Dealership Innovation Guide Q3 2014

Dealership

INNOVATION

GUIDE

A DrivingSales Publication • 3rd Quarter, 2014

Quar terly Ranking of Dealership Vendors and Best Practices

FREEDOM AUTO GROUP

Visit DrivingSales.com to view more than 17,000 verified dealer ratings of over 800 vendors in 28 categories.

& Life Improvement Business Eric Savage - Page 18

THE FOUR PILLARS OF SUCCESS Tony Caputo - Page 40

WHAT’S THE FUTURE OF BUSINESS? Brian Solis - Page 34

STOP ABUSING INNOVATION! Jay Rao - Page 44

Driver Connect Still No App? Waiting is costing you sales, gross, & retention!

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Dealership

INNOVATION

GUIDE

A DrivingSales Publication

Quar terly Ranking of Dealership Vendors and Best Prac tices

Dealership Executives, The pace of change is speeding up within our industry, continuing to move at a speed we never thought possible. Google is rolling out changes almost weekly. The social web continues to evolve.

Online Reviews are increasing in their importance to your dealership. You are collecting data on your customers and prospects at an unheard of pace. Keeping up is becoming almost impossible, which is why, as the industry’s leader in unbiased information, we’re sharing the industry knowledge with you.

Staying ahead of the curve on emerging technology, marketing and business strategies continues to be a prevailing issue to set yourself apart from your competitors. It’s a challenge to know where to invest your resources so emerging technologies does not disrupt your store. You have worked tirelessly to build a successful brand and thriving business. It’s up to you and your team to stay ahead of the curve on the latest technologies, marketing and business trends for continued growth.

Brian Solis is principal at Altimeter Group, a research firm focused on disruptive technology. He’s a world-renowned digital analyst, sociologist, and futurist, who has studied and influenced the effects of emerging technology on business, marketing, and culture. He will be one of our fantastic keynote speakers at DSES this October. I’m excited for Brian to demonstrate how dealers can drive sales and build relationships by becoming part of the disruption in their market instead of reacting to it. Rand Fishkin, co-authored/co-founded the Art of SEO, Inbound.org, and Moz will be returning. Ever since he presented at DSES 2012 dealers have been asking for more insight from Rand. Rand will share aggressive, advanced and untapped inbound traffic-driving marketing strategies and keep dealer ahead of the ever-changing SEO game to help you build a sound marketing plan for 2015.

For those dealers who are progressive in the industry and are looking to take their digital business to the next level, we invite you to the DrivingSales Executive Summit on October 12-14 at the Bellagio Las Vegas. The sixth annual event will bring together the most progressive dealers in the country, along with world-renowned speakers such as Brian Solis, Principal of Altimeter Group; Co-Founder of Moz, Rand Fishkin will be coming back; User Experience Guru and Online Marketing Pioneer, Bryan Eisenberg; and many more speakers focused on pushing the auto industry’s ‘innovation boundaries’ and translating the latest trends and business realities into solid 2015 action plans for every dealership department. As always, the exclusive dealer-driven event has a vendorneutral policy, meaning there is no vendor influence on presentation selection and we adhere to a strict dealer-to-vendor ratio.

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

Register quickly at www.DSES.com with the code DIG2014 to receive $100 off registration. Last year’s summit sold out, and although DSES 2014 will allow for an expanded number of registrants, it is expected to sell out quickly.

Training and education have become paramount to your organization’s success. Take every opportunity to learn, grow, and better those around you. Your operations depend on it.

We hope to see you in October at the DrivingSales Executive Summit, and until then, enjoy this 3rd quarter publication of the Dealership Innovation Guide.

Sincerely,

Jared Hamilton Founder, DrivingSales, LLC Dealership Innovation Guide

DrivingSales, LLC • 3rd Quarter - 2014 • 3

Thanks to our Sponsors!

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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 • 3rd 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

Car Hacks Breathe New Life into the Automotive Industry Matt Hatchel

22

18 Freedom Auto Group & Life Improvement Business Eric Savage

A Wake-Up Call on ID Fraud Leads to More Sales

22

Mark Gibson

30

6 Pillars of a Successful Mobile Marketing Strategy Mike Martinez

34

What’s the Future of Business?

Brian Solis

40

The 4 Pillars of Success for Modern Dealerships

40

Tony Caputo

44

06 On DrivingSales.com, dealers can rate

Stop Abusing Innovation!

Dr. Jay Rao

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

Dealership Innovation Guide

44

DrivingSales, LLC • 3rd 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 • 3rd Quarter - 2014 • DrivingSales, LLC

Dealership Innovation Guide

Dealership Innovation Guide

DrivingSales, LLC • 3rd 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. 376.10

95%

6.05

100%

CallSource CallTrack

206.50

CallRevu CallRevu

2.92

DealerSocket

DealerSocket Call Management

Dealer.com

Dealer.com CallTracking

1.24

100% 80% 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

239.50

Dealer e Process

Dealer e Process Live Chat

17.41

ContactAtOnce! LLC

CarChat24 Gubagoo

ContactAtOnce! Chat Connect

CarChat24 - 24/7 Fully Staffed Chat Gubagoo 24/7 Behavioral Live Chat

929.30

99%

177.18

100%

14.83

100% 100% 90%

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

56.05

CAR-Research XRM

CAR-Research XRM

14.09

DealerSocket ELEAD1ONE

*DealerSocket CRM ELEAD CRM

103.94

97%

29.33

99%

97% 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

Auto/Mate Dealership Systems Dealertrack Technologies

Reynolds and Reynolds

ADAM Systems

ADP Dealer Services 8 • 3rd Quarter - 2014 • DrivingSales, LLC

Product AMPS

Dealertrack Dealer Managment System

Reynolds ERA DMS

ADAM Systems - DMS

ADP Drive Dealer Management Systems

Score Rating Rec. 182.10 66.93

92%

80%

42.79

40%

23.55

73%

24.16

91%

Dealership Innovation Guide

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

Company

Product

Score Rating Rec.

DealerSocket

DealerSocket Service

68.28

CIMA Systems

CIMA CarView

14.16

ELEAD1ONE AutoPilot

CIMA Systems

CIMA Car Care Service Menus

335.90

98%

36.26

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

55.90

Dominion Dealer Solutions

DealerSocket

CAR-Research XRM

Dominion ILM

DealerSocket ILM

Internet Lead Manager

131.55

18.63

98%

17.46

99%

100% 98%

"We have been with ELEAD1ONE for three years and what sets them apart is their phenomenal product, the quality of employees and support they give to dealers. ELEAD1ONE’s ease of use is unmatched and helps us manage our business on a daily, monthly and yearly basis. The ELEAD Call Center is amazing and has helped us achieve the highest sales and service CSI in our district.

ELEAD1ONE is a great partner and valuable part of our team!"

Patrick Beck, General Manager Bakersfield Hyundai

Top Rated CRM, ILM, Owner Marketing

© Data Software Services, L.L.C. 2014

Dealership Innovation Guide

CRM Superstar and Marketing Innovation Awards

866. 989.8077 | sales@eleadcrm.com | www.elead-crm.com DrivingSales, LLC • 3rd 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

491.91

Car Game On

Car Game On Internet Trainers

4.25

PCG Digital Marketing

eXtéresAUTO

Dynamic Beacon

Brian Pasch

eXtéresEDU - Dealer Training Dynamic Beacon

495.25

100%

12.06

100%

4.25

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

Product

Score Rating Rec.

VinSolutions

MotoSnap™ Market Pricing Analysis

57.78

FirstLook

FirstLook -- 360 Market Pricing

11.96

ACE Tech

ADP Dealer Services Dealertrack Technologies

LotPro

ADP’s AutoCheck Express TrueTarget™

282.26

94%

18.76

33%

8.00

100%

75% 100%

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 Cobalt

DealerOn Mobiles Sites Cobalt Mobile Websites

Score Rating Rec. 599.95

100%

42.01

67%

1.92

0%

34.83

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

60.87

Dealix

TrueCar

Dealix New Car Leads

TrueCar New Car Leads

Cars.com NewLeadsPlus Black Book Online Division

Activator Complete

*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 • 3rd Quarter - 2014 • DrivingSales, LLC

783.06

91%

12.53

50%

5.04

100%

6.65

93%

60%

Dealership Innovation Guide

Make your voice heard.

