun. This is a 100% commitment to sharing what she finds fun with everyone around her, which is a fundamental part to her team’s camaraderie. For instance, Corina will book a full VIP floor for her team at a concert, and not just for her top performers. Top performers might get an extra incentive like, say, winning a Rolex. This mentality also reflects on her customer service. More than affecting her decisions on general business strategy, Corina specifically chooses the simple answers to providing the best customer experience. Sure a great looking showroom is nice, but customers still hate waiting. Because of her success there are some days where reps are genuinely unavailable due to helping other customers. Instead of throwing her hands up in surrender over her inability to aid the waiting customers, she created a simple solution: why not give the customer the keys to demo a vehicle? Let them drive the car they’re interested in buying down to the mall (very close to her dealerships) for lunch. Hand them a gift card for lunch or for shopping at the mall, coupled with the keys to test a new car, and see if your customer is still unhappy with waiting. Will this work 100% of the time? Perhaps not. But then, nothing does. Will it improve your customer experience? Absolutely. If you don’t have a mall near your dealership, understand this, it’s not about the mall. It’s about empathizing with your customer to understand that no one likes waiting. Find a way to make waiting fun! Share fun things with your team. Both will vastly improve your customer experience. You will find happy customers because of your personal treatment, and a team that is happy to help them because they love where they work. It really is that simple.
Corina Diehl is President/CEO of Diehl Automotive. For specific questions contact her via - twitter:@corinasdiehl or by e-mail at corina@dealersolutions.info.
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THE MYTHS OF WRITING SERVICE Part 2
BY JEFF COWAN
As you remember from my article last month, myths can be very dangerous things. They can and will impede your ability to grow, expand and succeed. I discussed some of the biggest myths surrounding the writing of service and will list a few more here today that have come up and continue to come up in the many meetings I am asked to speak at throughout the year. Myth: Service writers do not need the same amount of training as the car sales staff. Fact: A Service Advisor who works with just fifteen customers a day will generate more gross profit for a dealership in a month than a sales person does who delivers thirty vehicles in that same month. In addition, due to the volume of customers they will talk to in a month, they will have more impact on your survey scores and customer retention than any other employee in the dealership, including the dealer. So why would they not need the same amount of training or more? Myth: Women service writers who are mothers are risky due to parental responsibilities. Fact: Tell that to Abigail Adams, wife to President John Adams. While John was overseas for many years, she stayed behind and ran the farm, ran John’s businesses and raised 6 kids, one of which grew up to be our nation’s sixth president. One of my daughters is at the child bearing age. She and ten of her close friends have all had children in the past twentyfour months. While one of them quit her career and became a stay/work at home mom, the other nine not only continued their careers, but eight of them actually increased their hours or took on more responsibility. Why? Because they quickly realized that if their kids were to have a life equal to or greater than their own, they had to work harder and smarter. If all things are equal and I have the opportunity to hire a male service writer versus a female service writer with kids, especially young ones, I will take the female with kids every time. Think grizzly bear with cubs.
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Myth: Service writers who work in economically challenged areas cannot sell as much as service writers who work in affluent areas. Fact: Many times, they can sell more for one simple reason; the more financially challenged a person is, the more important their vehicle becomes to them. Financially challenged customers know that if their vehicle does not run and they cannot get to work, then their financial situation will only get worse. I have worked in countless service drives with countless service advisors where their customers were financially challenged and the sales made were either equal to or greater than those in service departments where the reverse was true. The difference iÂŹs that the financially challenged customer requires a service advisor who has a slightly different skill set and outstanding follow-up and over the telephone selling skills. Myth: Women service writers have a tougher time in service because men prefer to talk with men. Fact: This is not a gender specific problem. A service advisor who is strong at taking control of the customer and exudes confidence, can and will be able to handle your customers. While this myth used to have some validity twenty years ago, it has none today. If I were to list the top ten service advisors that I have worked with over the past twenty-nine years, seven of the top ten would be women. Myth: It does not take as much skill to be a quick service writer as it does to be a full shop service writer. Fact: Arguably, it takes more. Think about it. A quick service writer is many times the first person a new customer will work with in service after purchasing a new vehicle. Their ability to handle your customer and convince them that your shop is the only place to go for service, has to be near perfect, if not perfect, to get the job done. Although the path to full shop writer begins many times in express, the express writer should be trained to expertly handle any scenario that
a full shop writer would. Again, they are likely to be the first point of face to face contact in the dealership after purchasing a new vehicle. Express should be trained to impress – every time, on every level.
