Dealership Innovation Guide - Q4 2011 by DrivingSales, LLC

4th Quarter 2011

Quarterly ranking of dealership vendors & best practice guide

p.28 People Matter and So Does Their Chatter: Key Takeaways from the DrivingSale Executive Summit by Jared Hamilton

p.23 A Look Behind the Used Vehicle Sourcing Challenge at Many Dealerships by Dale Pollak

“THE DEALMAKERS”

TELL THEIR STORY HOW THEY STAY AHEAD OF THE COMPETITION!

Dave Dariano & Dave Carach Are

LOOKING FOR A DEAL THAT THEY CAN’T BEAT!

VENDOR RATINGS r r DrivingSales.com is a Vendor Rating and Best Practice community for Dealers and Dealership Managers to connect and collaborate on dealership strategies

NEW CAR LEADS ILM CALL MANAGEMENT DMS r SEM/ PPC r USED CAR ADVERTISING WEBSITES r CRM r SEO CHAT r AND MORE...

Pain Points LK ] S V Z 9L

What â&#x20AC;&#x153;painâ&#x20AC;? are you feeling â&#x20AC;&#x201D; how to grow the business, reduce expenses, keep up with the social media scene, or ensure compliance on the many legal and regulatory requirements? NADA University offers a

These and many more critical topics are addressed in

broad selection of resources

the new Dealer Pain Points series from NADA

to support you. visit: NADAuniversityblog.com for the Dealer Pain Points and 30-Minute Meeting Guide. NADAuniversity.com to train, track, measure, and monitor with ease.

Universityâ&#x20AC;&#x201D;all at no charge. Short 2- to 3-minute video vignettes and a meeting guide provide the foundation for a productive 30-minute meeting with your dealership staff.

Straight-to-the-point videos instruct you on what to do to address the issues and opportunities facing your dealership. For more training resources, click on the PDF unique to each pain point for a listing of what is available and where to find it.

Skills + Accountability = Results

NADA U: We build champions! 2

/"%"VOJWFSTJUZ DPN t 4 th Quarte r 2 011 | DrivingSales DEALERSHIP INNOVATION GUIDE

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Dealership Executives, Welcome to the 4th quarter edition of the Dealership Innovation Guide. As we near the end of 2011, we’re paying special attention to the actions that successful dealerships are taking to keep their stores profitable and give their business a running head start as we enter the new year. As such, we’ve jam packed these pages with: t

Dealership Case Studies that highlight the actionable strategies dealers have implemented to give their stores a leg up on the competition,

Best Practice Articles written by automotive industry experts sharing tips and tactics for dealers to incorporate into their 2012 business plan, and the

Vendor Ratings Directory to help dealers learn from their peers the best performing and most preferred vendors to work with. This listing shares honest and verified recommendations of vendors by dealers so you can get real feedback from real customers.

After a successful and over-capacity DrivingSales Executive Summit this past October at the Bellagio Las Vegas, it’s obvious that dealers are confident that education is one of those very things that dealers need to be paying attention to in order to give their business the best chance to stay competitive in the market. We’re heeding that demand, which is why DrivingSales is pouring resources into training and information, such as our recent expansion of our DrivingSales University branch. To join the most comprehensive, interactive educational training that will propel your business into 2012 success, visit www.drivingsalesuniversity.com. As we roll into the new year, DrivingSales is dedicated to making sure dealers across the country are equipped with the knowledge, information, and tools they need to tackle the numbers and become the business they want to be. As always, if you have any insight or feedback into how we can assist you better, please don’t hesitate to contact me or anyone else on the DrivingSales team. We’re here to serve you, the dealers, and we’re committed to that purpose. Happy Holidays from our family to yours,

LETTER FROM THE FOUNDER: Jared Hamilton, Founder/CEO of DrivingSales.com, welcomes you to the 4th Quarter issue of the Dealership Innovation Guide! Dig in and enjoy, and don’t forget to share your thoughts online at DrivingSales.com!

“Two heads are always better than one. We’ve got the whole industry

Jared Hamilton Founder of the DrivingSales.com dealer community

www.DrivingSales.com

talking...”

DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

Thanks to our sponsors! Thanks to our sponsors!

