Dealership Innovation Guide Q2 2013

Dealership

INNOVATION

GUIDE

A DrivingSales Publication • 2nd Quarter, 2013

Quar terly Ranking of Dealership Vendors and Best Practices

Google

Is making Eric Miltsch - Page 28

plans to put you out of

Are your Vendors Watching your Back?

Business?

Jim Radogna - Page 14

Is your Leadership in the Trenches?

Jay Radke - Page 32

Attacking the Dealer App Gap

Michael Feldmann - Page 36

Visit DrivingSales.com to view more than 8,000 verified dealer ratings of over 800 vendors in 28 categories.

I help customers find the formula to marketing success by keeping the lines of communication compliant as well as compelling.

Eric Sloan, Head Legal Watchdog

KEEP CALLING - The Mobile Consent Call from DMEautomotive New FCC regulations could prevent you from calling half your customers!

Time is running out to save these valuable mobile phone numbers – Call us to learn more.

MasterCall Solutions Dealer Branded Mobile Apps Science Driven Direct Marketing that gets Results www.DMEautomotive.com Images Š Steve Thornton

888-262-7982

Dealership

INNOVATION

GUIDE

A DrivingSales Publication

Quar terly Ranking of Dealership Vendors and Best Prac tices

Dealership Executives, Just as our industry is under a barrage of change, The Dealership Innovation Guide is also changing to help provide the most bleeding edge information to our community.

In this issue, we’ve devoted our cover story to an entire topic that should hit home for every dealer in the US. The Google Cars program marks a significant shift in the way new car dealers can market their inventory within the organic search results. This program could also highlight other key elements of a successful lead handling process.

Closely related and also representing more change within our industry is an in-depth look at the evolving landscape of technology being used throughout new vehicles to help improve both the quality of our rides and our lifestyle. How will this impact our decisions regarding your sales staff?

With the DrivingSales Presidents Club event in New York City approaching on April 21-22, at the Waldorf Astoria, this issue also addresses some of the key topics to be discussed at this exclusive event: Your brand, your capital and your people.

Be sure to spend some some time in Jay Radke’s leadership article and Adam Grossman’s article on the issue of BYOD and how it can impact your stores.

Compliance expert, Jim Radogna, takes you through the paces of high-level brand management that will certainly make you think twice about what’s happening under roof and beyond.

We’re also extremely proud to introduce five first-time DrivingSales Innovation Guide dealer contributors who who have an absolutely stellar record of industry experience. Take note of how these successful dealers have fully embraced the dynamic nature of the business and emerged themselves into today’s strategies and the tactics. Larry Goering from Ken Garff Automotive shares his social media experiences, Bill Simmons from Haley Certified dives into his successful inventory management methods, Lithia’s Michael Feldman gives a great overview on how mobile apps help power their ‘Customers for Life’ philosophy, and Chris Cady exposes his winning formula for an accessories sales program.

Bill Playford, a trusted industry consultant with DealerKnows Consulting breaks down some common misconceptions regarding strategy and tactics and helps you make sense of it all.

As you head into the second quarter of 2013, ask yourself what you and your team is doing to maintain continuous improvement and use the guidance shared by your peers within this issue (and issues past!).

We’re doing our best to bring you the stories and concepts that are most important to you and your dealership’s objectives: Performance improvement.

PS. Don’t forget to check out the latest vendor ratings and reviews, the best place for verified, objective information from dealers like you!

Meet the Team Jared Hamilton Founder, DrivingSales Inc. @jaredhamiltonDS Lindsey Auguste Editorial Director lindsey.auguste@drivingsales.com @lindseyauguste Jeff Pease Art Director jeff.pease@drivingsales.com @jeffpease Larry Schlagheck Director of Advertising larry.schlagheck@drivingsales.com @larryschlagheck Bart Wilson Business Development bart.wilson@drivingsales.com @bartrwilson Paul Hamilton Production Manager paul.hamilton@drivingsales.com @pbhamilton Tommy Bay Director of Marketing tommy.bay@drivingsales.com @tommybay Eric Miltsch Director of Product Strategy eric.miltsch@drivingsales.com @emiltsch

Jared Hamilton Founder, DrivingSales, LLC Dealership Innovation Guide

DrivingSales, LLC • 2nd Quarter - 2013 • 3

Thanks To Our Sponsors!

MAGAZINE CREDITS About This Guide Dealership Innovation Guide is published quarterly by DrivingSales, LLC. To subscribe, visit DealershipInnovationGuide. com. Printed in the United States of America. Copyright © DrivingSales, LLC 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, LLC assume no responsibility for unsolicited manuscripts or photographs.

4 • 2nd Quarter - 2013 • DrivingSales, LLC

Letters To The Editor Dealership Innovation Guide and DrivingSales, LLC 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, LLC, 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

Table of Contents

2nd Quarter

FEATURES 32

IS YOUR LEADERSHIP IN THE TRENCHES? FEATURED ARTICLE

2013

14

Are your Vendors Watching your Back?

18

Vietnam vs Arm Wrestling

22

Bring Your Own Device

24

Convergence of Technology

26

Using Twitter to Communicate with your Customers

By Jay Radke

By Jim Radogna

By Bill Playford

By Adam Grossman

By Lindsey Auguste & Eric Miltsch

18

By Larry Goering

06 On DrivingSales.com, dealers can rate their vendors. All reviews are

28

Is the Auto Industry under Attack?

36

Attacking the Dealer App Gap

40

New Accessories Sales Process

44

Reduce The Time

verified to be legitimate and posted for you to learn who the best vendors are – directly from your peers.

By Eric Miltsch

By Michael Feldmann

By Chris Cady

By Bill Simmons

36 Dealership Innovation Guide

DrivingSales, LLC • 2nd Quarter - 2013 • 5

6 • 2nd Quarter - 2013 • DrivingSales, LLC

Dealership Innovation Guide

Over 8,000 unbiased vendor ratings submitted by verified dealers.

CATEGORIES 8

Call Management Chat CRM/Sales Department Dealership Management Systems (DMS)

9

Fixed Ops Solutions Internet Lead Management (ILM)

1 0 Internet Trainers Inventory Pricing Mobile Sites New Car Leads

11 Owner Marketing Reputation Management

1 2 Search Engine Optimization (SEO) SEM - PPC Used Car Advertising Websites

Dealership Innovation Guide

DrivingSales, LLC • 2nd Quarter - 2013 • 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 CAR-Research XRM

Product

Call Tracking / Ad Sourcing Solution

CallSource CallTracking Century Interactive

Call Tracking from Century Interactive

CallRevu, LLC

CallRevu, LLC

Who’s Calling

Who’s Calling

Score Rating Rec 979.41

93%

47.36

100%

849.45 7.33 4.79

100% 67% 100%

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

Dealer e Process

Dealer e Process Live Chat

437.40

ContactAtOnce! LLC CarChat24

ContactAtOnce! Chat Connect CarChat24 - 24/7 Fully Staffed Chat

Client~ConneXion Chat~ConneXion ActivEngage

ActivEngage Chat

913.47

100%

122.40

100%

13.49 7.14

100% 100%

75%

CRM-Sales Department 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 CAR-Research XRM DealerSocket VinSolutions Dealerpeak

Product

Score Rating Rec

CAR-Research XRM

61.54

Dominion CRM

DealerSocket CRM

VinSolutions MotoSnap™ CRM Dealerpeak CRM Center

192.62

95%

2.72

62%

0.07

100%

0.11

99%

86%

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

ERA-IGNITE

54.90

Auto/Mate Dealership Systems Reynolds and Reynolds

AMPS

Reynolds ERA DMS

8 • 2nd Quarter - 2013 • DrivingSales, LLC

511.82 5.11

100%

75%

50%

Dealership Innovation Guide

Fixed Ops Solutions Customer Relationship Management systems for the Fixed Operations.

Company

Product

Score Rating Rec

CIMA Systems

CIMA CarView

428.72

CIMA Systems

Dealer e Process Dealer e Process

CAR-Research XRM

CIMA Car Care Service Menus Virtual Service Consultant Live Repair Orders

Service Drive Control Manager

688.91

99%

11.73

100%

9.60 1.18

100% 100% 100%

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

CAR-Research XRM

Internet Lead Manager

24.24

Dominion Dealer Solutions HookLogic - AutoHook ELEAD1ONE

ProResponse

Dealership Innovation Guide

Dominion ILM

Lead to Show 1.0 ELEAD ILM

ProResponse ILM

347.19

0.08

100%

0.02 0.02

98%

100% 100% 100%

DrivingSales, LLC • 2nd Quarter - 2013 • 9

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

PCG Digital Marketing

Brian Pasch

12.78

eXtéresEDU - Dealer Training

3.00

KPA

Phone Ninjas

eXtéresAUTO

DealerKnows Consulting

DealerWebinars.com presented by KPA Phone Ninjas Joe Webb

751.73

100%

11.03

100%

100%

93%

1.71

100%

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 Technologies

TrueTarget™

2.28

vAuto

Black Book FirstLook

VinSolutions

Pricing & Appraising Tools Black Book Used Car Guides

FirstLook -- 360º Market Pricing

MotoSnap™ Market Pricing Analysis

291.94

100%

67%

0.73

100%

0.54

0%

0.09

0%

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

Company

Product

Score Rating Rec

DealerOn

DealerOn Mobile Sites

0.60

Dealer e Process WorldDealer, Inc. DealerFire

Dealer e Process Mobile Websites WD2GO Mobile Websites

DealerFire Mobile Websites

481.46

100%

0.20

100%

0.20

100% 100%

New Car Leads These providers collect and aggregate leads from their web properties and from partner sites, then distribute these hot leads to dealers. Currently this category is for both finance and vehicle leads.

