Dealership Innovation Guide - Q2 2014

Dealership

INNOVATION

GUIDE

A DrivingSales Publication • 2nd Quarter, 2014

Quar terly Ranking of Dealership Vendors and Best Practices

The Four Factors

Affecting Today’s Blue Sky Multiples Erin Kerrigan - Page 22

CRM And Your Brand Hunter Swift - Page 14

There’s No Such Thing As Too Much Information David Spisak - Page 32

Content Marketing Demystified Sara Callahan - Page 40

Visit DrivingSales.com to view nearly 16,000 verified dealer ratings of over 800 vendors in 28 categories.

Driver Connect

Bringing Innovation and Retention to Your Dealership.

ABCMOTORS

www.DMEautomotive.com

Why Wait?

Join the Mobile App Revolution Today!

888-501-4205 Group.MobileSales@DMEautomotive.com

Dealership

INNOVATION

GUIDE

A DrivingSales Publication

Quar terly Ranking of Dealership Vendors and Best Prac tices

Dealership Executives, In our highly competitive industry, it’s clearer than ever before the business decisions you make at your dealership need to be based off of reliable information. News and information is not in shortage, but resonating news and relevant information is where answers lie. It can be time consuming to wade through the noise to find solutions to your dealership’s challenges that provide insight to tackle the biggest challenges in your dealership.

I believe the right news and information are an important element to leading a dealership, which is why we have already started to invest more in our media production to better serve you. We will be ramping up our content production and produce bleeding-edge news and information addressing your problems. Our goal is to produce substantive content that provides you with the news and information you need to run a progressive dealership. Our media platforms will become a bigger platform where dealers can discover new technologies on the horizon and why it’s important to their business. We will expand our bridge connecting emerging tech and digital marketing strategies to how they impact dealerships covering marketing, variable and fixed ops trends.

We value our relationship with you and are dedicated to relentlessly meeting your needs. We hope our increased efforts will encourage innovation and help propel the industry forward.

Because we’re here to serve you, the dealer, it’s critical to hear feedback from you regularly in order to meet our content goals. Do not hesitate to contact myself, or a member of our team, with your opinions…they matter!

We thank you for being apart of our Community and hope you have a successful 2nd quarter.

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.

Sincerely,

Meet the Team Jared Hamilton Founder, DrivingSales Inc. @jaredhamiltonDS Kevin Root President, COO kevin.root@drivingsales.com Jeff Pease Art Director jeff.pease@drivingsales.com Mike Jeffs Media Manager mike.jeffs@drivingsales.com @mikejeffs3 Larry Schlagheck Director of Advertising larry@drivingsales.com @larryschlagheck Tommy Bay Media Designer tommy.bay@drivingsales.com @tommybay

Jared Hamilton Founder, DrivingSales, LLC P.S. Don’t forget to check out the latest vendor ratings and reviews, the best place for verified, objective information from dealers like you!

Dealership Innovation Guide

DrivingSales, LLC • 2nd Quarter - 2014 • 3

Thanks to our Sponsors!

NADA UNIVERSITY

®

D I G I TA L MARKETING

SOLU T I O N S

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 2014. 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 - 2014 • 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 mike.jeffs@drivingsales.com. Include a telephone number and 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 FEATURES 14

CRM and your Brand Hunter Swift

18

Entering the Digital Mainstream in 10 Steps Clayton Stanfield

28

22 THE FOUR FACTORS

Affecting Today’s Blue Sky Mulitples Erin Kerrigan

Know your APC’s to Increase your Dealership’s 1s, 2s and 3s

14

James Casazza

32

There’s No Such Thing as Too Much Information David Spisak

36

What Search Engines Convert Sales?

Joe Chura

38

What’s your Story?

Arnold Tijerina

06 On DrivingSales.com, dealers can rate

40

their vendors. All reviews are verified

Sara Callahan

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

Content Marketing Demystified

44

It’s Not 1999 Anymore Brian Lollie

Dealership Innovation Guide

44

DrivingSales, LLC • 2nd Quarter - 2014 • 5

Over 16,000 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

1 1 Owner Marketing Reputation Management

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

6 • 2nd Quarter - 2014 • DrivingSales, LLC

Dealership Innovation Guide

Dealership Innovation Guide

DrivingSales, LLC • 2nd Quarter - 2014 • 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

Score Rating Rec. 260.89

95%

9.4

100%

CallSource CallTracking

201.26

DealerSocket

5.96

Century Interactive

Car Wars

CallRevu, LLC

CallRevu

DealerSocket Call Management

2.22

100% 100% 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.

ActivEngage

ActivEngage Chat

27.98

Dealer e Process

Dealer e Process Live Chat

1.12

ContactAtOnce! LLC

CarChat24

ContactAtOnce! Chat Connect

CarChat24 - 24/7 Fully Staffed Chat

121.94

99%

13.71

100%

100% 100%

CRM-Sales Department These are Customer Relationship Management (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

Product

Score Rating Rec.

Dominion Dealer Solutions

Dominion CRM

84.62

CAR-Research XRM

CAR-Research XRM

11.29

DealerSocket ELEAD1ONE

DealerSocket CRM ELEAD CRM

105.34

97%

32.86

99%

98% 98%

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.

Dealertrack Technologies

Dealertrack Dealer Managment System

56.64

Auto/Mate Dealership Systems Reynolds and Reynolds

ADAM Systems

ADP Dealer Services

8 • 2nd Quarter - 2014 • DrivingSales, LLC

AMPS

Reynolds ERA DMS

ADAM Systems - DMS

ADP Drive Dealer Management Systems

156.04

91%

86%

36.41

43%

17.94

70%

22.43

91%

Dealership Innovation Guide

Fixed Ops Solutions Products and/or services designed specifically for Fixed Operations.

Company

Product

Score Rating Rec.

CIMA Systems

CIMA Car Care Service Menus

58.72

CIMA Systems

CIMA CarView

15.42

ELEAD1ONE AutoPilot

DealerSocket

DealerSocket Service

607.13

98%

35.82

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.

ELEAD1ONE

ELEAD ILM

54.20

Dominion Dealer Solutions

DealerSocket

CAR-Research XRM

Dominion ILM

DealerSocket ILM

Internet Lead Manager

221.97

17.62

99% 97%

10.87

Keep In

Good

Company

99%

100%

18MM UNIQUE QUALIFIED SHOPPERS

10,000

DEALER FRANCHISES

1SITE

#

MOST

TRUSTED

To learn how an Edmunds.com partnership can power your business, contact us at: 855-EDMUNDS or Sales@Edmunds.com.

Dealership Innovation Guide

DrivingSales, LLC • 2nd Quarter - 2014 • 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.

Phone Ninjas

Phone Ninjas

140.00

IM@CS Automotive Consulting

Gary May: IM@CS Best Practice Consulting 1.71

PCG Digital Marketing

eXtéresAUTO

DealerKnows Consulting

Brian Pasch

eXtéresEDU - Dealer Training Joe Webb

551.71

100%

24.37

100%

1.71

100% 100% 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 vAuto

ACE Tech

VinSolutions

ADP Dealer Services FirstLook

Product

Pricing & Merchandising Tools LotPro

MotoSnap™ Market Pricing Analysis

ADP’s AutoCheck Express

FirstLook -- 360 Market Pricing

Score Rating Rec. 202.67

96%

1.99

50%

1.37

100%

21.99

1.99

92%

50%

Mobile Sites This category is for mobile site providers. Mobile websites are built specifically for mobile device browsers and cater to customers surfing the Web from phones and tablets.

Company Dealer e Process

Product Mobile Websites

Dealer.com MobileSites

DealerOn

Mobiles Sites

VinSolutions MotoSnapsTM Mobiles Websites

Score Rating Rec. 345.45

100%

42.82

67%

12.78

100%

12.78

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

77.95

TrueCar

TrueCar New Car Leads

16.77

Dealix

AutoTrader

Dealix New Car Leads New Car Advertising

Cars.com NewLeadsPlus

796.24 52.59

7.47

89% 93%

64%

63% 60%

*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 - 2014 • DrivingSales, LLC

Dealership Innovation Guide

Are You Annoying Shoppers & Sabotaging Your Inventory?

OVERVIEW

STANDARD

2014 SUBURB SUV 4WD LE

Find out what real in-market shoppers have to say about their inventory shopping experiences. It’ll change the way you merchandise your cars.

DESCRIPTION • Red 4-wheel drive SUV • AM/FM CD & MP3 • Front & rear seat warmers • Power locks & mirrors

View the study at

www.cobalt.com/shopperstudy

800.909.8244 | www.cobalt.com © ADP Dealer Services, Inc. All rights reserved

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 J&L Marketing

Product bLinked

Score Rating Rec. 962.97

100%

18.21

100%

ELEAD1ONE GoldDigger

357.44

CAR-Research XRM

14.60

CIMA Systems

Complete Virtual BDC Owner Marketing

OneCommand OneCommand

9.93

99% 96% 100%

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

Company DealerRater.com eXtéresAuto

Product

DealerRater Certified Dealer Program Online Reputation Management

Score Rating Rec. 298.21

98% 100%

30.75

Slipstream Creative

Reputation Management

14.84

Dominion Dealer Solutions

Dominion Prime

1.04

DealerSocket

Dealership Innovation Guide

DealerSocket CSI / MarketPlace Social

2.53

100% 100% 100% DrivingSales, LLC • 2nd Quarter - 2014 • 11

SEM - PPC Search Engine Marketing (SEM) and Pay-Per-Click (PPC) solutions help you determine how to invest in and execute a display or paid ad campaign on the major search engines for greatest ROI.

Company

Product

Score Rating Rec.

Dealer e Process

Dealer e Process Digital Marketing

68.25

Local Search Group

PCG Digital Marketing Showroom Logic

Netsertive

Search Engine Advertising

PPC Management Service AdLogic

Netsertive Digital Extend

262.25

100%

13.60

100%

11.26

6.89

100% 80%

100%

Search Engine Optimization (SEO) Search Engine Optimization (SEO) solutions work to optimize your websites so that they show up higher in the search engine rankings. These services generally include both on-page and off-page optimization. This category also includes Website Conversion Tools.

Company

Product

Score Rating Rec.

PCG Digital Marketing

SEO & Strategic Internet Marketing

30.97

Dealer.com

Dealer.com SEO

10.07

eXtéresAUTO

L2T Media

Dealer e Process

eXtéresAUTO - SEO

SEO

Power PageRank SEO

104.33

90%

12.14

100%

8.70

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.