DrivingSales Vendor Ratings is the only place for dealers to rate and review their vendors. The market is listening and your opinion matters.

www.drivingsales.com/ratings

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. 756.86

100%

13.33

100%

ELEAD1ONE GoldDigger

260.15

CAR-Research XRM

11.82

CIMA Systems

Complete Virtual BDC Owner Marketing

OneCommand OneCommand

7.83

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. 444.04

97% 100%

99.08

Slipstream Creative

Reputation Management

26.27

Digital Air Strike

Reputation Logix

2.61

DealerSocket

Dealership Innovation Guide

DealerSocket CSI / MarketPlace Social

19.17

97% 100%

50%

DrivingSales, LLC • 3rd 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 AMMP

104.74

Local Search Group

PCG Digital Marketing Showroom Logic

DealerFire

Search Engine Advertising

PPC Management Service AdLogic

DealerFire SEM/PPC

269.29

100%

19.09

100%

11.46

6.96

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

303.65

Dealer.com

Dealer.com SEO

86.45

eXtéresAUTO

L2T Media

Dealer Apex

eXtéresAUTO - SEO

SEO

Organic SEO

375.54

86%

105.29

100%

76.79

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

11.67

Dealix UsedCars.com 143.16 96% AutoTrader.com Cargigi Inc.

Used Car Advertising Cargigi inteliPhoto

Hammer-Corp Hammer

86%

2.91

40%

1.18

100%

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 Car Search

Website Design & More

399.68

DealerOn

DealerOn - Flex Sites

222.13

Dominion Dealer Solutions

Dealer e Process DealerFire

12 • 3rd Quarter - 2014 • DrivingSales, LLC

Dominion Websites

Dealer eProcess Websites DealerFire Custom Websites

717.24

97%

370.66

100%

78.81

98% 98% 100% 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 July 1, 2013 to June 30, 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 • 3rd Quarter - 2014 • 13

CAR HACKS

BREATHE NEW LIFE

AUTOMOTIVE 14 • 3rd Quarter - 2014 • DrivingSales, LLC

Dealership Innovation Guide

P

re-millennial coming of age films have long since idolized the freedom, status, and independence of The Car. The Car represented a vehicle of many functions for teenagers of decades past. Among those were a means of parental escape to drag race or fool around, a tool for proclaiming the onset of early adulthood, and an idea that was synonymous with freedom.

intersection of automobile and tech innovation has reignited car culture, and it’s because of this exact “car hacking” that car culture has found an audience in younger generations once again.

Generation Y saw a downshift in car culture, replacing the edgy allure of muscle cars and revved-up engines with the blue light of cell phones, computers, and video games. Whereas The Car was once the only means of achieving the type of assertive freedom to go and do what many teenagers desired, the cell phone can now do all of it (and more) in different ways. While a cell phone can’t physically move you from one place to another, it does offer the functionality of calling someone who can. Making out in cars, racing cars, fixing up cars—these activities were all replaced by electronic culture.

“The original hackers were those in the aviation field that were hacking on planes, attempting to get them off of the ground and produce the largest amount of lift,” explains Robert Edwards, Manager of Creative Technology at Team One Ad Agency (marketing for Lexus Automotive). Modifying the engine allowed aviation engineers greater functionality out of minimal product. The success of the do-ityourself approach continued to show up after WWII, and led to “a post-war culture that was skilled, in recovery mode from the war, and needing an outlet for their passions,” Edwards added. Making became key, and when coupled with a curious youth culture high on cars, plus the suburbanization of cities, highway system development, and a tech boom, hacking quickly found a space in the auto industry.

There has, however, been a recent resurgence in car interest, coming at the hand of hacking—or put more simply, the act of taking apart to make better. Today souped-up road vehicles and hybrid engines are more sought after than ever, and it’s not just older generations, looking for upgrades. The

Today’s rediscovered sense of car hacking possibilities is once again generating a buzz around tuner culture, bringing business back to the automotive industry. We see more people customizing cars, and the demand for customization is trickling down to manufacturers. Whereas

previously owning a “dream car” with special features and functions meant building it out yourself, company leaders in the auto industry are now embracing the notion of hacking, and creating more opportunities for auto customization and innovation for the general public. While vehicle look and feel are certainly huge draws for winning auto consumers over, hypertechnology and futuristic developments are quickly starting to overshadow mere aesthetic appeal alone. In fact, hacking for improvement is quickly becoming an integral piece of many automotive companies’ branding approach.

Edwards says that the true mark of a successful automotive brand is how fully they strive to incorporate this notion of hacking—of growth, development, and innovation—into their branding strategy.

We see it a lot in luxury brands, which consistently strive to be the first to offer the best new features. It’s this tactic that makes brands like Lexus, Mercedes, and Audi so synonymous with premium quality. Their relentless pursuit of the newest and best technologies affords them a certain expertise in the future of the auto landscape—or at least that’s what they’d have customers believe.

Either way, the constant demand for luxury vehicles suggests that it’s working.

“There’s something to be said for holding your brand up to a different

INTO THE

INDUSTRY Dealership Innovation Guide

DrivingSales, LLC • 3rd Quarter - 2014 • 15

light,” Edwards said. “It allows people to gather around it, drawn in by its intriguing nature. It begs to be paid attention to without asking to be the center of attention.” By rejecting the minimalist standards of other car manufacturers, luxury brands are able to guarantee a higher caliber product—a product no doubt made better by the practice of hacking and reimagining the vehicle status quo.

Edwards maintains that it’s these companies—companies that value the best product over the immediate product— that will draw the attention of auto enthusiasts—hackers or otherwise.

“Companies that continue to integrate technology into their offerings will win over a new crowd of people that weigh technology more heavily over other attributes.” And of course, it’s this crowd that’s ready and willing to spend money on auto enhancements.

It begs the question—what’s up next? There’s no shortage of ideas for innovation in the auto space, but who exactly is capable of executing?

Although luxury brands have capitalized on the notion of the super premium as being part of the brand identity, they aren’t the only companies capable of extraordinary hacking.

“Ford has some interesting things coming out,” Edwards explains. “Their OpenXC initiative allows hardware and software developers a platform for interfacing with the car’s telemetry data.

This has produced some interesting projects such as haptic feedback gear shifting, Bluetooth Heads Up Display, as well as a host of software that helps you understand your driving habits and vehicle performance.” And, of course, there’s the ultimate goal of the self-driving car, the pursuit of which remains at the forefront for most hackers, and really isn’t as far away as some might think.

“All of the innovations leading up to this point will fuel the technology that will eventually power the selfdriving car,” Edwards explained. It’s a possibility that’s hung in the air for a while, yet the actual mechanics of it simply still haven’t been realized.

However, manufacturers are getting closer. “The sensors and software from adaptive cruise control will make their way into the system to control the whole car. One begets the other.”

Anyone somehow still unconvinced of car hacking’s merit as a practice (read: necessity) need only look at major developments and conferences of the past decade for proof of its relevance.

Smart Cars, hybrid and fuel-efficient vehicles, self-parking cars, hands-free control, built-in Wi-Fi—even aesthetic improvements like window tinting– prove that cars are being eternally hacked for innovation. There’s even an entire conference put on by Edmunds every year dedicated to hacking and disrupting the auto industry.

Hackomotive, now in its third year, offers auto innovators and enthusiasts the chance to come together and collaborate on progressive developments for the auto industry, hoping to uncover the next “game-changer” for buying, selling, and building. Conferences like these suggest an overwhelming buy-in for auto hacking from manufacturers, dealers, along with an overwhelming demand for new developments. Certainly, hacking a place in every facet of the industry.

Whether rebuilding an old ’57 Chevy or imagining the first flying vehicle, car hackers have made a space for themselves in the garages and auto markets of America. Auto enthusiasts and novices alike can rest easy in the assurance that transformation in the auto space is alive and well, and that the once-again revved up car culture of the seventies and eighties is back and better than ever.

About The Author: After realizing ‘professional TV watcher’ wasn’t an actual profession at the University of Arizona, Matt Hatchell decided getting into advertising and marketing was the next logical step. After over a decade in the game, he brings his know-how to Century Interactive as the Director of Marketing. As co-creator of his beautiful daughter, Reva, he spends most of time with his wife, Wendy, keeping her from jumping off tables.

16 • 3rd Quarter - 2014 • DrivingSales, LLC

Dealership Innovation Guide

PRESENTS ...

FOUR Easy-to-Implement Principles for: GETTING MORE APPOINTMENTS THIS WEEKEND

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DOWNLOAD THE FREE GUIDE This quick guide will cover four tips that will help you reap a weekend packed full of appointments. We'll look at getting organized and prepared, making the calls, asking for appointments, and then confirming every one of them.

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Freedom Auto Group &

Life

Improvement O

n a chilly night in April, I had the distinct pleasure of catching up with Jared Hamilton while walking to a Driving Sales reception in New York City.

“So, how’s the car business?”

Jared asked.

“We’re not in the car business anymore”, I replied as we entered the vast cavern of Grand Central Station.