Company

Product

Score Rating Rec

Autobytel Inc.

Autobytel New Car Leads

49.83

Dealix

AutoTrader

Edmonds.com

Dealercentric Solutions

Dealix New Car Leads New Car Advertising

Edmunds New Car Leads

Get Preapproved n Seconds

843.73

100%

7.44

75%

1.23

100%

1.23

91% 100%

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

For questions about Vendor Ratings, please email to bart.wilson@drivingsales.com 10 • 2nd Quarter - 2013 • DrivingSales, LLC

Dealership Innovation Guide

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

J&L Marketing, Inc.

bLinked

101.94

CIMA Systems

Complete Virtual BDC

OneCommand OneCommand CAR-Research XRM

Dominion Dealer Solutions

Owner Marketing

Dominion Marketing Services

128.48

100%

19.21

100%

8.33 2.37

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

DealerRater.com

DealerRater Certified Dealer Program

125.21

eXtéresAuto

Dominion Dealer Solutions Cobalt

Slipstream Creative Dealership Innovation Guide

Online Reputation Management Dominion Prime

Reputation Management Reputation Management

450.21

97%

22.75

100%

11.56 7.32

94% 100% 100% DrivingSales, LLC • 2nd Quarter - 2013 • 11

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

Dealer e Process

Power PageRank SEO

55.02

eXtéresAUTO

PCG Digital Marketing KPA

Dynamic Web Solutions

eXtéresAUTO - SEO

SEO & Strategic Internet Marketing

TK Carsites PowerSEO

Search Engine Optimization

157.04

94%

46.78

100%

4.84 0.47

100% 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

Dealer e Process

Dealer e Process Digital Marketing

283.16

Local Search Group POTRATZ

PCG Digital Marketing

Dynamic Web Solutions

Search Engine Advertising

Search and Behavioral for Website PPC Management Service Pay Per Click Advertising

313.46

100%

59.16

100%

28.45 1.33

100% 100% 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

GetAuto.com

Advertising & Leads Program

41.21

100%

AutoTrader.com

Used Car Advertising

10.76

Dealix UsedCars.com 829.68 97% Cars.com

Cars.com Online Advertising

24.50

100% 14%

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

Dominion Dealer Solutions

Dominion Websites

135.61

Dealer eProcess DealerOn

DealerFire KPA

Dealer eProcess Dealer Website DealerOn - Flex Sites

DealerFire Custom Websites

TK Carsites Websites

178.30

100%

107.08

97%

14.84 1.42

99% 100% 92%

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

For questions about Vendor Ratings, please email to bart.wilson@drivingsales.com 12 • 2nd Quarter - 2013 • DrivingSales, LLC

Dealership Innovation Guide

How Vendor Ratings Work

Vendor Ranking

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.

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.

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.

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.

Learn more at DealerSatisfactionAwards.com

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 March 1, 2012 to February 28, 2013. *Category scores are computed per category and are not comparable across the board.

For questions about Vendor Ratings, please contact bart.wilson@drivingsales.com

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

Are Your Vendors Watching Your Back?

M any dealers do an outstanding job of maintaining compliant organizations by monitoring internal processes and holding their employees accountable for doing things the right way. But what about companies that provide services to the dealership?

Unfortunately, not all merchants are diligent about protecting their clients’ interests and many dealers continue to be exposed to significant legal liability and reputation damage as a result of vendor missteps. Regulators have made it abundantly clear that the primary responsibility for legal compliance lies with the dealership, not the vendor.

In a perfect world, all vendors would go out of their way to ensure complete compliance with all state and federal regulations - but we’re simply not there yet. As a result, dealerships should be proactive in protecting themselves. Let’s take a look at 5 areas where dealers are vulnerable and red flags to watch out for.

Direct Mail and Staffed Events This past January, a Louisiana marketing company was permanently banned from automobile advertising and marketing in North Carolina. What’s interesting is that this same marketing company was busted by the state of Washington back in 2007. In that case, the dealership involved ended up paying almost twice the amount in penalties and legal fees as the marketing company did. In addition, the dealer had to sign a Consent Decree with the Attorney General that involved a permanent injunction in which penalties of up to $25,000 per violation could be assessed by the AG for any future advertising violations by the dealership.

14 • 2nd Quarter - 2013 • DrivingSales, LLC

Dealership Innovation Guide

Text Marketing

STAFFED EVENTS WEBSITES Reputation SOCIAL DIRECT MAIL Management MEDIA So, the shady operator pays a fine and continues business as usual with other dealers in other states. Meanwhile, the dealership pays through the nose, gets its reputation trashed, and has the AG breathing down its neck forever. It just doesn’t seem right.

Regulators have indicated that they simply do not like what they perceive to be overly-aggressive dealer advertising and marketing campaigns, and direct mail and staffed events are commonly targeted. Following is a list, from actual enforcement actions, of violations cited by regulators. There may be more, but you definitely want to keep an eye out for these Red Flags: •

•

•

•

•

Falsely representing that vehicles are from sources such as rental car company bankruptcies, bank repossessions, or fleet liquidations when the vehicles sold came from the dealers’ usual inventories.

Falsely representing that a sale is being sponsored or conducted by a bank, lending institution, fleet, repossession, or liquidation company.

Using deceptive promotions, including mailers that state “Urgent Recall-Official Notice” or otherwise imply it is from a government agency.

Misrepresenting the number of vehicles offered at an advertised price.

•

Staffed Event personnel raising vehicle prices to enable them to offer “better” deals.

•

Staffed Event personnel using very aggressive sales tactics designed to maximize profit, not to offer lowerthan-usual prices to consumers.

•

Staffed Event salespeople and managers illegally selling automobiles without proper state licensure or without state licenses to handle insurance sales.

•

Hiding the costs of extra products in payment quotes, an illegal practice called “packing.”

•

Adding charges for extra products and services that were not authorized or desired by consumers.

•

Negotiating a verbal or informal sales or lease agreement then changing the contract terms without a customer’s knowledge or consent.

•

Advertising with the intent to not sell the vehicles as advertised.

•

Misrepresenting the amount of and reasons for price reductions.

•

Misrepresenting the selling price of vehicles.

•

Failing to state the odds of a winning a prize, the value of that prize, and all material conditions required to obtain a prize.

•

Advertising “free” merchandise and prizes without adequately disclosing that consumers would need to pay shipping, handling or other fees.

Ads that create a false sense of urgency.

•

Ads that guarantee credit approval.

•

Ads that guarantee a minimum trade-in value.

•

Using words, phrases or initials in ads that aren’t easily understood by consumers or using a font size that’s difficult to read.

Dealership Innovation Guide

•

Failing to properly disclose dealer documentary or other fees.

•

Making statements that the dealer could not substantiate through its business records.

•

Failing to provide disclosures required by the federal Truth in Lending Act.

•

Offering a rebate that is not associated with a manufacturer or failing to disclose material terms in conjunction with a rebate offer.

•

Use of simulated checks where prohibited or failing to include voiding language on the simulated checks.

•

Failing to disclose limitations related to ability to obtain credit or related to the condition of a trade-in vehicle.

•

Advertising “free” merchandise with the purchase of a vehicle.

•

Failing to include staterequired disclosures.

•

Selling vehicles above the advertised price.

•

Advertising vehicles that had already been sold, resulting in a “bait and switch” scheme.

•

Advertising false savings such as 75 percent off the MSRP on a used vehicle or that vehicles would be sold at 95 percent off the original price without defining the “original price.”

•

Statements such as “Your current loan will be paid off NO MATTER WHAT YOU OWE”.

•

Making misleading statements about the availability of financing such as “$0 DOWN DELIVERS!

•

Failing to disclose conditions or restrictions related to sales offers.

While regulations and “hot buttons” vary by state, keep in mind that attorneys general frequently compare notes with their peers, so you never know when your state’s AG is going to get a bee in his or her bonnet about a new issue.

If you see any of the above Red Flags or you’re not completely certain that all statements made in the ads are true and not potentially misleading, it’s time DrivingSales, LLC • 2nd Quarter - 2013 • 15

Lube settled a text message marketing lawsuit for $47 million. They too had used an outside vendor for their program.

Websites Another area of concern when it comes to compliance is dealer websites. You would think that website providers would make sure that this doesn’t occur, right?

Unfortunately, that’s not always the case.

Recently I was doing a routine check of a dealer group’s websites during their quarterly compliance review. I didn’t expect to find any problems because the last time I had checked everything was perfect. Well, the dealer had changed website providers and the new sites had none of the required state disclosures, dozens of non-compliant banner ads, and no privacy policies as required by law in the dealer’s state.

It’s a good thing I was paying attention because the vendor sure wasn’t.

to slow down and have the campaign reviewed by a qualified professional.

Text Marketing Advertising and direct marketing companies are not the only culprits.

Other high-profile cases where dealers suffered due to vendor missteps include text marketing. In 2011, a large dealer group along with a vendor they worked with launched a text marketing campaign that ended in disaster. According to a class-action lawsuit and regulatory filings, the companies failed to honor consumer opt-out requests. Although the defendants claimed that it was a “technical error”, they ultimately agreed to a $2.5 million settlement. That staggering amount is in addition to the reputation damage the dealer group suffered. Besides widespread media coverage, the nearly 60,000 people who were sent the text messages were contacted about the settlement. As if that wasn’t bad enough, in 2012 Jiffy 16 • 2nd Quarter - 2013 • DrivingSales, LLC

You should never assume that the company that creates and maintains your websites follows all the laws and regulations governing compliance.