Cars.com

Cars.com Online Advertising

14.19

Dealix UsedCars.com 119.95 95% 75%

AutoTrader.com

Used Car Advertising

2.85

40%

Cargigi Inc.

Cargigi inteliPhoto

1.18

100%

All Auto Network

Inventory Management Applications

1.18

100%

Websites Website solution providers create full-service websites built to be the main hub of your dealership’s online presence. These sites are central to your dealership’s marketing, branding and customer service. Micro Sites and Mobile Sites are rated in their own categories.

Company

Product

Score Rating Rec.

Dealer e Process

Dealer eProcess Websites

25.28

DealerOn

DealerOn - Flex Sites

13.20

Dominion Dealer Solutions

Dealer Car Search Dealer.com 12 • 2nd Quarter - 2014 • DrivingSales, LLC

Dominion Websites

Web Design & More Dealer.com Core

110.48

97%

16.54

100%

3.00

100% 95%

76%

Dealership Innovation Guide

How Do Vendor Ratings Work?

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

Rules •

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

•

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

•

Each reviewer must answer three questions to complete their rating:

1. How many stars does the solution deserve?

2. Would you recommend the solution to a friend?

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

•

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

Safeguards •

DrivingSales.com protects the anonymity of each dealer employee who leaves a rating and review.

However, DrivingSales requires valid name and contact information for each reviewer so that each reviewer can be validated.

•

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

Vendor Ranking In each product category the vendor solutions are ranked in real-time as each new dealer rating is submitted. The vendor products are ranked based on a weighted Bayesian Algorithm.

This is a standard mathematical calculation that looks at the number of stars the reviewer gave as well as the statistically valid sample size needed, relative to the competitive set, to create a ranking based on the statistical accuracy of the results. Sometimes a company with 3 stars will rate above a company with 4 stars if mathematically the first company has a higher probability of success based on the submitted reviews.

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

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

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, 2013 to February 28, 2014. *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

Dealership Innovation Guide

DrivingSales, LLC • 2nd Quarter - 2014 • 13

CRM and your

BRAND Why you should focus on your CRM to tell your Brand story.

A

dealership’s reputation is often determined by the customer’s last experience. If they had a positive experience, they will most likely be willing to share it with others. The same is true if they have a negative experience. Thus, it’s important that dealerships strive to create a positive experience for everyone who interacts with their dealership. Any interaction customers have with your dealership is a reflection on your brand.

Branding is not just a marketing responsibility, but also something that everyone at the dealership needs to be part of. That’s why hiring the right person, training them the right way, and having the right tools available are

14 • 2nd Quarter - 2014 • DrivingSales, LLC

essential to not only give your customers a great experience, but also to help build your brand and customer loyalty.

One of the most influential tools dealers can use that affect a customer’s experience and branding is your Customer Relationship Management (CRM) tool.

RELATIONSHIPS The days are gone when dealers relied on their CRM to simply manage leads and customers. Today, the most progressive and successful dealers are using their CRM to manage the relationship with their customers.

They are using their CRM to tell their Dealership Innovation Guide

Dealership Innovation Guide

DrivingSales, LLC • 2nd Quarter - 2014 • 15

“brand” by developing and managing long-lasting positive relationships and creating the ideal customer experience, while making customers for life.

This is only accomplished by offering a positive customer experience through marketing, prospecting, the entire sales process, the sales follow up, and service.

DATA VS LEADS Dealers often neglect their customer database and spend too much time, money and effort into acquiring new leads through advertising and third-party lead providers; leads that often have very little information, and do not even have dealership exclusivity. If dealers focus only on attracting new customers and don’t serve their existing clientele, they run a serious risk of losing the loyal customers they previously worked so hard to acquire. The use of CRM allows a dealer to capture a valuable database of information that it can use to better the way it interacts with its customers, and increase customer retention.

Today, we know more about a customer than ever before. We know every call, email, letter, and text that has been sent. We know where they live, their phone numbers, their email addresses. We know every lead they have submitted, every vehicle they have ever looked at. We also know what vehicles they own or have previously owned. We know their service history and average repair order cost. We know the estimated mileage, trade value, and if the customer is in an equity position.

We have all of this data, but are you using it? Do you have processes in place to know and understand who your customers are? Dealerships need to access this data to cater marketing and follow-up to their customers with relevant and timely messages, through the customers preferred method of communication. Are your marketing efforts aimed at the 2 percent of people who are in the market for a new car or the 98 percent that are not?

CRM AND YOUR BRAND Customers are loyal to a company or a business because of the quality of their product and/or the excellent customer service they receive. Because dealers do not have exclusivity on the products they sell, customers have many options when it comes to purchasing a new vehicle. With multiple dealerships selling the same cars, the distinguishing characteristic is often how you treat your customers. It’s not so much what you are selling, but how you are selling it. CRM technologies allow dealers to distinguish themselves by the service they provide.

Dealers often talk about how they are dedicated to customer service, but applying it is an entirely different matter.

As mentioned before, your brand is determined from the relationship between the dealership and its customers. This evolves from hundreds of small interactions (leads, phone calls, emails, visits, service). These interactions add up to build or destroy the dealership’s brand. Since a majority

“It was a no-brainer partnering with ELEAD1ONE. ELEAD CRM blows away our previous CRM system and our business results speak for themselves! We have first-class reporting, and best of all I can login at any time, with any device, to monitor our day-to-day business. Since signing up with ELEAD Virtual BDC, the customer information and feedback we receive has been invaluable, and there is no doubt that the call center helps us pick up an additional 20 to 25 units a month! Our business has grown 60 to 70 percent with ELEAD1ONE I highly recommend them!”

Richie Ruscitti

General Manager South Chicago Dodge Chrysler Jeep Ram

Top Rated CRM, ILM, Owner Marketing

© Data Software Services, L.L.C. 2014

16 • 2nd Quarter - 2014 • DrivingSales, LLC

CRM Superstar and Marketing Innovation Awards

866. 989.8077 | sales@eleadcrm.com | www.elead-crm.com Dealership Innovation Guide

of these interactions originate in the CRM, it is important that the CRM matches the brand or image you are trying to portray. A positive customer service experience must be applied to every customer touch point.

instead of letting them leave, search your CRM with your prospect for customers you sold that vehicle to 3-4 years ago. Offer the owner of the possible trade a free car wash or oil change for bringing their car in.

To your customers, branding is largely about faith; believing in something they can’t see, and trusting you when the dealership says, “We care.” Ultimately, people don’t trust companies, they trust people, making it critical to build this trust. When a salesperson says they are going to call the customer back tomorrow, the CRM needs to prompt the salesperson to call them.

If a customer says they don’t want to receive any calls at home, that should be respected. They expect when you email or send in a lead that the dealership will be quick to respond. They trust that when they give you their email address that you are not just going to spam it, but give them something of value.

Create customized business campaigns designed to send the right message, to the right person at the right time.

TODAY’S CUSTOMERS Today’s customers do not want to be “sold.” Most often, by the time they’ve contacted a dealer, customers have done their due diligence. They just want someone to engage with, to help them, and to celebrate with them when they make their decision. Customers are more likely to do research on the company’s brand, such as looking at online reviews or social media posts regarding past customer experiences. Apart from price, why should customers buy from you?

It should be all about the experience.

With the use of CRM technologies, dealers can better serve their customers, speed up the sales process, and create a positive experience.

CRM EXAMPLES THAT DRIVE POSITIVE EXPERIENCES Use CRM Desking multi-payments to present numbers and allow customers to choose their payment versus being pushed into a payment. This speeds up the negotiation process, improves CSI, and helps you hold gross.

When someone comes in looking for a used car you don’t have, Dealership Innovation Guide

Integrate sales and service by introducing recently sold customers to the service department and to your website to set their first oil change.

Then meet them in the service drive when they come in to follow up with the sale and ask for a referral.

Use the CRM’s data-mining tool to find specific customers in an equity position that could qualify for a lower payment by getting them into a new vehicle.

Incorporate a mobile CRM to allow your salespeople to be 24-hour salespeople, where they can enter and follow up with customers wherever they may be.

NEGATIVE EXPERIENCES We can’t control every interaction, and negative experiences are bound to happen. But you can control how you react to negative experiences. You should make sure you have a way to uncover negative experiences through surveys. If you receive a negative survey you should quickly enroll those customers into a campaign where it notifies those that can correct the problem, and immediately reach out to resolve the customer’s issue.

Communication is key to great customer service. Surprisingly, these customers become some of your best customers after you have spent time listening to them and resolving their issues. Learning from your mistakes is also an important aspect of good customer service.

Documenting heated issues into the notes in your CRM helps to ensure you don’t make those same mistakes again.

REWARD LOYAL CUSTOMERS Do you know who your most loyal and long-standing customers are, those who have bought more than four vehicles, or

spent over $100,000 at your dealership?

Use your CRM to identify and segment these customers so it will notify you when they visit your store. Create a customer appreciation campaign to thank your loyal customers and reward them for their repeat business. Offer sales and service discounts to entice them to continue to do business with you. Offer incentives for their referrals. Invite them to special VIP events, like new model introductions or a customer appreciation party.

Using a CRM will help you stay on top of your customers and ensure you’re being proactive in maintaining positive relationships, not just responding when something goes awry. Your CRM will be taken to the next level when combined with marketing, branding, and customer satisfaction. Dealers will be much more efficient when they use their CRM for more than just a storage bin for contacts.

Fully utilizing your CRM to manage the relationship with your customers will help create a better overall experience for your customers, increase your CSI, and ultimately grow your brand.

About The Author: Hunter Swift is the Director of Sales Development at DealerSocket and has been with the company since 2005. In addition to his current role, he has fulfilled the responsibilities of customer support, consulting, training, and sales. Hunter specializes in helping dealerships improve sales and follow-up processes through the use of CRM technology. He is known for his ability to connect with people and demonstrate his knowledge to help others solve their problems. Hunter honed his dealership skills as a salesperson prior to joining DealerSocket.

He has earned a Business Degree from Pepperdine University. Hunter can be reached at hswift@dealersocket.com and on social media at @HunterSwift.

DrivingSales, LLC • 2nd Quarter - 2014 • 17

D

efining the “mainstream” in today’s market requires that dealers assume a perspective on how consumers shop and purchase vehicles that is entirely different from the assumptions made just five to 10 years ago. Today’s mainstream shopper depends heavily on digital channels—primarily smartphones, online reviews and social—when comparing and choosing products as well as when making actual transactions.

The use of such channels by Millennials has attracted significant coverage in news media, but the phenomenon extends much farther up the demographic chain than only the newest generation of shoppers.

