Dealership Innovation Guide - Q2 2012

Dealership

INNOVATION

GUIDE

A DrivingSales Publication

Quar terly Ranking of Dealership Vendors and Best Practices 2nd Quarter • 2012

State of Auto Service

Loyalty

By Mike Martinez - Page 30

Creating An Online Footprint From The Ground Up

By Russ Chandler - Page 42

Holding Your Salespeople Accountable

By Hunter Swift - Page 20

GOT WOW! Benefits of Investing in a Customer Engagement Program

By Jeremy Alicandri - Page 14

How

SCOTT PITMAN Became the #1 Dealer & Changed a Community Page 24

Dealers Now Rating Over 800 Vendors INSIDE: A Look at the Top Vendors from Q1 - Page 6

Visit DrivingSales.com to view more than 5,000 verified dealer ratings of over 800 vendors in 27 categories.

46% of my loyal customers are over 50 years old.

I need a way to reach the next generation of car buyers!

Introducing

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Dealer Branded Mobile App from DMEautomotive

Dealers who want to shed their “senior center” image need to embrace new ways of communicating to younger generations.

Learn more in our latest WHITE PAPER

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2 • 2nd Quarter - 2012 • DrivingSales

“Marketing Success in a Changing Service Loyalty Landscape”

Free download available at DMEautomotive.com Dealership Innovation Guide

Dealership

INNOVATION

GUIDE

A DrivingSales Publication

Quar terly Ranking of Dealership Vendors and Best Prac tices

Dealership Executives, The auto industry is tearing through 2012 like a force to be reckoned with. We’re seeing loads of activity on DrivingSales.com. More dealers are blogging, engagement has doubled since this time last year, and discussions are active and diversified. Not to mention dealers can now rate over 800 vendors in the Vendor Ratings, and more are being added every day. Dealers are infused with the excitement of the industry outlook, and with summer around the corner, there’re sales to be made.

At DrivingSales, we’re right there along with you. Between doubling the number of employees for our company and seeing another triple digit growth year in 2011, we’re continually working to move the needle to make the auto industry better for dealers. I can’t spill all the beans just yet, but you won’t want to miss some huge announcements we have in store for later this year.

For now, we’ve made this issue of the Dealership Innovation Guide as diverse as the discussions on DrivingSales.com. Here, you’ll find everything from research on auto service loyalty, step-by-step experience of building an online footprint, strategies to holding your salespeople accountable, the benefits of investing in a customer engagement program, and so much more. We’ve also featured Scott Pitman, the #1 Suzuki dealer in the country, and what his road to success entailed.

We’re all always trying to create our road to success and raise the bar. If that’s your goal, you won’t want to miss this year’s DrivingSales Executive Summit at the Bellagio Las Vegas October 21st - 23rd. As the most distinguished retail automotive event for Dealer Executives, you won’t have to sift through sales pitches for useful information. DSES is a dealer-driven event prefaced on innovation and actionable strategies that you can take back to your store. You won’t want to miss it.

As always, DrivingSales is committed to you, the dealer. If you have any feedback, ideas, or questions, please don’t hesitate to reach out. We’re always here to help.

Sincerely,

Jared Hamilton, Founder of

DrivingSales Inc, is a third-generation car dealer and technology geek. His passion for this industry and for tech has inspired him to help dealers gain access to better information, faster.

This guide is meant to be used within dealerships to keep dealers informed about emerging trends in vendor products and world-wide best practices. Find this content online at dealershipinnovationguide.com.

Meet the Dealership Innovation Guide Team Jared Hamilton Founder, DrivingSales Inc. @drivingsales Lindsey Auguste Editorial Director lindsey@drivingsales.com @lindseyauguste Jeff Pease Design Specialist jeff@drivingsales.com @jeffpease Larry Schlagheck Director of Advertising larry@drivingsales.com @ larryschlagheck Bart Wilson Business Development bart.wilson@drivingsales.com @bartrwilson

Jared Hamilton Founder, DrivingSales Inc.

Paul Hamilton Production Manager paul@drivingsales.com @ pbhamilton Tommy Bay Director of Marketing tommybay@drivingsales.com @tommybay

Dealership Innovation Guide

DrivingSales • 2nd Quarter - 2012 • 3

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MAGAZINE CREDITS About This Guide Dealership Innovation Guide is published quarterly by DrivingSales.com. To subscribe, visit DealershipInnovationGuide. com. Printed in the United States of America. Copyright © DrivingSales.com 2012. All rights reserved. No part of this publication may be reprinted or otherwise reproduced without publisher’s written permission. Dealership Innovation Guide and DrivingSales.com assumes no responsibility for unsolicited manuscripts or photographs.

4 • 2nd Quarter - 2012 • DrivingSales

Letters To The Editor Dealership Innovation Guide and DrivingSales.com welcome letters to the Editor. If you have questions about the guide, or would like to make a comment, or voice an opinion about the guide, DrivingSales.com, or the industry in general, please feel free to write us.

Please send letters to lindsey@drivingsales.com. Include a telephone number and address (preferably email address).

Letters may be edited for clarity or space. Because of the high volume of mail we receive, we cannot respond to all letters.

Dealership Innovation Guide

Contents 2nd Quarter - 2012

FEATURES 1 4 Got Wow! Benefits of Investing in a Customer Engagement Program

By Jeremy Alicandri

1 8 3 Simple Steps For Putting The Internet to Work in Your Market

By Matt Murray

2 0 Holding Your Salespeople Accountable

By Hunter Swift

COVER STORY 24

Being #1: How Suzuki of Wichita Changed a Community

By Lindsey Auguste

6

Transparent in Your Pricing

By Jared Hamilton

3 0 State of Auto Service Loyalty

By MIke Martinez

3 6 Profiting From Product Integration

By Dennis Galbraith and Lindsey Auguste

4 2 Creating an Online Footprint On DrivingSales.com, dealers can rate their vendors. All reviews are verified to be legit and posted, for you to learn who the best vendors are directly from your peers. A summary of the ratings is published in this quarterly guide.

35

2 8 Process Point: Be

From The Ground Up

By Russ Chandler

4 4 Handle With Care: Using Internet Chat to Create Quality Leads

By Merritt Critcher

Mobile Apps vs Mobile Web [infographic]

Dealership Innovation Guide

DrivingSales • 2nd Quarter - 2012 • 5

Over 10,500 unbiased vendor ratings submitted by verified dealers.

CATEGORIES 8

Call Management Chat CRM Fixed Operations

9

CRM Sales Department DMS

10

ILM Inventory Pricing Internet Trainers

11

Mobile Sites New Car Leads

12

Owner Marketing Reputation Management

13

Search Engine Optimization (SEO) SEM - PPC

14

Used Car Advertising Websites

View detailed vendor reviews written by verified dealers at DrivingSales.com/Ratings

6 • 2nd Quarter - 2012 • DrivingSales

Dealership Innovation Guide

How Vendor Ratings Work The DrivingSales Vendor Ratings site is the first formal mechanism for dealers to rate and review their vendors in a comprehensive, real-time vendor directory. It empowers dealers by allowing them to learn about all the solutions available and to view actual customer feedback, both good and bad, about how each solution actually performs.

Rules • •

•

•

Only dealership employees can post ratings and reviews. Reviewers are verified to ensure they are valid and eligible to leave reviews.

Dealership employees can only rate and review the products they have experience using. The ratings are a chance to hear from actual customers with live experience using the solutions in their stores.

Each reviewer must answer three questions to complete their rating: 1. How many stars does the solution deserve?

2. Would you recommend the solution to a friend?

3. Why would or wouldn’t you recommend the solution?

All three components of the review, along with the job title of the reviewer, are posted live to DrivingSales.com for all to reference when selecting new vendors.

Safeguards •

•

DrivingSales.com protects the anonymity of each dealer employee who leaves a rating and review. However, DrivingSales requires valid name and contact information for each reviewer so that each reviewer can be validated.

Each review is passed through a variety of technological checkpoints to ensure vendors are not gaming the system. Furthermore, DrivingSales staff calls to verify a large percentage of the reviews.

Vendor Ranking In each product category the vendor solutions are ranked in real-time as each new dealer rating is submitted. The vendor products are ranked based on a weighted Bayesian Algorithm. This is a standard mathematical calculation that looks at the number of stars the reviewer gave as well as the statistically valid sample size needed, relative to the competitive set, to create a ranking based on the statistical accuracy of the results. Sometimes a company with 3 stars will rate above a company with 4 stars if mathematically the first company has a higher probability of success based on the submitted reviews.

We encourage all dealers to rate and review their vendors by visiting DrivingSales.com/Ratings

Dealer Satisfaction Awards The DrivingSales Dealer Satisfaction Awards recognize those solutions with the highest vendor ratings. For each category within the vendor ratings there are three award winners, the “Highest Rated” vendor and two “Top Rated” vendors. These awards reflect products and providers with a proven record of success and excellence in serving their dealer clients. The Dealer Satisfaction Award trophies are presented annually.

Rankings Only dealership employees are allowed to rate their vendors on DrivingSales.com and all submitted ratings are verified. The vendors are then scored and ranked using a weighted Bayesian Algorithm (shown below).

Sometimes a company with 3 stars will rate above a company with 4 stars if mathematically the first company has a higher probability of success based on the submitted reviews.

w = (m*v 2 )*r+(v 2 *m)*c

The Vendor Ratings in this issue are based on the aggregate of all dealer ratings submitted from April 1, 2011 to March 31, 2012. *Category scores are computed per category and are not comparable across the board.

For questions about Vendor Ratings, please contact bart@drivingsales.com Dealership Innovation Guide

DrivingSales • 2nd Quarter - 2012 • 7

Call Management Solutions that track inbound calls through designated tracking phone numbers so that you can manage your marketing spend and increase ROI.

Company

Product

Score Rating Rec

Callbright

Inbound Lead Tracker

157.71

Century Interactive

Call Tracking

CallSource CallTracking Who’sCalling Dealer.com

Who’sCalling CallTracking

633.53

100%

27.75

67%

7.85

9.95

100%

100% 75%

Chat Products These solutions allow you to meet, greet and converse with customers who visit your website, as well as set appointments, generate leads and provide better customer service.

Company

Product

Score Rating Rec

Activengage

Activengage Chat

180.06

ContactAtOnce! LLC Dealer eProcess CarChat24

Client~ConneXion

ContactAtOnce! Auto Dealer Chat PRO-ACTIVE Live Chat

CarChat24 - 24/7 Fully Staffed Chat~ConneXion

640.82

98%

25.65

100%

2.05 .258

99%

100% 100%

CRM / Fixed Ops CRM - Fixed Ops: Customer Relationship Management systems for the Fixed Operations.

Company

Product

Score Rating Rec

Dealer e Process

Virtual Service Consultant

122.37

CIMA Systems

DME Automotive DealerSocket eLead

VinSolutions

CIMA Systems

ADP Dealer Services

CIMA Car Care Service Menus The Customer Journey DealerSocket Service AutoPilot

MotoSnap™ Service CRM CIMA CarView ADP CRM

165.34

100%

13.81

100%

9.53 6.63

100%

6.22

2.11

3.70

100% 100% 50%

100% 50%

Add your own vendor ratings at DrivingSales.com/Ratings

*Category scores are computed per category and are not comparable across the board.

For questions about Vendor Ratings, please contact bart@drivingsales.com 8 • 2nd Quarter - 2012 • DrivingSales

Dealership Innovation Guide

CRM / Sales Dept Variable Ops: these are CRM systems that track all your walk-in, phone and Internet customers through the complete sales funnel and owner life-cycle. They allow for advanced customer segmentation and marketing and track your sales activities by employee to make your team more effective at attracting customers and managing relationships.