Fact: Only if they write ten to fifteen repair orders a day. Just like on the vehicle sales side, you want to free your service writers (sales people) up as much as you can, to talk to your customers. Sales people make the most money when they are talking to your customers. The more time they have to talk to your customers, the more money they will make you. Through the early 1960’s, vehicle sales people answered the dealership’s incoming sales calls, did their own financing and helped people when they came in for service. When dealers realized that those activities kept their sales staff in the building and not out on the lot where the buyers where, it ushered in the era of the telephone receptionist, the F & I department and service staff, and significantly more vehicles were sold. The more you can do to support your advisors by freeing them up to talk to your customers, the higher your retention, survey scores and sales will be.
Myth: It is impossible to train veteran service writers to adapt to changes in their customers’ demands and in new technology.
Myth: Service writers will not sell or are not good at selling additional products like special wheels, extended warranties, details, etc.
Fact: Not if you have established a culture of constant change in your department. The service writer or employee who cannot adapt to change and evolution in retail sales will become a dinosaur within five years. When you consider how rapidly your customers and their buying habits have changed in just the past few years, and how rapidly technology changes, any employee who can not keep up is costing you money. In the future there will be two types of sales people; those who sell technology and those who use it. The rest will become obsolete.
Fact: Not true. To sell anything on a service drive requires three things; a great product, great training in how to present and sell it, and a great pay plan.
Myth: Service writers can handle setting their own check-in times, checking in your customers’ vehicles, following up on those customers throughout the day, closing those customers over the telephone, closing out their own repair orders, contact customers who have been waiting for parts, cashier their own customers, actively deliver vehicles back to each customer as the vehicle repairs are completed, send a thank you note to each customer, contact customers who missed their check in times, contact customers who previously declined repairs, contact customers they have not seen in over six months, while at the same time getting and maintaining high survey scores and customer retention.
If you are consistently not hitting your sales, retention and survey goals, it is a sign of great weakness not to try something new. Trying something new can be as simple as taking a look at what you or your staff say can’t be done, and testing to see if the reason is based on fact or myth. You should make this a common practice and part of your monthly routine to dispel myths that may exist in your work place. I get blamed from time to time for being too willing to test and eliminate these myths and reasons that hold my business back. I am told I need more patience. The fact is, I do have patience for the time it sometimes takes for myths to be tested. What I do not have patience for is the lost customers and revenues that myths produce. Jeff Cowan is the CEO of Pro Talk. For specific questions contact him via twitter - @JCowansProTalk or by e-mail at jeff@dealersolutions.info.