Pew Research has measured the tremendous change in the mainstream landscape that has been generated by the consumer’s embracing of mobile devices and social sites. Pew found that the cell phone has been the most quickly adopted technology in history.

Last year 97 percent of adults owned a cell phone, and 56 percent of those were smartphones. Moreover, 34

18 • 2nd Quarter - 2014 • DrivingSales, LLC

percent of all users are exclusively mobile, using only their mobile devices, with no other computer or telephone.

networking. Pew reports 40 percent of cell phone owners use a social networking site on their phone.

The implications of mobility for retail shopping are momentous. According to the research, 41 percent of all mobile users search for a product on their phones or other mobile devices after viewing it on a television ad. Nearly four in 10 (36 percent) say they shop around on their phones while at a retail location before they commit to buying.

On trips to the dealership, and even long before a potential buyer sets foot in the showroom, this powerful digital capability has reshaped the mainstream way of looking for a car, and this redirection of the shopping experience has been building over the past several years. For example, a study conducted by eBay Motors found that 46 percent of vehicle owners would use their mobile device to research their next vehicle, and 41 percent said they would use their mobile device to research dealerships.

The second component of today’s mainstream is social networking.

Again, this trend extends well beyond younger shoppers. As of last Fall, according to Pew, 73 percent of online adults used social networking sites.

That included not only 90 percent of the 18-29-year-old demographic, but also 78 percent of those age 30-49, 65 percent of those 50-64 and 46 percent of seniors 65 and older.

The power of this demographic streaming towards mobility and social sites becomes amplified when mobile phones are used for social

Reflecting this digital diversion of mainstream shopping, eBay Marketplaces has seen 40 percent of transactions involve a mobile touch point, whether users are accessing listings or posting via a mobile device.

Clearly, automotive marketing has already evolved beyond simply having a dealership website or even banner ads. Participating in all aspects of

Dealership Innovation Guide

Dealership Innovation Guide

DrivingSales, LLC • 2nd Quarter - 2014 • 19

the digital environment has become essential for every dealership.

As a dealer, how should you begin to extend your influence in the digitalsocial-mobile mainstream? You can start forming a solid foundation for digital marketing with the following 10 steps: 1.

back and forth across pages or wait while weighty graphics download.

2.

Be sure your website can be easily viewed and navigated on smartphones. Your technical

designer should create your website so that it is responsive to the device on which it is being viewed. It should be optimized to automatically fit the confines not only of a laptop screen but also the screens of tablets and smartphones. When consumers visit an optimized site on their phones, they will not need to scroll

20 • 2nd Quarter - 2014 • DrivingSales, LLC

3.

Your website generally serves as “home plate” for your digital marketing efforts. Links in posts on social networks and in comparison-shopping sites generally drive consumers to a web page. It’s important, therefore, that your website be registered with the major search engines, online business directories, and other sources that can direct shoppers to your site during their early stages of consideration.

Purchase a smartphone.

Since the first impressions of your dealership that many prospective customers gain is through your mobile site and social posts, you need to be able to view your brand the way your customers see it.

Acquire a smartphone and use it regularly to view and link to your website and social sites so you can discover any unanticipated flaws in navigating your sites, images that download slowly, or videos and other heavy files that may fail to work properly on a phone if not appropriately optimized.

Make it easy for people to find your website.

4.

Participate in online marketplaces. These sites

no longer are just for selling used vehicles; many dealerships across America market individual vehicles, where they can post the photos, descriptions and pricing essential for comparison shopping.

Dealership Innovation Guide

5.

seek out opportunities to increase your online following. A consumer who “likes” your dealership on Facebook may have hundreds of friends who will see that person’s endorsement of your business. The same is true of far-ranging Twitter followers and fans of other social sites who are likely to rapidly spread the word about good service, deals and products they find in your dealership. Boost your following by:

Beyond your website, offer mobile apps. Apps

are the preferred way to shop via smartphones. Use existing apps from online marketplaces or search online for app developers to create a button on your customers’ phones to click for details on your inventory, hours, locations and deals. Increasingly, companies are offering mobile apps to make it easier to browse and shop for vehicles and parts.

6.

Offer free Wi-Fi inside your showroom and on the lot. Help your customers

learn more about your dealership and vehicles – and keep them on the lot – by offering free Wi-Fi. They want to use tablets and phones to compare vehicles and prices while at your dealership, and it’s advantageous for you to help them do so. By acknowledging and encouraging their preferred way to shop, you make customers feel welcome at your dealership.

7.

Be a frequent and proactive member of social networks. Choose

the social sites that your target audience values. In terms of sheer volume, Pew reports that 71 percent of online adults use Facebook, 18 percent use Twitter and 17 percent use Instagram.

Create a Facebook page for your dealership and post regularly to the site in ways that generate discussion and response. Develop a strategy for using Twitter to send short updates on news about vehicles, sales at the dealership, or support for local events and organizations. Instagram and Pinterest are great sites for showing photos of your vehicles as well as the consumers who buy them.

8.

Proactively recruit friends and followers for your social sites. As an important aspect of your marketing program,

Dealership Innovation Guide

•

Including your social network identifications (“handles”) on all your marketing materials—digital and print

•

Asking for followers to bring their friends into your social network

•

Asking current customers to provide you not just their email addresses but also their social handles and then inviting them to follow your business

•

9.

Having your employees follow your social sites and requesting them to recommend your social sites to their own online friends

Create a blog and update it regularly. A blog

gives you the opportunity to offer your thoughts and insights about such topics as new models and categories of vehicles arriving at your dealership, new technology available on vehicles, customer comments about their experience with your dealership and new digital features that you implement on your site and in the “social sphere.” Keep your blog current by adding a brief new article every week. If you do not feel confident in writing these blog posts, many local freelancers are sure to be available to draft your posts for very reasonable fees.

10.

Win friends and influence people. Be gracious to the online community. “Like” and follow others whose personalities, vocations or insights appeal to you. Praise and share social media posts and non-competitive

websites that you find helpful or simply interesting. Also, learn who the influencers are for your target audience and follow them to comment on their social and blog posts. Often these influencers are local political and entertainment figures, local and regional automotive experts, and online reviewers of products and services.

If your dealership is not yet in the mainstream of digital channels, now is the time to get your feet wet and begin equipping your facilities and your personnel to communicate with customers in the ways that they prefer and increasingly demand.

About The Author: Clayton Stanfield is a Senior National Sales Manager at eBay Motors, the Internet’s largest marketplace for buying and selling all things automotive.

Stanfield was previously a Senior Manager, where he oversaw dealer outreach programs, including the eDealer training program, eBay Motors Online University and involvement in franchise and independent dealer events.

Specifically, Stanfield has contributed to the development and expansion of the eDealer program. Under his supervision, eDealer has added more events across the country and now provides weekly dealer training sessions across the country.

Clayton has been with eBay Motor for over six years. Prior to his experience at eBay Motors, Clayton worked for five years as a consultant in the auto industry building and training Internet Departments and Business Development Centers. It was during his college years that he first entered the industry selling cars for a small dealership in Sacramento, California.

Clayton has a bachelor’s degree in Business Management and graduated with his Masters of Business Administration from Pepperdine University in August 2011.

DrivingSales, LLC • 2nd Quarter - 2014 • 21

THE FOUR FACTORS Affecting Today’s Blue Sky Multiples D

efining the “mainstream” in today’s market requires that dealers assume a perspective on how consumers shop and purchase vehicles that is entirely different from the assumptions made just five to 10 years ago. Today’s mainstream shopper depends heavily on digital channels—primarily smartphones and online – and social networks when comparing and choosing products as well as when making actual transactions.

Today we are in a seller’s market.

There are more buyers looking for dealerships than there are seller’s seeking an exit. This supply demand imbalance has resulted in very strong blue sky multiples.

Dealers often ask me where a given franchise should be valued in the current market. To answer that question, Kerrigan Advisors is introducing its first ever Blue Sky Chart, which will be published in the firm’s quarterly Blue Sky Report, currently available at www.kerriganadvisors.com. These charts lay out the high, average and low multiples for each franchise in the luxury and non-luxury segments.

The Kerrigan Advisors’ multiples are based on our view of franchise values in the current buy/sell market. Each franchise in the chart is designated with a high, average and low multiple.

Dealership Innovation Guide

Chart I Kerrigan Advisors Blue Sky Chart: Non-Luxury

Source: Kerrigan Advisors Analysis

Chart II Kerrigan Advisors Blue Sky Chart: Luxury

Source: Kerrigan Advisors Analysis

I am often asked what causes franchise multiple variability? Most dealers understand the average performance multiple, which is associated with an average performing franchise.

But they often ask what would cause a dealership to be valued in the high versus the low range.

There are four key factors that drive the variability of blue sky multiples: (i) earnings growth expectations; (ii) buyer demand; (iii) real estate, and (iv) market preference. The combination of these four factors plays a major role in the blue sky multiple a buyer is ultimately DrivingSales, LLC • 2nd Quarter - 2014 • 22

willing to pay. Below is a review of each factor, including some specific examples.

often commands a lower blue sky multiple. This usually surprises sellers, as they believe their overperforming store should command a higher blue sky multiple. The reason over-performing stores receive lower multiples is because most buyers do not expect earnings to grow at an above average pace post-transaction; in fact, they often believe earnings will decline after the sale. As a result, buyers are more likely to pay a below average multiple for an over-performing store.

Factor One: Earnings Growth Expectations Higher Growth = Higher Multiple: •

•

Underperforming dealerships provide an opportunity for higher earnings growth. A dealership that is underperforming, meaning its profitability and/or sales are below market expectations, often commands a higher blue sky multiple. Why? Because some buyers believe they can grow profits at an above-average rate by reducing expenses, increasing gross profit or growing sales. Simply by “fixing” the underperformance, buyers should experience a higher level of earnings growth. For example, I recently represented two underperforming dealerships that commanded very high multiples (even higher than the multiples in our chart). The profitability of both of these stores was far below market. The buyers felt that they could achieve outsized earnings growth within a year and accordingly priced the blue sky at a multiple above average.

•

Factor Two: Buyer Demand Higher Demand = Higher Multiple •

Dealerships in high growth markets have higher earnings growth expectations. Dealerships located in high growth markets, meaning cities/regions that are growing their economy and population at a faster pace than the U.S. average, often command a higher blue sky multiple.

Buyers are willing to pay a higher multiple for these stores because they expect their sales and earnings to grow at a faster pace than the industry. By way of example, Texas, Arizona and Florida are high growth markets where dealerships often command premium multiples.