Company

Dominion Dealer Solutions DealerSocket

CAR-Research VinSolutions eLead

Reynolds and Reynolds

Product

Score Rating Rec

DealerSocket CRM

34.87

Dominion CRM

CAR-Research XRM

VinSolutions MotoSnap CRM eLead CRM

Contact Management

214.97

97%

12.57

100%

94%

2.80

72%

.340

42%

.423

81%

Dealership Management Systems (DMS) Dealership Management Systems connect all your dealership departments with accounting and maintain your dealership data in one central place. These ratings are for the DMS systems themselves, NOT the solutions that plug into the DMS systems such as a Desking or CRM solution.

Company

Product

Score Rating Rec

Reynolds and Reynolds

Reynolds ERA DMS

344.41

ADP Dealer Services DealerTrack

Auto/Mate Dealership Sys AutoSoft Inc.

ADP Drive DMS

DealerTrack DMS AMPS

AutoSoft DMS

Reynolds and Reynolds Reynolds Power DMS half_page-CAO_Mitchell_Brenner_testimonial_ad.ai 1 12/22/2011 3:31:41 PM

“Signing up with Contact At Once! was the

C

M

to generate quality leads from people ready to buy.”

Y

CM

MY

CY

CMY

K

Mitchell Mit Mi Mitc itch itc che c he h elll Brenner Bre Br B renn re enn e nn nne ner err e Precision P Pre Prec Pr rrec re ecis e eci cisio cis c is sion s sio io on A on Ac Acu Acura cu c ura u ur ra ra off Pr P Prin rrinc in nce n c ceto eton e ton to on Princeton

446.60

54%

64.61

67%

63%

23.67

11.15

5.55

40% 50%

Contact At Once! Is The Dealer Chat Leader » Interact with At Least 25% More Buyers & Sell More Cars » Never Worry About Having to Log In or Out » Free Mobile Chat App to Answer Leads While on the Go » Improve Results With Lead Tracking and Analytics

Learn More at AutoDealerChat.com

autodealerchat.com facebook.com/autodealerchat +1-866-358-3880

Dealership Innovation Guide

86%

The Dealer Chat Leader

DrivingSales • 2nd Quarter - 2012 • 9

Internet Lead Management (ILM) These Internet Lead Management solutions are built exclusively to handle incoming Internet leads and manage your Internet sales process. Many full-service CRM systems include Internet Lead Management features, but the ILM systems listed below are stand alone utilities built exclusively for managing Internet Leads.

Company

Product

Score Rating Rec

Dealer.com

Dealer.com Lead Machine

88.69

Dominion Dealer Solutions VinSolutions iMagicLab

ADP Dealer Services DealerSocket

ADP Dealer Services

Dominion ILM

VinSolutions MotoSnap™ ILM Internet Lead Management Tool NetTrak Lead Manager DealerSocket ILM

ADP’s i-Lead Control

188.84

88%

86%

14.10

44%

5.37

80%

85.97 16.80 8.65

78%

70% 90%

Inventory Pricing With market volatility and transparency increasing online, knowing how to price your inventory is a science critical to increasing your store’s profitability. These “Inventory Pricing” tools collect various forms of market data to help define the optimum pricing for your inventory to maximize both Gross and Turn.

Company

Product

Score Rating Rec

DealerTrack eCarList

TrueTarget & eCarList HD

7.14

vAuto

VinSolutions FirstLook

Black Book

vAuto Pricing, Appraising Tools MotoSnap Market Pricing

FirstLook - 360º Market Pricing Black Book Used Car Guides

282.04

100%

4.06

75%

.481

1.56

90% 80%

100%

Internet Trainers Consultants and trainers who focus on bringing online success to dealerships. General Dealership Consultants, Sales Trainers, and Fixed Operations Consultants belong in their own categories.

Company

Product

Score Rating Rec

DealerKnows Consulting

Joe Webb

14.82

100%

4.24

100%

100%

PCG Digital Marketing Phone Ninjas POTRATZ

KainAutomotive.com eXtéresAuto

Brian/Glenn Pasch

Phone & Internet Training

Digital and Social Media Trainer David Kain

eXtéresAuto - Dealer Training

217.03 13.32 3.36 1.21

98%

100% 100%

Did you know DrivingSales has over 10,500 verified vendor ratings?

Visit DrivingSales.com/Ratings for more information.

*Category scores are computed per category and are not comparable across the board.

For questions about Vendor Ratings, please contact bart@drivingsales.com 10 • 2nd Quarter - 2012 • DrivingSales

Dealership Innovation Guide

T:7.625”

“IT’S SIMPLE. AUTOTRADER.COM GENERATES THE MOST ATTENTION FOR MY CARS.” Paul Monacelli–Retail Operations Manager Suburban Chevrolet of Stuart Stuart, FL

Dana Ford–Advertising Consultant AutoTrader.com

To hear Paul’s unbelievable story, just visit WeWorkForYou.com/Paul. ©2012 AutoTrader.com, Inc. All Rights Reserved. “AutoTrader.com” is a registered trademark of TPI Holdings, Inc. used under exclusive license.

Mobile Sites 82005_AT_AT2-574.indd 1

3/13/12 4:03 PM

AT2-574 (Driving Sales Innovation Guide)

These websites are built specifically for mobile browsers to cater to customers surfing the web from mobile devices.

Company

Product

Score Rating Rec

Cobalt

Cobalt Mobile Websites

223.55

Dealer.com

VinSolutions 82005_AT_AT2-574.indd DealerFire Saved at: 3-12-2012 2:25 PM

Job info Lime Marketing Naked

MobileSites

299.49

MotoSnap™ Mobile Websites

DealerFire Mobile Websites by hyuhas-mpt-09553 From: Approvals Mobile Marketing Print Producer Hodge, Brent Account Mgr DiCicco, Jaclyn Art Director Cooke, Mark Copywriter Hutson, Bryan Traffic Peters, Danielle Art Producer Frey, Karen Scale None Proof # 2

155.68

26.12 Heather Yuhas / Loralei Byatt

70%

Prepared by: Southfield, MI • 248.354.9700

Fonts 13.45 Fonts: News Gothic BT (Condensed, Bold Extra Condensed), Helvetica (Medium), Adobe Garamond (Regular, Bold)

100%

Printed At

AUTOTRADER.COM Client 21-02050-057 Job # 82005 Prefix 7.625” x 4.875” Trim 7.625” x 4.875” Bleed 7.625” x 4.875” Live Link Name: Line Screen 300 dpi AT_12_001_RM_4CSWOP.tif (CMYK; 2186 ppi; Product Code 006 - TRADE ADVERTISING 18.3%), AT_08_WWFY_pos_4C.eps (11.49%), These providers collect and aggregate leads from their web properties and from(22.29%), partner Unit Magazine AT_09_Ult_com_Orange_4C.eps Caption It’s Simple. leads to dealers. Currently this category is for both finance SignOff_out_K.eps and vehicle (72.9%) leads.

New Car Leads

91%

Used Swatches: Cyan, Magenta,

Yellow,

75%

100%

100% Black

sites, then distribute these hot

Company

Product

Score Rating Rec

Cars.com

NewLeadsPlus

10.02

63%

4.95

54%

.448

67%

Dealix

AutoTrader ZAG

Autobytel Inc.

Black Book Online Division Dealership Innovation Guide

Dealix New Car Leads New Car Advertising Zag Sales Strategy

Autobytel New Car Leads Activator Complete

180.54 5.99

3.12

87%

58%

75%

DrivingSales • 2nd Quarter - 2012 • 11

Owner Marketing These targeted solutions help you mine and segment your customer database, and then market to them successfully.

These solutions can market to your customers through email/direct mail/phone and other means.

Company

Product

Score Rating Rec

CIMA Systems

Complete Virtual BDC

106.32

J&L Marketing, Inc. J&L Marketing, Inc. J&L Marketing, Inc. Cobalt

Sales Events

Customer Pay Clinics bLinked

Owner Marketing

247.14

100%

47.92

100%

21.74 .826

100%

100% 100%

Reputation Management These products and services help a dealership manage its online reputation. They may assist with review collection, monitoring, resolution and promotion of online reviews.

Company

Product

Score Rating Rec

Dominion Dealer Solutions

Dominion Prime

105.53

eXtéresAuto

DealerRater.com

PCG Digital Marketing

Naked Lime Marketing 12 • 2nd Quarter - 2012 • DrivingSales

Online Reputation Management DealerRater Certified Dealer Program Reputation Management Services Digital Reputation Management

157.81

98%

28.63

91%

.514

3.17

100%

100% 100%

Dealership Innovation Guide

Search Engine Optimization (SEO) These companies will help get your website optimized so that it shows up higher in the search engine rankings. These services generally include both on-page and off-page optimization.

Company

Product

Score Rating Rec

PCG Digital Marketing

PCG Strategic Digital Marketing

325.69

eXtéresAuto

Dealer eProcess Dealer.com

Autofusion, Inc. KPA

eXtéresAUTO - SEO

Power PageRank SEO ManagedSEO

Search Engine Optimization TK Carsites PowerSEO

705.68 125.07

100% 93% 100%

41.98

22.10

29.44

90%

100% 100%

SEM - PPC These solutions help you determine how to invest in and execute a Pay-Per-Click campaign on the major search engines for greatest ROI.

Company

Product

Score Rating Rec

POTRATZ

Search and Behavioral for Web

825.31

Dealer eProcess

PCG Digital Marketing Dealer.com

DRIVE Digital Group

Dealer eProcess SEM

PPC Management Service TotalControl DOMINATOR SpeedSEM

926.15

100%

301.48

100%

182.32 94.08

100%

86%

100%

Used Car Advertising These consumer facing websites allow you to display your inventory to in-market consumers. They make huge media buys to attract customers to your inventory, and to increase your walk-in, phone and web leads.

Company

Product

Score Rating Rec

Cars.com

Cars.com Online Advertising

139.79

AutoTrader.com

Used Car Advertising

186.07

73%

90%

Dealix UsedCars.com 94.40 94% Digital Compass Marketing DealerMall.com

Automotive Advertising Network Cargigi

13.49 5.24

100% 75%

Websites These full service websites are built to be the main hub of your dealership’s online presence and are central to your dealership’s marketing, branding and customer service.

Note: Micro Sites and Mobile Sites are rated in their own categories on DrivingSales.com.

Company

Product

Score Rating Rec

DealerFire

DealerFire Custom Websites

414.97

Dealer eProcess DealerOn

Dealer.com

Autofusion, Inc. Dealership Innovation Guide

Dealer eProcess Dealer Website Flex Sites

Digital Website Suite

Custom WebSolutions

706.84

99%

193.53

100%

56.49 38.63

99%

90%

100%

DrivingSales • 2nd Quarter - 2012 • 13

GOT WOW? Investing in a Customer Engagement Program Improves Loyalty, Profitability, and Branding.

14 • 2nd Quarter - 2012 • DrivingSales

W

ith the lifetime value of the average dealership customer at just over $500,000, progressive dealers are seeking ways to ensure their customers are “extremely satisfied” – and with reason - extremely satisfied customers are 2.5 times more likely to make future purchases vs. their “only satisfied” counterparts, and also 5 times more likely to share their experiences with others. A customer engagement program (aka “WOW” program) transforms satisfied customers into extremely satisfied customers, by creating processes that create connections between the dealership and the customer.

The Automotive Industry does not understand Extremely Satisfied Customers Extremely satisfied customers ONLY emerge through memorable and emotional connections forged between them and the dealership’s staff. In

the automotive industry, the OEMs emphasize the factory CSI programs as the official measure of a dealership’s customer satisfaction standards.