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PASSION By David Villa
18
as a sales tool
We all know that sales is really all about “closing the sale”. There is not a salesperson alive who does not use a variety of techniques to help them be successful with customers. However, I believe passion is the most underrated and underutilized sales tool in our arsenal because it is too hard to measure and no one has found an effective way to teach it. Why don’t more people use passion to their advantage? It’s simple. Passion exists in those who are humble, focused, and unlikely to advertise their expertise. Passion is an effective sales tool because it isn’t artificial and can’t be faked for a long period of time. It is displayed in people who genuinely care and are willing to take the time to serve their customers in whatever manner is necessary. If your mindset is not to compassionately serve people, you can stop reading because the rest of this article is not for you. If you do have a willingness to serve and demonstrate concern, then continue reading. Passion in sales is evident when the sales person takes the time to listen to their customer and attempts to really understand what it is they are looking for. It is displayed not only in the questions that are asked, but also in the tone of voice and body language that are used and the followup demonstrated after the sales call. Sales people who have passion are able to create long-term profitable relationships with their customers. They also routinely benefit from referrals by their existing clients and, on many occasions, these prospects come to them ready to buy. It’s ironic to note that the individual characteristics that reveal passion are also the same characteristics that are demonstrated by many top-performing sales people. HOWEVER, WITHOUT PASSION RESULTING IN A STEADY SUPPLY OF NEW PROSPECTS, their status at the top is short-lived. Before you rush out to practice your body language and tone of voice in an attempt to find passion, let me add the secret ingredient: HEART. Passion comes from a genuine belief of wanting to help the customer in both good times and bad. It is at its truest form when things are not going well for either the sales person or the customer and the sales person is still willing to serve first and sell
second. Don’t get me wrong: having passion does not mean you’re giving up profit indefinitely. It might mean you are sacrificing a little short-term gain, but when you are committed to having passion for your customers, you will achieve a higher level of long-term profit, not only from the customer you’re serving, but also from the referrals they bring you. Passion can actually be measured in a couple of ways. Begin by asking yourself this simple question: “When the day is over and my customers are reflecting back on the people they’ve interacted with and the activities they’ve done, do they think of me in a positive light that contributed to them having a good day?” It is important to consider whether your customers truly believe you are helping improve their day or simply contributing to the chaos of it. Another assessment tool is found in analyzing the number of referrals you get. Referrals are an accurate measurement of how your customers view you, even more than repeat business with a current customer. If they honestly believe in you, they recommend you to others. (Keep in mind, however, that if they don’t like you, they’ll still talk about you, just in a negative light.) Passion in sales is underrated. Therefore, your ability to genuinely care about your customers, to show an interest in them, and to serve them will determine your long-term sales success.
David Villa is the President & CEO of IPD. For specific questions contact him via - twitter:@ipdmail or by e-mail at davidv@dealersolutions.info.
19
Giving Yourself A Raise By Tim Byrd
By Tim Byrd
What could you, as the dealer, do to put more income in your own pocket? You sell a car and turn the customer over to F&I who sells them protection packages and warranties, for a profit, of course. How much of that sale do you think actually ends up in your own pocket? Whatever you answered, it can and should be substantially more. How? One area that you may have overlooked is Reinsurance. Reinsurance is one of the smartest things a car dealer can do. With a Dealer-owned Reinsurance Company all the products you sell your car buying customer such as Vehicle Service Contracts, Tire Warranties, Door Ding, Windshield, Key, GAP, Interior/Exterior protection warranties can all be reinsured. Pick a product or warranty you sell where the dealer cost is, say, $595. You may currently be buying this product from a thirdparty warranty company. When the warranty is remitted to the administrator, it’s broken down into admin fees (overhead) and reserve (set aside for claims). So for this example, of the $595 let’s say $65 is the admin fee and $530 is reserve. The $530 in reserve is put in trust in consideration of future claims (this is similar to how all warranty companies are structured). Of course the dollar figures are simply for example. If you sold 10 in a month 20
you would submit $5300 to reserve. Over ten months $53,000. When the warranties expired let us say, for example, you had claims totaling $20,000 or 38%. The underwriting profit would be $33,000. If you are purchasing the warranty from a third-party, the underwriting profit of $33,000 would be in addition to their profit from their portion of the admin fee. By owning a Dealer-owned Reinsurance company this underwriting profit would belong to you the dealer. This profit would not be reflected on your dealership books because your reinsurance company is a third-party company, as any other third-party entity is. The difference is you own it, so you profit from it. Another great reason to own a reinsurance company is reinsurance companies are small Property and Causality companies. “Small property and casualty insurance companies with less than $1,200,000 in annual net premiums may elect to be taxed only on investment income under Internal Revenue Code 831(b).” My advice to you would be to identify any products you are currently selling that are not reinsured. There is certainly great potential for additional profit for you the dealer through reinsurance. Give yourself a raise, it’s what smart dealers do. Tim Byrd is the Founder and President of DealerRE For specific questions contact him via - twitter:@TimByrdRE1 or by e-mail at tim@dealersolutions.info.