Lower Growth = Lower Multiple: •

Over-performing dealerships can experience below average earnings growth post sale. Ironically, a dealership that is over-performing, meaning its profitability and/or sales are above market expectations,

Dealership Innovation Guide

Dealerships in slow growth markets can expect slower earnings growth. Dealerships located in low growth markets, meaning markets that are growing their economy or population slower than the national average, often command a low blue sky multiple.

As an example, certain markets in the Midwest and Northeast command lower multiples because of their slower population growth.

•

Dealerships located in major metro markets are in high demand.

The supply demand imbalance in major metro markets is extreme.

This is in part due to our country’s continued urbanization. There are significantly more buyers seeking acquisitions in big cities, than there are sellers willing to part with their highly valuable, metro stores. Large, well-funded buyers are seeking dealerships in major metros either because they already have a presence in the market or because they are seeking higher volume franchise opportunities where they can put a significant amount of their acquisition capital to work. High buyer demand, with limited seller supply, drives up price (Economics 101).

Dealerships in the Sunbelt are in high demand. Most of the largest, well-funded private and public dealership consolidators are focused on the Sunbelt states.

Dealerships in these states can expect a higher multiple.

Lower Demand = Lower Multiples •

Dealerships located in rural markets have fewer buyers. There are fewer buyers seeking dealerships in smaller/rural markets. Less demand means less competition and lower blue sky multiples. In addition, buyers seeking dealerships in smaller markets often have less capital, which can result in lower blue sky multiples.

•

Dealerships located outside the Sunbelt are in lower demand. As stated above, the largest dealership consolidators are expanding primarily in the Sunbelt states due to their population growth and lack of sales seasonality (minimal winter weather). Because there is less demand, dealerships located in non-Sunbelt markets can receive lower blue sky multiples.

Factor Three: Real Estate Image Compliant Facilities & Low Rent = Higher Multiple •

Image compliant dealerships with low rent command higher multiples. These dealerships are highly attractive to buyers because they require no additional investment and they have an attractive rent factor, thus low fixed expenses and less risk. Note: In 2013, the average dealership according to NADA had a rent factor of 7.4% of gross profit. In general, if a dealership is image compliant and its rent to gross profit is at or below 7.4%, then it is considered to have low rent.

A rent to gross profit margin above 10% is considered high.

Real Estate Investment Required and/ or High Rent = Lower Multiple •

Dealerships that require major real estate investments command lower multiples. Most buyers are not looking for real estate development projects. When a dealership requires a significant real estate investment, both known and unknown costs DrivingSales, LLC • 2nd Quarter - 2014 • 23

Digital is increasingly having a big impact on choice of car and dealership.* Keep your brand front and center with auto shoppers by taking steps to influence them before, during and after a sale. We’ll make sure there’s always room for you when shoppers are making decisions. Even if it’s in the living room. Get in front of your customers at dealers.cars.com. *J.D. Power New Autoshopper Study, 2013.

© 2014 Classified Ventures, LLC™. All rights reserved.

are created. These costs result in increased future rent, which could reduce future earnings (see Factor One). As such, buyers often price non-image compliant franchises at lower multiples to take into account the risks to future earnings.

Chart III Drivers of Blue Sky Multiple Variability

Exception: If a buyer believes that by building a new facility, sales growth will more than make up for the increased rent expense, then the new facility could positively impact the blue sky multiple.

•

Dealerships with high rents receive lower multiples. These dealerships are often located in expensive real estate markets, such as urban centers, or have overbuilt facilities.

Their high rent expense relative to gross profit adds risk to the dealership profitability, because rent is a fixed expense that does not fluctuate when sales decline (we certainly learned that lesson during the last recession). Also, the price of new vehicles does not

Source: Kerrigan Advisors Analysis

fluctuate from market to market.

Thus, dealers in high rent markets generally have higher expenses and can make less profit than those in low rent markets.

Exception: An underperforming dealership may have high rent relative to gross profit because either their sales and/or their gross profits are below market expectations. In this case, the high

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Dealership Innovation Guide

rent may not impact the blue sky multiple because the buyer believes sales and gross profits will grow post sale to a level that brings the rent in line with industry averages.

Factor Four: Market Preference Highly Suitable Franchise for a Particular Market = Higher Multiple •

Franchises that are highly suitable for a particular market receive higher multiples. For example, a domestic franchise located in a truck market, such as Colorado, is more valuable than the average domestic franchise in the U.S., and thus will likely command a higher multiple. This is due to the fact that unit sales volume and dealership earnings in those markets are expected to be far above the average domestic franchise.

Unsuitable Franchise for a Particular Market = Lower Multiple Franchises that are unsuitable for a particular market receive lower multiples. For example, a luxury franchise in a small city with fewer high-income wage earners will be much less valuable than the average luxury franchise located in a major metro. The lower multiple is due to the fact that the new unit sales volumes and earnings will be below franchise average, particularly if the dealer is required to have a stand alone, image compliant facility.

In each case, these multiples coalesce to push dealership multiples up or down. Sometimes all of these valuation factors can counter balance one another, as already noted in Factor Three (Real Estate). For instance, you may have an underperforming dealership located in a low demand market or an over-performing dealership located in a high demand market. In both cases, each store could command an average franchise multiple as the factors counter weight each other.

Valuing dealerships is much more of an art than a science. The goal of Kerrigan Advisors Blue Sky Charts is to help bring a bit more science into the process.

Dealership Innovation Guide

Ultimately, a dealership is only worth what a buyer can and will pay, and what a seller can and will accept, in other words the market-clearing price. At Kerrigan Advisors, we run a professional, discrete and competitive sales process to determine the highest market-clearing price for our clients. Dealerships are far too valuable to do it any other way.

About The Author: Erin Kerrigan founded Kerrigan Advisors in 2014. Kerrigan Advisors is a national dealership brokerage firm focused on sellers. The firm’s leadership has advised on over $2 billion worth of transactions in their careers in auto retail, private equity and investment banking. Kerrigan Advisors provides its clients with the highest level of

sell-side advisory services, including end-toend management of the dealership sale process. The firm does not take listings or build “inventory”. Rather, Kerrigan Advisors focuses on a select number of sell-side client engagements. Kerrigan Advisors’ dealership sale process is highly professional, actively managed, competitive, and most important discrete. The firm maintains a buyer database that logs buyer acquisition preferences, including location, brand, and budget. This database allows Kerrigan Advisors to develop a very targeted list of potential buyers for its clients’ dealerships. Prior to founding Kerrigan Advisors, Ms. Kerrigan headed Presidio Automotive. During her time at Presidio, the firm represented dealer clients in numerous multi-million dollar transactions. Prior to Presidio, she was a Senior Vice President at AutoStar, a subsidiary of iStar Financial (NYSE: SFI), where she led transaction origination. Ms. Kerrigan is a recognized, industry expert on dealership valuation, real estate and buy/sells, and is a frequent speaker at leading auto retail events and conferences. She was the number one rated speaker at NADA 2012.

DrivingSales, LLC • 2nd Quarter - 2014 • 27

APC’s

Know Your to Increase your Dealership’s

1s, 2s and 3s

28 • 2nd Quarter - 2014 • DrivingSales, LLC

Dealership Innovation Guide

T

he hard truth about sales and marketing is that it simply doesn’t matter how strong your brand, product or customer service is – if you’re not targeting quality prospects at the right place and time, it’s as if you aren’t in business at all.

Digital and social technology can help automotive dealerships refine the process of segmenting customers and communicating through the channels they prefer. But along with these new high-tech tools emerges a new fundamental for marketing strategy, the APCs: Audience-Preference-Channel.

Knowing and following the APCs for your customer base can help you realize marketing efficiencies and win more business. It’s the new standard for smart automotive customer engagement, and embracing it can be profitable in both the short- and long-term. Here’s the concept: •

First, a dealer must decide what types of shoppers comprise its ideal target Audience. There is no one “right” customer profile for every dealership, but this decision should be strategic, reasonable and rooted in measurable data or other information. This knowledge will help you optimally allocate your marketing resources.

•

Second, because today’s automotive consumers are empowered with the wealth of information available on the Internet, it’s critical that dealers understand not simply how those shoppers could be engaged, but their Preference for engagement.

•

Lastly, depending upon the preferred Channel or Channels for customer engagement, dealers may need to integrate new outreach techniques to accommodate.

More than ever, you must have an online presence to capture the attention of consumers, regardless of their demographic.

These are the APCs of effective modern automotive marketing, and there is hard data that supports the case for adopting them.

Dealership Innovation Guide

The numbers behind the APCs Audience: Most automotive

dealerships depend on business from a wide variety of shoppers, but when determining where to invest your marketing dollars, it’s helpful to understand what shoppers hold as the greatest revenue potential in the long term. Millennials – the generation of young consumers born after 1980 – are a customer segment worth investing in, given that their spending power is increasing, and is now at a total of $170 billion per year. This group is worth pursuing not just for its spending power, but also for its spending longevity.

Capturing young shoppers’ business, and then ensuring their loyalty with exceptional customer service, could

mean securing repeatable business for the duration of their car-buying lives.

However valuable Millennials are, they also bring high expectations to their shopping experiences: recent research from FordDirect also showed that the younger a customer is, the less satisfied he or she is with the overall sales experience at automotive dealerships. The takeaway here is that Millennials are great business to have, but their business may not be won over in the traditional ways.

Preference: Knowing that Millennials are a high-potential audience, it’s important to know how they like to interact with businesses.

Critical to capturing this segment’s automotive spend is capturing its attention, which is a distinctly different DrivingSales, LLC • 2nd Quarter - 2014 • 29

challenge than marketing to shoppers of even ten years ago. Across a variety of automotive shoppers, regardless of age, online communications is emerging as a top communications tool. FordDirect research found that 84 percent of consumers prefer to be contacted through email, and 79 are open to being contacted by dealers occasionally or as often as needed.

However, Millennials are even more pronounced in their preference for and use of social and digital media.

Because members of this generation heavily rely on the Internet and their mobile devices to inform their shopping experiences and expect ease and speed when researching a potential purchase.

They also do not readily respond to mass marketing efforts; rather, they expect businesses to respect and react to their communications preferences.

Channel: Because Millennials are

FordDirect’s recent Digital Advertising Survey, 26 percent of respondents indicated that they have contacted a dealer because of its online advertising when buying a vehicle. This same research showed that Millennials search local dealer promotions in digital and social media ads more than Generation X consumers and Baby Boomers, and that more than 40 percent of the respondents have conducted research on a dealership through their mobile devices. 46 percent of respondents said they are likely to click a dealer’s mobile ad when browsing through their mobile devices.