However, the OEM’s CSI programs only measures the satisfaction of what a dealer should be doing – and not the “extreme satisfaction” necessary to yield extremely satisfied customers.

As the prestigious Ritz-Carlton Hotel Company explains, customers want to be “thrilled and feel a rush of extraordinary satisfaction” by receiving unexpected attention or value from a company’s staff. By receiving this attention or value, the customer “feels a rush,” and an emotional and memorable connection is formed, therefore creating the “extremely satisfied” customer.

Justifying the Cost of a Customer Engagement Process When I design a customer engagement program, my first objective is always the same; projecting the financial benefits of Dealership Innovation Guide

the potential program on the company’s bottom-line. When implemented correctly, investing in a customer engagement process will yield amazing returns for committed dealers. There are three core benefits that are quickly obtained:

it will be impossible to elevate customers into “extremely-satisfiedbrand-promoting-loyalists.”

•

1. VIP Treatment Often an overused and misunderstood term, a true VIP experience is only accomplished when the customers feels like a well-known celebrity or dignitary when visiting your dealership.

•

•

Loyalty - Within 5 minutes, a customer can obtain your competitor’s online reputation score while also visiting TrueCar.com to also receive 3 fiercely competitive quotes – why should your customers remain loyal to you? The answer lies in the customer’s connection with your business - they’ll want to stay with you if they are emotionally connected with your dealership.

When shoppers contemplate the large expense of an automobile, they won’t easily leave the dealership that treated them exceptionally well for the past 3 or more years. Remember, humans are emotional beings, they want to stick with the business that appeals to their emotional senses, regardless of a “lower” online price from a competitor. In my experience, after a customer engagement program is implemented, I’ve seen same-brand sales loyalty regularly exceed the market’s loyalty average.

Profit Per Customer – Customers are willing to pay a premium for a place that makes them feel “special” and earned their trust in the past. Similarly, customers are less likely to shop dealerships if they have a strong bond with their existing dealer. Thus, opportunities (within reason), exist for dealers to profit more per customer.

Brand Ambassadors – Dealers know that the most profitable new customers come from the referrals of existing customers. And yet, dealers are quick to waste thousands each month on advertising that remains unmeasured – whether it’s buying leads, print or radio, or even unregulated SEM. Investing in a program that makes your customers want to talk about your dealership, or more specifically the amazing experience they received at your dealership, is the foundation of a brand ambassadorship and word of mouth marketing campaign.

Developing a Customer Engagement Process…

Before a dealership implements a customer engagement program, the dealership must already provide a satisfactory standard for their core dealership services. Keep in mind, without providing the basic services to meet a customer’s basic needs, Dealership Innovation Guide

“

Customers want to be thrilled and feel a rush of extraordinary satisfaction...

There are three basic elements to a customer engagement program:

2. Fulfill Unexpressed Wishes and Personalized Surprises.

When your employees provide your customers with a surprisingly personalized level of attention, an emotional bond is formed between the customer and the employee (and therefore your business).

3. Provide Unexpected Value for a Customer.

Customers recognize unexpected value, but are only WOW’d when it’s a seemingly genuine act that is unrelated to a current/future transaction or not a complimentary benefit of doing business (e.g. a free oil change is a benefit of doing business, and is not engaging).

While customer engagement is certainly not an abstract business idea, it’s is highly situational and relative to the dealership employee and customer.

The exact engagement act and technique will vary in each situation.

However, if the employee chooses an engagement act that follows one of the three elements above, it will be a successful “WOW” moment for a customer. To help you understand sample customer engagement acts or “WOW” moments, I listed samples from some successful dealers with customer engagement programs:

Examples of WOW in the Auto Dealership Memorizing a Customer’s Name (VIP Treatment) As author Joseph Michelli explains in his book “The New Gold Standard,” most people are surprised and pleased when your staff (especially those they have never met) use their name in a greeting. Oral communication of a customer’s name (saving the customer from having to repeat his/her name or other background information) elevates the interaction of ordinary people to the level of “well-known celebrities and dignitaries.” This in turn makes the business memorable to the client.

How do we do this?

”

•

2-Way Radios in the Dealership When a client drops off their vehicle for service, the service greeter or valet will ask for the customer’s name while welcoming them. As the customer gathers their belongings or while walking to their advisor, the initial greeter will transmit via a radio ear piece a short description of the customer (e.g. “Alicandri Blue Sweater & Jeans”) to a radio monitored by the service advisor, therefore the service advisor (or whoever else is listening to the radio channel) can greet the customer by their name.

•

RFID in the Service Drive New technology allows dealers to place an RFID tag in a customer’s vehicle and therefore detect once the vehicle arrives in the service drive. I’ve developed software that merges RFID technology with a database of customer photos (you can obtain these from drivers licenses) to show a pop-up photo of the customer to reception staff, the original salesperson, and the service cashier. Now, when the customer walks through the service drive and showroom, the customer is greeted by their name by various staff members – the same applies when they pickup their vehicle’s key from the cashier.

Automatic CRM E-mail Notifications (Personalized Surprise) I recently met with Hans J. Van Order, CEO of UDCNET, and his company has developed many unique ways to tailor CRM e-mail communications to provide enhanced personalization. One idea is to send a short text e-mail to a customer the day prior to the birthday.

The e-mail simply states “Mr. Customer, I hope everything is well with you! I DrivingSales • 2nd Quarter - 2012 • 15

16 • 2nd Quarter - 2012 • DrivingSales

Dealership Innovation Guide

“

Do you have someone to monitor your Internet Reputation...

”

know I’m a day early, but I just wanted to be the first one to wish you a Happy Birthday!” The response rate from these e-mails is very high, and it’s seemingly personable unlike the “fancy” and impersonal graphical cards that many dealers automatically send.

Providing a Memorable Gift at Delivery (Personalized Surprise) Before delivery, place a CD of your customer’s favorite music artist in the vehicle with a short and personalized card. You can obtain the customer’s preferred artist during the test drive phase, through a series of calculated questions when demonstrating the audio system. When the customer discovers the CD, they will be shocked that the salesperson remembered their preferences and provided a seemingly genuine gift. It’s important to note, that the CD must be provided for the customer to discover it, it shouldn’t be directly given to the customer by the salesperson as this will diminish the sincerity of the salesperson’s gesture.

Using the Dealership’s Existing CRM to Record Customer’s Preferences (VIP Treatment / Personalized Surprise) Utilize your existing CRM to keep records of simple facts about your customers. Where does the customer work and do they prefer service dropoffs at this location? Does the customer prefer late pickup? What is the name of the customer’s wife that generally picks up the car? What are the customer’s favorite radio stations (so you can program them into their next car)? Keep track of these preferences and WOW the customer with using this information during their next visit to your dealership.

Service Welcome Letter (VIP Treatment) If a customer is new to your service department, deliver a personalized welcome letter (hand-signed by your GM) thanking them for visiting your dealership and your GM’s desire to exceed their expectations. Be sure to include the Dealership Innovation Guide

GM’s mobile number for any issues, and if feasible, arrange for your GM to greet these new customers upon their arrival.

Monitoring Twitter Conversations (Personalized Surprise) Do you ask your customers for their Twitter names? What about monitoring customers discussing your dealership on Twitter? Use your CRM to record dealership related comments/preferences that your customer has stated on Twitter.

For example, we recently had a long time client Tweet to Verizon Wireless that he hated his BMW Bluetooth system because of the complexity of pairing the phone with his BMW, our social team intercepted this message and immediately e-mailed the customer a video demonstrating how to program his phone with the vehicle. The customer, a local micro-celebrity, was very impressed with our quick response and Tweeted his favorable opinion of our dealership to his 15,000 followers.

Complimentary Umbrella (Unexpected Value) One of my dealers purchased 500 inexpensive umbrellas that are imprinted with the dealership’s logo. Since this store is located in Southeast Florida, which is subject to unpredictable and torrential downpours, the dealer will give out complimentary umbrellas to any customer (even showroom shoppers) leaving the dealership while it’s raining. When a customer receives an umbrella, at no cost, they are WOW’d because the dealership has provided an unexpected value, unrelated to a transaction, and just aimed to help the customer. Keep in mind, if this dealer provided the umbrellas with every new car delivery, then the umbrella would not be perceived as an unexpected value, but instead an insincere benefit of purchasing a car from the dealership.

Creating a Client Relations Specialist to Manage Customer Engagement Do you have someone to monitor your Internet Reputation on sites like DealerRater.com? This would be the ideal candidate for the “WOW Czar” or more appropriately, the Client Relations Manager. The Client Relations Manager is the dedicated liaison in the dealership for managing the customer engagement process. They collect and organize information from your CRM/ DMS, monitor customer conversations online, train employees, and assist your staff in providing “WOW” moments for distinguished customers. The Client Relations Manager should ensure that

your sales/service departments are collecting information in a manner that does not violate your customer’s privacy. Finally, dealers should aim to provide “WOW” moments as often as possible, with the realization that they will not be able to reach all customers but instead reach as many as possible.

However, the Client Relations Manager can ensure the “high-value customers” are targeted for a WOW experience.

Customer Engagement: A must for progressive dealers It may seem intimidating to change your company’s culture to embrace extreme customer service. In the typical car dealership, it’s difficult enough to satisfy a customer’s basic needs, nevermind appealing to their emotional senses. But by following simple processes, appealing to the emotional side of your customers is within reach, and the rewards are significant.

Today, with customer loyalty becoming more and more difficult to maintain, dealers must aim to exceed the OEM’s CSI minimums and pursue new heights in customer satisfaction – by providing WOW and other customer engagement techniques to ensure their greatest assets, the customers, become profit driving brand ambassadors. Extremely satisfied customers are the future of our dealerships; they are honored to be loyal fans, they enjoy bragging about their WOW experiences both online and offline, and finally they are repeat buyers that generate referrals – isn’t this the customer you always wanted?

About The Author:

Jeremy Alicandri is Vice President of Habberstad Auto Group (New York), where he devotes his time to corporate and strategic development activities. Jeremy is a member of TrueCar’s Dealer Council as well as an Editor for DrivingSales. Prior to his career in automotive, Jeremy was a management consultant for clients including BMW of North America and Motorola.

DrivingSales • 2nd Quarter - 2012 • 17

W

Three Simple Steps...

e tend to think of the Internet in terms of its reach. Online, we can connect with people in the most remote places on Earth, and store huge amounts of data in a far-off “cloud.” Even the name World Wide Web sounds like a far cry from our comfortable dealership confines.

But when we look at where automotive technology is going, the web starts to become a lot less “worldwide,” and a whole lot more local. New online tools are taking tried-and-true advertising and reputation building techniques to a new level while offering more ways than ever to target specific markets. Simply put: everything traditional is becoming digital, and everything digital is becoming local.

This evolution is good news for you as a dealer, because you already know your local market like the back of your hand. All you need to do is transfer that expertise online. Following a few basic steps will get you well on your way.

1. Shore up your website “foundation” with Mobile and Video Any online program begins with a search engine friendly website. That’s a no brainer. But you can’t stop there. Nearly one in five visits to dealership websites now come from mobile devices, and turning those views into leads requires a well-designed mobile website.

Likewise, the numbers on video views are too powerful to ignore. Online videos increase visitors’ time-on-site by 327%, deepening customer connection to your brand and making them more likely to submit a lead. In fact, form conversion 18 • 2nd Quarter - 2012 • DrivingSales

increases an astonishing 140% on sites with video. Whether or not you buy in to the numbers, your customers have simply come to expect videos in their online experience. Have you visited ESPN.com lately? CNN.com? You get the point.

So, how do you firm up your web foundation? Talk to your website provider. They should be able to quickly incorporate mobile sites and video into your solution, and do so without breaking the bank.