Federal and state regulators have been taking an increasingly aggressive stance in examining and challenging internet advertising and privacy. Let’s not forget that the FTC’s notorious enforcement action against dealers in 2012 resulted from advertisements they found on websites and YouTube.

Social Media Many dealers rely on vendors to post to their social media accounts. Despite the fact that social networking tends to be a low-keyed, casual type of communication, advertising regulations still apply. For instance, if inventory is posted or prices/payments are quoted on a social media site, it’s likely that the posts will be deemed to be advertisements and will be subject to disclosure and truth in advertising regulations. Sweepstakes, contests, and giveaways are also governed by a variety of federal and state laws.

Remember, it’s dangerous to assume that outsourcing responsibility for social media advertising and promotions will result in a legal compliance.

Reputation Management Finally, dealers should pay close attention when outsourcing their reputation management. There are plenty of companies out there that offer seemingly quick and easy ways to improve online ratings. Unfortunately, some of these review companies may be using “Black Hat” techniques and putting dealers that use their services at risk. A classic example is the dealership in Texas that suffered devastating reputation damage a few years ago because of the review-posting practices of a company they hired. A customer discovered that suspicious “reviewers” were writing 5-star reviews about all kinds of businesses and dealerships across the nation on the same day.

These Black Hat techniques can result in substantial penalties. In recent actions, the New York attorney general fined a company $300,000 and the FTC ordered another company to pay $250,000 for posting fake reviews. In case against a Florida dealership, the attorney general is seeking restitution for harmed consumers, civil penalties of up to $15,000 per violation, attorneys’ fees and costs, and injunctive relief.

Besides the potential legal ramifications, fake, paid-for, and “on behalf of” reviews violate the Terms of Service for most review sites. Google, Yelp, and others are cracking down on reviews written by someone hired or paid by a business, and violations could result in having reviews removed or worse, being banned and causing a dip in your search rankings.

Questionable reputation management tactics can destroy a dealership’s credibility, lead to legal headaches, and do far more harm than good.

So that’s my spiel. This article is not meant to villainize vendors. I can attest to the fact that there are plenty of great companies out there that practice due diligence. In fact, I work with a number of vendors in reviewing dealership advertising and marketing campaigns for compliance before publication. Quite simply, this shouldn’t be an option.

Dealers should insist that all of their vendors prove that they’re following Dealership Innovation Guide

state and federal regulations and acting ethically every time.

About The Author:

Jim Radogna is the President of Dealer Compliance Consultants, Inc., a national automotive compliance resources and training firm. Before founding Dealer Compliance Consultants, Jim developed a strong background in dealership operations, having spent over 15 years in dealership management. His experience includes working in diversified roles including sales manager, F&I director, general manager, and training director. In addition, he served as compliance officer for a large auto group, where he developed and integrated a comprehensive compliance program.

Being well-versed in all aspects of dealership operations, Jim has used his knowledge and industry experience to develop unique, no-nonsense compliance and reputation management solutions for automobile dealerships of all sizes. These programs are designed to not only protect dealerships from liability, but also greatly enhance the company’s reputation, increase profitability through consistent processes, and increase customer satisfaction and retention.

Jim is a sought-after speaker and frequent contributor to several automotive industry publications including Dealer Magazine, WardsAuto, Auto Dealer Monthly and F&I Magazine.

DealerSatisfactionAwards.com

Dealers Have Spoken Again Throughout 2012, dealers dutifully visited DrivingSales.com and rated their vendors across many categories. Their voices were heard loud and clear and it is our pleasure to present these outstanding vendors. Congratulations to the recipients of the 2012 Dealer Satisfaction Awards!

Highest Rated - Dealership Management Systems

Highest Rated - Call Management Top Rated - Call Management

Top Rated - CRM / Sales - Internet Lead Management

Highest Rated - CRM / Fixed Ops

Highest Rated - Chat

Top Rated - Chat The Dealer Chat Leader

Highest Rated - Mobile Sites - SEM - PPC - Websites Top Rated - Chat - CRM / Fixed Ops - SEO

Top Rated - Owner Marketing

Top Rated - Websites

Top Rated - Reputation Management

Tomorrow’s Technologies - Today’s Solutions

Top Rated - CRM / Sales

Highest Rated - New Car Leads - Used Car Advertising

Highest Rated - Owner Marketing

Highest Rated - Reputation Management - SEO

Top Rated - SEM - PPC

Any verified dealer can rate his or her vendors every quarter, so visit DrivingSales.com/ratings and share your reviews today.

Vietnam Arm vsWrestling M

any of us get confused with the terms strategy and tactic.

We see, hear, and use the word strategy so much, that it carries the same thought value as a banner ad.

The word tactic, on the other hand, only seems to carry meaning in the wannabe black-ops set. These words actually carry a lot of weight, and can fundamentally shape the way you do business. Since many dealers are committing huge sums of money to

tactics that have no strategic value, and I think it’s important to dive into the difference.

The term strategy has its roots in the military, specifically regarding the art of commanding troops. Although I didn’t live 2,500 years ago, it’s pretty safe to assume the Greeks didn’t just roll into conquer a territory all willy-nilly (some of your GMs and owners might remember back that far). Good generals (the ones who lived) realized that one needed map makers, navigators, medical personnel, couriers, and a supply chain, among many other things, to not only conquer, but to survive

and thrive afterwards. The Invasion of Normandy, occurring a couple millennia later, involved several months of intense planning, and involved more than 150,000 people. Good strategies aren’t just conjured up over night.

Business strategy is a more modern phenomenon, starting to coalesce in the late 1950s. SWOT, vertical integration, management by objectives, and the title CEO, were all just cool things academics said to impress each other.

Eventually, over the decades, all these ideas were put to work, and have since dominated big-business. Long-storyshort, if you can’t tell anyone why you are in business (if your answer is to get rich, quit now, and start selling drugs), what market(s) you serve, what you do, what your weaknesses are, what your competitors strengths are, what your long and short term objectives are, and detail plans on how make all of it work, you don’t have a strategy. End of story.

For more than half my career now, I’ve had the privilege of working with hundreds of dealerships. I have got to work with some of the very biggest, and some of the very smallest. Outside of those dealers with shareholders and corporate governance, I can think of three that actually had some sort of mission statement, vision

18 • 2nd Quarter - 2013 • DrivingSales, LLC

Dealership Innovation Guide

statement, or overarching long-term objectives. The rest had building upon building of revolving doors, with tools, talent, and, targets changing weekly. This leads me to tactics.

•

Putting balloons on every car is not a strategy

For most dealerships, doing business online is a tactic.

•

Selling vehicles from triplenet is not a strategy.

Tactics are the means to executing a strategy. Tactics are the little victories that achieve short-term goals. Tactics are the tools we use to make us more efficient. Tactics are what we use to get a leg-up on the competition. Tactics only win battles. Strategy wins wars.

These are just tactics. When used in concert to achieve a long-term objective, they can be part of a strategy. But by themselves they have the useful longevity of a firecracker.

(I can hear both boos and cheers right now). It’s not built on any sort of solid foundation. Training and leadership isn’t consistent. Job descriptions are vague, if established at all. Technology comes and goes. Budgets fluctuate with the lunar calendar. Interdepartmental cooperation is reluctant, at best. 30-day OEM targets rule the day. In 2013, some Internet departments still operate on Internet connections slower than broadband speeds. Frustrated yet?

Let’s make this a.bundantly clear: •

Technology is not a strategy.

•

Social media is not a strategy.

•

Being open 24/7/365 is not a strategy.

•

Lead acquisition is not a strategy.

•

Radio is not a strategy.

•

Having 100 sales people is not a strategy.

•

Live chat is not a strategy.

Dealership Innovation Guide

Much in the way that our customers think, we feel like there might be something better around the corner. Maybe we can wait from something to change in a few months. Maybe we’ll win the lottery, and get to move on to what out little hearts’ desire. Maybe we can keep spending money on something that is clearly broken, but keep limping it along.

Maybe an asteroid will hit the Earth, and that three-year contract won’t mean anything. Even though ISMs, sales people, sales managers, and general managers are great at convincing customers that the right time is now, for whatever

DrivingSales, LLC • 2nd Quarter - 2013 • 19

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20 • 2nd Quarter - 2013 • DrivingSales, LLC

Dealership Innovation Guide

reason, most dealerships don’t have a strategy for the 21st Century. It’s been well over ten years since the Internet has become widely available.

Yet a good portion of dealerships are still fumbling with ways to deal with Internet customers. The Internet now resides in our pockets, and the instant access to nearly infinite information is not going away anytime soon.

Imagine that you’re Eisenhower and laying out plans for D-Day, except the French coast is your dealership. Grab a piece of paper right now, grab a pen, and describe what your Internet operations/dealership is going to look like 10 years from now. Detail what your customers are going to be like.

Explain how your dealership is going to outmaneuver both local and regional (plan on full ecommerce being more common). Write down the one thing your store is going to be known for.

You don’t have Patton, Bradley, De Gaulle, or Montgomery to lean on.

Moving and coordinating all the men, all the machines, all the artillery, all

the planes…all the fuel, all the food, all the cigarettes…all the bandages, all the coffee, all the tools…every single piece of the invasion force… is all up to you. Even the boot laces.

Now you’re thinking strategically.