Applying the new basics for business success Knowing your APCs – like knowing the alphabet – is only the first step.

Dealers must understand how to put that knowledge together to form complete and productive outreach strategies. A few ideas on how to put together what you know about

at ease with – and so often immersed in – digital and social media, automotive dealers must be online and mobile to 1 3/10/14 11:47 vie for DominionCMX_DRAFT.pdf their attention. According to

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the APCs to get greater return on your dealership marketing efforts: •

Manage your reputation. Millennials put greater trust in people than brands, so it’s important that you know what’s being said online about your dealership. According to a FordDirect study, 57 percent of consumers said negative comments and/or reviews impacted their perception of a dealer. And even if there is online feedback that’s lessthan-positive, the way you respond can still improve your reputation: FordDirect research finds that 59 percent of auto shoppers feel more positive about a dealer who responds to negative comments.

•

Have (an online) presence. The first thing many Millennials are going to do when looking for a dealership is conduct an online search. As a result, it’s important to have a presence on the major search engines to get exposure when car buyers are doing keyword searches

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DriveDominion.com Dealership Innovation Guide

in your local market. To ensure that your presence is full and up to date, use GetListed.org to identify your unclaimed online channels.

•

Get Social. The value of social media goes beyond lead generation.

Consumers are more likely to associate a strong social presence with business credibility, which during their shopping research, plays a crucial role in converting any customer. Also, with so many Millennials frequenting social channels daily, establish a consistent and engaging presence on websites like YouTube, Facebook, Twitter and Instagram to ensure that your advertising and marketing messages reach Millennials in their comfort zone.

•

Make a connection. Social channels offer dealerships a chance to showcase content and engage in a way that appeals to the new generation of customers. Simply offering the customer a forum for sharing feedback indicates that your business cares about its customers, which can encourage loyalty. Leverage the interactive, opt-in nature of social media to make your Millennial customers and prospects feel like members of an exclusive club: online-only customer promotions, contests, behind-the-scenes and ride-along videos, and images of community involvement display your business’ personality and draw younger shoppers in. And one of the many great things about social media is that it also lends itself to measuring customer sentiments, as well as the effectiveness of your loyalty marketing activities.

For example, social channels are a natural opportunity to pulse check customer satisfaction. Simply ask “How are we doing?” or poll your social network as a focus group for new dealer services.

•

Integrate your efforts. Applying the learnings above, make sure you are communicating the right message at the right time. Today’s technology and evolving consumer

Dealership Innovation Guide

shopping behavior means consumer marketing is no longer about reaching out to all your customers at once. By utilizing various marketing channels you can reach specific customers at the best time, with the most effective message, using the media in which they respond best.

Many types of customers are worth your marketing time and effort, but the APCs allow you to drill down to activities that get you in front of the right customers, at the right place and time. The long-term revenue potential of a Millennial customer base is tremendous incentive to put resources behind a custom outreach plan.

Reach them by ensuring your website is optimized for mobile shopping; maintaining social media profiles that are informative, interactive and current; and implementing digital marketing offers and ads to reach them where they spend so much time…online.

About The Author: James Casazza is the senior vice president of digital retail solutions at FordDirect joint venture between Ford Motor Company and Ford franchised dealers that provides technology, digital marketing and other dealer-related services. Casazza leads the product strategy and delivery across a portfolio of digital marketing services including websites, mobile solutions, consumer marketing and inventory management. He previously held roles in technology and product development at FordDirect. Prior to joining FordDirect, Casazza was a product development engineer in telematics at General Motors, where he developed navigation systems, Bluetooth hands-free connectivity and visual in-vehicle display interfaces for OnStar. Casazza holds a bachelor’s degree in economics, a bachelor’s degree in electrical and computer engineering, and a master’s degree in electrical and computer engineering, all from Carnegie Mellon University. He also holds a Master in Business Administration from the University of Michigan.

DrivingSales, LLC • 2nd Quarter - 2014 • 31

32 • 2nd Quarter - 2014 • DrivingSales, LLC

Dealership Innovation Guide

THERE’S NO SUCH THING AS TOO MUCH INFORMATION N

ot when your dealership’s performance (or your reputation, career or income for that matter) is on the line. In a typical auto dealership, a tremendous amount of data is contained in various systems and departments throughout the operation. Some is readily accessed, but much is not. This presents a problem, as dealers are making decisions without visibility to the complete picture. There is a lack of transparency across functional departments; Dealership Innovation Guide

the inability to be proactive and make adjustments quickly that are needed to impact profitability faster; productivity lost on manual reporting; and potential data inaccuracies.

Accuracy and timeliness of financial and operational reports is critical. Decisions made about inventory, advertising, staffing and forecasting based on incorrect or out-of-date information can have dire consequences on the bottom line. Getting accurate information on a timely basis is paramount. And while

dealers rely heavily on their dealership management systems (DMS) for their information, the data in their standard reports often doesn’t tell the full story.

Depending upon what they want to monitor, they may need to extract data from three or more different reports, merge and filter that data, and manually put it into Excel to create a report that provides the information they need.

Did you know that nearly 100 percent of all dealers in the US are relying on manually created reports today? If the DrivingSales, LLC • 2nd Quarter - 2014 • 33

store is part of a multi-franchise dealer group, the problem is magnified. It chews up an incredible amount of time directly impacting the bottom line of every store. Worse yet, at best they are relegated to trying to decide what needs to be done today or next month based on old information. As I’ve been telling dealers for the past 5 years, it is like a football team using pictures from last weeks game to determine what to do next in their game next week. They may work if they played the same opponent every week but like our business things change every week, month and year.

Technology now exists to streamline these processes, but dealerships and their executive teams often cling to traditional ways of accumulating the information they need. Dealers who are embracing this technology are not only finding incredible savings in time and money, but the benefits of unparalleled visibility into the operation has given them insights that are having significant positive impacts on the bottom line.

Lee Butler, Chief Operations Officer of Ascent Automotive Group based in Las Vegas, said, “Our group has about 500 employees with six locations in four states, and we are looking to expand by acquiring additional dealerships, so it has become critical to be able to monitor activities, expenses and revenue at each store. Because they are geographically diverse, having a solution that allows remote monitoring is of the utmost importance.”

Spending an inordinate amount of time on preparing fixed operations reports, Chris Dixon, Service Manager at Don Beyer Volvo, Subaru and Kia, was manually going into the DMS and reviewing three different screens and reports to identify repair order status and repair delays in the service department. He would look at open tickets, then at the calendar and manually create an external document that logged tickets to review repair order issues that were still open after three days. This ate up almost an hour of his time every morning. That

Increase your lead volume and close more deals

means that over a year, six weeks of his time was spent on report gathering — for just one report.

Dixon said, “I can see where some traditional service managers might resist leveraging new cloud-based technologies because they are comfortable doing things in a consistent, tried-and-true fashion, but once they implement these programs and see the incredible time savings and the ease with which they can access information, they quickly overcome their initial hesitancy and depend on the new process.”

Take Control of Your Data Dealers are challenged by doing things the same way, but I am happy to report that the landscape is changing.

In today’s environment where there is so much data being produced around the organization, harnessing the data a dealership team needs is simply no longer manageable using traditional processes and manually-created reports. The good news is that the Internet has given us the opportunity to use technology to our advantage.

Dealers today have a way to aggregate all the critical data about what’s happening around the dealership today ‒ not last week or last month ‒ and automatically generate reports that give the dealers timely, accurate and actionable information they can use to change their destiny right now.

According to Lee Butler, gaining efficiencies and saving time is especially valuable. He said, “When I take into account the efficiency gained by our management team, and the time and money saved by not having to travel to our various locations each month, I estimate we are bringing back $10,000 to the bottom line each month.”

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Working with benchmarking data from NCM Associates, Reverse Risk recently studied the reporting habits of 50 auto dealers before and after automating their reporting processes. They found that the average dealership and management team looks at 800 reports Dealership Innovation Guide

each month and before implementing automated reporting, managers spent an average of 10 minutes pulling data from the DMS and importing it into Excel to create a spreadsheet report for analysis and review. It is understandable why reports were not updated with the dealership’s most current data every time they were viewed when you consider that 10 minutes per report multiplied by 800 report views equals a total time expenditure of 133 hours each month preparing management reports.

Now dealers are able to view and analyze current operating performance with reports generated in a matter of seconds. Those 133 hours of management productivity are now put back into the dealerships toward more revenue-generating, profit-enhancing activities.

The Right Information Right Now Dealers like John Altman, the Chief Operating Officer at the Don Beyer Stores in Northern Virginia, are finding real productivity and profitability benefits to automating the dealership’s reporting. “We rarely need to go into our DMS to pull information and compile reports,” John said. “The real value lies in its ability to put the information at our fingertips, and that makes our management team more responsive and efficient.”

The Beyer team also appreciates having an accurate preview of where they stand on any given day during the month. On the 10th of each month, they get a snapshot of their month-todate performance. It indicates whether they are on track for their volume and profit goals. If they see something askew, such as lower gross profit on the front- or back-end, they can address the issue and get back on track.

Valuable Management Tool The most important goals for a dealership are adequate cash flow and net profit, because without them, no one has a job. By tracking all the key metrics that impact cash flow and net profit on a daily basis, any Dealership Innovation Guide

dealership can be sure they are on the right course and doing things in a timely fashion to optimize these critical elements. Since the automated reporting software is an integrated layer on the dealers’ proprietary platforms, it becomes a simple process to put important data into easily managed tables, reports and charts customized to meet any dealer requirements.

It truly is amazing to see the detail and level of information you can get from automated technology. But, the beauty of these tools, especially those that are developed by technology providers with strong retail automotive management expertise, is that the information is displayed in ways that make it more meaningful and immediately useful to the dealer across the operation. The information is used to improve service drive efficiency, better monitor vehicle aging, offer more control over marketing dollars and channels, and create more accountability for the performance of salespeople, service advisors and parts staff. It also monitors expenses to ensure they stay in proportion to revenue.

Clearly, technology is driving the next generation in improved operational oversight. By offering unprecedented transparency into the dealership operation, dealership data management technology brings accountability for all managers, providing vital tools and resources for enhancing dealership

profits. But while gathering the information is easier today than ever for dealers, information alone won’t make the difference in the operation.

There is incredible opportunity for even the most profitable dealerships to improve, given the right data, delivered in the right format, at the right time.

But what makes the real difference in bottom line performance is how the information is used. Smart dealers with their fingers on the pulse of their operations will always win the day.