2. Think Local and listen to your market Once your web fundamentals are solid, spend some time understanding public sentiment toward your brand in the local market.

For example, reputation-monitoring tools allow you to “see” and “hear” your current and prospective customers online. Quick story for you: a friend of mine, Dave, owned a restaurant in my neighborhood, a college town. The place was popular and well regarded among the local crowd. Like any business owner should, Dave turned to the Internet as a place to create his business’ personality while listening for the signals of satisfaction and/or discontent. He created profiles for his business on sites that showed solid restaurant-oriented activity and decided that Yelp was not a place that would provide any real value

for him. In Dave’s research, there simply didn’t seem to be much activity there.

Fast forward to the Fall, and suddenly the college crowd started chatting about his place. Where? You guessed it – Yelp.com. Why? The students brought their habits and preferences with them, something that makes a college town unique.

Dave quickly discovered that his own views on the importance of online marketing didn’t matter. His local community—his core clientele—were online whether he liked it or not, so it was on him to make sure he reached them on that site, where they were clearly comfortable. In other words, Yelp wasn’t just another site “out there” on the Internet. It was a part of his community, and it had measurable impact on his hard-earned local reputation.

Back to our industry, rep-monitoring is not the only online tactic that is locally oriented. Paid search and display advertising are also great “local” online tools. Imagine you had a billboard along a nearby highway. Now, instead of millions of random drivers seeing it, imagine that everyone who sees it is in the market, or interested in the type of vehicles you sell. And instead of those people seeing your billboard once, then ignoring it every other day they drive by, picture them seeing it posted at every exit they like to take. That’s Dealership Innovation Guide

WATCH NOW!

For Putting the Internet To Work in Your Market display and search: a totally measurable, progressive evolution of old-school, local branding, with targeting capabilities that make the military jealous.

In all three of these examples, the online tool gets its power through traditional concepts: knowing your customers, and reaching them where they travel. This smart, modern take on proven ideas should be part of any online automotive marketing solution.

3. Partner with a Trusted Expert So your foundation is in place, and your local strategy is sound. What happens when Apple drops the next groundbreaking product and things change again? Or when the next Facebook or Foursquare or Digg or Pinterest comes along? By now, we all know that rapid change is “the new normal” in digital marketing.

The challenge is that the industry is constantly flooded with new tools, and new experts telling you how to use them. What’s the best way to manage it all? Again, I recommend an old school approach: retaining someone you trust to navigate the waters for you while you focus on what you do best – selling cars and running the dealership.

new technology as well as shifts in the industry. Most importantly, they should make recommendations based on deep knowledge of your dealership and market. Not every new online tool impacts your market, but some do. It takes a real partner to know the difference and guide you in the right direction.

About The Author:

Matt Murray brings more than 8 years of technical and software training to his role as Director of Digital Marketing. His expertise includes search, social media marketing and best practices training for dealerships and manufacturers. In his five years with the company, Murray has helped thousands of dealers maximize their digital marketing efforts using Dealer.com solutions. Currently he manages Dealer.com’s East Coast Enterprise Sales team while assisting with ongoing digital marketing strategy development and implementation.

Prior to joining Dealer.com, Murray spent 6 years in the United States Navy, serving in every major theater as both operator and trainer of forward deployed Forces.

Exclusive & Entertaining Automotive Coverage DrivingSalesTV combines two powerful media platforms – video and social media – with powerful profit-building information. With DSTV, dealers can easily keep tabs on their industry, see best practices in action, and have a more personal view into peer success stories, in a format that is lively, interesting, interactive – even, at times, provocative – but always with a focus on business innovation and improvement.

Your web solutions provider should be more than simply a vendor. They should be someone you trust to pay attention to Dealership Innovation Guide

DrivingSales • 2nd Quarter - 2012 • 19

Holding Your SALESPEOPLE

Accountable

W

hen I sold cars, I remember multiple times when the sales manager would tell the salespeople to make their daily follow-up calls and some salespeople would simply respond that they had completed their calls, even when they hadn’t. It became a constant battle. Apart from not making the calls, these particular salespeople were notorious at finding ways to cut corners and cheat the system. I know not all salespeople are like the ones I worked with, but how do we encourage our salespeople to be accountable for their daily, weekly, and monthly activities?

In today’s dealership, 80% of the leads received come through the phone and/ or internet. That means that 80% of your business is dependent on your salesperson’s ability to schedule appointments that drive people into the showroom. CRM utilization becomes critical when managing these processes that are attached to your leads.

What You and Your CRM Should Do A CRM tool should allow salespeople to achieve new levels of production with unsold AND repeat customers, thereby increasing their personal incomes. CRM enables salespeople to work more efficiently, be better organized, and better manage time and relationships. The benefit to the dealership is that managers have access to reports that enables them to monitor all activities and can help coach and motivate each salesperson.

20 • 2nd Quarter - 2012 • DrivingSales

The reason accountability was low at the dealership where I worked was because the managers weren’t doing their job of monitoring what was going on every day at the dealership. What they thought was being done in the dealership often wasn’t, and they had no concrete way to show that it was or was not happening.

In order to help improve accountability, I suggest utilizing these reports to track the number of new opportunities that your salespeople are entering into the CRM. Nothing is worse than seeing someone take multiple ups and not having any of the customers entered into the CRM. A rule many dealers have is “if it isn’t in the CRM, it didn’t happen.” If everything is not getting put into your CRM, it throws off your marketing and ROI reports.

The second key metric is phone calls. It is important that your CRM is integrated with your phone system in order to track outbound phone calls. Having your salespeople mark all of their calls completed is one thing, but it’s better if there is proof that they actually made the call and how long they were on the call. When I look at the compiled data, I find that the top salespeople are constantly those who take the time and make the most calls. If your state allows it, I suggest recording your calls. This is great for managing quality and training. Make sure you are also monitoring inbound calls. It is easy to think since the customer is calling you that it might not need to be monitored like the outbound calls, but most customers are calling multiple dealerships and this is often the first contact the customer has with your

store. If your salespeople don’t handle inbound and outbound calls correctly, it will ultimately affect your conversion rate.

E-mail and web lead tracking is also important. You need to know how many e-mails the salespeople are receiving and sending out, as well as how long it is taking them to respond to their web leads.

Salespeople love people that come in and buy, but what about those that don’t buy or those that they talk to but are hard to get in touch with afterward? Are they reaching out to them? Make sure you are looking at reports that reflect this data.

Pipeline Management Pipeline Management is a key for success. When salespeople get busy, the first thing thrown off their plate is prospecting. When sales people stop prospecting, the pipeline eventually runs dry. Make sure when you are tracking calls that you know what types of calls the salespeople are making and that there is always a focus on prospecting.

Salespeople also have a tendency to move people to Lost. Often, this is a way to get the CRM follow-up to stop or to hide those customers they did badly with. Do you have a review process in place for a manager to look at each lost deal and try to “save a deal?”

Some CRM tools have a daily activity report or check out report that shows everything the salesperson has done for the day (ups, appointments, calls, talk time, e-mails). One dealership with which I was working had a problem with Dealership Innovation Guide

accountability, so they instituted a new process: before a salesperson left for the day they would print out a report and give it to their manager to check out.

The report told the manager everything they had done as well as all of their calls (Daily To Dos) that they didn’t complete.

Quickly, managers were able to see what had been done and what had not been done. Often, the manager would send the salesperson back to make more calls before they left. Salespeople began to feel ashamed when they handed a manager their sheet that said they didn’t do anything which, in turn, motivated them to make more calls. The dealership drastically improved their follow up process and began to see an immediate increase in their sales.

Have a Plan Having a plan and setting goals is also an essential part of improving accountability. It is crucial for salespeople to establish a set of daily, weekly, and monthly benchmarks that help them measure and manage their ultimate goal. If the goal of each salesperson is to sell X amount of cars, don’t focus on the end goal, but actually the activities that will help them reach that goal. It also helps if the salespeople are included in setting the goals. If you do this, they should have a personal stake in the outcome. Without inclusion, salespeople will figure out the best excuses in the world why they can’t achieve.

If you have a salesperson who isn’t taking responsibility, then you may need to Dealership Innovation Guide

mentor them individually. Focus on their behavior and the problems it is causing and not on the person. They need to be held accountable for their actions which can include low prospecting activity, not meeting sales targets, or low margin sales.

consulting, training, and sales. He specializes in helping dealerships improve processes through the use of CRM technology. Prior to DealerSocket he sold cars and is a graduate of Pepperdine University.

As accountability grows, your salespeople will form a good habit of doing the things they must do on a regular basis and will help them on their way to becoming a top producing salesperson.

About The Author:

Hunter Swift is a Sales Business Analyst at DealerSocket and has been with the company since 2005. In addition to his current role he has fulfilled the responsibilities of customer support, DrivingSales • 2nd Quarter - 2012 • 21

The Man Who Changed

BASEBALL as Featured in "Moneyball” Billy Beane - Keynote at DSES, Oct 22, 2012

Become a Game Changer at Your Dealership

22 • 2nd Quarter - 2012 • DrivingSales

Oct. 21 - 23, 2012 • Las Vegas, NV

Dealership Innovation Guide

THE MOST DISTINGUISHED RETAIL AUTOMOTIVE EVENT FOR DEALERSHIP EXECUTIVES

The Best Dealers. The Best Solutions.

The DrivingSales Executive Summit is a premier event reserved for those who are dedicated to innovation and doing their best to improve the industry. We think it makes sense to award those dealers and vendors who put their money where their mouth is.

DrivingSales

INNOVATION CUP The DrivingSales Innovation Cup Contest, held annually at the DSES, invites automotive vendors on stage to present their most innovative solutions or products and compete head-to-head. A panel of dealer judges determines the winner of the Innovation Cup trophy and the title of “The Most Innovative Solution of the Year.”

Visit DrivingSalesInnovationCup.com for more information.

DrivingSales Annual

BEST IDEA CONTEST The DrivingSales Best Idea Contest, also held during the DSES, invites automotive dealers on stage to decide who has the very best new idea or strategy. This face-off and subsequent interviews by a panel of dealer judges results in a number of winners receiving prizes totaling $10,000! One outstanding dealer also walks away with the title of having “The 2012 Best Idea”.

Visit DrivingSalesExecutiveSummit.com for more details.

Dealership Innovation Guide

DrivingSales • 2nd Quarter - 2012 • 23

Being #1 How Suzuki of Wichita Changed a Community

Y

ou know you’ve made your mark in a community when the local kids wants to have their birthday parties in your showroom. Not only was the young girl disappointed when she learned she couldn’t invite her friends to a birthday celebration at Suzuki of Wichita, but she cried hysterically when she learned her mom was heading to the dealership to buy a car and the young girl couldn’t go because she had to go to school. That’s when you know you’ve struck a chord.

Such is the case for Suzuki of Wichita in Kansas. Walking into the showroom feels like you’re at a birthday party already, with the colorful balloons, open spaces and circular classroom tables, and video and arcade games up against the wall.

You’re just one birthday hat short of a massive celebration.

But even without the birthday hat, the fun doesn’t waver.

Only a man as driven as Scott Pitman could create such an enjoyable car buying experience. In his early 20s, Scott promised himself that he would own the controlling interest in a dealership by the time he was 40. For 18 years, he worked his way up through sales, Used Car Manager, General Sales Manager, and General Manager. As January came around the year he was set to turn 40, he politely notified his previous partner that by his birthday come July, he would own the controlling interest in his own car dealership. And he did. Just prior to turning 40, Scott purchased the Suzuki franchise and has never looked back.