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5
Steps to Make
Each Day a Masterpiece By Dave Anderson
Leaders of organizations spend much time giving thought to, creating, and communicating annual visions for their enterprises; then breaking them down into monthly forecasts for their teams to achieve. These “big pictures” provide essential direction, unity, and meaning in the workplace. While longer term planning is vital, the bulk of organizational discussion focuses on the question, “Where do we want to go?” and not nearly enough on the rubber-meets-the-road proposition: “What must we execute DAILY to get there?” This out-of-balance approach is somewhat understandable because vision casting and goal setting is fun, creative and inspiring. Strategic and tactical planning, on the other hand, is mundane and harder work. It requires deeper thinking, more specificity, and often results in the awakening that a change in the daily routine of people is needed; change that can bring both pain and discomfort.
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The reality is, in order to consistently achieve goals you’ve never reached before, your team must consistently do daily what they’ve never done before; including executing like they’ve never executed before. In short, the goal must be to make each day a masterpiece. I first heard the mantra, “Make each day a masterpiece” from the late UCLA men’s basketball coach John Wooden. Wooden was known for his intensely structured practices that required perfecting basic drills to the point of exhaustion. Wooden famously observed, “I don’t worry about game day. We practice so intensely in-between the game days, focusing on making each day a masterpiece, the games tend to care of themselves.” Indeed they did; Coach Wooden’s teams won ten national championships in twelve years, including an astonishing seven in a row, and four undefeated seasons sprinkled in for good measure.
1 2 3 4 5
Following are five thoughts for helping you and your team make each day a masterpiece: Redirect more of your focus and energy away from lag measures and to the daily lead measures that create them. Lag measures are outcomes; lead measures are the essential activities that create them. Lag measures are the result; lead measures foretell the result. There’s far too much discussion in dealerships about the “numbers” and anemic focus on managing the daily activities necessary to make them reality. Identify and communicate the key lead measures for each position. We’re not talking forty things, or fourteen things, but the two or three things most essential for creating the desired result; the lag measure. The wrong strategy question for reaching a lag measure is: “What’s everything we can do to achieve the outcome?”, because you don’t have the time or energy to do EVERYTHING that would contribute to the goal; and some of the activities would bring only a modicum return and siphon time from higher return lead measures. The right strategy question is: “What are the fewest battles necessary to win the war?” This narrows your focus to the highest leverage daily actions. Outline key lead measures in PSP’s. A PSP is a Personalized Success Profile that outlines, in writing, the key lead measures each team member must execute as a daily priority. PSP’s eliminate gray areas, and provide clear direction about each day’s most important tasks. They can be updated as needed; seasonally, or in response to market shifts. PSP’s become a coaching tool for managers to help their team grow and should include: • The two or three key daily lead measures most relevant to creating the desired lag measure. • Essential weekly activities: these are tasks that don’t have to be done every day, but should be executed at some point during the week. • Essential monthly activities: these are responsibilities that needn’t be done daily or weekly, but should be completed at some point during the month. Train people to execute with excellence the lead measures you’ve outlined in their PSP’s. If one of your salesperson’s lead measures is “X shown appointments” daily, your responsibility is to provide the training and support systems so he can make effective phone calls, set and confirm appointments, and follow up effectively with no-shows. In fact, as with John Wooden’s championship teams, this skill should be continually drilled on and perfected. Hold people accountable for daily execution of the lead measures you’ve outlined as non-negotiable. A lead measure is a daily behavioral standard not a behavioral suggestion, which means those who don’t execute it, should be quickly held accountable for their failure. At the end of the day, people do what they’re held accountable for and somewhere along the line that is going to have to involve consequences built into a system of progressive discipline that gives the required credibility to the daily tasks you have outlined as non-negotiable.