Strategy and tactics are closely related, but they are not the same. If the Vietnam War could’ve been settled by an armwrestling match between Ho Chi Minh and Lyndon Baines Johnson, tens of thousands of lives, not to mention hundreds of millions of dollars in weaponry, could have been saved (it would also have held the record for the most widely watched television event in history, but I digress). Instead military planners developed long-term objectives, and created a timeline to complete them (an infinite supply of Chinese bullet-catchers wasn’t part of the planning). Take the time to develop a long-term strategy, planning all the way down to last disposable pen.

Then develop the tactics to achieve every one of your objectives. Stop waiting. Your competitors aren’t.

About The Author:

Bill Playford is Vice President and Partner at DealerKnows Consulting, dedicating himself to helping auto dealers transition to the digital age. Before joining DealerKnows, he served as Director of Retail Operations for Trilogy’s SmartLeads program, and developed several successful “click-to-buy” strategies at the local, national, and international level. Bill resides in Kalamazoo, MI with his brilliant wife, two gifted sons, a fancy cat, and a mutant dog. He holds an MBA from Texas Christian University and a BA in Political Science from St. Edward’s University. He’s an automotive junkie, a Red Wing fanatic, and a TEDx organizer.

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Dealership Innovation Guide

DrivingSales, LLC • 2nd Quarter - 2013 • 21

Bring Your Own Device

Near the Tipping Point 22 • 2nd Quarter - 2013 • DrivingSales, LLC

I

n 2007, late Apple CEO Steve Jobs ushered in a new era of computing with the launch of the iPhone. For the first time, the device a consumer carried in their pocket had nearly all the capabilities of an Internet connected computer. In 2011, the iPad launched which became a true competitor to the laptop for many consumers. The iPad and other tables on the market are very powerful media consumption machines.

Within just a few years, the ubiquity of these smart devices set the stage for consumers to begin demanding the same level of technology from their employers. This trend, known as the Consumerization of IT, has been pressuring technology teams at companies of all sizes.

Dealership Innovation Guide

One increasingly popular method of engaging technology-enabled employees is the BYOD—or Bring Your Own Device—program. A BYOD program allows employees to use their device of choice, sometimes within parameters, and creates the infrastructure and procedural adjustments to accommodate them. Done well, a BYOD program boosts morale and productivity while potentially cutting costs. Done poorly, a BYOD program can cause huge compliance risks and cost the company a small fortune.

What to Consider Two of the most serious concerns regarding a BYOD program are security and privacy. Once the company willingly places information on a device owned by an employee, lines of control can become murky very quickly.

An important first step in defining a BYOD program is to determine what information will be available to outside devices. Then decide what controls are necessary to protect that data. Finally, make sure the employee agrees to those controls before allowing access to the data.

MDM - Mobile Device Management MDM is a management software that allows the organization to maintain control of its data across multiple device categories from laptops to phones. Basic MDM solutions allow employees to register their devices, giving the organization’s tech staff the ability to remotely wipe the device if it is lost, stolen or if the employee became untrustworthy.

There are some tricky legal questions about wiping all the data off of a device that you don’t own. Seek advice from your legal counsel as you put your plan together. More advanced MDM solutions provide data containerization, which allows central monitoring to wipe only the company data elements from a device without disturbing the employee’s personal records

Is BYOD right for me?

One of the challenging realities of BYOD is that you may not have much of a choice. Unless you have a completely locked down network, rogue devices are most likely a reality already. The question isn’t whether or not to have a BYOD program but what it will look like. Some organizations choose to support the program financially through stipends, reimbursements, or a combination. Most organizations, however, provide no direct financial support for the employee. Their BYOD program is simply allowing employees to use whatever device they want and charging the tech team with figuring out a way to do everything safely.

About The Author:

Adam Grossman is the CIO of Auction Direct USA, three time winner of Auto Dealer Monthly’s Independent Retailer of the Year award. He also acts as a strategic advisor to DealerTeam, the first automotive dealer platform born in the cloud. Adam is a product visionary with broad experience in technology startups including a media partnership with the NFL Players Association called Pro Player Insiders and a technology partnership with the U.S. Postal Service called Epostmarks. A systems engineer from Virginia Tech Adam is passionate about system optimization, crafting amazing experiences, and the intersection between machine learning and the human brain. Adam is married with two young children and lives in Rochester, NY.

Dealership Innovation Guide

DrivingSales, LLC • 2nd Quarter - 2013 • 23

AUTO IN Convergence of Technology T

echnology has turned the auto industry on its head. Take the advent of the Internet, for example. This monstrous form of progression has changed the way we market to people, has forced us to redefine how we align our processes, and has even caused us to re-orient our entire organizational structure for success. Technology has demanded of us that we recalculate how we interact with the customer and how the customer interacts with us.

It’s not stopping there, though. The convergence of technology and the automotive industry is really only beginning, and for the first time ever, our industry is keeping up with and even fueling some of these changes.

No longer will we be judged as the last ones to have Facebook pages or understand Internet leads; the industry is taking great strides in riding this technological convergence wave and potentially even driving it.

Technology and Automakers Ford is making revolutionary strides for the industry with the announcement that its OpenXC platform is publicly opening its software development kit (SDK) to encourage developers to build new hardware and software for the platform. According to the official OpenXC website, “OpenXC is an API to your car - by installing a small hardware 24 • 2nd Quarter - 2013 • DrivingSales, LLC

module to read and translate metrics from a car’s internal network, the data becomes accessible from most Android applications using the OpenXC library.”

The goal of this new platform, built on the Arduino and Android platforms, is to allow complete access to the data being created within the vehicle.

Developers can now build software programs to access, read, and complete new actions that will ultimately lead to improved driving experiences.

“Vehicle-aware applications can have better interfaces based on context, can minimize distraction while driving, can be integrated with other connected services, and can offer more insight into a car’s operation,” states the official website.

This is where it gets fun and interesting for the driver. The key element is being able to take this data and turn it into readable information and then pass this information along to create a mountain of benefits: •

Manufacturers benefit from less expensive solutions equating to higher profit margins for the OEM.

•

With safety sensors ready more information and transmitting that data more frequently, drivers can feel more comfortable riding in a vehicle with improved safety features.

•

Automakers can leverage locationbased data for improved sensor performance, while consumers can upgrade their LoJack system to a more sophisticated alternative.

The potential impact for the industry is incredible: technology improvements, enhanced value perceptions, and eventually even the sales process will become more sophisticated as salespeople and dealerships will need to be well informed about these advances.

And Ford isn’t the only one with their sights set on in-vehicle technological enhancements that will impact the driving experience. GM swiftly followed Ford’s open source movement, announcing their own API and SDK (Software Development Kit) for their upcoming vehicle app program.

GM’s open source platform, called MyLink, allows developers to create apps that will be native to the vehicle’s infotainment system while Ford’s OpenXC system is focusing on the vehicle sensors and relies on the driver’s smartphone to host the apps.

Smartphone users are familiar with downloading apps from iTunes and the Android marketplace; now, drivers will be able to download apps from an app catalogue within the infotainment center.

This new era of vehicle-hosted apps will start to hit showrooms in later 2013 for the 2014 model year. Even though the models that will receive Dealership Innovation Guide

NDUSTRY this new technology haven’t been announced yet, early speculation points to the mid-range sedans and coupes targeting younger, more technology-savvy buyers. The ultimate goal: Lower total cost of ownership for the next wave of consumers.

The familiarity with the smartphone process is so alluring that Hyundai is pursuing that course with the technology that it is looking to implement in its vehicles through Near Field Communication (NFC). NFC is still labeled as a tipping point technology because of its ability to help people interact, in a whole new way, with technology. The true potential lies within mobile payments. The ultimate goal: a cashless society of mobile users using electronic payment transactions with improved efficiency and greater security. Consumers are expected to spend $1 trillion via their mobile devices by 2017, with the majority of these transactions coming from electronic and mobile commerce. A new payment system, such as NFC, is also expected to be the second largest for of mobile payments by 2017.

Other than waiting for the next major breakthrough in mobile payments, how else can this tipping point technology leave it’s mark? And how can it be applied to the automotive industry?

Hyundai appears to be on to something big with the “Connectivity Concept.”

Hyundai wants to use NFC technology to allow owners to simply pass their phones in front of the tags to unlock doors, start the car, and sync with the central infotainment system.

Additionally, once the owner’s smart phone is docked, it can stream music, sync the address book, text message, and even access radio station and seat settings. This can ultimately eliminate apps and increase the overall utility of the smart phone device itself.

In the short term, however, Hyundai is incorporating the all-familiar Siri, the apple-produced intelligent assistant that helps you get things done just by asking, into its vehicles, along with Chevrolet and Honda, as soon as late 2013 models. With compatible iOS 6 iPhones, drivers can instruct Siri to tasks while they safely keep their eyes on the road and their hands on the wheel. Called the Eyes Free mode, Siri functions as a hands-free device and even further and minimizes distractions through a variety of functionality.

Technology and the Dealership The dealership experience will shift in a variety of ways with this fastchanging technology interaction with the automotive industry. For starters, with NFC technology, we’ll realize a whole host of possibilities in the dealership itself. Eventually, new payment and point-to-point solutions such as NFC can help improve different elements of the dealership experience. Imagine new financial transaction methods for down payments or streamlined service department functionality.

As for the in-vehicle applications, expect these features to create an entirely new level of awareness and consumer research for new vehicles.

Buyers are going to want the best of both technology and efficiency baked into their new vehicles, moving beyond just the standard fare of comparison with items such comfort, fuel economy, and safety ratings.

the rest of the technology community by opening up their platforms. Big win for the consumers and a whole new area of opportunity for dealers.

About The Author:

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.