Kaizen Culture This May marks the 5-year anniversary of Scott owning Suzuki of Wichita. Although the store is most well-known for being the #1 Suzuki dealership in the country three years in a row, its incredible story doesn’t start with those accolades, making the journey all the more impressive.

When first starting out, Scott and crew sold cars out of a convenience store on the other side of town. After purchasing their current land, he received authorization to build and sell the franchise out of a triple-wide mobile home in 2008.

Scott Pitman

With a background in a fast-paced environment and high volume operations, Scott knew he could turn cars, and he wasn’t going to let his triple-wide trailer impede on that course. In their first full year of business, Suzuki of Wichita was the fourth highest volume Suzuki dealer in the country.

Scott was probably the only person that wasn’t surprised at that standing at the end of the year. In fact, the first Performa that he ever took to the bank stated that the previous dealership sold 32 cars a year. Scott’s proposal was that he was going to sell 50… per month. The bankers inquired as to how Scott and company were planning to take the number from 32 to 50.

Additional information was needed to better clarify that they, in fact, we’re going to sell 50 new cars per month, or 600 cars per

24 • 2nd 2ndQuarter Quarter--2012 2012 •• DrivingSales DrivingSales

Dealership Innovation Guide

year. All the jaws dropped to the floor.

But again, under Scott’s direction, that number was met and exceeded. Suzuki of Wichita sold 758 new cars their first year in business… out of a mobile home.

The philosophy through which Scott was able to generate such a massive transformation is through Kaizen culture, meaning change for the better or continual improvement. Scott is a change agent. He’s not afraid of change, as is so typically the motivation in the auto industry. He’s not afraid to ask customers what they like and don’t like about the business. He strives to eliminate the things the customers don’t like about the auto industry and incorporate strategies from outside the industry.

People, Process, and Systems The primary success of Suzuki of Wichita emphasizes a huge process on documentation and holding people accountable. Their people are the starting point for their success and training employees the way the store wants to do business is essential. In fact, their hiring practice excludes hiring anyone who has previously sold cars. The thought process behind this is that it’s difficult to retrain old habits.

Suzuki of Wichita does things in such a unique manner that the only way for their new hires to be successful is if they are trained in the ways of the store from the get go. They maintain a heavily managed system, and most previous salespeople are used to autonomy. Suzuki of Wichita has 20 sales people, almost all of who have never sold for anyone beside Wichita.

Dealership Innovation Guide

In addition to the sales people, for every 3 salespeople there is one manager. Every customer deserves to meet a decision-maker, ensuring the customer gets the best service as early as possible. How early is early enough? It’s required that the managers are in front of the customer within the first 10 minutes of the customers’ visit on the showroom floor in order to put the deal on track as quickly as possible. Scott despises wasting people’s time, which is the number one complaint of the car shopping experience, according to NADA. The number one complaint that Scott personally hears from car shoppers is having to purchase the car twice.

When they discuss price, payment, trade, and money down for the car, they don’t want to wait another 45 minutes to discuss it all over again with finance and insurance. For this reason, all of the managers that work with the customers up front at Suzuki of Wichita are also trained in Finance and Insurance, and represent the customer to the bank in order to speed up that process.

That’s just one way that Suzuki of Wichita is unique from its competition. They also know how to generate traffic to fill the showroom full of people. But what’s more, is all that tactics that they use to generate the traffic from their marketing is 100% consistent with the store experience.

For dealerships all across the country, it’s not uncommon when their ads don’t add up to the experience in the store. All of the marketing that Suzuki of Wichita uses – No Sharks and the possibility of a full refund if unsatisfied, for example – is in synch with the process and thus legitimizes the experience.

DrivingSales • 2nd Quarter - 2012 • 25

Tom White Jr.

26 • 2nd Quarter - 2012 • DrivingSales

Dealership Innovation Guide

Roles

Communities of All Kinds

Marketing is surely Scott’s favorite part about his opportunity in the dealership, so he plays a large role in that department. He spends a lot of time on the marketing side by evaluating what their message to the consumer is, how they are perceived by their customers, and ensuring their actions line up with their message. They place an emphasis on non-interruptive advertising. For example, they aren’t on any TV commercials. You can find them in Internet media, but only if you’re looking for a car, as goes with the newspaper – you can only find them in the automotive classifieds.

Scott definitely serves as the leader of his Suzuki of Wichita community, but his service does not stop off the showroom floor. He’s taken his success in the dealership and used it to help benefit even the larger community of Wichita.His wife and he started the non-profit organization called the Lady Bugg House, which services parenting teen mothers. They purchased an early 1900s mansion, and with the help of the community, they renovated the home, welcoming teenage mothers and their babies, and becoming a support system for the young teens to be the mother they want to be.

Of course, when Scott’s not honing in on the marketing side of things, his main responsibility is to cast vision for the company, and take time to think about the business and the direction it’s going. He’s all about putting the right people in the right spot on the right bus and directing down the road.

He functions more like a GM instead or an owner: he tries to get in front of the sales people and lead training personally every other day, seeing it as a great opportunity for his team to hear from the leader. His workspace even speaks to that sense of interaction and availability, as his office is on the showroom, with floor to ceiling glass instead of walls, and with a door always open. Anyone is welcome, anytime.

Incredibly, Scott and his wife have a second non-profit organization that services a further community – a small village town in Haiti, called Balan.

Known as Walking in the Reign, this ministry serves under-privileged people through a school sponsorship program, providing meals 5 times per week, schoolbooks, uniforms, and other education necessities.

Dealership Innovation Guide

Grateful for the opportunities and resources that being in the car business has afforded him, Scott is sharing that opportunity with those less fortunate than he, both in his immediate community and abroad. Scott exemplifies the possibilities that selling cars can create and the impact one automotive dealer can have on both his local and broader community as well, all while directing a #1 car dealership in the country. I sure wouldn’t mind having my next birthday in Wichita.

About Scott Pitman:

Disciple | I believe every word of the Bible to be true.

Husband | Michelle and I desire is to glorify God through our marriage and to pray for marriages in our community.

Father | Never miss an opportunity to tell your child (or mine) you Love them and you are Proud of them! Matthew 3:17 Car Dealer | I am the Chief Evangelist and Operating Partner for Suzuki of Wichita Teacher | Words Kill and Words Give Life. I strive to uplift, encourage, challenge and give life.

Servant | Never, Ever forget that you are a Servant.

Causes | Haiti, Wichita, Walking in the Reign, Lady Bugg House, FatherFULL, YoungLives, Poverty, The Workplace, Marriage, Kingdom work.

DrivingSales • 2nd Quarter - 2012 • 27

Process Point: Be Transparent in Your Pricing

O

ne of the main process points that dealers have to execute to be successful in the current and future retail automotive environment is transparency with price on both purchasing a vehicle and the trade.

In this article, we’ll focus on pricing transparency for a vehicle the customer is shopping for. The four things that customers need to know before they can make a purchasing decision is if they have the right product to buy, are they at the right place to buy it, is this the right price to pay, and is now the right time to buy. Dealers need to answer these questions before they can close the deal, whether that customer is on the internet, on the phone, or in the store.

Consumers can find unlimited inventory of their vehicle of choice online. It’s everywhere. They can find any make or model online easily. What’s difficult to find is the right dealership to do business with, and the largest determinants of the right dealership to do business with is who is going to be the easiest to work with and who has the right price.

No Price is the High Price If customers are determining whether or not to do business with you based on your price range, then not offering a price to your consumers is saying, “We’re not in the price game, so go ahead and ignore us.” Although it boggles my mind that we even still have this conversation in the industry today, it does exist. Some managers argue against price transparency by saying, “Yes, but I’m going to lose my 28 • 2nd Quarter - 2012 • DrivingSales

gross average if I give the price,” to which I respond, perhaps, but you’re going to lose the car deal if you don’t.

You can always point to the example of the one time that you didn’t give a price and you got the car deal, and to that I say there are always exceptions to the rule. But by far and away, if you do not respond to a price, then you are not in the game. Think about it: Consumers can go online and, in a few short clicks, can find hundreds of the new or used cars they are looking for.

Are they going to shop at over 100 car dealerships to weigh all those search results? Absolutely not. They’re going to narrow their search to a handful of cars and/or dealerships and part of that is the price equation. If you don’t share the price upfront, you get overlooked.

Contrary to popular belief the goal isn’t to be the lowest price on the list. It might be the strategy for some dealers, but it plain won’t work for others. Instead, you want to price your cars competitively enough so when that consumer narrows their list of 100 options that they found online to 5, you make the short list.

You do not have to be the lower price to make the list; you just have to be competitive enough to get a lead.

But it’s becoming increasingly harder to have the opportunity to share that information with customers unless you’ve made it on their short list, which is generally motivated by price. In this retail age, transparency wins, and we need to play that to our strengths. Make it a fair price, but have one. Having no price is as good as having the highest price, so be transparent in your pricing and close more car deals.

About The Author:

Jared Hamilton, founder and CEO of DrivingSales, is often described as one part dealer operator and one part tech geek. He has over 10 years of dealership management experience in addition to his award winning entrepreneurial record.

Jared is a highly acclaimed international speaker educating audiences across the globe about capitalizing on the Internet’s opportunities and how to invest and implement technology solutions inside businesses.

More than Price What every dealership wants to be able to tell their customer is their value proposition. This is where you get to dazzle the customer with information on customer relations, service, and your peripheral guarantee – all the goods that provide value to the customer.

Dealership Innovation Guide

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DrivingSales • 2nd Quarter - 2012 • 29

State of

Loyalty Auto Service

30 • 2nd Quarter - 2012 • DrivingSales

Dealership Innovation Guide

Is Your Service Center Becoming a Senior Center?

Yes! Are Independent Repair Shops Really Your Biggest Threat?

No!

N

ew findings from DMEautomotive’s recently released white paper1 on the state of auto service loyalty reveals emerging industry trends that could prove costly for the dealers who ignore them and rife with opportunity for dealers who recognize them.

The automotive service industry is experiencing an era of growth and dramatic change, fueled by a confluence of factors: the rebound in new-vehicle sales; ongoing, strong used vehicle sales; and Americans holding on to their vehicles for historic lengths of time.

These forces benefit different service players. The “graying” vehicle fleet, of course, favors independent service centers and aftermarket chains, which attract more postwarranty, older vehicles.

However, our new white paper “The Changing Service Loyalty Landscape” reveals another “force of graying” (in addition to the aging vehicle population) that is now in play threatening the profits of new car dealerships. The data clearly indicates that the dealership service center is becoming a “senior center,” while younger, more tech savvy consumers who shop “harder,” are gravitating towards aftermarket chains.

DMEautomotive’s detailed report on consumer loyalty rates and industry Dealership Innovation Guide

Figure 1

share-of-wallet realities for dealerships, independents and aftermarket chains, also busts persistent industry myths, including independent shops representing dealerships’ key competitive threat, and dealer loyalists representing the most valuable service customers.

Key findings from the report:

Low Loyalist Levels Industry-wide: Dealers Most Dependent On Them The white paper identified three levels of loyalty for service center customers: “loyalists” (who both visit and spend most at a store type); “swing loyalists” (who either visit, or spend most at, a store type, but not both); and “disloyalists” (who neither visit nor spend most at that store type).

And the report reveals very low loyalty rates across the U.S. auto service industry, with a whopping 77% of customers now in play, and not tied to one service center. Overall, “loyalists” represent only 23% of the service market, while “swing loyalists” make up 50%, and “disloyalists,” 27%. Now let’s look at the loyalty realities for the three, main service stakeholders. (See Figure 1) It’s crystal-clear that while loyalists are the service shopper minority, they drive the lion’s share of revenue for every

store type. And with 23% of dealer loyalists driving 62% of dealer service revenues, it’s clear that dealership profits are the most loyalist-dependent, while aftermarket chains are the least.