He looked at me with a quizzical halfsmile, as if this was some kind of joke and he hadn’t yet caught the punch line.

18 • 3rd Quarter - 2014 • DrivingSales, LLC

“I’m not kidding,” I said. “I still sell and service cars, but I’m not in the car business.”

In typical Jared fashion, he stopped in his tracks, risking tardiness for his own reception and said, “Tell me more”.

In 2006, I left my family’s auto group and founded the Freedom Auto Group with an inkling that there was something more to being in the car business than just selling and servicing cars. To all outward appearance, the car business is transactional (we sell and service cars).

But I felt like it had the potential to be something much bigger. Something

much more meaningful. But what was it? I was looking for a hedgehog.

The extraordinary business author, Jim Collins, writes in his groundbreaking work “Good to Great,” that every business needs to understand its “Hedgehog Concept”– the one thing in the world that they do best (Collins coined this name because of the hedgehog’s singular and very successful defensive tactic of rolling into a ball). Collins further asserts that a business that understands and embraces its “Hedgehog Concept” has positioned itself to make the leap from good to great.

Dealership Innovation Guide

Since I started Freedom Auto Group in 2006, our team has been on a quest to identify our “Hedgehog Concept”. What is the one thing in the world that we do best?

While it’s easy to point to the basics, like “sell cars”, “satisfy customers”, or even, more selfishly, “create profit” as possible answers to that question, none of those resonated for our team. We all felt that our “Hedgehog Concept” was something bigger than what the normal boundaries of the auto dealership business would suggest. Furthermore, we wanted our Hedgehog Concept to be aspirational – not just what we Dealership Innovation Guide

currently do best, but what we WANT to do best. Answering this question has been much harder than I had anticipated. It’s been a soul-searching pilgrimage through uncharted space trying to figure out who Freedom Auto Group wants to be when it grows up.

Our first Christmas season in 2006, we developed a small giving program to help local families in need. Our team worked together to create Christmas packages for families experiencing challenges. We asked our employees to come together with food donations.

Our people then assembled boxes of all

the food and arranged for those families to pick up their holiday care packages.

In this first year’s effort, we had success, although somewhat limited. Our people were excited by the giving process, and we made a meaningful difference in the lives of a handful of local families.

In 2007, members of our team formed a committee to make this program, now named “Freedom Holiday Helpers” bigger and most importantly, better. They began meeting in the fall of 2007 and targeted helping 15 families. Instead of accepting food donations from employees they asked DrivingSales, LLC • 3rd Quarter - 2014 • 19

wealth or “stuff”, travel, or hobbies.

For others it’s something deeper.

So I began asking questions...

But what creates fulfillment?

Psychological studies over the last one hundred years have proven that while money, vacations, and the acquisition of “stuff” all contribute to some forms of happiness, the greatest sense of fulfillment comes from helping others.

So I began asking questions…

What if we could radically change our business model? What if we could make our business about improving the lives of others? What if it was more than just words? What if it was our value system? What if improving lives could be our “Hedgehog Concept”?

What if we could really be in the “Life Improvement Business”?

for financial donations, and I allowed payroll deductions over several weeks to make the donations easier. By the time we launched, we had enough funds to provide one week’s worth of food for 28 families AND include presents for all the kids in each family!

This program has continued ever since, and grown in the process. In fact, Freedom Holiday Helpers has served over 250 families in each of the last three years. Since our first floundering attempt at this program in 2006 to the extraordinary execution practiced today, we have presented Christmas gifts to over 5,000 children, delivered over 1,500 weeks of food and improved the lives of nearly 7,000 people in need.

I cannot claim to own this success.

I had an initial idea – to help needy families during the holidays. But the Freedom Auto Group team saw far more potential than I ever dared to dream.

The point of this story is not selfaggrandizement, but rather to illustrate the fact that we had started a journey.

20 • 3rd Quarter - 2014 • DrivingSales, LLC

There is rampant passion for “Freedom Holiday Helpers” among all of our staff. The donations we receive from employees are humbling - we even have a member of our Reconditioning staff who consistently contributes $1,000 every year. Perhaps most significantly, there is a burning desire to constantly improve the process and extend our reach to improve even more lives.

Each year staff members offer new suggestions and even occasionally ‘strong-arm’ me into trying something radically new that enhances the experience for our target audience.

Somewhere along this journey, I started to see what our “Hedgehog Concept” might look like. And I wasn’t the only one who saw it.

I believe every human being seeks fulfillment in their life. This is easy to understand and hardly surprising.

After we satisfy the basic needs of our existence, like food, shelter, health and safety, we’re able to work on more meaningful aspirations. For some, this takes the form of accumulation of

I brought these questions to the Freedom Auto Group team just a few years ago, and, just as they always do, they ran with it and made it bigger and better than I could have imagined.

By looking at our business through a “Life Improvement Business” lens, we are better at selling cars (and selling more), better at satisfying customers (and satisfying more), better at creating employee loyalty, and far better at making meaningful impact in our community.

Of course, we’re not perfect. Some days we are practicing the “Life Improvement Business” at a ninja level, and other days, well… like I said… we’re not perfect!

On an average day in an average month, if you were to walk into a Freedom dealership and ask the question “what business are you in?” any Freedom associate would answer “we’re in the ‘Life Improvement Business’”.

Think of it this way: no person ever walks into a dealership for any other reason than to improve his or her life. The only reason people buy or lease a car is to improve some aspect of their existence.

The only reason people service a car is to make sure the investment they made in a very expensive life-improving machine remains intact. The only reason an Dealership Innovation Guide

employee joins a dealership and remains there is because they expect that doing so will make a better life for themselves and their family. The only reason a non-profit solicits the neighborhood dealership for sponsorship or funds is to improve the lives of people in need.

In the end, here’s the simple truth I learned about my business: THE ONLY REASON ANY PERSON WANTS TO DO ANYTHING WITH OUR BUSINESS IS TO MAKE THEIR LIFE OR SOMEONE ELSE’S LIFE BETTER. So you see, we are all EXPECTED to be in the “Life Improvement Business”, regardless of whether we know it, practice it, want it or even believe it.

Even if you don’t advertise it, even if you don’t think about it, it’s simply expected by all those around us. Every “up” on the lot, every customer in the service drive, every vendor peddling their goods, every bank selling their programs, every little league team seeking sponsors, and every employee trying to make a living with you has one hope: that YOUR BUSINESS will make their life better. Does that feel as heavy to you as it does to me?

Today, we try to look at every aspect of our business through the “Life Improvement Business” lens. If there’s a function or process we practice in the dealership, the first question to ask is “does this process improve the lives of our customers, our associates, or the community?” If we can’t get at least 2 out of 3 to be ‘yes’, then it’s time to redesign the process.

Sometimes the question is more pointed: “are we more interested in ‘getting’ or ‘giving’?” I find that when our motivation is “getting”, we simply don’t execute well. We fall far short in truly improving the lives around us, and any gains we make on a material level are usually given back in the long run. This is possibly the most challenging aspect of the “Life Improvement Business” model – it really is about putting others first, which is an extraordinary paradigm shift for many businesses.

Dealership Innovation Guide

On a practical level, here are some operational questions that came up throughout this process: Do our salespeople really understand how to guide a customer through a lifeimproving purchase decision? Or do our salespeople just try to push products?

Does our service cashiering process truly improve the lives of our customers, or is our process mostly for the benefit of the dealership?

Do we communicate with our customers about anything other than doing business with us? Are endless “Come in and buy something from us” messages more focused on “getting” or “giving”?

And the list goes on and on…

Stating values seems easy enough, and it usually feels pretty good as an exercise.

But living those values is something else entirely. It takes tremendous discipline, focus and confidence to make choices that exemplify the “Life Improvement Business”. Sometimes these choices are countercurrent to the traditional car business model, and that can make anyone uncomfortable. But I believe living the values of the “Life Improvement Business” does exactly what it sounds like – it improves the lives of our customers, our associates and our community. And in the end, that’s really why we’re all here.

“And I know I’m not alone,” I said to Jared. “There are dozens, maybe even hundreds or thousands of other dealers living the ‘Life Improvement Business’ every day. I think DrivingSales can have a role in helping more dealers learn how to live these values by the examples of successful dealers’ efforts.”

“And I think you should write about it,” Jared said with a wry smile as we walked up the steps into the reception area.

Within seconds Jared was swallowed by a crowd of vendors, dealers and the press. As I watched him interact with people – one at a time – he never lost his energy or enthusiasm for conversation.

He listened, laughed, and commented thoughtfully. As each person finished

their brief or extended moment with Jared, the one thing they had in common was the smile on their face. Their lives were made better even by the briefest encounters with a guy who is a black belt at the “Life Improvement Business”.