POTRATZ

4 th Quarte r 2 011 | DrivingSales DEALERSHIP INNOVATION GUIDE

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VendorRatings LOOK AT WHAT THE DEALERS ARE SAYING: Don’t forget to rate your vendors again. You can now rate every quarter!

6 7 8 8 9 10 10 11 11 12 12 13 13 14 14

Why Vendor Ratings? New Car Leads Websites Call Management SEM - PPC DMS Database/Owner Marketing Reputation Management Search Engine Optimization (SEO) CRM Inventory Pricing ILM Chat Used Car Advertising Internet Trainers

ExpertArticles COVER STORY: Read how METRO FORD of SCHENECTADY Separates Themselves From Other Dealers

www.DrivingSales.com

16 20 23 25 28 32 34 36 40 42 44

Dave Darino and Dave Carach Are Looking For A Deal That They Can’t Beat! Bringing Mobile Into the Store A Look Behind the Used Vehicle Sourcing Challenge at Many Dealerships Foreign Cars Italia: Motivating Salespeople Through Customer Reviews People Matter and So Does Their Chatter: Key Takeaways from the DrivingSales Executive Summit Roseville Toyota Increases Engagement With Increasing Mobile Customer Base Are You Managing For Success? Honda Dealership Saves Additional 5-7 Sales per Month Open Platforms Help to Open Doors for Industry Innovators? How Used Car King Used its Mobile Website to Lap the Competition Challenging the Status Quo

DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

VendorRatings Why Vendor Ratings?

www.drivingsales.com/ratings *DrivingSales.com is in no way affiliated with Consumer Reports. 6

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Dealer Satisfaction Awards

Rankings

New Car Leads

Company

Product

Score

Dealix

Dealix New Car Leads

262.3

85%

Cars.com

NewLeadsPlus

20.84

66%

ZAG

Zag Sales Strategy

17.95

70%

AutoUSA

AutoUSA New Car Leads

.865

88%

Autobytel Inc.

Autobytel New Car Leads

.449

78%

Black Book Online Division

Activator

.293

90%

Dealercentric Solutions

Get Preapproved in Seconds

.119

100%

Kelley Blue Book

KBB New Car Leads

.109

50%

www.DrivingSales.com

Rating

Recommended

DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

VendorRatings Websites Note: MicroSites and MobileSites are rated in their own categories on DrivingSales.com.

Company

Product

Score

Rating

Recommended

Dealer eProcess

Dealer eProcess Dealer Websites 103.1

DealerFire

DealerFire Custom Websites

20.85

100%

Dealer.com

SmartSites

17.77

82%

Cobalt

Cobalt Websites

15.41

66%

DealerOn

Flex Sites

11.57

97%

Nexteppe

Websites

4.43

100%

WorldDealer, Inc.

Ultra 7.0 Websites

2.46

100%

POTRATZ

Custom Auto Websites

2.40

85%

Dealerskins

Dealer Web Solutions

1.48

71%

VinSolutions

VinSolutions Dealer Websites

1.40

79%

Drivings Force Automotive

Custom Websites

.952

93%

Naked Lime Marketing

Dealer Websites

.536

60%

eBizAutos

Dealer Websites

.491

70%

99%

Call Management

Company

Product

Score

CallSource

CallTracking

13.26

96%

Who’sCalling

3.86

65%

Callbright

Inbound Lead Tracker

1.45

92%

eLEAD

eLEAD Call Center

.438

100%

4 th Quarte r 2 011 | DrivingSales DEALERSHIP INNOVATION GUIDE

Rating

Recommended

www.DrivingSales.com

SEM - PPC

Company

Product

POTRATZ

Search and Behavioral for Web

2.31

100%

PCG Digital Marketing

PPC Management Service

1.95

100%

Dealer.com

TotalControl DOMINATOR

.959

85%

Dealer eProcess

Dealer eProcess SEM

.288

90%

The Local Search Group

Eagle Edge PPC

.155

100%

2011

www.DrivingSales.com

Score

Rating

Recommended

Only dealership employees are allowed to rate their vendors on DrivingSales.com, all submitted ratings are verified. The vendors are then scored and ranked using a weighted Bayesian Algorithm. 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. These Vendor Ratings are based solely on the aggregate of all dealer ratings submitted from October 1, 2010 to September 30, 2011.

DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

VendorRatings Dealership Management Systems (DMS)

Company

Product

Score

Rating

Recommended

Reynolds and Reynolds

Reynolds ERA DMS

49.6

56%

ADP Dealer Services

ADP DMS

29.5

47%

DealerTrack

DealerTrack Dealer Mgt System

3.26

66%

AutoSoft DMS

1.04

85%

Reynolds and Reynolds

Reynolds POWER DMS

.709

46%

Auto/Mate Dealership Systems

AMPS

.310

100%

Database / Owner Marketing

Company

Product

Score

J&L Marketing, Inc.

Sales Events

145.0

100%

@utoRevenue

46.38

96%

CIMA Systems

Complete Virtual BDC

37.23

100%

J&L Marketing, Inc.

bLinked

21.36

100 %

J&L Marketing, Inc.

Customer Pay Clinics

16.36

100 %

Cobalt

Cobalt Owner Marketing

8.40

83 %

4 th Quarte r 2 011 | DrivingSales DEALERSHIP INNOVATION GUIDE

Rating

Recommended

www.DrivingSales.com

Reputation Management

Company

Product

Score

Rating

Recommended

eXtéresAuto

Online Reputation Management

18.8

98%

DealerRater.com

Certified Dealer Program

8.95

82%

Torque Dealer Solutions

Reputaion Mangement

.361

100%

PCG Digital Marketing

Reputation Management Services

.260

100%

Search Engine Optimization (SEO)

Company

Product

eXtéresAuto

eXtéresAUTO - SEO

13.5

98%

PCG Digital Marketing

PCG Strategic Digital Marketing

12.6

98%

Dealer.com

ManagedSEO

1.51

92%

Dealer eProcess

Power PageRank SEO

1.27

100%

Cobalt

PowerSearch

.679

81%

TK Carsites

TK SEO

.170

90%

2011

www.DrivingSales.com

Score

Rating

Recommended

DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

VendorRatings Customer Relationship Management (CRM)

Company

Product

Score

Rating

Recommended

Autobase

Autobase CRM

225.9

95%

VinSolutions

VinSolutions MotoSnap CRM

15.73

87%

DealerSocket

DealerSocket CRM

13.75

88%

Reynolds and Reynolds

Contact Management

11.96

42%

eLead

eLead CRM

3.88

76%

CAR-Research

CAR-Research XRM

2.85

97%

iMagicLab

Dealer CRM

1.74

75%

The Higher Gear

Higher Gear CRM

1.48

48%

Inventory Pricing

Company

Product

Score

eCarList

TrueTarget

64.96

100%

vAuto

vAuto Pricing, Appraising Tools 18.34

98%

FirstLook

FirstLook - 360ยบ Market Pricing

1.86

100%

VinSolutions

MotoSnap Market Pricing

1.40

86%

DealerTrack

DealerTrack AAX

1.31

83%

4 th Quarte r 2 011 | DrivingSales DEALERSHIP INNOVATION GUIDE

Rating

Recommended

www.DrivingSales.com

Internet Lead Management (ILM)

Company

Product

Score

Rating

Recommended

VinSolutions

VinSolutions MotoSnap ILM

2.33

87%

AVV

Web Control

.892

70%

ADP Dealer Services

NetTrak Lead Manager

.518

52%

Dealer.com

Control Center

.374

76%

iMagicLab

Internet Lead Management Tool

.266

68%

Chat

Company

Product

ContactAtOnce! LLC

ContactAtOnce! IM/Chat

54.4

95%

Dealer eProcess

PRO-ACTIVE Live Chat

5.71

100%

Activengage

Activengage Chat

2.36

97%

CarChat24

CarChat24 - 24/7 Fully Staffed

2.17

94%

Client-ConneXion

Chat-ConneXion

.318

100%

2011

www.DrivingSales.com

Score

Rating

Recommended

DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

VendorRatings Used Car Advertising

Company

Product

Score

Rating

Recommended

AutoTrader

AutoTrader.com

49.3

72%

Digital Compass Marketing

Automotive Advertising Network 12.2

100%

Cars.com

Cars.com Online Advertising

9.12

84%

Dealix

UsedCars.com

2.34

90%

Dealer Specialties

www.dealerspecialties.com

.954

78%

Liquid Motors Inc.