Myth: Dealer Loyalists Are the Most Valuable Customers

Reality: Independent & Aftermarket Loyalists Spend & Service More If loyalists are the lifeblood of dealerships (generating roughly two-thirds of total service revenue), the report indicates they also have other uniquely valuable traits. They’re the wealthiest service customer, with a household income of $72,017 vs. independent customers at $57,081, and aftermarket at $69,249.

They’re the most compliant: 70% of dealer loyalists report “always following manufacturer service recommendations,” vs. only roughly half of aftermarket and independent customers. And dealer loyalists are dramatically less priceconscious than independent loyalists, and especially, aftermarket, loyalists.

Store attributes like “competitive prices,” “frequent sales events,” “frequent coupons/discounts” and “different price options for parts,” indexed between two and five times more important for aftermarket than dealer loyalists.

Figure 2

Dealer Loyalist

Independent Loyalist

Aftermarket Loyalist

Annual Spend:

$1,105

$1,191

$1,178

Spend@ Store:

$884

$1,024

$1,001

Share-of-Wallet:

80%

86%

85%

DrivingSales • 2nd Quarter - 2012 • 31

Myth: Dealers’ Biggest Threat Is Independent Shops

Figure 3

Reality: It’s Aftermarket Chains

Given that dealer loyalists have the deepest pockets, are far less pricedriven, and follow stricter service schedules, one would imagine they would spend and service the most.

Guess what? The opposite is true: not only do independent and aftermarket loyalists spend more overall on service annually, they spend significantly more at the store they’re loyal to roughly 15% more than their dealer loyalist brethren. (See Figure 2) Dealership Senior Center?

Aging Dealership Loyalists The report analyzes loyalty, spend and service selection motivators by age, and the findings are troubling for dealerships: dealer “loyalists” represent the oldest service customer, while aftermarket chains are best capturing the younger wave of shoppers. These age demographic “sweet spots” for each service center category. (See Figure 3) Dealership loyalists are more likely to be over 60 than any loyalist group. And while roughly half (47%) of aftermarket loyalists are under-34, nearly half (46%) of dealer loyalists are a “graying” 50+.

Meanwhile, over a third of those most likely to be disloyal to a dealership service center are only 25-34.

32 • 2nd Quarter - 2012 • DrivingSales

Aging Vehicle Population Means Dealer Hits: The data also provided fresh confirmation that the aging, out-of-warranty vehicle fleet is favoring the aftermarket, while taking its toll on dealers. Consumers reported on their service center preferences for five “bread-and-butter” services across their vehicles’ lifespan – and major dealership defection points were identified around brakes, battery and tires. (See figure 4) Notably, less than half (45%) of service consumers reported they’re likely to visit the dealership for these core services even within the first two years of ownership, when the in-warranty relationship is still strong. And, as vehicles hit 3-6 years, dealerships lose (on average) 47% of that initial business, with only 31% reporting they would use dealerships for these services. By 7+ years, only 13% of customers will select dealerships for these services. Our new survey shows that independents and aftermarket stores grab significantly more “core” service business at vehicle-age-three, much earlier than many dealerships may imagine.

It’s conventional dealer wisdom that independent shops represent their biggest threat, but this new data reveals that the poaching of dealer customers by independents is, in fact, super low, with strikingly little interplay between dealer and independent customers. Only 10% of the annual service spend of a dealer’s customers (in total) migrates to independents, and independent customers only spend 13% of their wallet at dealerships. But dealers are bleeding $3 in business to aftermarket chains (i.e., the quick lubes and tire retailers) and only capturing $1 of aftermarket business in return. And, in general, when every type of dealership customers spend elsewhere (whether loyalists, swing- or dis- loyalists), the majority of dollars are now bleeding to aftermarket chains.

Embracing Reality = The Real Path to Profit: Across our new data there are some serious surprises and wake-up calls, particularly for dealerships. For one, the 77% of service consumers that are now non-dealer-loyalists are an extraordinarily high-value, high-spending opportunity.

For instance, if anyone who imagines that aftermarket chain “loyalists” don’t exist - and that if they did, they would just be a series of unprofitable oil changes - needs to radically revise their thinking. Dealers also need to digest the news that their “graying” loyalist base and the aging vehicle population are two distinct forces further poised to color their market-share picture. They need to work overtime to retain their profitable 23% of loyalist customers, but must also start tackling the huge, largely untapped opportunities that lie beyond their aging core base. Dealerships must ultimately reach the younger waves of shoppers charging to market who are now gravitating toward aftermarket chains - their true business “poacher.”

All the talk is about recovering newvehicle sales - and this is great news.

But despite the fact that service now accounts for (a cozy) 47% of the average Dealership Innovation Guide

The most authoritative source for selecting dealership vendors

DrivingSales.com/Ratings

Figure 4

34 • 2nd Quarter - 2012 • DrivingSales

dealership’s total profits,2 it still remains their most unrealized opportunity. Grasp the realities of who your core service customers are - why three-quarters are now non-dealer-loyal - and what the best ways are (based on fact, not theory) to actually reach and convert far more of the more those three in four customers who now choose to take their service dollars elsewhere. Service is a highly volatile, in flux, booming $215 billion market.3 Dealers that squarely tackle the mounting challenges (whether changes in media consumption habits, or the shift of buying power to younger generations), have much to do, and unthought-of profits to gain.

Methodology

About The Author:

Mike Martinez is chief marketing officer of DMEautomotive, the science-inspired, results-based automotive marketing leader that provides turnkey marketing to the largest and most innovative automotive organizations in the U.S. DMEa’s uniquely panoramic view of the complete automotive sales and service market, combined with its cutting-edge, science-based marketing programs, increases customer yield, conversion and retention.

DMEautomotive’s Strategy & Analytics division’s reports are based on a recent survey of 4,000 U.S. vehicle owners conducted in 2011. All respondents were responsible for service-related decisions on their primary vehicles(s) and purchased auto service within the last year.

DMEautomotive’s “The Changing Service Loyalty Landscape,” which analyzes the decision-making process behind service center selection; consumer loyalty rates and demographics, and industry share-of-wallet realities for dealerships, independents and aftermarket chains and “Marketing Success in a Changing Loyalty Landscape,” which analyzes shoppers’ communications preferences, are available for download at: http://www.dmeautomotive.com/ solutions/the-changing-service-loyaltylandscape-whitepaper-request.aspx

Dealership Innovation Guide

Dealership Innovation Guide

DrivingSales • 2nd Quarter - 2012 • 35

Accountability Efficiency and effectiveness are improved when both vendors and team members are held accountable with a complete bundle of metrics. When management lacks complete transparency into the business, the focus can easily drift from achieving the objective to gaming the metrics. Effective management of an incentivized team cannot be achieved without broad-based accountability.

Consistent user experience When everything has a similar look and feel, users are able to work more efficiently and effectively. They tend to explore software tools and reporting more completely and extract more benefit from the products they purchase.

Product Profiting from

Integration

O

n October 13, 2009, Dennis introduced a spaghetti chart in a keynote presentation at the first ever DrivingSales Executive Summit. As the slide built out with 18 animations, it became clear to the dealers in attendance just how complex their business had become. Today, there are even more products and services available and more services and activities dealerships must engage in to maximize profitability. Yet some of the spaghetti is beginning to straighten out into something more akin to designed enterprise architecture, on which product integration has a dramatic influence.

There is no single right way of mapping out a plan for enterprise architecture, except that it must begin with the objectives of the organization. Here are examples of both cost reducing and revenue increasing objectives in automotive retail over which increased integration can have a purposed impact: Elimination of data reentry and manual transfer of data 36 • 2nd Quarter - 2012 • DrivingSales

Profit is enhanced directly through labor savings and indirectly through cleaner data being used for selling and decision-making. Reentry of data doubles or triples the chance of incorrectly adding or omitting a digit.

Consolidation of customer shopping and purchase activity

Revenue is increased when BDC agents and salespeople can see all of the customer’s shopping activity and past purchase activity during preparation and/ or engagement. They better understand the shopper’s needs and desires, resulting in more sales. Additionally, a more complete understanding of the customer, combined with proper training, leads to higher customer satisfaction, more loyalty, and better advocacy.

Better planning and decision-making Planning and decision-making are improved when relevant information is derived from various bits of data from across data tables.

At the 2012 NADA Convention, we interviewed some of the largest vendor organizations to find out what they are doing to help dealers achieve these objectives and how they are going about it. What we found was a mix of acquisitions, development of new product categories, and development of new products spanning the gaps between former product categories. We found that integration can reduce the need for training on software usage and increase the need for training on how to get the most out of new software capabilities.

We found a variety of philosophies and approaches to product integration. We found tools for centralization within dealer groups, and tools easy enough to use at the store level to reduce the need for centralization. Here, we’ll explore the product integration themes that we found most prevalent from the top vendor companies and most relevant to dealer success: Integration via new products coupled with the ease of use.

Integration Via New Products We uncovered at least three key areas where product integration is and will benefit dealers. One of those three areas is through new products. Most Internet products participate in at least one of the following areas: 1. The process of linking shoppers to the store (e.g. listings, leads, search, websites) 2. Facilitating or improving the store’s initial engagement with the shopper (e.g. auto response, call whisper, chat, phone recording, and phone training) 3. Improving the store’s ability to close and maximize profitability from walk-ins and appointments (e.g. sales training, desking Dealership Innovation Guide

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Dealership Innovation Guide

tools, and tools for selling accessories and F&I products) Nearly all of these produce information as a byproduct. The more of these pieces that a vendor can stitch together, the clearer the picture they can obtain for the entire process. This gives the vendor an opportunity to see additional needs and build products to fill those needs. But how each vendor does that varies as widely as the needs themselves, which is why we spent time at NADA interviewing the top people in prominent vendor companies to get an understanding of their approach to new products as a means of integration.

Sometimes, the use of data between merging companies is as straightforward as one group throwing it to another to see what they can do with it. In talking with AutoTrader.com CEO, Chip Perry, this was the case after they acquired vAuto. After sifting through the mountains of online shopping data that is a natural byproduct of AutoTrader. com’s listing service, vAuto was able to come up with the Provision tool. Today, a free version of Provision is available for the benefit of all AutoTrader.com customers and a premium version to vAuto customers. Additional advances are needed to help dealers obtain the right used vehicles at the right price, but the product has widely been acclaimed as a step forward for the industry.

Acquisitions have been important for ADP/Cobalt as well. The organization’s network of sites now receives over 1 billion impressions per month and employs dozens of analysts to sift through it all in a big-picture fashion. As CMO, Chris Reed, put it, “the acquisitions got us out of our stovepipes.” However, integration need not be exclusive across one’s own suite of products. ADP/ Cobalt is massive, yet it freely integrates with over 400 vendors. The company is happy to work with others, but prefers to have an API for an integrated view of performance – once again demonstrating the integration of data to form a more complete picture of online auto shopping.

In addition to acquisitions and free integration with other vendors, companies can also begin to grow their own suite of products to extend their reach in the overall marketing and make it possible for that integration to occur accordingly. Dealer.com continues to grow as a major player across dealer advertising. It’s roots are in dealer websites, but this has lead the firm to expand into virtually everything that drives traffic to the site, content generation for the site, social media, and an upcoming CRM. The path appears clear: the more the firm learns from the Dealership Innovation Guide

data it collects and research it conducts, the more products it can expand into in a way that integrates with the core platform. The more product areas it expands into, the more it can learn from the data collected. On and on it goes.

Many of the product lines Dealer.com has expanded into are not new, but the firm has brought new features into those product areas. Some of these features are completely dependent upon the pieces of the system working together.