So here I am. And if you own, operate or manage a dealership that practices the “Life Improvement Business”, I want to talk to you! I’d like to share your success on these pages. There are dealers who want to make that leap but are unsure of how to start. Others might be looking for that last bit of inspiration before they make the jump.

Either way, your story can make the difference. Think of it as part of your mission. After all, improving the lives of your fellow dealers, their associates and their communities is just another aspect of the “Life Improvement Business”.

If your store is in the Life Improvement Business, I want to hear from you.

Let’s start sharing the good our dealerships do for our communities and employees. savagecars@aol.com

About The Author: As the President and CEO of the Freedom Auto Group, one might think all that Eric Savage has on his mind is selling cars, but that is not at all the case.

More than any other purpose, Freedom Auto Group was built to embrace the “Life Improvement Business”. Certainly that is expressed in the way Eric’s company helps people purchase, maintain and service their cars. Of even greater importance to him is to provide an environment at Freedom where every team member’s life is improved by occupying a job that focuses on improving the lives of others. But most significantly, Eric and the Freedom Team work to create Life Improvement in their Community. By reinvesting Freedom Auto Group’s success into charities and community projects, he is able to help those most in need.

DrivingSales, LLC • 3rd Quarter - 2014 • 21

A WAKE-UP CALL on

ID Fraud

Leads to More Sales

B

enny Boyd Auto Group lost four vehicles to ID fraud. But by adopting a tiny, powerful ID scanner, and a new ‘MUST SCAN-IT PROCESS”, he not only shut down fake-ID scams, he increased sales 10% storewide.

Have you ever had a vehicle bought (and hence, stolen) with a fraudulent ID? Lost a vehicle to a fake-ID-toting test driver?

22 • 3rd Quarter - 2014 • DrivingSales, LLC

No? Then you’re lucky… but it’s probably just a matter of time before it happens.

At Benny Body Auto Group, we had a major wake-up call when four vehicles were stolen in one month! Because our stores are mostly in rural areas, we do about 30 long-distance car sales a month. About 18 months ago we sold four vehicles (three in Texas, one in

California) to buyers whose driver’s licenses and credit info “checked out” perfectly. The bank agreed, funded the loans and signed the contracts.

The vehicles were then shipped to the “buyer’s” given address, where the thieves cleverly intercepted the truckdriver, smilingly signed for delivery, and promptly drove off into the night!

In fact, the thief-recipient of the car Dealership Innovation Guide

Dealership Innovation Guide

DrivingSales, LLC • 3rd Quarter - 2014 • 23

Š2014 Classified Ventures, LLCTM. All Rights Reserved.

GET IN FRONT OF CUSTOMERS BEFORE IT’S TOO LATE. Today, most car shoppers will only visit two dealership showrooms.1 Will you be on the shortlist?

Studies show that the number of consumers using independent research sites to decide on a dealership has grown more than 33% year-over-year. 2 As a trusted consumer resource, Cars.com puts you in consideration as shoppers are deciding which dealerships are worth an in-store visit. Learn more at dealers.cars.com.

1 2

DMEautomotive, April 2014 Millward Brown Digital/Google Auto Purchase Study, August 2013

in California, knowing he had to meet the truck driver/vehicle right in front of the victimized family’s house, arranged for the car to arrive at 2 AM: arguing he owned a pizza restaurant that closed late and didn’t want his wife to be woken up by the transaction!

ID fraud is a national and dealership crisis: according to the FBI, identity theft has overtaken the drug trade as the most costly U.S. crime. In fact, more than 267 million consumer records get exposed - and 60 million pieces of personal ID wind up in the hands of identity thieves – each year. And from what I hear, more and more dealerships are reporting that fraudsters are

presenting impeccable-looking (fake) IDs, and then driving off on test-drives or purchasing vehicles with them.

Why? Most dealership processes are way behind ID thieves’ super-sophisticated technology. Every dealer knows the ID-verification headaches we have lived with for decades: the endless ID photocopying and verification calling – and all those barcode scanners, which are next to useless because they can only verify that data is present on a card, not that it’s valid. And while those time-consuming calls to the DMV, etc. to verify identities can be effective, most cars are bought on weekends, when these organizations are closed.

And even if all the old processes successfully raise flags in an F& I department – what about the test-drive? Think of the chaotic weekends: dozens of cars out on testdrives, photocopied IDs all over the place…It’s a recipe for disaster.

And, ID fraud is becoming an increasingly expensive dealer problem. Lender contracts often include verbiage stating the dealer is responsible for establishing the buyer’s identity and that they’re responsible for damages when a car is stolen/bought fraudulently. And, of course, the government requires us to take steps to flag identity fraud (the Safeguard and Red Flags Rules) – or face steep fines. The cost to a dealership of a single car obtained with false IDs/ documents can run north of $100,000!!!

So, what to do? The answer is astonishingly simple: get a state-ofthe-art ID scanner. And then use it to institute a whole new process for your dealership, which can deliver eye-opening benefits that go WAY beyond stamping out fake ID scams.

A GOOD SCANNER AND A “MUST SCAN IT PROCESS”: FROM EXPECTED TO SURPRISING RESULTS 1. Get a Great Scanner. Like many of you, we have used scanners before: about 30 old ones are gathering dust in a closet, because they quickly broke or were too complex for the team to set up/use. This time we chose a new scanner that incorporates the same ID verification technology used by the Department of Homeland Security (DHS), Department of State and global border patrols. It was easy to set up, and when we insert any ID it takes only five seconds to know if there are any problems. We have been 26 • 3rd Quarter - 2014 • DrivingSales, LLC

Dealership Innovation Guide

Save $100 and register today!

Discount code:

DIG2014

using it non-stop in our dealerships for over a year and there has not been a single technical issue.

2. A“MUST SCAN-IT PROCESS” Because this scanner works and protects us flawlessly, it’s allowed us to put in place a, new strict ID-scanning process that begins at first point of contact, the reception desk. Now, no salesperson can get the keys to take a car out or work any deals unless that customer’s ID has been scanned.

Management has to mandate this process change: no ID scan, no test-drive, no working car deals.

3. Connect scans to your CRM. The receptionist can enter the vehicle stock number and the salesperson connected to the customer at the point-of-scan, so you always know where each car is and with whom. And, critically, this scanner automatically imports that customer’s data right into the DMS, so their pre-existing relationship with the dealership, and any lead or credit apps they’ve ever submitted, are immediately available to sales and F&I. 4. Speed up the Process. With the customer info connected to sales and financing pre-test-drive, you can have the foursquare invoice/ paperwork ready before that test-driver pulls back in. The only thing that needs filling out is the Social Security number.

5. Track Sales and Marketing. As part of the ‘MUST SCAN-IT PROCESS’ make sure that each customer is asked where he/she heard about your dealership when the receptionist scans the license, 28 • 3rd Quarter - 2014 • DrivingSales, LLC

to better track what marketing is putting customers through the door. The scanner we used enabled test-drive reporting by volume, time, make/model and salesperson, for far better sales person accountability (tracking closing rates and follow-up).

SO, WHAT ARE THE BENEFITS? 1. No More ID Fraud. Since installing the new scanner and “MUST SCAN IT PROCESS”, no vehicles have been bought or stolen with fake IDs. 2. More Sales: Because the customer’s key info is transferred from scanner into the CRM (and identifies any lead or credit apps they submitted before), many more leads are getting captured and followed-up with. Our scanner and “MUST SCANIT PROCESS” are directly responsibly for a 10% increase in sales – or, about 50 incremental car sales a month throughout the organization.

Dealerships don’t realize how many in-store leads they drop (and they’re the hottest possible prospects) – before “MUST SCAN_ IT”, we often didn’t even capture the last names of so many testdrivers and showroom shoppers.

3. Protection Against “Pulled Credit Without My Permission” Lawsuits: A consumer’s credit score can be affected when their credit is pulled. Recently, we were nearly wrongly sued for this. Although my staff clearly remembers a female customer test-driving and applying for financing, she was adamant that she had never set foot in the Dealership Innovation Guide

dealership. Our CCTV tapes only went back 30 days, but our scanner keeps digital scans of IDs (with the license photo) for eternity, and found that she had indeed been in the dealership – and that her signed credit app matched her license. With the scanner proof, the allegation was dropped.

4. Protection Against Titles Getting Kicked Back: In Texas (and many states), new laws require that the vehicle registration match the sales title exactly: i.e., if “Mark Gibson” is on the contract/title and the registration is for “E.M. Gibson,” the title gets kicked back and the title application is void. It’s a costly headache to get that customer back in, and this occurence making it more likely that deals falls apart. Because the scanner captures the license exactly, and connects it to the CRM tool, now all documents will be correct.