In my The Five Disciplines of Execution (5DX) workshop, I present a strategy that has each team member post his or her lead measure results on a scoreboard during an earlymorning Rhythm of Accountability Meeting (a five-minute, roll-call-style stand-up gathering). The forum this provides for quickly recognizing those performing well, and exposing those who do not, is a cultural game-changer; especially when one understands the dynamics of reporting to, and being held accountable by, an entire team and not just the boss. The clients who have installed 5DX in their culture attest to the incredible impact it has had on focus, morale, momentum and results.
the next step already-successful entities need to become great. Any journey to greatness starts with the understanding that, when all is said and done attaining greatness won’t depend upon brilliance of your plan, but on the consistency of right actions; that corporate vision and monthly forecasts aren’t “destination things”; they’re daily things.
David Anderson is the President of Learn to Lead. For specific questions contact him via twitter:@daveanderson100 or by e-mail at davida@dealersolutions.info.
Based on my experience in helping good organizations become great, I am convinced that a more ferocious focus on identifying and executing key daily lead measures is
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By: Bob Burg
As they walk toward you, the attractive, young-middle aged couple, they just look like they want your vehicle, they certainly appear to be able to afford it, and you’re hoping they’re not the shopping around type but just want to get their car-buying over with.
And (and this is key): “Value is always in the eyes of the beholder.”
But, there are two problems with that:
It isn’t what you believe is valuable about your vehicle and it isn’t what you think they should believe is valuable about it. What do they believe about your vehicle (and the ongoing caring they’ll receive from you and the dealership) that brings value to them above and beyond what your competitors selling the exact same product are communicating?
The first is that:
It all begins with what I call The Golden Rule of Sales, which is:
“No one is going to buy from you because you have a quota to meet, you really need the sale, or even that you really love your product and think they should own it.”
“All things being equal, people will do business with, and refer business to, those people they know, like, and trust.”
At least that’s what you’re telling yourself because, well…you need this sale.
The second problem is that, because you are focused on yourself (and on the commission) you cannot adequately focus on them. And, if you cannot truly be 100 percent focused on them, you put yourself at a huge disadvantage in the selling process: namely, you won’t find out exactly what they want and need. And, if you cannot effectively determine that the chances are far less likely the sale will occur. After all, when it comes right down to it: “Successful selling is all about finding out what your prospective customer wants and needs…and helping them to get it.” So, the suggestion is to shift your focus – shift your focus from “getting a commission” to giving exceptional value to your prospects. But, please don’t confuse value with price. Price is the dollar figure. Value is the “relative worth or desirability of a thing to the end user or beholder.”
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And, there’s no faster, more powerful, or more effective way to elicit these know, like, and trust feelings toward you from your prospective customers than by focusing on them rather than on yourself. In John David Mann’s and my book, The Go-Giver, Law #3, The Law of Influence states: “Your influence is determined by how abundantly you place other peoples’ interests first.” Of course, that doesn’t mean that you should be anyone’s doormat or in any way self-sacrificial. It simply means that when you move from an I or “me-focus” to an “other-focus,” you naturally bring more value to — and hold more value to — that person. As Sam, one of the mentors in the story advised the protégée, Joe: “Make your win about the other person’s win.”
In other words, to the degree you can take your focus off of yourself and place it onto the other person, that’s the degree to which you yourself will become successful; it’s the degree that you’ll have customers who love you, who buy from you again and again, and refer lots of other people to you. They will become your Personal, Walking Ambassadors! Shift your focus from getting to giving (in this context, giving means being constantly and consistently focused on providing value to others). Become unabashedly, unabridgedly, laser-focused on making this experience the most phenomenal customer-based experience they’ve ever had. You know, the Old English root of the word Sell was “Sellan” which literally meant, “To give.” Exactly what are you giving when you are in the selling process? If you are doing it correctly, I suggest you’re giving: Time; attention; counsel; education; empathy; and, most of all, value. How do you believe your prospect would then feel about you? Would they be more likely to buy from you? To want to do business with you?
To make you a part of their life? Would they be more interested in your success? Would they be more excited about referring/introducing you to those they care about so that you could make your win about their wins, as well? Of course. And this is exactly how the most successful automotive sales professionals conduct their business. They know that, when it comes right down to it: “Money is an echo of value. It’s the thunder to value’s lightning.” Yes, the focus must be on them. The money you’ll receive in the form of a commission is simply a very natural and direct result of the value you’ve provided through that focus.