@lindseyauguste

Eric Miltsch develops and manages new digital media product strategies for DrivingSales.com to create the most authoritative and influential automotive professional community in the world. Prior to joining DrivingSales, Eric directed the successful digital experiences for Auction Direct USA, one of the nation’s fastest growing used vehicle dealerships.

@emiltsch

These applications can also offer a whole new layer of convenience and change the driving experience. Imagine how this will also send a ripple through the developer community in terms of new competition and opportunities for further progress. The automotive industry is taking a giant step closer to

While this may take greater time to develop, the changes NFC has the potential to impact with regards to payment alternatives and other connectivity solutions is huge.

Currently, Hyundai is anticipating production and roll out by 2015.

Dealership Innovation Guide

DrivingSales, LLC • 2nd Quarter - 2013 • 25

Using Twitter

to Communicate with Your Customers

D

ealerships are faced with a daunting task in today’s world of juggling all of the different social media platforms in addition to their traditional marketing and digital marketing initiatives. Of all the different platforms, Twitter is often the least understood and by default receives the least amount of focus.

This misunderstanding about the potential power of Twitter is certainly understandable on the surface. After all, how much impact can you make with 140 characters anyway given the fact that most of us in the car business can’t even say hello to someone in 140 characters or less! It is much easier to understand other social media outlets like Facebook or blogs as we can easily see how to use these sites to help us convey our messages to our followers.

Take a little deeper dive however, and the engaging communication power of Twitter becomes more clear.

To do this, let’s first look at the effects it can have on a much larger scale.

In 2011, civil unrest in Egypt caused

26 • 2nd Quarter - 2013 • DrivingSales, LLC

Hosni Mubarak to resign as leader of the country. There were many factors that caused his eventual fall including real people taking real risks but much of the planning and communication among the protesters happened by simply following one simple hashtag on Twitter, #egypt.

On a more personal level, I experienced the power that businesses can have with the tool. On a recent business trip, I found myself stranded in Denver, CO thanks to two different United Airlines airplanes with mechanical problems. My plight eventually landed me in Dallas, TX the next day still trying to get home to Des Moines with a new reservation on an American Airlines flight. I was tweeting my frustrations throughout the course of the 2 days but was amazed to discover that after landing in Dallas and starting to mention American in my tweets, someone at American started responding to my tweets! This continued up until shortly before my flight time when American tweeted “Looks like you are good to go on time with us, hope you have pleasant flight and thanks for choosing American”. Now while I fully realize this is someone’s job at American, it was still

a pleasant surprise to get real responses back, something that I never received from United Airlines even though my frustrations were due to their issues.

So how does this relate to us in car business? Well, more than most might think our customers are also using Twitter to communicate with their followers and they are including their experiences with dealerships in those communications.

They are tweeting while shopping on the lot, while negotiating their car deal, while sitting in our service department waiting rooms, and after walking out of the store. Unless we are using some available tools to “listen” in, we will never know what they are saying.

An example happened recently at one of our dealerships. We had a customer interested in purchasing a new Chrysler 200 and was looking to trade in a Ford Mustang. After presenting the customer with our price and trade-in offer, he calmly and politely told the salesperson thank you and he was going to need to think about it and left. Upon exiting the store however, he immediately

Dealership Innovation Guide

tweeted that he had just had the most horrible buying experience ever at the dealership and he would never be back. This was immediately available for all of this customer’s 500+ followers to read. Fortunately, we discovered the tweet and reached out to him.

Upon contacting the customer, we discovered that the only reason for this outburst was his disappointment in the dealership’s offer on his tradein vehicle. The sales manager at the dealership was able to bring him back in, sell him a car and the customer subsequently posted new tweets the following day praising the dealership for how they handled the situation.

Of course, the tweet does not have to be a negative one for us to respond.

Taking the opportunity to thank a customer for their kind words when they tweet something positive about their dealership experience can also go a long way toward building a long term relationship with the customer.

Examples of popular free tools that can be used to listen for mentions of the

Dealership Innovation Guide

dealership are Hootsuite® and Twitter’s own TweetDeck®. In addition, you can use these free tools to post across multiple social networks at once and set up scheduled posts to automatically post on specified networks at a subsequent date or time. There are also multiple commercial options available which may provide additional social networking tools like social activity reporting and managing the dealerships online reviews.

Additionally many companies are now setting up special Twitter accounts that they promote for the sole purpose of customer interaction. An example of this would be Delta Airlines @DeltaAssist which is a specific account for Delta customers to direct customer service requests to Delta representatives 24 hours/day 7 days/ week. With the proper staffing, a dealership could also promote this type of Twitter service to its customers for things like general questions, service department appointment requests, or even sales inquiries.

Twitter is a great way to improve your customer’s experience and to open up new channels of communication as well as generating more traffic for your dealership website or blog, so jump in and start engaging your customers 140 characters at a time!

About The Author:

Larry Goering is a regional sales and finance director and digital media manager for the Ken Garff Automotive Group and a 25 year veteran of the auto industry. Prior to his current position, Larry started his career in sales, moving to finance and insurance, information technology director and general manager. Larry is an avid tech enthusiast and spends much of his free time riding his Harley Davidson motorcycle, boating and spending time with family in Des Moines, IA.

DrivingSales, LLC • 2nd Quarter - 2013 • 27

Is the Auto Industry Under Attack?

G

oogle has been hard at work changing their leadership, corporate culture and most importantly, their fragmented product line-up over the past couple of years. Leadership is tight, teams are focused and there is a feeling of solid direction for the products Google is providing to users.

On top of the advertising model, the Android operating system, Google Play, Google+ and even products like the new Google laptop have helped prop up Google’s stock price 30% to an all time high of $832 per share at the time of this writing. And the future looks even brighter as analysts are predicting the stock will hit $1000 in 2013.

Adding to this rosy outlook is an entirely new venture: Google Cars. I’ve often said Google has successfully wrapped their head around many business segments, with the exception of automotive and healthcare.

Google Cars is positioned early to help Google understand the retail automotive segment and make another strong connection to consumers who are already using their platform while searching for vehicles.

28 • 2nd Quarter - 2013 • DrivingSales, LLC

Dealership Innovation Guide

Cars What is Google Cars?

Google Cars is the newest shopping product from Google for the retail automotive industry. This will be a pay per lead advertising model, keeping it close to the revenue generation model Google has nearly mastered to perfection over the years. The initial cost for these lead is approximately $10 per lead.

The program is still only available in limited regions within California currently and other regions are planning to opening up soon, although Google has yet to announce these specific expansion plans. When shoppers search specific keyword terms related to the new vehicles desired, sponsored ads will show the vehicles available, brief description including VIN numbers, vehicle price, the dealership name and the distance away from the user’s current location.

Dealership Innovation Guide

Shoppers can request a quote by submitting their online request and selecting the dealership desired. Minimal information is provided: Name and email can be submitted or you can simply place a call to the number provided. The calls are not directly connected they are delivered via proxy so that the dealership doesn’t have your information unless you share it with them. The dealership will only know it is a Google Cars lead being passed along to their store.

Dealers within the program must have their inventory merchandising processes in place to ensure the vehicles are properly displayed within the new advertising platform. Google will also provide support to dealers needing help with their inventory coding for proper display. Dealerships participating in the program can also create a maximum threshold for the price paid per lead received within their markets.

One of the most important elements of this program is the necessity of a strong CRM process in place for the dealerships interested in participating in the Google Cars programs. A regimented approach needs to be in place because of the inability for a dealership to see anything more than a first name if the shopper elects not to share their last name, email or phone number.

The successful dealers on the program will be those with experienced, skilled representatives who can engage the customers to the point of earning their trust to get their full information and create the appointment.

The standard, broken follow up processes of many dealerships will not work with theses leads.

Dale Pollak, Founder of vAuto shared his thoughts on the anonymity element of the Google Cars program, “There is a classic tension between buyers DrivingSales, LLC • 2nd Quarter - 2013 • 29

and sellers in the automotive industry. Typically, shoppers would prefer to give up as little personal information as possible in order to get vehicle pricing information, and sellers would like to get as much personal information as possible prior to giving up a price. This is a classic dynamic that creates much tension for buyers and sellers alike. A proper solution must balance these interests. In other words, give-to-get in an appropriate manner. The more information that can be exchanged through the relationship process, the more trust that develops, which leads to willingness to give more.”

The Google Cars program could also be the start of a new advertising and marketing head-to-head challenge between Google’s solutions against other massive industry giants such as AutoTrader, Cars.com.

This is Google’s playground and they make the rules. So, the question remains, how will this affect page one search engine results?

Will it now become even more difficult to rank for highly competitive and productive longtail search terms? This falls even deeper into Google’s philosophy of providing the most relevant content for users searching online.

Google can now connect a buyer directly to the product and your website, or other third party marketing solutions, can be skipped.

Dealer feedback regarding the program has been mixed as some of the larger dealerships in the original rollout area have been positive while another dealer, who asked to remain anonymous for this article, “has yet to see any significant results from the program.”

Important note, they did acknowledge they were new to the program and did not have their CRM process tuned to the desired level.

“The retail automotive industry has many products and services designed to connect buyers and sellers. Some include the sale of direct leads, others pay-per-click, SEM, classified and display ads, as well as radio and TV.” Said Dale Pollak. “In the end, however, the market will sort out and reward the most effective means of connecting buyers and sellers. The most efficient and effective means are those solutions that connect the largest number of in-market shoppers to dealers for the least amount of money. The extent to which Google represents a competitive threat will depend on their ability to rival their competition on this basis.”

How will this play into bidding strategies within the new program itself also needs to be considered?