5. Protects Against Expired Licenses: Our scanner instantly red-flags altered dates of birth and expired licenses - critical because if a person with an invalid license – or a 15-year-old with an altered one – drives a car on a test-drive and has an accident, your dealership is liable and your insurance premiums go up.

6. In-Dealership Fraud Compliance: Red Flags and Safeguard Rules mandate that all dealers follow a written program procedure protecting against identity theft from employees. In Texas, a single infraction carries a fine of $10,000. Having a digitized ID record trail removes a lot of pieces of ID once left in plain sight.

Dealership Innovation Guide

7. Protects Salespeople from Harm: We’ve even heard about criminals using fake IDs, pulling guns on salespeople during test-drives.

Knowing that we can instantly identify any false-ID-toting criminal gives us peace of mind against this growing problem.

8. Faster Sales Process: Using a scanner that connects the testdriver’s info to the CRM tool, and creates a new, instant information flow to sales and F&I has trimmed our total sales process by about 30 minutes.

After four cars stolen, our new scanner and “MUST SCAN-IT PROCESS’ has given us a whole new level of ID fraud protection, while eliminating problems like lawsuits and compliance challenges.

But because it’s re-organized the sales process “kick-off” around a scan that captures customer info into the CRM, it has led to a 10% sales increase across the board. It may be a small piece of technology, and a simple new process, but those are BIG results.

About The Author: Mark Gibson is a 27-year dealership veteran, and the E-Commerce & Internet Director and Compliance Officer for Benny Boyd Auto Group which spans nine stores across West Texas: from Benny Boyd Lubbock to Lamesa Dodge.

DrivingSales, LLC • 3rd Quarter - 2014 • 29

6

Pillars of a

Successful Mobile

MARKETING

STRATEGY 30 • 3rd Quarter - 2014 • DrivingSales, LLC

Dealership Innovation Guide

M

obile is not simply a onedimensional platform. Done right it supports your entire business, improving every aspect of your dealership, from the customer/ dealer relationship to the foundation of a faster, more nimble operating system across your entire store. And with 326 million mobile phones in use today in the US (more than one per American)1, and 91 percent of American cell phone users within reach of their device 24/72, mobile is the most powerful marketing platform available for dealers in today’s particularly competitive market. From email, apps and mobile wallet to QR codes, text and mobile web, let’s break down the channels that make up not only a successful mobile marketing strategy, but a plan that evolves your dealership for the future.

RESPONSIVE EMAIL DESIGN (RED) Responsive Email Design (RED) is the best way to create crazy powerful email campaigns, regardless of the device your customer is using to read these emails, because it embeds special sensing technology that recognizes if the email is being read on a desktop, tablet or mobile phone. The email reformats on the fly, creating the best possible reading experience possible for every device.

RED allows the dealer to focus mobile customers on the actions they want them to take (call us, visit us, forward to a friend, etc.) via large and easily tapable buttons while still allowing desktop email client users the benefit of reading more copy and accessing more links.

When viewed from a mobile device, the email will display a different image, adjust the size of both buttons and text, as well as customize the content.

Do not confusethis medium with mobile web, because it serves a completely different purpose. RED specifically addresses the 56% of dealer customers that open emails using their mobile device.3 With 71% of mobile purchasing decisions influenced by emails from companies 4, it’s not hard to see the Dealership Innovation Guide

kind of power that can come from a well-executed email campaign.

So maybe you’re asking what constitutes a well-executed email campaign? Making sure your email uses RED is the first step, but after that, content is key. 66% of dealer customers report that they want to see special offers and coupons in their email inbox, while 62% want service reminders and 49% want to see urgent vehicle recalls.3 The placement of easy to tap buttons like Call (to Schedule), Click (to Schedule Online) and Visit (Maps and Directions) is also important. Mobile consumers move fast and tap instead of click, so placing these buttons front and center allows the consumer to take action, getting where they want to go right away.

Simple: if the content is too small to see on the consumer’s mobile device and not easy to tap, they won’t think twice about sending it straight to the trash.

There is proof that RED reigns supreme when it comes to amazing email marketing. One of the nation’s largest dealer groups implemented RED, and in just one month they saw a 6.7% open rate increase, 1.2% click through increase across all devices, an 18% increase of service appointments scheduled online and hundreds of additional phone calls due to one Tap Direct Dialing!6 So here is what you need to do right now to start delivering some crazy powerful email campaigns. Call your email-marketing partner and ask if they support Responsive Email Design. If so, start using RED a.s.a.p. If not, find a new partner. Monitor your open and click through rates and experiment with the placement of content on your easy to tap buttons (call us, visit us, forward to a friend, etc.). Then repeat!

MOBILE APPS About 80% of time on mobile is spent inside apps6 and mobile app usage is set to grow by 29.8% each year reaching 4.4 billion app users by the end of 2010.7 But what may be even more pressing is the fact that 45% of consumers DrivingSales, LLC • 3rd Quarter - 2014 • 31

prefer using downloadable automotive apps to automotive websites (24%)!8 It is no shock that your dealership is already falling far behind if you don’t have an app in place today.

The point of a mobile app is to provide customers with an in-dealership experience-when they’re not in the dealership. Apps give them easy access to store hours, directions, appointment scheduling, special offers, coupons, and even payment assistance. The payment via app function gives the customer the ability to receive real time vehicle-inservice and vehicle- ready notifications.

But here is what consumers are really looking for in a dealership branded mobile app. Vehicle shoppers want vehicle info, pricing, vehicle photos, trade in value and dealer location.

Vehicle owners want to be able to set appointments, have easy access to dealership contact and hours, view vehicle service history and access special offers. 45% of customers would like to be notified that their vehicle is due for service and 74% of customers want to be notified that their vehicle is ready after it’s been serviced.3 There’s really no question of should your dealership have a mobile app, but rather how to get one and make the most out of it. An app is absolutely mandatory in today’s always-on market.

Promote your app through email, on your dealer website, with in-store advertising and get your service and sales teams spreading the word. Get your entire store on board, include store training and make sure every associate downloads the app to their smartphone.

Most importantly, make the app apart of your entire customer experience.

MOBILE WALLET The mobile wallet is an emerging channel of mobile technology. 80% of consumers will conduct mobile commerce in the next 12 months,9 meaning this channel will become a regular part of the consumer purchase process.

32 • 3rd Quarter - 2014 • DrivingSales, LLC

Mobile wallets are Apple iOS and Android applications that hold virtually any financial service, from bank accounts, credit cards and loans - to coupons, store cards and boarding passes. These passes can all be scanned with the consumer’s mobile device at the time of purchase or use. Consumers can access these passes via social media, QR codes, email or apps. The pass is then transferred into the mobile wallet and can be redeemed at the retailer either by scanning or keying in. Once the pass is redeemed, the customer’s account is automatically updated.

10 times as many coupons are redeemed through mobile as through traditional channels, so this is where your dealership can start experimenting with the mobile wallet. Offer a promotion or multiple coupons, or use it for a store account or for a traffic driving points based program (Buy 3 Get 1 Free) and distribute the passes via social media, QR Codes, email and through your app. Then analyze all the data, and optimize your coupons for the type that your consumers use most. Include a mobile wallet marketing version for all of your coupons and make sure your mobile wallet couponing system supports Apple and Android devices.

While these wallets are very user friendly, the technology is complex, so it

is important to work with a trustworthy vendor with deep background in new era mobile technology services.

Mobile wallets not only offer an important customer retention tactic for today, but also for tomorrow, as more and more consumers join this third wave of mobile adoption.

MOBILE WEB With the smartphone quickly becoming the new desktop, it’s no surprise that today’s consumers expect a mobile optimized website from your dealership.

Mobile web is so mainstream that not having a mobile optimized website is like closing your store one day each week10. 57% of users say they will not recommend a business with a poorly designed mobile site.11 Your mobile website is your dealership’s first impression, but it’s the more personalized tools like mobile apps, that will keep your customers coming back. If you’re not giving consumers that complete mobile experience then they’re going to find it somewhere else. So, don’t let them find it somewhere else!

If you don’t have a mobile website, get one now! Test your mobile website. Is it fast? Is it easy to navigate? Taps happen much faster than clicks, is your mobile Dealership Innovation Guide

website built for speed? Check out your design. The majority of consumers use mobile sites while at or near your showroom, does your design support those needs? Your mobile website is a great customer acquisition tool, but its really not meant for customer retention, that’s the job of your mobile app. Put “smart tags” on your mobile website to make it easy for existing customers to move to your mobile app.