Bob Burg is a Bestselling Author & the Founder of Certified Go-Giver Coaching Program. For specific questions contact him via - twitter:@BobBurg or by e-mail at BobB@dealersolutions.info.
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Winning
Demonstrations By Tom Hopkins
When it comes time to demonstrate a vehicle, you need to be very well prepared. Too many automotive salespeople invest most of their preparation time in vehicle knowledge, which is very important, but spend little time thinking about how to actually demonstrate vehicles so their clients quickly envision themselves as owners. There are very specific things you can do to accelerate their acceptance of a vehicle, thus leading to more closed sales. Before getting to the point of demonstrating, you have to use your other selling skills well. Let’s say you did just that. You used some of your excellent prospecting methods to find a couple who needs a new vehicle. You made a competent original contact and warmed them up nicely. They seem very comfortable with you. You qualified them as to their needs by asking the right questions and are confident you have a vehicle that will truly be good for them. Now, it’s time for the show to begin…and you are the master of ceremonies. Are you properly prepared for this step in the sales process? Giving a winning demonstration is not unlike presenting at the Oscars. It’s not easy preparing for such a major event. Even tougher is performing before all of the best and brightest in Hollywood, not to mention the millions of television viewers.
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Chances are good that you will probably never have to face such a challenge. However, every demonstration you make can potentially earn you the award of a new client, a hefty addition to the company’s bottom line and a nice little “fee for service” for you and your loved ones to enjoy. Always keep the potential reward in mind when you are preplanning a demonstration. That reward or goal should be inspiration enough to keep you working on honing your demonstration skills until they are as smooth as silk. While most people agree that the fun is in the demonstrating, too many fail to prepare properly. Doing your homework is vital. Knowing the decision-maker’s history, his or her likes, and dislikes will help you direct your demonstration in a manner that will be well received. In some cases, you may get the feeling that the decisionmaker is challenging you to demonstrate and present an offer better than he or she can decline. They may come across like this, “Okay, Mr./Ms. Professional Salesperson, you’ve got my attention and you have 20 minutes to show me why I should part with my hard-earned money for your vehicle.” It’s almost like a dare with some people. So, you have to be prepared to dazzle them during your demonstration. Tom Hopkinsis the President and Founder of Tom Hopkins International. For specific questions contact him via - twitter:@TomHopkinsSales or by e-mail at TomH@dealersolutions.info.
STAY OUT OF THE
FINANCIAL DANGER ZONE OF
“FALSE POSITIVE” By Matt Manero
The concept of “false positive” is, in my opinion, the most dangerous trap anyone trying to build financial wealth can fall into. It is imperative that anyone on the road success does everything in their power to stay out of false positive and, by doing this, financial success is far more attainable. What is false positive? False Positive occurs when you have started to gain initial financial traction in your career, and you start to look for ways to spend rather than save your money. We see examples of this everywhere. In Texas we call it “big hat...no cattle.” Here are two perfect examples of false positive. Example #1 – Starting from Broke: You start a new job, broke, and are terrified that you will not be able to pay the bills in the coming months. You bust your butt to meet your financial obligations and finally you start to see some success. Your confidence goes up, the commission checks start to flow and you can take your significant other out for a fancy steak dinner. DANGER… HERE COMES THE FALSE POSITIVE! You start thinking about ways spend your money. First it’s the hot car, then a better, more expensive house and finally that boat you have always had your eye on. As exciting as all those purchases are in the moment, you have yet to build financial success, you are just not broke anymore. It is important to not let yourself get caught up in this classic example of false positive thinking, it can kill the path to financial freedom. Example #2 – You Are Already Making Money: Your career is going well and you are long past worrying about the bills getting paid. You live in a nice house, drive a nice ride and take $20,000 vacations with your family. But do you really have enough money to be doing these things? My guess is NO and here is the math to prove it: Even if you have saved $1,000,000 and you put it into tax free municipal bonds that pay you, say, 3% per year that equates to $30,000 per year or $2,500 per month. Does that sound like the ideal retirement you had hoped for? Let’s get real