30 • 2nd Quarter - 2013 • DrivingSales, LLC

Dealership Innovation Guide

Will there become new ways to optimize your listings within Google Cars? Another layer of awareness and education needs to happen around this program to ensure the best understanding and performance, whether this is being managed in-house or a part of a managed service by vendors and marketing firms.

This is clearly in the early stages of development for Google; they have the opportunity to so many more feature enhancements that can benefit both the consumer and the dealerships participating.

What’s Next for Google Cars?

Once the rollout territory expands, consumers become familiar with the process and dealership adoption rates increase then Google can flip the switch and turn on more value added features.

I can imagine Google Cars improving even more over time by incorporating:

•

Google+ contextual relevancy information and activity – the ability to see what your friends have to say about the vehicle and the dealership will be powerful

•

More robust images and videos rather than simply displaying stock images

•

Greater integration with mobile search results

•

Google analytics/Adwords integration for more robust data reporting

Dealers interested in this program should also consider the following: •

What is your current new vehicle inventory merchandising process? Is your vehicle checkin process up to par?

•

What type of data do you have available to consider your options with regards to adding (or changing to) a solution like this? Can you make a rational decision based

on the data vs. a subjective decision based on your gut?

•

Is your lead management process as solid as it can be? Do you have your scripts, personnel and follow up engagement goals in place to maximize these opportunities?

About The Author:

Eric Miltsch develops and manages new digital media product strategies for DrivingSales.com to create the most authoritative and influential automotive professional community in the world. Prior to joining DrivingSales, Eric directed the successful digital experiences for Auction Direct USA, one of the nation’s fastest growing used vehicle dealerships.

@emiltsch

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DrivingSales, LLC • 2nd Quarter3/22/13 - 2013 1:58 • PM 31

T

housands of articles and books have been published describing what it takes to be a great leader. I am sure that almost every General Manager or Dealer Principal have personal collections of great books that they have accumulated over the years on this topic. Some researchers and authors claim a superior leader possesses certain traits or abilities; others say it’s all personality.

Throughout my automotive career, I have come to believe the organizations that are the most successful are lead by individuals that live by the following characteristics and views.

32 • 2nd Quarter - 2013 • DrivingSales, LLC

Dealership Innovation Guide

Is your Leadership in the

TRENCHES? 1. Great leaders have a clear vision: What direction is your organization heading? A vision needs to be grand enough to encourage people to imagine it but solid enough for your team to see it, understand it and be willing to put the effort in to accomplish it. The trick is to accept who you are and not try to fundamentally change to what other companies or people want you to be.

Resist letting other companies dictate your path. Veering off-course will only lead to a misunderstanding of your value to the ecosystem. Stay true to your vision.

2. Have S.M.A.R.T Goals set: The number #1 question answered by a great leader is: How is your organization going to achieve its goals and how will you measure your progress? Similar to having a clear vision, goals need to be a foundation of your operations; that is specific and measurable.

S.M.A.R.T is an acronym created to define your goals as Specific, Measureable, Attainable, Relevant and Time-bound. If your dealerships output and results can’t be easily measured, then it will be difficult to know if you have achieved your business’s longterm aspirations. The reality may be that your team has wasted important resources (time, money, people, and equipment) pursuing a strategy or plan without knowing if it truly succeeded.

Dealership Innovation Guide

3. Possess natural Aptitude: When leading a team, top-level management must be viewed by your advisors, stakeholders, employees, and your customers as being an expert in your field. It is no longer enough to have a great resume full of MBA’s, best selling author titles and keynote speaking tenure, leading your company to success requires a high level of aptitude. More commonly known as ‘street smarts’ or the ability to ‘quickly think on your feet’.

As well, Aptitude can be defined as the ability to learn from past experiences and to apply those lessons to workrelated situations. Practically speaking, not all executives immediately possess all of the characteristics that spell success. Many leaders learn along the way with hard work. As crises and challenges arise, those at the top of the hierarchy have key opportunities to demonstrate to others that they are in fact, qualified to be leaders. Greater competency can be achieved as a leader gains more on-the-job experiences.

4. Developed superior team-building skills: A strong team is easy to envision and hire, but few executives possess all of the skills and abilities necessary to demonstrate total mastery of team building. A great leader has the ability to complement their areas of weakness; a wise leader assembles effective teams full of experience and capable individuals

who can supplement any voids in the leader’s skill set. This ability is what sets leaders apart from others. However, the leader needs to be willing to admit he lacks certain abilities and go about finding trusted colleagues to complement those deficiencies. After building the team, the entrepreneur needs to trust that team to understand issues, create solutions, and to act on them.

5. Work to improve their communication skills: It does little good to have a clear vision, set S.M.A.R.T goals and invest a solid amount of resources--if the leadership cannot easily and effectively communicate his/her thoughts to the team inside and outside of the organization.

Communication on regular basis with key individuals is essential. Without it the entire organization becomes fragmented. Of course, the best way to ensure other people receive and understand the message is with faceto-face interactions. In today’s world of SKYPE, Google hangouts and GotoMeeting there is no excuse to overload and rely solely on emails.

Communication is now about connecting.

6. Embrace the value interpersonal and coaching skills: Successful leaders are comfortable relating to other people; they easily build rapport and are a touch more extroverted than they are introverted. These attributes help leaders seem approachable, likeable, and comfortable in their position. As well, these qualities create a feeling within your staff to want to interact with the individuals they report to.

Motivating employees to do a better job is directly related to how refined a leader’s coaching skills are. Just because you write the paychecks

DrivingSales, LLC • 2nd Quarter - 2013 • 33

MOTIVATE or create the opportunity does not automatically make one a great leader.

When a team can relate to their boss, they believe that they have a leader that is more concerned about them, with their performance, and with their output than themselves. Furthermore, they believe that they actually have an outlet for their problems they encounter on the job without fearing consequences for not knowing how to resolve issues.

A great coach has enough selfconfidence to set his/her team up for succession rather than success.

The intangible costs are far too high for a leader to not improve on their interpersonal and coaching abilities.

Think about it this way, when a strong team comes into play. The less experienced leader with great coaching skills can outperform someone with more experience operationally, by using their coaching skills to pull their team together. The team will get out there and to “put the gas pedal to the floor”, interact together and spread a positive attitude that can’t be overturned. I have yet to see a dealership with high morale have low sales numbers.

7. Display an unwavering positive attitude: Nothing builds a better picture of success more than a positive attitude, and attitude is the number one factor that motivates just about everyone across all cultures. When employees see that their boss can lead and direct, has a clear vision and attainable goals, and actually gains results in a timely manner, then that person’s credibility increases throughout the organization.

A positive attitude is the key ingredient that leaders must modestly demonstrate, their skills are always in “fine-tune” mode and give their team valid reasons to appreciate and value their efforts.

8. Set the example with inspiring Aggressiveness: Quite often, employees need someone to look up to for direction, guidance, and motivation.

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Dealership Innovation Guide

The leader needs to be that person. Nevertheless, there are times, when many employees need the boss to inspire them by strong advice and firm action. Employees need someone to look up to, admire, and follow.

Inspiring aggressiveness can be summed up by this great quote “ At the peak of success, looking for ways to be better.” I heard that once and realize that aggressiveness is often framed in a negative manner. There is nothing wrong with making aggressive decisions, taking risks and leaving your comfort zone to find new ways to be better.

When great teams view their service and performance to be “it is all going well,” the leader must step in personally to offer a suggestion or encouragement to ensure that employees perform their jobs in an optimal manner.

9. Understand Work Ethic: Employees need to view their leader as one who is constantly striving for improvement and success; it is directly related to their amount of effort they view as “minimum requirements” for their work environment. When the boss is seen as someone who works to attain increasingly higher goals, employees will be impressed and more willing to mirror that behavior. It’s a win-win for everyone.

device, the user is provided simple on-screen instructions detailing exactly what to do, requiring very little training or experience.

Prior to joining cDemo, Jay spent the majority of his career working in the wholesale side of the business in the auction, remarketing and fleet services industry with Enterprise Holdings Inc as Group Remarketing and Acquisition Manager in Alberta, Canada and St. Louis, MO. He oversaw a team responsible for the complete life cycle of a fleet that peaked at over 50,000 units at any given time of the year.

Gaining extensive industry knowledge from vehicle purchasing, ordering, marshalling, direct to dealer sales, auction resale initiatives and fleet planning for over 50,000+ cars allows to Jay speak and share about a deep level of automotive industry knowledge. His passion lies in helping the automotive community move forward and he has made the shift to apply his knowledge to the digital aspect of this great industry. His expertise comes from being a part of development and launch of the cDemo Merchandising platform, which propelled his expertise in this area of the business.

In summary, the basic message of this article is that you, as the owner/entrepreneur, need to “be out there” for your employees. Continually demonstrate to them why and how you earned the position you now hold. These nine characteristics are impressive and when tied together are very hard for others to compete with. A clear vision, great goals, strong aptitude, gravitating team building skills, approachable personality with a great work ethic and positive attitude is someone almost anyone would work for.

About The Author: Jay Radke, is a Canadian entrepreneur that has been with cDemo.com since 2008 and currently holds the role of Vice President of Business Development for cDemo Mobile Solutions Ltd. cDemo Mobile Solutions is a recognized leader in Mobile App Data Collection Technology.