QR CODES Even though twice as many customers use mobile apps (44%) than scan QR Codes (18%)12, QR Codes can still be useful when strategically placed - because they are strictly a distribution device. The top three places auto service customers want to be sent via QR Codes are coupons/ discounts, current store promotions and to an online service appointment scheduler.12 Do not send customers to your website via a QR Code! This makes consumers unhappy because sending them to a simple URL that they could have otherwise found themselves is seen as a waste of their time.

Use QR Codes for couponing, especially for offline to online coupons, and for any coupons that can be added to a

Dealership Innovation Guide

mobile wallet. Send customers to your mobile app’s download page via a QR Code and use them on vehicle window decals in your lot to give customers more information on that vehicle.

TEXTING When executing any text campaign it is imperative to ensure that you have prior express written consent before texting. Failure to do so may open your company up to the wrath of a possible class action lawsuit. So remember when you increase texting, you increase the potential of lawsuits!

But if you must text, then follow these guidelines. Be very selective with your text messages. Make sure your entire texting strategy is 100% compliant, including your opt in and opt out mechanisms. Be very specific in your text messages and non controversial.

Have your legal team review your text messaging strategy. One potential use of texting is “Vehicle Ready” and “your special parts are in” communications from your service department.

About The Author: Mike Martinez is Chief Marketing Officer of DMEautomotive, the industry leader in science-based, resultsdriven automotive marketing. DMEa provides a range of marketing services to the biggest and most innovative automotive organizations in the industry. An automotive digital veteran, Martinez has served in key leadership positions at many of the industry’s most renowned automotive digital innovators.

CITA 2012

1

Morgan Stanley, 2011

2

DMEautomotive 2013 auto[mobile] survey

3

Adobe 2013 Digital Publishing Report

4

DMEautomotive 2013 research

5

Flurry Analytics

6

Portio Research March 2013

7

Mobile Web and App Usage for Auto Shoppers,

8

Conducted on behalf of Cars.com by Nielsen, Sep 2012 Forrester Research

9

The mobile revolution is upon you, so get moving!

Super Monitoring, State of Mobile 2013

10

The Mobile Playbook, Google

11

DMEautomotive 2012 survey

12

DrivingSales, LLC • 3rd Quarter - 2014 • 33

In Progress Brian Solis

BOOK EXCERPT FROM WHAT’S THE FUTURE OF BUSINESS: CHANGING THE WAY BUSINESSES CREATE EXPERIENCES. 34 • 3rd Quarter - 2014 • DrivingSales, LLC

T

hrough technology, consumers are experiencing a validating and influential form of empowerment. Businesses must recognize that the voice of the customer is now more powerful than ever before.

Whether Facebook, Twitter, YouTube, Yelp, review sites, product forums, Dealership Innovation Guide

blogs, or Pinterest, your customers are sharing their experiences on platforms where audiences can find what others are saying about you.

SO WHAT? Your customers and prospects will inevitably find the negative experiences others have had. Customers will uncover the one horrendous review rather than the incredible experiences that others have had.

As customers tweet negative experiences, businesses try to respond or address the complaint. The more a company engages, and the more people gain access to social and mobile platforms, interactions accelerate and amplify. Knowing this, companies are spending more money and resources managing their online reputations.

Increasingly, businesses are shifting resources until the traditional call center is replicated at social scale.

Although that’s inherently a good thing, the downside is that the call center becomes a notable cost center.

Perhaps this is just the new cost of doing business. In an era of connected consumerism, to earn customer attention, trust, and loyalty is a cost and an investment in relevance and relationships.

Yet even with the pervasiveness of technology, and increased customer expectations, businesses are making the same mistakes. We are not designing and implementing incredible experiences; rather, we’re marketing, selling, and serving customers.

Happ i n some ess is n o t h i expe ng yo t r u i e n some ce, it t ’ h i reme ng yo s mbe u r.

—Os

car L

Dealership Innovation Guide

evan

t

DrivingSales, LLC • 3rd Quarter - 2014 • 35

Peop le ne ver l anyt earn hing told, by b e t i h e y hav ng find out f e t o them or selve s.

—Pa ika D ulo Coe ecide lho, s to Die

Vero n

c01.indd 12

WHAT ARE CUSTOMERS TO ALIGN WITH IF WE DON’T FIRST DEFINE IT? WHAT DO WE WANT THEM TO BE A PART OF? 36 • 3rd Quarter - 2014 • DrivingSales, LLC

17/01/13 6:54 P

Now’s the time for an investment in something more than price, performance, or value. The future of business is about creating experiences, products, programs, and processes that evoke splendor and rekindle meaningful and sincere interaction and growth.

Dealership Innovation Guide

At the center of this evolution—or (r) evolution—is the experience. And, the experience is everything now.

ARE YOU EXPERIENCED? Yes, it’s time to invest in proactive experiences. If we do not, we will be forever tethered to the unproductive dance that is reacting, responding to, and solving negative experiences in real time, over time.

What if I told you that the cost of reacting to experiences is far greater than the cost of proactively defining experiences from the onset? Indeed, companies are investing in reactive engagement. And, for the most part, they can succeed in shifting negative experiences toward positive territory.

However, any favorable outcome is weighed against the cost of the initial negative experience—or more importantly, the cost of how that negative experience was shared and how it ultimately impacted others. What’s most startling is that businesses do not measure these numbers today. But that’s about to change.

Businesses must invest in defining not only a positive experience, but also a wonderfully shareable experience.

Doing so influences others to join the fray while offsetting negative inquiries and the damaging viral effects of shared negative experiences.

This is the time to reframe those negative experiences. Pushing a change from responding to negative experiences to proactively creating positive ones is everything. Why? The cost of reacting to negative experiences is completely eclipsed by the upside of creating and nurturing positive experiences at the inception.

To better understand the importance of experience requires that you first acknowledge that you are the very consumer you’re trying to reach. You’re not looking for just any experience, you’re looking for the experience.

Dealership Innovation Guide

Businesses that recognize and adapt to you and people like you will quickly learn how to entice you through shared values and meaningful affinity hooks . . . while never stopping to compete for relevance.

But make no mistake: This is as much a technology revolution as it is a series of real-world revolutions that will eventually seize organizations, governments, and businesses.

Experience is everything. And, businesses must create experiences that mean something. If necessity is the mother of invention, then vision is the father of innovation.

Change boils down to three things:

#InnovateorDie

Look, I get it. Change is all anyone talks about today and we all know that talk is cheap.

The customer journey is still evolving.

How businesses react and ultimately lead the enhancement of relationships is not solely determined by technology.1 To truly get closer to customers takes a culture of customer-centricity, empowerment, and innovation.

Saying that we need to get closer to the customer is hardly enough to convince business leaders that the customer revolution they hear about is literally steps away from their office door. I know I’m not saying anything here you don’t already know. The difference is, however, that what started as a groundswell for business transformation from the bottom up has hit a ceiling. To break through it requires that someone (read: you) has to make the case to bring change from the top down.

Most executives don’t use social networks or smart phones. Many don’t even read their own email.

Many won’t ever read this book. So, trying to convince decision makers that this is a war fought on the battleground of technology is in and of itself fighting a losing battle.

The future of business isn’t tied to the permeation of Facebook, Twitter, iPhones, and Droids, pins on Pinterest, tablets, or real-time geolocation check-ins. The future of business comes down to relevance and the ability to understand how technology affects decision making and behavior to the point where the recognition of new opportunities and the ability to strategically adapt to them becomes a competitive advantage.

1. Listening 2. Learning 3. Adapting

We also know that change is inevitable and that it is rarely easy. Among the greatest difficulties associated with change is the ability to recognize that change is needed at a time when we can actually do something about it. All too often, by the time we realize that change is needed and that we must shift to a new way of thinking, it is already too late. Or worse, competitors recognize the need for change before us, and we are by default pushed into a position where our next steps are impulsive or reactive rather than strategic.

The volume of emerging technology is both awe-inspiring and overwhelming.

As new technology makes its way into everyday life and work flow, devices, applications, and networks, it disrupts the norm and begins to impact behavior. It is this disruptive technology that over time influences how people work, communicate, share, and make decisions.

THE QUESTION IS AT WHAT POINT DOES EMERGING TECHNOLOGY OR NEW BEHAVIOR BECOME DISRUPTIVE? DrivingSales, LLC • 3rd Quarter - 2014 • 37

special path you must follow to set in motion the change that opens the door to xperiences inside and outside the organization.

• • • • • • • •

CompUSA E.F. Hutton Hostess KB Toys Kodak LIFE Merry-Go-Round Mervyns Pontiac Tower Records Woolworths

This is about the survival of both

And, more importantly, what systems, processes, and protocols are in place that recognize disruption, assess opportunity, and facilitate the testing of new ideas?