Inventory Data Distribution

.178

100%

Automotive.com

Used Car Classifieds

.079

60%

Internet Trainers

Company

Product

PCG Digital Marketing

Brian Pasch

21.4

100%

DealerKnows Consulting

Joe Webb

1.15

100%

Phone Ninja

Phone & Internet Training

.747

100%

eXtĂŠresAuto

eXtĂŠresAuto - Dealer Training

.628

100%

eDealer Solutions

Jennifer Suzuki

.383

87%

4 th Quarte r 2 011 | DrivingSales DEALERSHIP INNOVATION GUIDE

Score

Rating

Recommended

www.DrivingSales.com

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DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

Dave Carach Metro Ford General Manager

Dave Darino and Dave Carach Are Looking For A Deal That They Can’t Beat! By Dave Carach

n 2004, Metro Ford in Schenectady, New York was facing some serious challenges. After 30 years in business, the explosive growth of internet marketing, and the change in our market due to General Electric eliminating thousands of jobs, we still had not created the top-of-mind awareness in our market that was needed to prosper the way we had many years ago. Our dealership didn’t truly stand out when compared to our competitors. We found that our location was virtually unknown to a lot of buyers. We knew that we were well behind the curve in taking advantage of digital advertising and the internet sales process, but had no idea where to start or how to set goals. It was my job as sales manager to find answers. The Solution: Branding Our Dealership We knew we needed help so we did what every other dealer does: hire an automotive advertising agency. That partnership lasted only about six months, mainly because it felt like the agency was just doing more of the same things we had tried previously. I knew if we really wanted to make a transformation, we could not continue doing the same thing and expect different results. It was September 2004 that we met with a firm that seemed completely different – in fact, even a little weird in what they were saying – but, we liked what we heard. They created a strategy that would grow and improve over time. Our new partnership was with Potratz, and several years later we continue to work with them, using the same marketing philosophy which began with creating an integrated traditional and digital campaign incorporating the celebrities of the dealership. Dave Dariano, our president, and I, Dave Carach the vice president, became the faces of Metro Ford. We are Dave and Dave, The Dealmakers, “Looking for a Deal We Can’t Beat.” To accomplish this, we put ourselves in television commercials, print ads and online. We’re

4 th Quarte r 2 011 | DrivingSales DEALERSHIP INNOVATION GUIDE

in all of our advertising, so people feel comfortable when they come into the dealership. They can say, “Hey I saw that guy, I know that guy, I saw him on television.” Positioning Dave and myself as the celebrities of the dealership was a progressive step at the time and continues to be; it’s something other agencies don’t do in the same style. In our industry, it’s hard to walk away from the idea that we must be selling by price, payment, rebates, and sales events. We had always focused on the offer, the hook, instead of creating awareness in a fun way. While it may be true that as a dealership we must always be looking to sell, our strategy also includes branding or “Creating Our Celebrity Status,” so when people are shopping, they shop us online and on the lot. We always underestimated the power of incorporating a consistent, branded, and unique message, but that is what has allowed us the luxury of more customers at a lower cost per sale. Part of the branding process was developing a slogan that represented Dave and me as the celebrities of Metro Ford. We adopted “We’re Still Looking for a Deal We Can’t Beat.” We do a lot of creative advertising around our theme. Dave and I are the sometimes quirky, always outgoing and sometimes (we think always) funny guys of Metro Ford. We have done skits beating deals ranging from running a lemonade stand, fishing for a deal, hunting for a deal, shooting basketball for a deal, and even cooking a pig for a deal. We can be found on the sales floor most days supporting our sales team and interacting with customers. People know who Dave and I are through the humorous ads that have been produced over the years. Customers know we’re “Still Looking for a Deal We Can’t Beat,” which gets our call to action heard, but in a slightly different way. After all, that’s what works...being memorable! Keeping the brand message consistent was not a priority before. Instead, like most dealers, we were focused on one-off sales events, but now we are all about www.DrivingSales.com