The cDemo team has developed and refined their product over a period of more than 10 years, resulting in a system that is very flexible and easily configured for any type of user or industry. Their cornerstone smartphone app “Mobile Inspector ” is a very simple to use process. Using only one Dealership Innovation Guide

DrivingSales, LLC • 2nd Quarter - 2013 • 35

Attacking the Dealer APP GAP

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t Lithia Toyota of Springfield we have one strategy: customers for life. And that’s exactly why we invested in a mobile app In mid 2012 it became clear that this emerging channel would be key to engaging with our owners and future customers, so Lithia decided to make the move and became an early adopter to the mobile app revolution.

My Lithia was initiated in June 2012.

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My Lithia is fully integrated with our DMS system meaning it displays our inventory, including pricing and VDP; sends service reminder notifications and allows customers to easily set service appointments.

Plus, it delivers other useful tools.

The average age of customers in Springfield is early to mid 40s. So it was particularly important that this app was simple enough for everybody to use. I

Dealership Innovation Guide

The Results: Across all stores, My Lithia accumulated more than 1,500 downloads in the first month.

After downloading the app, 52 percent of downloaders created accounts. Social media has seen a significant increase, with 675 Facebook click throughs and more than 700 Facebook engagements due to the social media integration with in the app.

And in Q3 more than 200 appointments were made via the app. My Lithia is averaging more than 950 downloads a month, an average visit duration of approximately 20 minutes, with an average of 15 page views on the app per visit. But what is most impressive is that 63 percent of the downloads are still active after 30 days.

Dealership Innovation Guide

DrivingSales, LLC • 2nd Quarter - 2013 • 37

even helped a 76-year-old lady put the app on her phone and navigate through it. And it wasn’t a hard sell. People don’t have to use it, they want to use it.

Lithia Toyota of Springfield identified the following “must haves” for the app: iOS and Android support, inventory and DMS integration, service appointment setting for customers and engaging ownership tools. With a limited amount of clicks, the customer can go straight to the source.

The app has become key to our sales and service strategy. It helps both sales and service teams form relationships with their customers, and at Lithia Toyota of Springfield we believe relationships matter. It gives the customer an easy way to view detailed information on their vehicle, while also listing current new and used inventory. People can see the value in the app; they can look at it and say ‘hey this is easy.’

You’re empowering your customers through the ease of doing business.

My Lithia fits perfectly with our service strategy. Because it is fully integrated with the DMS, it enables easy and convenient scheduling. We are able to send out appointment and service reminders via push notifications, including a direct link for instant coupons, discounts and specials. This keeps our

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service center top of mind and in the customer’s hand – every single day.

The app is ever evolving – it can’t be concrete. We take the input of our customers and the input of our stores, and constantly apply them to the development of our app.

The app-powered world requires a dedicated internal effort, as well as the enthusiastic support of both your sales and service teams. So when we first introduced the app to our store, we had to get the buy in from every single employee, showing them the value, ease of use and how it would directly benefit them.

The sales teams saw it as ‘now I don’t have to take the customer around to every vehicle, they have it right there on their phone,’ and the service teams were excited that they would no longer have to sit at one computer station if they could just pull up everything they need on the app with the customer.

We started by having our account representative perform in house training on the app for both sales and service teams, and prepared reference materials to assist teams during customer interaction and provided appropriate collateral and promotional materials to assist in our teams’ message.

Dealership Innovation Guide

We also found it helpful to create performance awards for service and parts personnel, incentivizing sales and service customers to download My Lithia by providing those who used the ‘Showroom’ tool with a coupon offer.

contests, in the every day language of your store and via social media.

You can even add the QR code, for a direct link to the download of your app to all business cards, in newspaper ads and on all mail communications.

you’re going to move backward, and in order to excel in today’s industry, the mobile app is your key.

One of the biggest challenges has nothing to do with the technology of the app, and everything to do with fresh, consistent and cross channel communication. It is vital to keep the discussion alive to keep your customers aware and downloading the app. On our dealership front window, right next to our hours of operation we have a giant picture of a guy pointing to the app on his phone. We have table toppers set up all over the store dedicated to the advertising of our app and windshield hangers inside all of our vehicles. We even added app real estate to all of our direct mail that is sent out through our marketing vendor.

And even with all the app literature we have in service, sales and in our windows, I think the most significant way to promote your app is by simply getting your employees excited about it so they want to show your customers how to use it and what it can do for them. My Lithia has seen great results due to these practices.

Michael Feldmann has been in the automotive business for 34 years.

Starting as a salesperson, he has grown to own multiple franchises as well as become the General Manager and Executive Manager for some of the nation’s greatest groups. Today Michael is proud to be a part of Lithia Motors.

It’s also important to promote your app through TV and radio ads, during on hold phone messaging, though customer download and activity

Mobile communication is not a fad that’s going away, it’s here to stay and starting to become a part of everything we do.

If you’re not going to move forward then

Dealership Innovation Guide

It’s the plain hard facts, everything started growing immediately and our new sales and customer pay have grown dramatically. It isn’t just a coincidence that we are selling more cars and that our customers are happier buying them. It’s My Lithia.

About The Author:

Michael’s family is the light of his life.

He has been married to Karen for 31 years and has two wonderful daughters, Jayme and Cara, who both make him proud each day. His two grandchildren, Ariel and Ewan make him smile. And of course there is Bernie his labradoodle.

DrivingSales, LLC • 2nd Quarter - 2013 • 39

New Accessories Sales Process Drives Unprecedented Revenue Growth – And Unexpected F&I and Vehicle Sales Benefits

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ike most dealerships in today’s economy, at Scott Clark’s Toyota we are always on the lookout for innovative – and easy-toimplement – ways to increase profit margins. We found one such opportunity through accessories sales – an area that traditionally has proven challenging and burdensome to dealerships. As it turned out, not only did we discover quite the opposite, but the creation of an accessories sales program in our store brought with it some unexpected benefits that positively impacted the dealership from new car sales training to F&I (yes, I said F&I!).

Scott Clark’s Toyota is home to 194 employees, has been in business since 1985, and sells approximately 450-475 40 • 2nd Quarter - 2013 • DrivingSales, LLC

new and used vehicles a month. Until we implemented our new accessories sales program, we made ZERO dollars in vehicle accessories sales. We had avoided the whole ‘old’ accessories model which meant selling a car buyer something they couldn’t actually see or imagine through an un-engaging, static presentation (often with outdated product and pricing info) – and then massive accessories inventory, installation and coordination headaches. But, when we first saw the benefits of a virtual accessories sales tool – one that would help solve the cross-department coordination problems that plagued most dealerships – we were sold – but not without concerns: Would customers have the time, or appetite, for a sales

pitch on accessories, especially after having made a huge purchase decision? Would a sales presentation on accessories make them rethink their car buying decision? Even if they decided to purchase accessories, was it possible for an online interface to actually handle installation and workflow issues? And, critically, would that hinder sales of F&I products, a key profit center? In the end, we decided to take a chance on a new accessories sales process and a new tool*, which offered three key critical elements: 1. Rich customer visualization/ personalization tools 2. A 100% virtual inventory system Dealership Innovation Guide

Your

3. Integration of all accessories sales workflow across the sales, F&I and service/installation departments.

The tool enabled our customers to pull up their exact vehicle model (down to trim level) and interactively configure it with thousands of accessories on the fly. But without process and the human element, the tool – as good as it was – was just a tool, so we had to experiment with process. Because, psychologically, consumers are far more likely to spend money on accessories at that exciting ‘sweet spot’ when they have just decided to commit to their vehicle, our dealership decided to do something that went completely against the grain of the traditional process, which funnels customers to F&I immediately after the ‘yes, I’ll buy that car’ moment: we inserted a rapid and colorful accessories presentation prior to sending customers through F&I. We understood that the new more budget-conscious car-buyers were leaving the dealership to buy accessories elsewhere, cutting the dealership out of the equation and out of significant profits; Dealership Innovation Guide

but because the tool was able to not only allow customers to have the experience of seeing what the vehicle they had just bought would look like with the addition of accessories, but also allowed them to see how easily that cost could be added into their monthly payment (right before they headed for F&I) – we gained an immediate convenience advantage over other suppliers. And it worked… even better than we had imagined.

Our team created an open ‘Apple Store-like’ layout, with booths for pre-F&I accessories presentations strategically situated in the waiting area.

This familiar, Apple-style environment proved appealing to our customers and positively impacted their comfortlevel during the process. We also made the decision to have a dedicated accessories sales team member presenting accessories, more like a consultant (or Apple-store sales person) versus a high-pressure sales person.

This meant that more details and pricing could be explained to each customer, in a relaxed and informative manner. This modern approach allowed the customers

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to feel like they were in charge, and to have fun and get excited about their new vehicle, and we decided to assign brand new dealership staff (usually with zero automotive sales experience) to manage the accessories sales centers.

We could not have predicted the impact this decision would have on overall sales.

Knowing how hard it is to hire sales people, I had an instinct that it might be easier to find and hire good, cheerful, happy people to answer questions about accessories using a digital interface that was familiar to these generally tech-savvy new employees. The accessories sales process required a swift but effective presentation of generally 5-10 minutes, meaning that each accessories sales person was meeting an average of 150 people per month, running through presentation after presentation, guiding customers, and answering questions about every vehicle on the lot. These new “accessories consultants” were not only becoming adept in handling customers quickly, but, as it turns out, the digital tool proved to be an exceptional training tool on our dealership’s main product – the cars themselves. After one month of helping customers accessorize their new vehicle on screen, these new dealership employees knew the cars in our inventory “inside and out,” making them not only accessories experts, but experts on the features of each car. That granular knowledge combined with their experience as customer consultants translated brilliantly into sales expertise that could encourage customers in a decision on which car to buy by pointing out the vehicle’s features, bells, and whistles, and this has helped increase sales effectiveness, and has also helped to close the gap on what is usually a huge learning curve for new employees.