The time to answer these questions is now.

In my last book, The End of Business as Usual,2 I introduced the notion of Digital Darwinism, the evolution of consumer behavior when society and technology evolve faster than our ability to adapt.

And the reality is that because of the role technology now plays in our lives, we forever compete for survival to effectively fight off Digital Darwinism.

Humility is a gift and it’s needed in business now more than ever. Disruption not only faces every business, its effects are already spreading through customer markets and the channels that influence decisions and behavior.

A recent advertisement produced

by Babson College cited a rather humbling statistic: “Over 40 percent of the companies that were at the top of the Fortune 500 in 2000 were no longer there in 2010.”

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As we’re often painfully reminded, history has a way of repeating itself.

Forbes published an article in early 2011 that served as a harbinger for the turbulent and transformative times that lie ahead.3 The opening line read, “ The End is Near: Why 70% of the Fortune 1000 Will Be Replaced in a Few Years.”

The author cited a study published in the book Built to Change by Edward E. Lawler and Christopher G. Worley.

The study found that between 1973 and 1983, 35 percent of the top companies in the Fortune 1000 companies were new to the list. Over the next decade from 1983 to 1993, churn jumped to 45 percent, and then soared again to an astounding 60 percent between 1993 and 2003. If the current trend continues, more than 70 percent of Fortune 1000 companies will turn over from 2003 to 2013. As the author observes, “In other words, over three-fourths of the existing captains of industry will fall from their throne.”

They include: • Blockbuster • Borders • Compaq

SORRY, WE’RE CLOSED

new channels to improve customer experiences and relationships. It takes courage. It takes persistence to break through resistance. But, in the end, it’s how you work with your leaders, or how you lead, to move toward an empowered and customer-centric culture that sets in motion real transformation.

You have a special path you must follow to set in motion the change that opens the door to improve experiences inside and outside the organization.

17

About The Author:

17/01/13 6:54 PM

Brian Solis is principal at Altimeter Group, a research firm focused on disruptive technology. A digital analyst, sociologist, and futurist, Solis has studied and influenced the effects of emerging technology on business, marketing, and culture. Solis is also globally recognized as one of the most prominent thought leaders and published authors in new media. His new book, What’s the Future of Business (WTF), explores the landscape of connected consumerism and how business and customer relationships unfold and flourish in four distinct moments of truth. His previous book, The End of Business as Usual, explores the emergence of Generation-C, a new generation of customers and employees and how businesses must adapt to reach them. Prior to End of Business, Solis released Engage, which is regarded as the industry reference guide for business to market, sell and service in the social web.

Dealership Innovation Guide

O

ver my twelve years traveling as a sales consultant and 15 years owning my own dealership in Omaha, Nebraska, I’ve heard the same question asked over and over: “Does sales training really work in the car dealership industry?”

Statistics show that the ‘half life’ of traditional sales training is between 45 and 60 days, meaning that most people who attend training will forget 86% of what they learn during that time frame. While this is a disheartening statistic for those of you considering 40 • 3rd Quarter - 2014 • DrivingSales, LLC

sales training for your team, I do believe there is a fix and that fix is based on what I call the ‘Four Pillars of Success’.

I liken traveling the country as a consultant to visiting a buffet line.

There were so many ‘options’ when it came to dealerships, some of which were appealing to the consumer and some which were not. I definitely noticed some commonalities between the top performing dealerships, or the dealerships that were as ‘appealing’ to the consumer as that sliced to order

prime rib you see at some buffets.

There were also, of course, some commonalities to the low-performing dealers that would be about as appealing as the suspicious mystery meat you can never quite identify at a bad buffet. What I’ve found is that the top performing dealerships make their sales training work by concentrating on four strategies with their team members: Culture, People, Process and Pay Plan.

Dealership Innovation Guide

The Four Pillars of Success for

MODERN DEALERSHIPS dealerships attracted the best talent, encouraged development of that talent and gave them the tools and ownership they needed not only to perform, but also to further their careers. The dealerships that were not as successful did not have a culture that emphasized these four key points and the results were high turnover, accidents, low productivity, high absentee wages and a poor reputation.

PILLAR ONE: CULTURE When I bought my dealership, I knew that one of the first decisions I would need to make is what kind of culture I wanted to create. Through my years as a consultant, I’d seen some consistencies in successful dealerships as it related to culture. The best dealerships had a culture of coaching, encouragement, development and executing. These Dealership Innovation Guide

A good reputation is probably one of the most important factors that results from having the right culture as the car dealership industry often struggles with this point. In fact, in the wake of the recent government shutdown, a poll showed that Congress had only a five percent approval rating from the general public. You’d be hard-pressed to find anything else that has less than a five percent approval rating. Five percent approval is getting down to the levels of cockroaches, hemorrhoids and

people who allow their dogs to poop in their neighbors’ yards. There was a group, however, with a lower approval rating than Congress’s five percent: car salesmen. We in the industry already need to battle the public’s perception that we do not have their best interests at heart, so developing and maintaining a good reputation is imperative.

A bad culture creates a gap; not only between dealership owners and their employees, but also between the employees and the customer. To mitigate this gap, we need to become modern dealerships, meaning we need to help our employees think like the customer by focusing on a culture of coaching, encouragement, development and execution. This mentality starts with us: the owner. As owners and leaders we must define our mission and clarify our culture so our team has something to latch onto and be proud of.

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PILLAR TWO: PEOPLE The people we bring into our dealership to work for us are the second pillar of success. Fortunately, if we have created the right culture, it becomes easier to attract the right types of people. Once you have the right people in place, it becomes an issue of helping them create the correct daily habits to be able to succeed.

To put it relatively simply, there are three types of people who may come to your organization. The first is the type who just wants a paycheck, a vacation and a few days off. When I first started in the industry this was known as ‘a demo, a draw and a day off’. We don’t normally want these types of people as their loyalty, commitment and willingness to learn are not at the level we need them to be. The second type includes those who see their jobs as careers. They want advancement, status among their peers, more responsibility and a career path and are much easier to develop. If we have created the right culture and reputation, we should be able to attract a handful of these individuals who will made good additions to our team. The final group, which we are lucky if we are able to attract a few of, are made up of those who see their positions not just as a job or a career, but as a mission or calling. They take deep ownership of their position, see their role as contributors or servants and realize their mission (and the mission of the dealership) is bigger than they are. We’re lucky if we have one or two of these individuals in every store.

When looking at the potential of people who come into our organization, we look at the profiles for the top performers in each department. What we’ve found is the type of people who are most successful in our organization are the type we call ‘redwoods’. The ‘redwoods’ are the career or missionoriented individuals who understand our mission, are coachable and who add to the culture we are trying to create.

Now, sometimes we have people who 42 • 3rd Quarter - 2014 • DrivingSales, LLC

come to us who we think we can coach and train to be redwoods, but the reality of the matter is that they are acorns. We all know what acorns grow up to be: oak trees. No matter what we do to develop these individuals, they will never grow to be redwoods.

You can teach them redwood habits, have them shadow other redwoods, give them redwood affirmations, but at the end of the day, they will still grow to be oak trees. It’s important to hire only redwoods (or those types of people you know can succeed in your organization) and stay away from acorns.

It’s also important to make sure that your best redwoods are in coaching positions within your dealership so they can help other redwoods develop.

According to a recent poll, 78% of people hate going to work. 78%. That’s a frightening statistic. When you develop the right culture and focus on hiring redwoods, you can guard against any of those 78% working for you!

PILLAR 3: PROCESS Now that you have the right culture which is attracting the best people, you need to have the necessary processes in place to develop those people, which leads us to our third pillar. The problem many dealerships (or any business, for that matter) face when it comes to process is that they make the mistake of turning sales training and development into sales meetings. Sales meetings are not encouraging or fun to attend and are often demoralizing as they end up being a lecture on all the ways your people aren’t doing enough, giving enough or selling enough. Who wants to go to a ‘sales training’ just to get beat up? So the question becomes, how do you develop a process that encourages leadership and development?

In our dealership, we’ve developed a sales training schedule that includes some type of training every day. We never go over an hour and we try to keep it upbeat, we role play and we focus on mastery of the skill or skills we are teaching to help our team get their ‘black belts’ in each skill. We focus

on everything from process training to personal development and goal setting and we bring in outside speakers to help educate and motivate. We also do daily one-on-ones where our managers (or coaches as we like to call them) review each employee’s behaviors, make sure they are staying on their action paths and model different types of calls to help them improve performance.