Conversely, some organizations remain eager to integrate their products with others, but have maintained a strict focus on their product development efforts. Cars.com’s Bill Swislow and Alex Vetter made it clear that once the consumer contacts the store, the rest is outside their area of focus. This

“

Sometimes, the use of data between companies is as straightforward as one group throwing it to another...

”

allows them to focus on more mobile products. Cars.com was an early entrant into mobile solutions for consumers and was quick to launch an iPad app for shopping in 2012. The percentage of consumer traffic coming to the Cars.com network from smartphones and tablets continues to increase. In short, Cars.com is integrating a number of ways consumers can shop for a vehicle into the products dealers already buy.

In a more minimalistic fashion, Autobytel has shed off a number of businesses over the years to focus on the effectiveness of their primary one: connecting online, in-market consumers to dealers. In many ways, this takes Autobytel back to its roots.

Steve Lind, the firm’s EVP of Corporate Development, is proud of this focus and the fact that it has taken the firm to profitability. The focus here has been an improved website and better SEM practices, allowing the firm to create

far more of the leads it sells to dealers.

Lead quality is a concern for every lead aggregator (Autobytel, Dealix, AutoUSA, and Cars.com’s NewLeadsPlus).

Creating more of what one sells is the surest way of controlling quality.

Many of the new or better developed products coming out of this integration era will profit dealers directly. There are enough large players to prevent any type of oligopoly situation in the market, and dealers are gaining the tools they need to hold vendors and team members accountable for performance.

Still, many dealers are struggling to keep up, leading the motivation behind discovering the other types of product integration: Can products and service become simpler for dealers as they continue to become more robust?

Profitability Through Simplicity Most marketing products sold to dealers are participatory. That is to say, what a dealer gets out of them is somewhat dependent upon the non-cash things put into them. Vehicle listings require vehicle merchandising. Search engine marketing requires ad layouts and landing pages. Leads require quick and complete responses. We continue to hear a lot of talk about whether or not a particular product works, but the fact is that most marketing products work for those who work them, and don’t work for those who don’t.

However, savvy vendors are putting the burden of improvement on their own shoulders to make it easier for dealers to maximize their ROI from marketing and information system investments.

As vendors expand the array of products they provide dealers, some of the benefit is derived from new product features. But some of the benefit comes from making products easier to work. A few years ago, Lindsey’s just-turning-4 nephew showed her how to log onto the computer, get onto the Internet, and find his favorite online game site. Now, we know we’re biased when we say he’s smart and even was back then, but let us remind you – he was four. Are the products you’re using easy enough for your fouryear-old niece or nephew to use?

In our discussions with leading vendors, this focus on the ease of product use was paramount for some, like Dominion and ADP/Cobalt, but for others, the issue never came up. There is a big difference between an organization that uses the dealer’s share of wallet as a top performance indicator and an organization focused on the value dealers extract from the products they DrivingSales • 2nd Quarter - 2012 • 39

buy up other companies so they can provide their own suite of products with seamless integration, and those that will openly share their products to interact with other vendor products that dealers’ have in place already or will have in place. Product Integration is also possible when either of these two companies add new products organically through product development. It’s no secret that the largest vendors for dealers are considerably larger today than they were a few years ago. Whether the growth is through acquisition or organic, it generally involves expansion into additional services. Gradually, this will change the way many vendors interact with their dealer customers and the prices vendors charge them.

offer. It is absolutely possible to keep an eye on both, but there is currently a great deal of variation between vendors.

Ask any vendor what percentage of their dealer customers receive at least 70% of the value they could receive from their product. We’ve asked this question to dozens of vendors over the years and get answers back ranging from zero to less than half. We have yet to find any organization selling to dealers that believes more than half its dealers utilize over 70% of the potential product value! News flash: That’s a problem. Still, the focus of many product teams is on developing new products and new product features, rather than providing the tools and training dealers need to extract more value from what they already buy.

Just as it is important that marketing products continue to offer consumers a better user interface (UI) and user experience (UX), it is also essential to improve the UI and UX for the dealership.

The changes occurring in automotive retail shopping by consumers are more than many stores are able to keep up with; however, we have seen this play out before in consumer markets.

Twenty years ago, there was a loud cry to make everyone “computer literate.”

Today, iPad applications are made to be so user friendly that children can use them long before they are able to read. That same drive toward simplicity must take place among the products dealers work with to maximize profits.

Fortunately, that is the focus of some companies – and we suspect a growing number of companies – serving dealers. They look at product 40 • 2nd Quarter - 2012 • DrivingSales

integration and ask how things can be made easier, simpler for those in the store. As we listened to George Nenni of Dominion, we heard the voice of a man unsatisfied with what has been achieved in this area, by his company or any other, but enthusiastic about what can and will be achieved for dealers over the months and years ahead.

It stands to reason that although new features will continue to grab headlines, what generates an ROI for stores is how well people in the dealership can execute with those features. Our industry is just starting to come to grips with the fact that consumers are trading in vehicles they still have not fully learned to operate, and it stifles loyalty and advocacy. Many consumers won’t blame their lack of understanding the vehicle on themselves, just as many dealers won’t blame their lack of understanding the products they buy on themselves either. Nor should they. It will be up to vendors to step up with products and systems that are more intuitive and draw on skills already obtained elsewhere. The good news for dealers is that vendors are beginning to not just get the message, but are working on a better response to it. The more dealers select systems based on the profitability they can really extract from them rather than the profitability that is theoretically possible, the faster vendors will adjust to the demands of the market.

Impact of Vendor Integration on Price and Service In the way of product integration, we’ve found that there are more or less two kinds of approaches: vendors who

Vendors sell to dealers in one of two basic ways, through transactional sales or consultative sales. With transactional selling, the sales person simply sells the dealers on the benefits of their product relative to the price. The ongoing service may include access to the sales person or an account manager, and perhaps even involve a periodic call to the dealer to review some performance reports. Alternatively, with consultative selling, the sales person adds value during the selling process. That sales person may continue to add value after the sale with advice beyond the product itself. Carrying a multitude of products allows the sales person to offer additional solutions as additional problems or opportunities are identified.

Consultative selling, while informative and beneficial, can earn a vendor a premium. Dealers need to make sure that the services they pay for fit within their realm of operation and goals.

They need to constantly reevaluate if they need the additional consultation on strategy and products. If not, a transactional model might better fit their needs and budgets. But frankly, many of the companies who think they are providing consultative selling are simply providing an expensive latte delivery service. As previously mentioned, most dealers do not receive even 70% of the potential value from the products they buy. There is certainly room to add value, but if it’s not happening, then the vendor may as well cut the sales staff and reduce prices to dealers.

Additionally, there is no shame in conducting a transactional sales approach. Companies like Member Services have virtually eliminated the expense of having salespeople in the field and are doing just fine passing those savings on to dealers. Sales author, Neil Rackham, studied tens of thousands of business-to-business sales calls before concluding that moving Dealership Innovation Guide

from consultative selling to transactional selling is a natural evolution as the product category matures. Companies refusing to adapt can find themselves at a significant competitive disadvantage.

Organizations seeking a high share of the dealer’s wallet, along with share of mind, often weave consultative selling into the very culture of the organization.

Their natural evolution will be to add additional products with which to service the dealer and spread the cost burden of consultative selling. This is clearly and openly the path of AutoTrader. com. As Chip Perry pointed out to us, the firm’s sales people make knowing the dealer’s business their business.

Sales reps will help the dealer get more out of the products they buy, and introduce them to additional services when the rep perceives a need for them. This may involve bringing in someone more expert about the additional product, but the sales agent is expected to be expert enough to know when that additional expertise is called for. These services can be decidedly valuable, when done right.

Indeed, vendor consolidation can lead to a higher level of service delivered, without an economic burden. Execution can be a bit tricky: when the rep starts talking about the product they are having an introductory special on this month rather than a clear correlation between an identified need and a product solution, then the system is no longer consultative. We suspect executives at large organizations like AutoTrader.com, ADP/Cobalt, Dealer.

Dealership Innovation Guide

com, Dominion, and others have their hands full balancing this challenge with that of meeting short-term financial goals.

Some may execute the consultative model well. Some may evolve to a transactional model, and some may flounder in the middle. The challenge for dealers will be to make sure they are not paying a premium for non-beneficial service. Which approach is best for a dealer to team up with depends completely on the goals and strategies of each individual dealer operation.

An interesting wildcard will be the growing community of trainers and consultants. On one hand, well executed consultative selling can be seen as a threat to their livelihood. On the other hand, there is some level of expectation for trainers and consultants to remain vendor neutral. Again the field is mixed.

Some trainers refuse to accept any form of payment from vendors, while others are registered agents of various vendors.

Integration and the Future Throughout the course of our interviews with top executives at prominent vendor companies, we found that approaches to product integration are as varied as the products themselves. The age of product integration has just begun in automotive retail, but the change it brings must be adapted to quickly. Dealers don’t all need the same solutions, and vendors won’t all provide the same approach. However, margins are too thin for inefficient practices to compete alongside those who fully capitalize on the changes ahead. There will

be carnage among those slow to adapt, but that merely adds to the opportunity for those who adapt best.

One thing is certain, dealers dictate the pace at which that evolution happens; there is no need for lions to evolve as long as there are plenty of lazy zebra around. The more diligently the dealer community identifies what works and rejects that which does not, the faster the market will evolve toward maximum efficiency.

About The Authors:

Lindsey Auguste is the Editorial Director for DrivingSales, ensuring that the community is getting the content and experience they need to improve their dealerships. Lindsey comes from a background in psychology and sociology at Chapman University and worked as a research assistant at Stanford University where she executed the research design and collection process. She applies this specialty at DrivingSales by providing research across the industry and by helping to bring relevant content to her DrivingSales peers.

Dennis Galbraith leads Research and Business Intelligence for Dealers at DrivingSales and is the author of Sales Integration. Dennis ran the automotive internet division of J.D. Power and Associates and was Vice President of Advertising Products and Training for Cars. com. He has owned several successful companies, Dennis Galbraith Marketing Services and Revenue Guru. He earned an MBA from University of Southern California and taught marketing for Embry-Riddle Aeronautical University and NADA Academy.

DrivingSales • 2nd Quarter - 2012 • 41

From The Ground Up locations, in a top Independent dealer of the Midwest, Bart’s Car Store.

Up to that point, I had been involved in just about every dynamic of the company and finally, in 2011, I had an opportunity to prove myself online. Hardly anyone else was interested in tackling our online marketing, let alone familiar enough with computers and the Internet to be qualified. So, I took on the adventure.

I

first entered the auto business in 2004, a senior in high school, as a lot porter for a new and used dealer in Goshen, IN. I naively applied for sales with a “go-getter” attitude and, thankfully, made an impression on the store manager. From washing cars, I worked my way from the bottom of the ladder to working 65 hours a week on a shark infested sales floor. This was my first encounter with my love for sales, but what I didn’t realize was it was also my first encounter with the online dynamic of the business, which would ultimately lead into the career path I’m on now. While learning the ropes, my manager noticed my knack for computers and put me on the task of posting on eBay motors and Craigslist. This gave me the experience and interest early on that snowballed into a niche that I quickly realized was rare in the business. Eight years, 2 dealerships, and a recession later, I got my shot as the “Online Media Coordinator” of 5 42 • 2nd Quarter - 2012 • DrivingSales

Online Footprint I started my venture online with Bart’s Car Store foundation in mind. I wanted to see just how large I could make our footprint online. I claimed and registered our business and website anywhere I possibly could: search engines, business listings, review sites, and social platforms. Tasked with having to tackle 5 locations at the same time, I replicated the same process with all stores, but kept them separate with their own contact information and listings. I made it a point to correct the several errors we found online when posting information about our business and made sure that each store had its own email and separate phone number. Next, I focused on tracking. Google Analytics was a fantastic way to do this for free and I was already familiar with Google products, making it easy to use.