It is all about having fun with your marketing strategy, being consistent, staying true to your brand standards, embracing all the tools that are available, and being different in your message delivery. maintaining and developing new ways to impress our dealership’s brand message onto the public. The Integration Digital marketing has probably been our biggest leap ahead. Embracing technology is a vital step in being the answer to your customers’ needs. We had never really considered Facebook and YouTube as part of our advertising plan. We quickly built up our following on various networks. If it’s new and it’s digital, and if it fits into our budget, we do it! We are not gadget freaks or tech guys, but when that call comes in from Potratz and they say we are doing video ppc, video this, video that, text, behavioral, we say, “Great! Let’s do it!” Our latest venture has been text marketing and mobile marketing and it seems like we have hit on something that is working like a charm. We have seen a lot of opportunity for a more integrated campaign for our service department through the use of text marketing and mobile marketing. I know it’s a factor in our fixed-ops being up 18 percent this year since we are now communicating with people the way

ia Dave Dar www.DrivingSales.com

they want to communicate and building interaction. Mobile text coupons are receiving five to seven times the redemption rate of traditional coupons we run in the newspaper. We have found having a mobile strategy essential because it has increased our traffic weekly. It’s incredible the impact mobile marketing has had and can only imagine what it will become. We have a strategy in place to continue building our 100 percent opt-in mobile text database, which includes point of sale signage in the service lane, customer waiting areas, wash rooms, vending machines, repair order fliers, entry doors, showroom sales tables and on the lot – wherever we can get people to sign up! We have added our text-in code and a QR code, and we use only 100 percent opt-in list to avoid fines that have been handed down to companies much larger than ours in the past. It isn’t only mobile text marketing that has made the difference, but mobile marketing has been a great tool for driving traffic to our websites. In March 2011, we were receiving 2 to 3 percent mobile visitors to our websites. Now we are seeing visits to our site at 12 percent and returning visits as high as 23 percent every month. It was not long ago we would see people with the newspaper

Dave C a

rach

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Call: 866.682.8908

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on the front seat of their car but now they walk in with an iPad. A technology that Potratz has had us using for a couple years that we see and hear a lot about from customers is Retargeting. I didn’t have the slightest clue what it was at the time but now it is a staple of our marketing. Retargeting is based on behavioral and search terms of a car shopper visiting our

an average of 34 percent. We followed Paul’s guidance and built a business development center that is primarily focused on converting our Internet leads into appointments. When the conversation with the customer starts to discuss details about rebates or price, the customer is passed to a sales person, but the BDC follows the process to continue the quest for an

“Maintaining a clear, constant and concise brand message enables a customer to see your products as the answer to their needs.”

website. This strategy has definitely increased our brand awareness. The bottom line is we have more traffic to our websites, more people seeing our ads, clicking our ads, watching our videos. Even when I am at the grocery store we are selling more cars, more people are talking about us, more people knowing who we are outside of the dealership. It’s all about awareness and being different than any other dealer. The stats do show that 70 percent of people who are retargeted are more likely to convert on our website or call us. That makes it worth doing if you ask me. We created a dedicated Internet department and Internet team focused specifically on developing our e-commerce business. The Internet department had to create a new system for handling all of the new leads we were generating from our traditional and Internet branding campaigns. Sales increased by www.DrivingSales.com

appointment. If the customer visits the store and does not purchase, the lead goes back to the BDC for continued interaction. We never mark a lead bad if the contact info is correct...We believe in lead or customers for life in our process, we will win them over one day! Measurable Success Over the years we have grown to understand how maintaining a clear, constant and concise brand message enables a customer to see your products as the answer to their needs. By having a set marketing budget, a clear strategy utilizing both traditional and digital media, and marketing Dave and myself as the celebrities, we have increased our gross profit and total sales of used vehicles by 53 percent. This simple marketing philosophy worked to our advantage, while our advertising budget cost per unit decreased. By 2009, we were

able to claim our position as the fourth ranking certified pre-owned volume dealer in the New York region and we firmly believe in turning inventory fast. Today, we are only 3 units behind the number one spot and plan on securing the position of largest CPO dealer in the New York region. Sales have seen double-digit growth year over year, gross on the front and back is up and advertising cost for sales and service is below the national average at $375 per vehicle. It is all about having fun with your marketing strategy, being consistent, staying true to your brand standards, embracing all the tools that are available, and being different in your message delivery. I am so excited for 2012 and I’m confident that the continued integration of our traditional, Internet, and mobile campaigns for both fixed-ops and sales will take us to higher profits. We will keep saying it “We are Still Looking For A Deal We Can’t Beat!”