The goal of putting the right processes in place is to ensure you are continually developing your people to grow into the redwoods you need to make your dealership successful. Even if you have the right culture and the right people, if you aren’t always working to develop them, you will not experience the level of success that is possible.

PILLAR 4: PAY PLAN I once heard a quote when I was younger that has stuck with me for years: “Tell me how you’re going to pay me and I’ll tell you how I’m going to behave.” While this may not be how we want our people to think, the truth is that it’s how most Dealership Innovation Guide

Keep life simple. As I’ve gotten older and hopefully a little wiser, I find this is the motto I try to live by.

Incorporating these four core values into my life has helped me not only be a better dealership owner, but also a better father, husband, friend and member of the community.

In closing I would like to ask each one of you to examine yourselves and give an honest assessment of where our four pillars are. And remember, if they’re not where you want them to be, or where you know they should be, the best news is that you have the power to change it. Expect the best from yourself first and others will want to give you their very best!

About The Author:

of them do think (whether they know it or not). So if we want the right culture to attract the right people and have the opportunity to develop those people, we need to ‘put our money where we want our activities to be’. In our dealership, our motto is to ‘inspect what we expect’.

We have job role scorecards where we are constantly monitoring our process and checking for places of improvement.

This helps us manage the actions that produce the end results we want. We then create pay plans that are based on the fact that humans naturally move away from pain or fear. The antidote to fear is hunger. If our team members stay hungry, this will help them push past the fear. Therefore, it’s our job to create a pay plan that allows them to do that. Coming up with this type of pay plan is a personal decision for each owner and it may vary between dealerships as each of you have your own unique team. Do your research, know what your team needs to stay hungry, and develop a plan that works.

We’ve talked about the four pillars that I think are the foundation to success in modern car dealerships: Culture, People, Dealership Innovation Guide

Processes and Pay Plan. I’d like to sum up with four ‘lessons’ that I have learned in life and that have not only helped me develop these four pillars, but have also helped me implement them every day, even when things get rough: Your attitude is the only thing you really get to control in life. You can’t control the weather, how other people will act, or even the health and safety of your own family. The only thing you can control is that attitude you bring your into each situation.

Great attitudes create clear vision.

Bad attitudes create glaucoma.

Remember the acronym WIN. WIN stands for What’s Important Now. Be in the moment, pay attention and learn everything you can from the people you are around.

Be a person of trust. You can’t tell your team to treat the customer right if you aren’t a person of integrity and treating people right in your own life. Your people will follow you with passion only if they see you as a trustworthy leader and overall person.

Tony Caputo started selling cars in 1980 at Boston Datsun and during his career has held every position on the sales side of the business, including General Manager.

Branching off from a successful sales career Tony began his own Sales Training company, Caputo Consulting in 1991. Widely recognized as the leader in Integrity Based Selling, Tony grew Caputo Consulting to over 75 individual accounts that also included factory training agreements with Ford Motor Company and Land Rover and Jaguar North America. Wanting to spend more time with his family, Tony transitioned from life on the road to his current position as Vice President/Owner Partner of the Markel Automotive Group in 2002 where he is responsible for all the day-to-day operations of the dealership as well as the coaching, encouraging and development of his personnel. Residing in Omaha, NE Tony has been married to his wife, Maryann, for 33 years and has two children, Nicole, 30 and Michael, 24.

DrivingSales, LLC • 3rd Quarter - 2014 • 43

I

nnovation—indeed, this once worthy term is being degraded by CEOs, consultants, marketers, and journalists for whom it is the buzzword d’jour. The term “innovation” has been deeply devalued—to the point of being a slogan or aspiration. Also, for all the use of the term, it is clear that businesses are having lots of problems

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managing innovation. They’re spending heavily and complaining about how little they are getting back. Abuse of the term “innovation” is leading to dismal outcomes, cynicism, and wasted money.

Studies show that despite huge sums spent on ideation software, stage-gate systems and consultants a majority of executives are dissatisfied with the

results. Dissatisfaction among employees is even higher. The reasons are many.

Firstly, most people today still associate innovation with R&D and invention. For example, in a lot of Spanish speaking countries, the governments, large enterprises and executives commonly use the expression I+D+i. In fact some Dealership Innovation Guide

Stop Abusing Innovation!

Start Learning and Practicing it.

governments also have special tax incentives on R&D spending; but no rewards for spending on innovations.

If we really read the expression I+D+i carefully, it would mean “innovation” is less important than R&D. This is wrong.

Inventions and patents that are not commercialized have very Dealership Innovation Guide

little value. Since 2005, consulting firms—Booz Allen, McKinsey, BCG, CapGemini—have been publishing yearly data about innovation practices within large global firms. Data from Booz Allen shows us that there is no correlation between R&D spending and financial performance among the top 1000 global firms. Based on this

they created two categories of firms – innovators and spenders. Innovators spend much less money in R&D as compared to their peers and have a better financial performance while the spenders spend a lot of money in R&D, but have poorer financial performance.

DrivingSales, LLC • 3rd Quarter - 2014 • 45

Innovation is more than R&D. Innovation encompasses R&D, products, processes, services, supply chain, marketing, business models and others. These are just opportunities for innovation activities. In fact, Innovation is a discipline. It is a discipline that can be managed and mastered like other management disciplines.

2. Mastery requires years of effort.

Many disciplines operate in the world of business, and their evolutions provide insights into the development of innovation as a body of knowledge and field of practice. Marketing, for example, has a conceptual framework (the “4Ps”) and a unique vocabulary. It has developed practical methods (e.g., segmentation) and tools (e.g., conjoint analysis) that practitioners master through formal study. Subfields of marketing such as advertising and consumer behavior have broadened the discipline.

Academic departments have formed to increase the body of marketing knowledge and to pass it on to others.

Journals, professional associations, and conferences dedicated to marketing have emerged over the years.

Like marketing and quality, innovation has been following an evolutionary path. As a discipline, it is perhaps midway along its evolution path— where the quality movement was twenty or so years ago.

We have witnessed a similar evolution with the quality movement. Businesses that took quality seriously made it part of their cultures—embedding the “discipline” in their thinking, planning, and behaving. Today, quality is no longer an empty buzzword or organizational aspiration, but a solid and respected discipline that produces measurable benefits for companies and their customers.

Like other disciplines, innovation can also be mastered. The good news is that the road to mastery in any discipline is the same: 1. Mastery is the result of leadership desire, choice and commitment.

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3. Mastery requires a cadre of experts to lead the way.

4. Mastery requires a broadbased understanding of principles and methods of the discipline among employees.

Disciplined corporate innovative efforts can be traced back to Thomas Edison’s first “invention factory” at Menlo Park, New Jersey. Bell Laboratory and the R&D centers of, DuPont, Etc were its offspring. By the 1980s other tools of the innovator’s craft were being adopted by new product developers. It wasn’t until the 1990s, however, that academics began publishing thoughtful and practical books that explained innovation as more than R&D or invention, but as a process, and told executives how to harness it in service of corporate strategy. The explosive emergence of eBay, Google, Facebook, and Amazon made it clear that innovation is not simply about physical products and technologies, but extends to services and business models. So, today the word innovation is sizzling hot and on every executive’s lips. Academics are studying and writing about it, and today’s employees have some useful principles, methods and tools to work with.

Despite the availability of principles, methods and tools, several obstacles impede progress in handling innovation as a discipline. The biggest obstacle of them all is the failure of most executives to recognize and support the “soft” side of innovation. Executives are investing substantial time, money and energy

on resources, processes, and metrics but most ignore the values, behaviors and workplace climate—aspects of culture—that make those investments pay off. Several studies support the conclusion that enterprise culture is the primary driver of innovation. The fact that successful innovation is one part principles, methods and tools, and another part human creativity and insight is the greatest impediment to innovation in large companies. To capture the potential of innovation, leaders must bring these two very different parts together.

About The Author: Dr. Rao teaches extensively in the Babson Executive Education programs.

His executive teaching and consulting is in the areas of innovation, implementation of innovation initiatives within firms, corporate entrepreneurship and customer experience innovation. His research has appeared in The Sloan Management Review, The European Financial Review, IESE Insight, Journal of Innovative Management, The Academy of Management Executive, Production and Operations Management Journal, Quality Management in Health Care, and the Cornell Hotel and Restaurant Administration Quarterly. He has written several business cases that range in topics from Innovation, Innovation Strategy, Customer Experience, Customer Service, Operations Strategy, Strategic Alignment, Supply Chain Management, and Quality Management. He is a member of the Innovation Advisory Board at Ocean Spray. He also has a family-business background and sits on the board of The HJKP Educational Trust (Bangalore, India).

Dealership Innovation Guide

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