About The Author: David Spisak, President and Co-Founder of Reverse Risk, is uniquely qualified to effectively teach others how to achieve maximum results in their department or dealership. His realworld, on-the-front-line experience includes managing both private and publicly-owned dealerships. Along with his partners, David co-founded Reverse Risk in 2008 with the goal of creating the most powerful, easy-to-use software platform in the world that enables dealers and their management teams to achieve the highest performance possible in their stores.

DrivingSales, LLC • 2nd Quarter - 2014 • 35

WHAT SEARCH ENGINES CONVERT SALES?

The answer may surprise you.

I

t goes without saying that Google Adwords has become the newspaper advertising of today.

We took a quick poll of 100 dealers and found that 90 percent of them were paying directly or indirectly for advertising via Google’s AdWords platform. This is similar to the auto space 10 years ago, when nearly 90 percent of dealerships included newspaper advertising in their marketing budgets.

receives approximately 75-85 percent of their search traffic from Google.

The traffic from Google is impressive, but how effective is this traffic when it comes to conversions? Are people that use Google more likely to buy a car than shoppers that use Bing, Yahoo or another search engine?

The answer may surprise you.

This surprising data discovery occurred when we examined the referral path of lead forms and then matched this research against DMS data. In other words, when a customer entered a dealership website and submitted a lead, our system would specifically track whether the lead originated from organic, paid, referral, or direct traffic.

If the lead came in from organic, paid,

The shift from newspaper (let’s call it traditional advertising) to Google makes sense as consumers are turning to search engines for answers to their questions. Google has gone from a company’s name to a verb.

“Just Google it” is stated millions — if not billions — of times per day.

But what about other search engines?

Do you ever hear, “Just Bing it” or, “Just search Yahoo?” The obvious answer is, “No.” Google continues to dominate the organic SEO and PPC pay-for-performance conversation. But why is Google so powerful? Google drives more search traffic to dealership websites when compared to Yahoo, Bing, and other search engines. In fact, the average dealership website 36 • 2nd Quarter - 2014 • DrivingSales, LLC

Data collected from sales over a 90-day period — not leads, but sales — indicates that non-Google search engines, specifically Yahoo and Bing, are driving more qualified, lower-funnel customers to dealership websites. Statistically, the probability of a non-Google search user buying a vehicle after visiting the dealership website is up to 2-3 times higher than that of a Google user.

or a referral source, that specific data was also stored in the customer’s record. Over a 90-day period, the results were more than interesting.

Let’s see how the data stacked up: If you’re like me, you are now asking, “How can this be?” How can 81 percent of search traffic come from Google but be significantly less effective compared Dealership Innovation Guide

to Bing and Yahoo? The answer is more obvious than you may think.

First, you need to ask the question of how one chooses a search engine.

The answer is simple. Many people do not choose a search engine, but one is presented as a default option the moment a computer is turned on. If you have bought a personal computer at Best Buy or even online, what’s the default search engine the moment you power it up? You guessed it! Bing. Microsoft Windows powers most PCs by default, and if it has Windows, it has Bing.

Next question: What percentage of people know how to change their default search engine? This is actually a more complicated answer than you may think. This largely depends on demographics, and this is where the data gets interesting. In areas with older populations, such as Arizona and Florida, we are seeing more people use Bing and Yahoo. On the other hand, in more tech-driven communities like Boulder, Colorado, Google remains the dominant search engine. If someone is not tech savvy or a heavy computer user, they may not know how to change the default search engine (or they may not care). Therefore, they are left with Bing as their “decision engine.”

What does this prove? In examining the user behavior of “non-Googlers,” we find that the consumer is lower in the funnel.

They typically are using search for location and contact vs. research. This type of customer is already influenced by other factors such as traditional advertising. Given that keyword data is less restricted in Bing and Yahoo, we also discovered that 90 percent of the terms searched before a customer purchased a car were branded terms. Branded terms consist of the dealership name and location vs. car, make, model and city.

What can you do with this data? Look at the demographics of your dealership’s PMA first and then your budget allocation next. If you are in the states of Arizona or Florida, then without a doubt you are missing out if you are not using Microsoft’s Ad Network. If you are not in those states, you are still missing out, but possibly not as much.

Next, look your budget allocation.

Dealership Innovation Guide

Are you just advertising on Google’s AdWords platform and not Microsoft’s Ad Network? If you are just advertising on Google, it’s time to diversify.

Think about the consumer.

Since it’s proven that lower funnel customers are using Yahoo, Bing, and AOL, do you really want to take a risk and have your competitor show an ad on one of those search engines, hijacking a potential sale from you?

That’s obviously a rhetorical question.

The key to advertising is to have your brand or products show up at optimal times. There is no better time to show up than when the consumer is primed to purchase.

The additional benefit of creating paid ads is that you can control the message. The online message needs to be consistent with the offline message that probably got the consumer to search for you in the first place. This best practice is search platform agnostic, but vital to optimizing any campaign.

While having a Google strategy is fantastic, your marketing plan needs to cover more. A good start would be to begin with sources that have been statistically proven to sell you more cars!

About The Author:

Since 3rd grade, Joe Chura has been involved with computers and computer programming—interests that collided with the auto industry when he started working at Ford’s Marketing and Sales Division in early 2002. Most of his tenure at Ford was spent convincing dealers of the importance of a strong website. Today, after 3 years in retail as a GM, then as BDC creator post-Ford, Joe is CEO of the award-winning Dealer Inspire platform and Launch Digital Marketing.

l2tmedia.com 888-227-1132

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RAISED IN AUTOMOTIVE Founders have 30+ years of automotive experience.

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DrivingSales, LLC • 2nd Quarter - 2014 • 37

What’s Your Story?

A

n old blind man sits on the sidewalk of a busy street holding a cardboard sign on which he had written ‘Blind. Please help.’…

Storytelling is one of the most ancient forms of communication in existence.

Leaders use stories to inspire people.

Companies use stories to sell product.

Stories are what make us human. We all have one. We like to share ours and we like to hear others. We share them daily in person, on social media, in blog articles, on the phone, and with our spouses and children. We tell them every day in our offices. We read them in books. We watch them on TV and we go to movie theaters to see them. Stories are a powerful way to connect with another person in a meaningful and memorable way… yet many businesses fail to take advantage of the simplest technique in existence to create a bond with their customers.

38 • 2nd Quarter - 2014 • DrivingSales, LLC

In my opinion, people inherently know that everything I’ve said is true. What they don’t know is why it is true and how they can use it to increase business.

As the day went on, the old blind man wondered when his next meal would be for in the hours that he had been sitting, nobody had given him any money.

When we are listening to someone that is throwing data at us in PowerPoint presentations, we use only two areas of our brain – Broca’s area and Wernicke’s area. These two areas are responsible for language processing and decoding. They take the words that we are hearing and decode them so that we can comprehend them. If you’ve ever had to sit through an hourlong presentation full of statistics and bullet-pointed data, you understand how difficult it can be to not only stay awake but to remember everything.

When we are listening to a story, however, our brains go into hyperdrive.

According to an article by the New York Times, “The Neuroscience of Your Brain on Fiction”, “Stories…stimulate the brain and even change how we act in life.” Stories will stimulate every part of the brain you would use had you experienced that story in reality. If the story includes descriptions of odors, the part of our brain that processes smell is activated. Actions in stories awaken the motor cortex areas of our brains.

According to researchers, this fact was consistently true in every part of our brain. The brain doesn’t discriminate between reality and stories. We simply connect with stories better because we have evolved to do so. Stories were necessary for the survival of our species.

Before writing existed, a father had to tell his son that those big cat things with really long teeth are bad news.

Chances are really good that learning Dealership Innovation Guide

this fact “the hard way” would’ve been the last life lesson that child learned.

back to the old blind man, put a dollar in his cup and left.

A young marketer walking down the street saw the old blind man sitting there. He noticed that people were not giving him any money and were walking by as if the man did not exist.

There’s an old business saying that states that people like to do business with people they like. Replacing one word in that saying creates a different one that is just as true: people like to do business with businesses they like. Most businesses are nameless entities. They are places for us to transact for goods or services we need. The key to successful marketing is all centered around telling your story to your customers. Integrate them into your business. Tell them who you are. Allow them to be a part of your team vicariously through your content. By far the most engaged with content for any car dealership revolves around its people and its customers.

When someone sees the happiness on the face of that person you just delivered a car to, it makes him or her happy. That person remembers what it felt like when they got their new car or they imagine how it will feel when they do. When you post pictures or video of your employees having fun and enjoying themselves at work, your customers have fun with them.

Wise marketing agencies realize that our world is noisy. The world is so noisy, in fact, that we do everything we can to decrease it. We skip commercials.

We ignore ads while on the Internet.

We immediately close those little pop up windows on websites without even giving them a chance to deliver a message. Our mice hover over the area we know will contain “Skip Ad” when attempting to play a YouTube video.

Does that mean we are unwilling to connect with companies? No, it doesn’t.

Companies are so focused on making us listen to what they want to tell us that they’re trying to tell it to us in a way that doesn’t interest us. That’s why it doesn’t work. That’s what makes it noise.

The young marketer approached the old blind man and asked if he could have the sign.

Reluctantly, the old blind man handed it over to him.

The marketing that does connect is story-centric. Think of the young boy running around his house dressed as Darth Vader trying to use the Force.

That Volkswagen commercial has been viewed almost 60 million times on YouTube alone. People are looking for that commercial to watch it, not trying to fast-forward through it.

It’s a commercial for a 2012 Passat.

That’s it. The difference between that commercial and most others is that it told us a story. We empathized with the little boy. We rooted for him. And when his father came home, saw the boy in the driveway with his arms extended in front of the Passat, and used his remote start… we cheered.

The marketer pulled a thick Sharpie out of his bag, flipped the cardboard sign over and proceeded to write. When he was finished, he gave the sign Dealership Innovation Guide

Very quickly, the old blind man noticed a change. Whereas before, he heard the swish-swish of pants legs rubbing together as people quickly walked by, now those swishes were slowing down and even stopping as people placed money into his cup.

Storytelling, at its most basic, is effective on all levels. You’ve heard experts preach how powerful rich vehicle descriptions are for years. Why are they so powerful?

They tell a story! Walk-around videos, personal video introductions, community involvement, employee celebrations, babies being born, birthdays, random acts of kindness… all of these tell stories about your business. They will connect your customers to your business and create a bond that will overcome the lowest price your competitor can offer.

it or not. If you put control of your story into someone else’s hands, however, it might not be a story that you like.