To discuss this article and to view comments by others, please visit DrivingSales.com/innovation ___________________________ Dave Carach is a General Sales Manager at Metro Ford. Dave has been with Metro Ford for 20 years Dave Darino is aGeneral Manager at Metro Ford. Dave worked his way up from maintanence to General Manager in the span of 24 Years

DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

Dennis Galbraith Revenue Guru President, Founder

Bringing Mobile Into the Store by Dennis Galbraith

f you’ve only been thinking about mobile as a way to get shoppers into the store, you are missing the best part. Retailers across a multitude of industries are putting tablets or smart phones in the hands of their frontline sales people. Putting mobile devices in the hands of salespeople makes sense when: 1. Products are complex 2. Features vary widely from product to product 3. The purchase decision is infrequently made and has a big impact on the household 4. Customers generally start their shopping process online 5. Customers often leave the store to return to their online shopping process or another store Automotive retail fits all these criteria, and dealers are responding. Phoenix, AZ dealer, Roger Camping, was an early pioneer of bringing the iPad into the showroom, but many dealers are now embracing this move. Some are finding resistance to change among their sales teams, but the changes appear to be paying off. Mobile Beats Memory Many shoppers are distrustful of salespeople, afraid they will say whatever they need to in order to close a deal. Truth be told, I occasionally gave false information to shoppers unintentionally, and thousands of salespeople continue to have that problem today. It is hard to remember everything about these complex products. Nonetheless, wrong is wrong. Using a mobile device aids the memory of the salesperson and greatly adds to their credibility. There is still something much more credible about

4 th Quarte r 2 011 | DrivingSales DEALERSHIP INNOVATION GUIDE

that which is written down than that which is said off the cuff. Mobile Trumps Be-Backs At most stores, be-backs are more common than sales. In fact, my good friend Chuck Dapoz crunched some numbers using J.D. Power and Associates data to conclude that of those people buying new vehicles last year, they delivered over

“Using a mobile device aids the memory of the salesperson and greatly adds to their credibility.”

26,000,000 rejections or be-backs on their way to roughly 11,000,000 actual purchases. When you factor in all the shoppers who turn from our new vehicles to someone else’s used vehicle or to exit the market altogether, the picture looks even worse. The solution to be-backs is mobile. Keeping shoppers in the store is the most important objective you can address with your mobile strategy. A be-back signals one of three things: 1. The customer is going to exit the market altogether. 2. The customer is going to go to your competitor’s store. 3. The customer is going to go back online. The best answer to a customer saying they will be www.DrivingSales.com

back is “Let’s go together.” With tablet computers in the hands of your frontline salespeople, you can invite your be-backs to look at other inventory outside the store right then and there. This gives your salespeople an opportunity to point out the differences between your vehicles and competing vehicles. It also gives you an opportunity to point out the differences between the online reputation of your store and that of your competitors. I recommend you do this in a tactful manner that enhances your stature as a trusted advisor. Just the fact that your store is not afraid of the transparent marketplace is a positive message to the shopper. Your team may need some training in this area, and good trainers are already working on best practices for using mobile at the store. Of course, even tablets that just run off your store’s WiFi have an expense associated with them. However, when you think about how much you are spending to lure shoppers into your store, it makes sense to spend a little on a great tool for keeping them there. Tablets Are Sharing Devices Regardless of how the title is registered, a single person does not make most vehicle purchases. Often, someone else is a co-decision-maker or a strong influencer. In many cases, they have already shared information online before coming to the store or looked at it together on a tablet. Smart phones are more difficult to share, because of the small screen size and laptops are not hand-held. That same notion of sharing the tablet screen easily transfers into the showroom when working www.DrivingSales.com

with the salesperson. Many shoppers take a clandestine peek at their smart phone while at the store, but this puts the salesperson at an informational disadvantage. The chance of completing a sale is enhanced when the salesperson is able to see what the shopper sees, see the shopper’s reaction, and respond to it using information online available to all parties. Generally speaking, smart phones help retailers answer customer questions quickly, but tablets help retailers engage the customer and the shopper together. The Merger of Technological and Human Touchpoints Without mobile devices, walk-in customers are forced to transition from purely technological touchpoints online to purely human touchpoints in the store. Worse, they are working with a salesperson that, until now, has not been a part of their sales process. Having the customer bring the salesperson up to speed by showing them what they have been interested in online is an excellent stating point.