Another unexpected benefit was increased sales in F&I. Traditionally, F&I departments worry about anything that can come between them and the moment immediately after the car sale — and conventional wisdom argues that putting something like an accessories sales presentation in the way can cannibalize sales of F&I products. So, perhaps, the most exciting and groundbreaking part of our dealership’s new focus on 42 • 2nd Quarter - 2013 • DrivingSales, LLC

accessories sales is that not only have we seen zero decline in F&I product sales, we have actually seen an increase.

Since the addition of the accessories sales tool and the implementation of an Apple Store-like sales process, our dealership has increased its average monthly vehicle accessory sales from $0 to $150,000, averaging roughly $300 in vehicle accessory sales per transaction.

In 2010 we sold over $750,000 in accessories while in 2011, total vehicle accessories sales reached $1.5 million; a stark comparison to negligible sales in 2009. Our dealership has also enjoyed an effective training process for new team members, as those assigned to the accessories sales platform were able to quickly learn the vehicles inside and out, while providing valuable sales support. For us, in-dealership accessories sales is a terrific idea, and super lucrative. From a culture standpoint, there might be some initial resistance, but once it is embedded into the system, it quickly and easily becomes engrained into the dealership’s culture. *Scott Clark’s Toyota uses the izmocars’ AddOnAuto (AOA) accessories sales tool.

Best Practices for Accessories Sales Champions - Seven key tips for capturing your share of the $38 billion vehicle accessories industry.

1. Map out a solid game plan.

Understand your accessories market and know which accessories can be added to new cars, and which are more likely to be popular with your customer base.

2. Identify and adopt an online tool that can quickly configure the exact vehicle (down to year, make, model, interior, and exterior color) with any requested accessories, allowing customers to see their vehicle with desired additions.

negotiated and before financing is being arranged. Allow customers to digitally configure their new vehicle with accessories, or make arrangements to give each customer a visually exciting presentation that shows their exact vehicle being transformed with accessories, right before their eyes.

4. Consider hiring a dedicated accessories salesperson who serves more like a consultant guiding customers through a presentation, and answering their questions. This position can serve as a great training ground for new dealership employees.

5. Interior accessories and electronics are critical to your accessories profitability, so make sure that the tool you choose has interior, as well as exterior, visualization capabilities.

6. Ease the financial pain for consumers by calculating the enhancements into the overall financing and monthly payment, along with providing the upfront price.

7. Ensure that the accessories sales, financing, and installation process is seamlessly coordinated across the entire dealership, facilitating the efforts of everyone involved (the sales, F&I, service and parts departments - management).

Your accessories sales efforts will crash and burn quickly if any member of the value chain has a bad experience.

About The Author:

Chris Cady is Managing Partner of Scott Clark’s Toyota in Mathews, North Carolina.

3. Take advantage of ‘wait time’ after the purchase has been Dealership Innovation Guide

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Reduce The Time it Takes to Display Online Inventory

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f you have ever attended any of our industry conferences, you have no doubt attended a presentation on the importance of online merchandising.

At a recent conference, we heard from many speakers that supported the fact that our websites need to be “VDP factories”. After all, what reason does a customer visit our website if they are not in the market for a vehicle? We know have seen actionable data that supports the belief that consumers will rarely click on VDP listings with “picture coming soon” or “call for price”. I would like to share with you a process that we use here at our used car dealership that has been a great help in getting our vehicles online faster and in turn sold faster. In this day and age of having an app or software program to help us do our jobs, this process uses the one of the oldest methods of sharing information, “copy and paste.”

We purchase a very high percentage of our vehicles online, either by Manheim simulcast auctions or OVE listings.

Consider this, when your used car manager or buyer attends a physical auction or buys your inventory online, how many days does it take for that vehicle to arrive at the dealership, be serviced and detailed and merchandised online? In most cases depending on where the vehicles were purchased, you may be talking a week or more.

The other time lag in most dealerships seems to be the paperwork flow. The auction receipt is sent to accounting, the office adds the vehicle to the DMS, the DMS feeds the vehicle to your inventory manager or website. This paperwork flow sometimes creates another wasted time lag for merchandising and selling the car. I would like to share with you an idea that has proven successful for us in getting the car online the day it 44 • 2nd Quarter - 2013 • DrivingSales, LLC

is purchased. All of these vehicles that are listed online have several pictures used in the listing. In fact, some of the OVE or Smart Auction listings have the pictures used from the selling dealers’ websites. Why not put those pictures to use? Several months ago we had the idea of using these pictures to merchandise our vehicles online the day that we purchased them. As soon as we win the car from the auction or

estimate reconditioning costs, we have a pretty good idea of what our total ACV or investment will be in the vehicle.

We now have everything we need to price the vehicle on our website using our pricing tool. Here is an example of a Manheim vehicle condition report:

buy it on OVE, we create a folder on our desktop. We then copy and paste those pictures into a folder on our desktop. We also do not wait for the inventory clerk to enter the vehicle into the DMS; we enter the vehicle into our CRM inventory module that day! The pictures that we saved to our folder from the simulcast or OVE listing are then uploaded to create a completed VDP listing.

dealer, turning our inventory rapidly is a huge goal of ours. Since we have started using this process we have gone from an average days to sale of 35 days to the low 20’s. Aged inventory has been reduced and we are able to keep a minimum of 65% of our inventory in our 30 days or less bucket. To provide some proof of how well this system can work, see the picture on the next page.

Online auction listings also provide a detailed condition report of the vehicle. These reports have all of the equipment listed, how many sets of keys the vehicle has, if the vehicle is still under factory warranty, as well as any dings, dents, scratches etc. This condition report provides us with all of the information that we need to write a thorough detailed vehicle description for our VDP. Using this information to

The highlighted vehicles in this screenshot from our AutoTrader backend tool were purchased on Friday February 22nd via simulcast at Manheim Auto Auction in PA. The vehicles were listed on our website later that evening.

Notice the incredible amount of VDP views that these vehicles received over that weekend. Keep in mind that these vehicles are still in transit to us from Manheim Pennsylvania. Of the 9

So what are the benefits in doing all of this extra work? We feel that there are many. Being an independent used car

Dealership Innovation Guide

VDP views on the 2005 GMC Yukon, 4 customers submitted leads. From the 30 VDP views on the 2005 Lexus, 6 customers submitted leads. From the 7 VDP views on the 2006 VW Passat, 2 people submitted leads. Our sales force loves this process as you can see in this example; they have 12 solid Internet leads to follow up with once we reopen for business on Monday morning. Our

Dealership Innovation Guide

dealership is closed on Sunday but we do have a process for following up with internet leads after hours. These vehicles were delivered to our lot late that Sunday and were awaiting us when we arrived back to work Monday morning.

We had 2 scheduled appointments for later that day on the 2005 GMC Yukon. The vehicle was sold and delivered at 6:00 Monday evening.

Here is how you can implement this process at your dealership. It doesn’t matter if your buyer was at a physical sale or purchased the units online, the condition reports and pictures are available to you that day. Log into your Manheim account online and click on the “My Manheim” tab on the right hand side of the page. This takes you to page for “My Purchases”. All vehicles that you have purchased will be listed here.

This page will list vehicles purchased at both Manheim auctions and online via OVE. Simply click on the highlighted last 6 of the VIN and you will be directed to the Manheim condition report. Once here you are all set! Copy and paste the pictures into a folder. List the vehicle in your inventory manager, write a description, upload the pictures, price the vehicle and you are done! Let’s not allow trucking companies and the normal paperwork flow that exists at dealerships keeps us from getting our cars online.

DrivingSales, LLC • 2nd Quarter - 2013 • 45

Let’s Get Our Trades Online Faster Also

You will turn your inventory faster, reduce aged inventory and make more money

Do your salespeople and managers own smartphones? The odds are pretty good that they do. Using the Dropbox and Google Drive apps, I have created shared folders. My sales department employees have this shared folder on their smartphones. As soon as we trade a vehicle, we have them take pictures of the vehicle and upload them from their phones to the shared folder. The folder syncs to my Dropbox or Drive accounts on my computer.

From there, as soon as the vehicle appears in my inventory manager we have pictures available to upload.

Let me point out that we also take additional pictures for display on our website after the vehicles have arrived and been through reconditioning. These processes are in place to reduce the “down time” normally associated with merchandising a vehicle online. We firmly believe that once we own the vehicle, it is for sale. Let’s use that 7 to 10 days transportation time and paperwork flow time as selling and merchandising time!

Groups that compare front end grosses with days in stock buckets. You will always have your greatest opportunity for better gross in the lower days in stock buckets. This process has helped my dealership achieve those goals. I hope that you have found this article helpful and that you can use these processes at your dealership also. If you have any questions or need help with this information, feel free to reach out to me at bsimmons@haleyauto.com.

About The Author:

in the process. I have seen many front end gross studies from various NADA

Bill Simmons is the General Manager of the Haley Toyota Certified Center, an independent used car dealer in Richmond VA. His 34 years of experience encompasses many positions in new and used car dealerships. He has been in his current position for 7 years and loves every minute of it.

@haleycertified

“Choosing ELEAD1ONE as our longterm vendor has 100% proven to be the right choice. ELEAD1ONE provides me with fact-based accountability for both fixed and variable operations. Their 24/7 customer service is the best in the industry. The pros at the Call Center supplement our phone operations so successfully that huge BDCs just don’t make financial sense – ELEAD1ONE definitely does a better job.”

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