here, you are very possibly in false positive mode, but just do not want to believe it. There is hope! Here is how to stay out of false positive: In example #1, you need to do the exact opposite of what you are thinking. DO NOT BUY ANYTHING, DO NOT EVEN THINK ABOUT BUYING ANYTHING, AND DO NOT SPEND A DIME! The pressure you felt when you were broke is what I call “low level pressure.” Anyone would feel the same pressure if they were also facing tough times. Yes, you are now out of the low level pressure, but financial success is still a long way away. Focus on making more money, saving more money and spending nothing. In example #2, you need to pick a higher income goal and push yourself to the next level. If you are making $125,000 per year, push yourself to make $250,000. If you are making $250,000 per year, push yourself to make $500,000. Determine the dollar amount your household needs to live on each month, including your date nights, vacations, etc. and SAVE the difference. Every dollar you earn above your household needs should be put into a separate bank account that is untouchable. The key is to accumulate more cash NOW! The investment type you will use for this cash is far less important than the need to simply accumulate more cash. Once you have the cash built up, something magical happens…as your net worth grows more opportunities will come to you. The key is to be in a position to take advantage of the opportunities when they show up which will be impossible if you do not have the cash built up. You know the neighbors and friends who are caught up in false positive…it’s a very dangerous place to live. Decide now that you will not fall into the trap, your financial future depends on it. Matt Manero is the President and Founder of Commercial Fleet Financing, Inc. For specific questions contact him via - twitter:@MattManero or by e-mail at mattm@dealersolutions.info.
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When Implied Permission is NOT GRANTED by Don O’Neill
First I want to start by saying that I never hawk our wares in the articles that I write. I feel that these articles are mean to share insight, provide dealers with a definitive plan of action or at least a few action items that they can implement. The pitch, as they say, has its place ad time. But for the sake of disclosure I will say that the topic in this month’s article, deals directly within our vertical, and I have very strong opinions with regards to our space. Being on the dealer side for a good period of time, and having run multiple points, I have had to deal with every type of vendor. The good, the bad and sometimes the ugly. What I did was constantly educate myself in those matters which I didn’t feel comfortable simply taking a vendors word. I wanted to be dangerously educated on those points of engagement where the only control I had was the vendor I chose. That ever elusive service lane sale is the gold, the lifeblood of the incremental sales in any thriving dealership. There are challenges, but we all know we can tap that lane for sales each and every month. However, when Bob and Betty Smith come in for an oil change there is NO implied permission to introduce a sales process. So being hounded by a sales person was not in the cards this morning. There was one thing we forgot to talk about. Can Bob and Betty still buy a car? Do they actually still have the credit worthiness to purchase? Or did that co-signing for the grandchildren finally blow up in their face?
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The reality is that your process, no matter how good, and your equity mining, no matter how good, can tell you if their vehicle is on your hit list if they have equity, if it is a hit list market piece. But it cannot tell you if the customer can buy. So, let’s prescreen them. Let’s ensure that the only people we talk to today in the service lane, are the ones we can sell. Let’s present a value proposition instead of a sales pitch. Let’s make sure that the transactions are efficient. All this can be done with pre-screening. But, ooooh beware. There are some pretenders out there. There are some who will give you a FICO score and model. What’s the problem with that? Ask your banks if they will utilize a FICO model for decisioning. The reality is I hear every once in a blue moon, that a dealer would rather save the $200.00 and go with the cheapest solution. His choice. But as important as the tool is in its operational role, that’s like saying I want the cheapest brake pads. Or, hey doc, just fix the one valve in my heart… how much would that cost me? The point is that we have tools that help us sell, tools that don’t, and some that play house and pretend. Don’t be that guy or girl who jumps over that pile of profit and picks up the quarter. There are times to cut corners, and times to pay the toll and put our foot on the gas. Don O’Neill is the V.P. of Sales and Marketing of CreditMiner. For specific questions contact him via - twitter:@CreditMiner or by e-mail at don@dealersolutions.info.
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