Website After correcting the listing information on all platforms, I took a long look at our website. I had to decide whether to start over with a new site or build from the one we had. I tried to make several immediate changes to our site and started to make use of the numerous features we had available to us that were not currently being used. Most of the time I found that, with online features and advertising, there was just a lack of training or effort to learn how to use the resources available.

Inevitably, this resulted in taking the time to learn the tools and applications that didn’t charge any extra money, and since we were already paying for them, it would easily make me a hero.

The website vender we were with when I started was one that had transitioned to a wholesale company of sorts. They had lost interest in serving dealers themselves and basically wholesaled their software to a company that would resell with a monthly service charge for support. Since we were not a part of this service and no longer a priority, getting anything accomplished in a reasonable amount of time was just not happening.

The owner of my dealership and I quickly became frustrated with being restricted and set goal to find a new provider.

We wanted an all-in-one company that could provide us everything we Dealership Innovation Guide

from the bottom up, using as much of what you have in place to the best of everyone’s ability. Time after time, I see dealers who don’t utilize what is right in front of them; tools that, in many cases, they are already paying for. Don’t wait for someone else to do it because it won’t get done. Start now and don’t stop – the pace setters are the winners in this online race. To stay ahead of the competition, you have to track, adjust, and execute, and do it quicker than everyone else. needed integrated and on the cutting edge. I jumped online and researched every nook and cranny for companies that offered such services. We used the Drivingsales.com Vendor Ratings to view the categorized list of such companies and especially the reviews from other dealers. This allowed us to quickly narrow down the countless businesses to 3 of the top website providers. One in particular, eCarList, offered a pricing tool that had great reviews that stood out. We were using a different provider at the time and were enjoying the pricing tool, but not the cost or the rest of the software. With a product so expensive and realizing that we were not even coming close to using the whole program, it made sense to go with eCarList where we could save money and streamline the process with one program for everything. Now we were logging into to just one place to merchandise, price, appraise, and manage our inventory. Most of our time was spent integrating our in-house software and designing the portal page.

It was a high priority to stand out and not follow the common cookie cutter design that most dealer sites fell into.

We wanted a simple, but memorable customer experience. Customers visit so many dealers online; thus, making it easy for customers to remember ours was very important. After a few revisions, we had a final and beautiful portal page that represented the front door to our entire locations inventory.

Creating a Features List Implementing features was next on the list and from there it was all about testing. Choosing the correct features for a website is crucial to a website experience; too much of one thing or not enough of another can throw the whole balance off and miss the entire goal online. I try and stick to a few basic fundamentals on our site: generate traffic, convert or capture visits, and distribute data. Everything on my site that pertains to the customer experience falls into one of those categories; the rest is just about repeatedly testing and tracking everything. Generating traffic covers everything you put into Dealership Innovation Guide

SEO, SEM, and 3rd party sites. The value of a visit is something that is hard to track and many times overlooked.

Converting or capturing the visitor’s information via the countless lists of forms and features is equally important.

Like ice-skating uphill, you find yourself getting nowhere if all you pay attention to is getting customers to your site.

Tracking and Testing Tracking and testing different methods of converting these visitors to customers with information is your next step. There are piles of features and forms with incentives that can get this done. Placing the correct ones in the correct places is what makes all the difference. You have to keep it fresh and new looking. If you ever get the impression something looks stale or that you are used to seeing something, it probably needs to change.

You have to keep that wow factor.

Still Moving By the end of the first year, I had not only received the “Employee of the Year” award, but was promoted to “Digital/BDC Manager.” It felt good to finally make use of my niche for online marketing and merchandising. I chose this career path because I am truly amazed by the constant innovation and pace of change that you can find online.

All the capabilities and possibilities the Internet offers a dealership is amazing to me. To be a part of constant innovation and understanding that dealers still don’t realize its potential, is even more amazing.

About The Author:

Russ Chandler is the Digital Manager of the independent 5 location dealer group, Bart’s Car Store. At 25, he has already accumulated 9 years of experience working in almost every department, from sales to IT specialist. Living in Fort Wayne, IN, he takes pride in making ideas come to life online for company owner, Bart Churchward.

Russ specializes in the one-man-show operations and process side of the online dealership. With a strong belief that it comes down to working harder, longer, and with an entrepreneur’s spirit, he hopes to set new standards in the online auto market. “I try to run the website and rest of the online components as if the business was my own.”

He goes on to say “most of the time that keeps my boss happy and personally, I think it’s the only way to do things.” You can also find Russ in other markets online locally, as he manages more than one website and Facebook page in his spare time. “I’ve always loved the dynamics online and gain a lot of experience working for very different businesses in different markets that I can apply to my work with Bart’s Car Store.”

In the future, Russ plans on staying with Bart’s Car Store; they currently are working on plans of expanding and know competing online is going to be a big part of it.

But of course, finding a balance between the people and the technology is paramount. To this day, I battle the process of getting the digital customer in front of a BDC rep or salesman so they can be contacted before the competition.

There is no such thing as a selfsustaining system. Computers will break and software will make mistakes. You have to constantly manage everything to ensure each and every customer makes it all the way to a real person. This means training everyone on everything DrivingSales • 2nd Quarter - 2012 • 43

HANDLE WITH Using Internet Chat to CARE Create Quality Leads 44 • 2nd Quarter - 2012 • DrivingSales

Dealership Innovation Guide

T

here is no denying that over the years, technology has dramatically changed the way dealerships collect and respond to leads. Today, one of the growing technology offerings that can positively impact one’s bottom-line is online chat on a dealer’s website.

A couple of years ago when we started the DealerTrack eCarList chat service, the question I received most was, “Do chat leads take away from my other leads?” And, my answer is “No, if handled properly and with care.”

In actuality, online chat leads can significantly increase the number of quality leads that result in sales, and complement your other leadgenerating activities. This can be done through managed chat lead service.

Managed chat leads are live one-on-one interactions with your customers and a first impression to your dealership.

These leads typically contain all customer contact info, the vehicle they are looking at, full trade info, and most importantly, the mood of the customer.

Since developing our chat service, I’ve had the opportunity to study the relationships of chat leads versus other lead sources over a massive amount of dealerships.

In our study, we compared data from dealerships without chat and dealerships that previously managed their own chat, against the same data once they began having a third-party, such as DealerTrack eCarList, manage their chat service. Not to bore you with a bunch of statistics, but overwhelmingly leads went up…. way up. By adding a service like 24/7 Live Web Concierge, dealership leads doubled and even tripled, in some cases.

•

Neglecting to delve into and “hear” what is being said in the chat transcripts - If they had, they would have frequently seen an overzealous sales guy was on the case and was, more than likely, beating the visitor up trying to close on the deal right then and there. The data is there to help you, use it.

Chat vs. Website Pop-ups How do you feel when you go to a website and stuff is jumping out at you from all angles? Not good. There are many, many dealerships that spend hundreds of dollars each month on pop-ups, pop-unders and floating boxes to create leads. A lot of money is spent each month that, in reality, turns away a lot of customers. That’s not to say you won’t get a sale here and there from a die-hard brand loyalist that you had anyway, but really think about the experience the potential customer is having. Why do all of that?

In most cases, the money you spend on all that junk could easily be allocated to a low cost managed chat service. The leads you’ll get will far outweigh the few sales that come from a coupon for $500 off MSRP. Once you have a great lead from managed chat, what you do with it makes all the difference in the world. At the heart of what should be done by your sales staff is read the transcript. A quick example of a dealership falling short is the case of an independent dealership

“

The leads you’ll get will far outweigh the few sales that come...

”

owner describing that they weren’t selling any cars off the chat leads and wanted to cancel. A quick look into how they were handling the leads shed some light onto why they weren’t selling. The sales people (a) were not reading the transcripts, and (b) were responding with non descript, canned responses such as “My name is Tom. If you have any questions please call me at (xxx) xxx-xxxx.” Not only were they missing the specific questions that needed the sales person’s attention but also the email did not even include a signature with the dealership’s information.

The numbers don’t lie. Dealerships using managed chat properly are closing 20 percent+ of the incoming the chat leads.

In the cases where sales people took their time to read and respond according to the transcript details, those leads had overwhelmingly high conversion rates.

Chat leads are full conversations that sometimes last as long as 45min about your dealership and the vehicles you

Despite these findings, dealers can still be reluctant to fully and properly leverage chat functionality because of previous lackluster results with chat at their dealership. In our study, we found a few reasons for the less than stellar use of chat technology. They include: •

Simply staffing chat with unqualified dealership personnel rather than using a qualified outside managed chat team. It was also obvious that they weren’t looking at their own statistics and evaluating the amount of answered chats versus missed chats, which could have been useful leads. And let’s be real, at a dealership they typically have a nice receptionist with a pleasant first impression for your visitors. Why wouldn’t you also want that for your website?

Dealership Innovation Guide

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to your team on a silver platter. Don’t spill it by not spending a few minutes to get personal with the customer.

Turn off the CRM auto-responder.

Typically a full discussion has already taken place and the customer does not need five emails from the dealership explaining how awesome they are. Read and respond to the transcript you’ve been handed. If you really don’t want to turn off the auto-responder, take the time to word it correctly for incoming chat leads. An example may be something like, “Thanks for chatting with our web response team. My name is Tom and I’ll be getting in touch with you shortly. If this is after normal business hours, I’ll be in touch first thing in the morning. If you should need to reach me at any time, please call (xxx) xxx-xxxx.” Recognize the fact the customer took the time to engage, and then do the same.

Review the details. Take the time to review the numbers and the transcripts, and then get to the bottom of what’s working and what’s not. The answers will always be in there; you simply need to take the time to engage. Nothing in this business is completely turnkey, so utilize the knowledge at your fingertips and turn those leads into sales.

Implementing chat properly can be a challenge for any dealership alone. Chat leads can be some of the most valuable leads a dealership can receive and need to be handled with care. For many dealerships, leveraging a third-party managed chat provider can be the answer to turning chat sales leads into gold.

About The Author:

have for sale. If the customer is going to spend that kind of money on a purchase, it’s the sales person’s duty to spend a few minutes of their time to read and respond accordingly. Some of these leads are pure gold and we’ve seen them tarnish quickly after a poor response from a sales guy on the CRM’s round robin.

By simply applying some of the following best practices, dealerships can benefit from increased conversion of chat leads: Get personal. This is a common theme throughout this article but it’s extremely 46 • 2nd Quarter - 2012 • DrivingSales

important. If you have ever called for support at a bank or phone company and you’ve had to give the same info over and over to each person you talk to, you know it’s pretty annoying. The same goes for this experience! A potential customer has already had a live chat with somebody representing your dealership and now it’s your turn to take that discussion further and not have them rehash the same information.

Read the transcript and address everything brought up. The beauty of chat, assuming you’re using a quality vendor, is that all the information is given

Merritt Critcher created and is the Director of DealerTrack eCarList’s Managed SmartChat product, which provides 24/7 live chat services for retail automobile dealerships. For over two decades, inclusive of the last seven years specifically in the automotive industry, Merritt has been a unique force in developing unique marketing approaches within the business community. His track record for innovation in using emerging technologies has assisted clients nationwide in realizing significant business growth. Merritt attended Centenary College and is a graduate of Texas A&MCommerce. He resides in Dallas, TX with his wife, Kimberly, and their daughter, Luca Claire.

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Dealership Innovation Guide