As his cup overflowed, the old blind man asked a passerby what the sign said. “It says,” said the passerby, “It’s a beautiful day. You can see it. I cannot.”

Touching others is easy if you pay just as much attention to how you say something as you do to what you say.

The young marketer knew that all the old blind man needed was a way to cut through the noise and touch people.

Stories have the ability to not only deliver your message, but also to make the listener believe it was their idea.

Once the old blind man’s sign ceased to ask people for help and sought to connect with them, everyone thought it would be a great idea to help.

And that is why stories are powerful.

What’s your story?

About The Author:

Arnold Tijerina is the president and corporate storyteller of Storytailer LLC. He has over 12 years experience in the auto industry, 7 of which were in retail before transitioning to positions that allowed him to share his knowledge and expertise in sales, digital marketing and social media with dealers.

They become loyal customers and brand evangelists. Thinking that not sharing your story somehow insulates you from potential negativity is naïve.

Your story will be told whether you tell DrivingSales, LLC • 2nd Quarter - 2014 • 39

Demystified

Content Marketing

C

ontent Marketing has become increasingly important in our world. All marketing goals essentially boil down to one basic idea: reach as many people as possible with your message. Consumers are looking for quality content and search engines are changing their algorithms to reward unique high-quality content. No longer can you simply inundate the Internet with microsites, backlinks and PPC ads to dominate Google Page one. While they may still be a part of a comprehensive marketing strategy, high quality content is beginning to trump these.

Chances are that as a dealer, you are already doing some content marketing, whether you realize it or not. Content marketing can take many forms including: •

Blog Articles – Blogs allow you to share information and

40 • 2nd Quarter - 2014 • DrivingSales, LLC

humanize your dealership. Blog articles can be about a wide variety of things including manufacturer news, car reviews, company culture, community involvement, employee highlights and more. They give you the opportunity to position yourself as a resource for consumers,

while also giving the customer an opportunity to get to know you.

•

Newsletters – Newsletters

serve to keep you top of mind with your customers. They are useful to stay in contact with prospects, sold customers, service customers and Dealership Innovation Guide

previous customers. Newsletters can also be a great retention and referral tools. In addition, a newsletter that contains a quality mix of brand, dealership, community car care tips and current event articles, can assist in exposure as people share your content with their networks. If the content is mainly informational and interesting to your audience, newsletters can then also serve to subtly deliver your sales and service messages in a way that isn’t perceived as spam by your customer base.

•

•

•

or local charity you’re involved in is a great way to inform local media and news websites. Follow up with the local reporters by phone to establish a relationship and to help get your releases picked up by local media sources. This can result in publicity on a much larger scale.

•

your delivery process is, consumers will always have additional questions. Crafting effective howto articles and videos is simple.

The most effective ones are those that answer questions or guide consumers through the things that you receive the most queries about. An example could be “how to pair a phone to the vehicle.”

These can even be emailed to customers as well as used on your YouTube channel and website.

Video – Videos have always

been great for search engine optimization. Video content can include everything from vehicle walkarounds, company culture, employee introductions, sales events and commercials, to personalized messages to consumers, and more. Videos are a great tool to offer your customers dynamic content that is engaging.

They also help to personalize your dealership and increase exposure.

Videos can be full-length or as short as 15 seconds on video platforms such as Instagram.

Social Media – Consumers visit social media platforms like Facebook and Twitter daily, and for increasing amounts of time. With audiences as high as a billion people, you are missing opportunities for exposure if you neglect to have a presence on these platforms. If done correctly, social media content can engage your consumers and provide more opportunities for you to connect with them. Consumers are increasingly expecting businesses to have presences there and, by failing to do so; you send a message of apathy.

Press Releases – Press

releases are invaluable ways to get you exposure in many ways. As a dealer, however, these should be less geared towards manufacturer news and be highly specific to your dealership. Distributing a press release about a community event

Dealership Innovation Guide

How-to Articles and Videos – No matter how great

•

•

Images – Pictures tell a thousand words. In my experience, some of the most popular content dealerships have are images that include customers taking delivery of vehicles, dealership events and company culture. People like to experience the human side of a business, and these images can personalize you to your current audience, as well as to any consumers that are deciding where to take their business.

Testimonials – Consumer reviews of your dealership are a powerful way to instill trust in potential customers. By having a concrete review building strategy, and a proactive presence on review sites, you give potential customers reasons to do business with you.

Don’t be afraid of negative reviews.

These are opportunities in disguise.

They give you a chance to show how you interact with a customer.

Ensure that you are responsive and address the customer’s concerns.

People are forgiving and realize that nobody’s perfect. All they want is some reassurance that your dealership will be there for them should they experience any hiccups.

Simply having a website isn’t enough.

Your website is competing with endless other entities, many with far larger budgets. You are fighting manufacturers (both your own and competing brands), third party lead providers, shopping portals, your direct competitors and independent websites, for both web traffic and exposure. It’s very easy to get buried in the results when a consumer is researching your brand.

Creating consistent content, spread across multiple platforms, increases the chances that your brand and content will attract consumer interest.

We know that more than 80 percent of consumers are beginning their car purchase online by reading reviews and researching various options, such as financing. Quality content can help you become higher up in the funnel.

Think about it: the typical path for consumers starts with researching brands and vehicles. Only after narrowing their vehicle selection down will consumers then begin looking for which dealer they would like to patronize. If your dealership is creating content that could be found in the initial stage of research, the chances of a consumer choosing your dealership in the second phase only increases.

In addition to providing a trail of bread crumbs for consumers to follow that eventually leads them to your website, content marketing assists your dealership in staying top of mind with consumers. This not only includes people that are in the beginning stages of their car buying experience, but also your past and present customers.

Content marketing allows your dealership to have a digital presence that transcends inventory. Establishing an online personality and becoming a subject-matter expert assists in your efforts to convince customers why they should buy from you, or get their car serviced by you. It establishes trust and gives the dealerships an opportunity to build rapport before customers even step into the showroom.

Dealerships are increasingly realizing that content marketing is important.

The largest obstacle we hear about is that they get stuck on actual DrivingSales, LLC • 2nd Quarter - 2014 • 41

content creation. Here are some simple ideas of activities that can help any dealership develop content: 1.

3.

in your community and make sure to get involved. It doesn’t matter what the event is… car show, craft fair or farmer’s market. Don’t be there to sell, however. Just be there.

Hand out balloons and popcorn to kids, or free water to attendees.

Maybe there’s a parade going on.

Offer to drive some vehicles in the parade. Contact your local high school and get involved in their homecoming games; driving their royal prospects around the track.

There are infinite possibilities to gain exposure through goodwill.

You just have to look for them.

Have a Test-Drive-AThon: Offer to donate $25 to a

charity for every test drive that a customer takes. Movie tickets and gift cards work great. However, they won’t create the widespread good feelings you’ll receive from your community, especially if the charity you choose is local. Hold it over a weekend -- you’ll benefit not only by increased traffic – but also from people in the community who hear about the promotion. Planned correctly, most charities will even assist you in promoting the event.

2.

Sponsor Animals at your Local Shelter: There’s

nobody more passionate than animal lovers. In many cases, pets become an extension of family and are treated like children… and there are a lot of animal lovers out there. Arrange with your local shelter to cover the adoption fees of a few animals per month. The animal shelter will appreciate it as most of their employees are also animal lovers; and nobody wants to euthanize animals. Chances are they’ll also promote the sponsorship via social media and in their normal marketing. Locals will come out of nowhere to thank you on your social media accounts. I’ve seen brand new Facebook pages literally acquire hundreds of new fans in the space of a week from this activity.

People left comments such as “I’m definitely buying my next vehicle there.” And “I will refer everyone I know to your dealership. You are doing a great thing. Thank you.”

The cost to the dealership for such an effort was minimal – about $100 per month; and they didn’t have to do much at all. Of course, this also makes great marketing, social media and customer communication content for your dealership to use.

42 • 2nd Quarter - 2014 • DrivingSales, LLC

Get Involved in Local Events: Find out what’s going on

4.

Sponsor Local Little League Teams or School Clubs: There are so many different children organizations that need your help staying afloat.

High school clubs need funding to survive, which is why fundraising is extremely important. Let them hold a car wash on your property or just offer to sponsor an event for them. Their parents and the school will be appreciative and think of you when it comes time to buy a vehicle. Little league baseball teams are also a great way to gain goodwill and exposure. Many leagues will even imprint your logo on their jerseys. Another great organization to consider would be your local Boy or Girl Scout troops.

5.

Hold a Service Clinic to Answer Frequently Asked Questions: This can

be promoted via your website, customer newsletter, Facebook and Twitter. Photograph and video the event and customers to provide content for your website, customer newsletter, Facebook and Twitter. Invite the local media. I know of a women’s service clinic one dealership held that was filmed by a local TV crew and made prime time news!

6.

Promote New Vehicle Launches: Most dealerships have a party to launch their new models. Broadly promote this on your website, to the media, on Facebook and Twitter and in your company newsletter. Again this is a chance to capture some dynamic photos and video that can be used in many ways.

When all is said and done, all good marketing strategies will include great content. Simply pushing sales messages to consumers will not work. By utilizing some or all of the techniques and ideas that I’ve shared, you can very easily increase your online exposure, customer retention and loyalty, and see more consumers choosing you.

About The Author:

Sara Callahan is the Founder and President of Carter West Public Relations, an agency that specializes in retail automotive public relations.

Born in the United Kingdom, Sara Callahan re-located to the United States twenty-five years ago and held executive positions in several marketing/communications firms before founding her own agency, Carter West Public Relations, in 1990.

Ms. Callahan’s particular strengths include community and media relations, social media, campaign strategies, trade shows, special events, print and broadcast media placement.

In addition to honors for achieving three national best-selling science fiction books in both the U.S. and Great Britain, Sara Callahan has also been recognized by J. D. Power & Associates for managing one of the best campaigns in the nation for an auto mall. Working with one of the largest auto malls in the US for a decade, her efforts supported sales increases which consistently exceeded industry averages. She can be reached at scallahan@carterwestpr.com

Dealership Innovation Guide

I L E R S R E K N I H T E V I E D R E C REAT L A E D S U C O F S S A L C S D D R L A OR W A ELI TE G N I K R OCUS O NE T W T N E T SIGHT N O C A E D I T S E B D E C T C N A A V H D C R A E S E R E G D CUTTING-E OCT 12 -14 GROUND E V I S S E O R C S S ROG E C C U S S R E D A E L G N I I D K P A E U R C N O I T A V O N N I S N O O I F T L U A I OL C O S O I G A L L E B P I H S S R E E D D S A R E E K A M N O I S I C E D E T V I A T M C R A O F N I Y T I L A U Q S R E P K A S E E T P S O N Y E K E R E H T E ORWARD B IGHT ENTER TAINM S N I R E I E M V R U PRE C E H T F O D A E H A S T N E V THINKIN E What makes

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IT’S NOT 1999 ANYMORE

Simple Tips for Taking your Dealership Website into the Future

I

n 1999, dealership websites became all the rage as the dot-com craze sent our industry scrambling to catch up. Though 3rd party lead companies had been sending leads since 1995, dealers had begun to realize having their own digital address might make sense. In the age-old argument of “who owns the consumer?” dealers did not want to lose out. This drove many of the still-skeptical dealers (“how long was this Internet thing going to last?”) to open “virtual” (albeit fairly static) web “front doors.”

44 • 2nd Quarter - 2014 • DrivingSales, LLC

As time moved on, third-party leads became less effective and more expensive, and Google Adwords stepped into the void – promising direct traffic to dealer websites. Dealerships were inundated with SEM salespeople and ‘specialists’ bent on optimizing their websites, traffic numbers began to rise…but what didn’t rise was conversion rates on those still static sites. Many dealers were still trapped in the third-party lead addiction and thought of their own websites simply as a branding or advertising tool. Even today, dealerships are generally able to

convert only about 1 -2 percent of the very expensive traffic streaming to their website – this is a serious disconnect – all that money spent sending traffic to websites, yet many dealerships still turn to ineffective third-party lead providers when looking for conversions.

But what do I know about any of this? When the dot-com craze was raging on, being a car salesman was the last career on earth I considered.

Having lost my trucking business, I was working at a local grocery store stocking shelves, but then I saw an ad promising “you can make $100,000 a Dealership Innovation Guide

year selling cars!” Not that I believed the claim, but after seeing the ad a few times, I decided to give it a try.

That was 2003 and, after a couple of tough months when I thought I’d never make it as a car salesman, things turned around – and, amazingly, I became the No. 1 Honda salesperson in the state of Georgia.

Then, in 2006, coming very late to the table, I discovered the power of the Internet. I was lucky, because I was able to work with and learn from very talented co-workers. Better late than never because, soon, I was selling more than 100 cars a month (versus 25 to 35 before I began working with Internet customers). I was fascinated by the online customer and figured out the more I learned about their behavior, the more cars I was able to sell. I found a formula for success: 3 online appointments/day = 1 sale a day.

I know that if you don’t sell the first, or even the second, you will always sell the third. This meant that the more valid leads I could acquire directly through my dealership site, the more appointments I could set; therefore, the more vehicles I could move. And this formula worked not only for me but also for others on my team.

Though the Honda dealership I was working for had embraced the Internet and its opportunities wholeheartedly, I knew there were some dealerships out there still holding fast to their pre-2000 notions of the Internet. And, after the Honda dealership came under new management, I started exploring other places where I could make a real difference. I went to Hyundai Mall of Georgia where, after just three months, I helped bring it to the #1 Hyundai Dealership in Southeast Georgia. Then, I found a new digital challenge at Savannah Toyota. When I joined as the Internet sales and digital marketing director, their website had not been updated for over a decade. That’s a few lifetimes in the digital world!

But, credit where credit is due, the owners had woken up to this oversight and were ready to take their website into the next millennium. When I arrived, the site Dealership Innovation Guide

was achieving 1 percent conversions on 200 leads per month – not a big surprise given the lack of support the website had been given to date.

Five Biggest Website Mistakes

So how did I take a site that was generating 200 leads per month at less than 1 percent conversion, to a site that generated 500 leads per month – converting a full 20 percent of them and lower cost per sale to $169 from $338?

Here are just a few of the things I did, the formula is actually pretty simple and 100 percent effective if correctly applied.

2. Spending Mega Dollars on Driving Traffic, Then Forgetting to Identify and Convert It – Chat 2.0 is here with mega website analytics and behavioral tracking.

If you are stuck in Chat 1.0, time to get out, and while you are at it, make sure your website is tracking every move that customer makes and acting on it.

The Assessment When the site was constructed, in 1999, the Internet was still in its infancy and the Internet customer was just as new to online car buying as we were to online car selling. The Savannah site reflected this – it was a flat, nonengaging site, a virtual dead zone. I knew I had to supercharge that site.

There was not a shred of tracking or reporting available about the website – one of the biggest mistakes dealerships make – nevertheless, it was clear that this website was simply obsolete. Not only was there no tracking, there was no search optimization, no SEM spend and no chat. In fact, they weren’t capturing customer data or interacting with the customers at all.

Know Thy Customer Before I got too far down the road, I did some good old fashion demographic research by looking at public census information about Savannah, as well as available CRM data. It’s amazing how much you can learn from this step – knowing your customers enables you to figure out the best ways to market to them. It can help shape your messages and also guide you where your marketing dollars are best spent.

Follow the Money Then I looked at where the dealership was currently spending money – on vendors, 3rd party leads, classifieds, etc. – and analyzed how I could cut the spend while increasing performance. A lot of this comes down to choosing the right vendors.

1. Too Much Choice – don’t confuse users with too many options; they’ll click away and not know why or where they’ve gone.

3. Allowing Clicks Away to 3rd Party Sites – some vendors will try to convince you they need to host your inventory on their sites, this is the last thing you want to do.

It screws up your relevance with Google and benefits your provider, not you.

4. Ignoring Analytics/Tracking – First, if you aren’t tracking your site’s performance then you can’t possibly expect its performance to improve. And if you are tracking but not analyzing, then you also can’t expect to improve its performance.

5. Not Knowing Your Customer – do your research, check your database, and understand what they are doing when they are on your website. Make sure your sales team uses all available tracking info from the website URLs to know and understand that customer.

Bigger Not Necessarily Better My philosophy has always been to choose vendors that are small but strong in their field – big doesn’t always mean better. It took a while, but I was able to convince the owners that just because a vendor is OEM recommended, it doesn’t mean that they were the right choice for us. A good lesson, especially for smaller dealerships. I had a huge amount of confidence with some of the vendors I had already been working with and was fast researching new vendors I believed could help us take the performance of our website to the next level.

DrivingSales, LLC • 2nd Quarter - 2014 • 45

Rework Investment to Work for Your Needs One of the key goals with any website is to optimize for search. We had a huge advantage that our name had our city in it, and yet we still weren’t seeing results. Of course, investing in Google Adwords is important, but you are investing dearly to be at the top of the page with SEM. Why not take 50 percent of that investment and put it towards building up your organic search results – though the rules from SEO are constantly evolving, a good agency can help you figure out how to get your site higher in the rankings, whether that’s by adding unique content; increasing the links into your site from other well respected websites; hosting videos and/or participating in social media. Taking advantage of social media and mobile apps is a great way to stand above the competition.

For my dealership, I didn’t opt for the OEM-recommended tools and instead engaged with an agency that could deliver a customized level of service.

visitor identifiable – and do it efficiently and cost-effectively. I discovered this process when I was on a search for an online chat service. I wanted a service that would let our online customer to know we were there to help them with any of their questions – just as we would inside the dealership.

What I discovered was online chat has come a long way recently and, at least through the vendor I chose, it extended well beyond just chat, across the website and into a kind of “Chat 2.0,” that wasn’t going to simply jabber at my customers like a big mouth with no brain, but through its platform. It was making once-invisible traffic completely visible – because it continuously gathered data on every site visitor.

Now that you’ve worked out how to get the customer to the website, the next step is making sure you engage them once they are there. It’s almost a sure bet all your customers will visit your website at one point or other – current statistics show that 4 in 5 people use the Internet to shop for vehicles – so it’s critical that the site is easy to use with no unnecessary links sending your customer away from your site.

The chat operator knows exactly what a visitor has done on the site before he/she starts using chat—so chat can then be immediately relevant to the customer. This website knowledge extended well beyond chat, into offers/coupons and even matching inventory with the precise vehicles the customer had been looking at – not to mention providing great information for my in-house sales team. This is key, because generally customers are not as forthcoming on the phone, because they are more guarded as they know the sales person is trying to sell them something, which means they tend not to share as much information. But with this info, you can know what they are thinking, so you can approach them in a way that is not as aggressive as the phone. That makes them much more comfortable because they know you are really listening to their needs.

I had the basics down, but I knew I needed to go many steps further and literally supercharge the website with tracking and analytics that would make sure that every interaction, published offer, chat etc. was relevant. It’s important to know comprehensively and in real time what each customer was doing, where it had been and then, through the magic of algorithm, score each visitor so he/she was communicated with properly and automatically. In essence, give my website a brain and make every single

For example, when a customer looks at a Kia Spectra but has also looked at a Camry or Yaris – we can see the amount of time they spend on each and know what other options we can send them. It provides great relationship rapport. We know they are looking at the Spectra but are also interested in a Yaris, so the conversation takes all of that into account. It’s as if we have looked at a picture of their future and can cater to them. And the proof is in the conversions – 75 percent of website visitors who participate in live

Supercharge Your Site to Convert: Chat 2.0 is Here

46 • 2nd Quarter - 2014 • DrivingSales, LLC

chat on our site are now converted into a showroom opportunity.

Fixed Ops is our bread and butter so we knew we had to include them in all our initiatives. For example, when a customer lands on the website and starts looking at service or parts pages, sending them offers on a new car or chatting with them about a vehicle special makes no sense. What does make sense is sending them a coupon for an oil change – so your chat operator starts a service or service appointment based discussion.

Practice Makes Perfect Optimizing the website, social media and even email marketing is only one part of the equation, training the Internet sales managers on how to handle Internet customers is the other crucial part.

Once a lead has been created – the ISM needs to take the time to analyze the content of that lead, along with any details they can glean from their website behavior so that they can deliver the experience the customer is expecting.

If they know their customer they are far more likely to create a real sales opportunity – and isn’t that what we all want? Whether it’s 1999 or 2014?

About The Author:

Born and raised in Detroit, Brian Lollie is currently Internet Sales and Digital Marketing Director of Savannah Toyota. Brian began his automotive career in 2003 at Honda Mall of Georgia, becoming the #1 Honda salesperson in Georgia and ranking in the top 10% nationwide. In May 2010, he became Internet Sales Manager for Hyundai Mall of Georgia and, in just three months, helped make it the #1 Hyundai Dealership in Southeast Georgia. In his 11 years working in auto dealerships, Lollie has developed Internet sales and marketing processes that have resulted in consistent increases in car sales, digital marketing ROI and lower cost per sale.

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