To discuss this article and to view comments by others, please visit DrivingSales.com/innovation ___________________________ Dennis Galbraith is the author of Sales Integration. Through his company, Revenue Guru, Dennis delivers consulting, training, and analytical services to dealers and their vendors. Previously, Dennis ran the automotive internet division of J.D. Power and Associates and was V.P. of Advertising Products and Training for Cars.com. He earned an MBA from University of Southern California and taught marketing for Embry-Riddle Aeronautical University and NADA Academy.

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Turn more data points into easy decisions. Respond faster to ever-changing markets. Automatically know what to pay to purchase cars profitably. See the exact location of the vehicles you need, anywhere in the U.S. The time to stock your inventory has passed. Now is the time to Provision it. To learn how Provision is changing the way dealers source used vehiclesâ&#x20AC;Ś

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Dale Pollak

Chairman, Founder vAuto

A Look Behind the Used Vehicle Sourcing Challenge at Many Dealerships by Dale Pollak

’m willing to bet that when a dealer or used vehicle manager says they have a “used vehicle sourcing problem,” they really have three problems, not just one.

This is because these dealers and used vehicle managers haven’t yet come to recognize the realities of today’s volatile and Internet-driven used vehicle marketplace, even as they struggle to find vehicles and improve their used department’s sales and profit goals. Collectively, there are three problems that underscore the lack of what I’d term a “provisioning strategy”

vehicles than today’s marketplace requires. This is because physical auctions are losing ground to online auctions and bidding sites as the “hot spot” for sourcing wholesale units. Just a few weeks ago, Toyota Financial announced a goal of using online auctions for all of its off-lease and other used vehicles. This is another sign of a broader trend that will compress the scope of vehicles available at physical auctions. Add in the pressure from dealers and used vehicle managers doubling-down on these auctions to find vehicles, and it’s not difficult to see why many used vehicle managers and buyers return from auctions emptyhanded.

“In today’s marketplace, there’s no room for pride or prejudice in what a dealership’s used vehicle department could and should sell” for managing their used vehicle departments and sourcing vehicles. That is, these dealers and used vehicle managers have a less-than-holistic view of their markets and its opportunities, and less-thanefficient technology and process in place to do the job well every day. The three specific problems behind today’s sourcing challenge for many dealers and used vehicle managers are: 1. Where they look: Spending more time at physical auctions won’t cut it in today’s environment; nor will sending a larger pool of buyers out to a greater number of auctions. Both of these sourcing tactics are in the “comfort zone” of most dealers and used vehicle managers, but they are far less efficient and productive approaches to finding used www.DrivingSales.com

In fact, this movement from physical to online auctions and bidding sites is the primary reason vAuto has integrated inventory access and clickto-purchase functionality from all major auctions into our Provision engine. As the saying goes, “the market waits for no one,” and it’s this kind of real-time used vehicle sourcing power that will provide greater efficiency at finding the “right” vehicles for a dealership. 2. What they look for: Many dealers and used vehicle managers still operate with a “go with what we know” approach to used vehicle sourcing. It’s not a bad instinct, but it’s not as “market holistic” as it could or should be. In today’s marketplace, there’s no room for pride or prejudice in what a dealership’s used vehicle department could and should sell. The market speaks all the time and, over and over

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

again, it tells us “the car is the star” with today’s buyers. As used vehicle retailers, our job should be to know the individual vehicle “stars” that are right for our dealerships, irrespective of make or model. Of course, the “star power” at every dealership is different. I can see why a Mercedes dealership might not want to retail used Kias. However, this should be a conscious decision, based on the store’s unique inventory turn and profit goals and, to a lesser extent, its image as a used vehicle retailer. If I’m a Ford dealer, though, and Kias are hot sellers in my market, I’m hard-pressed to think of any reason why I wouldn’t want part of that retailing action (assuming every Kia we acquire meets our inventory and profit parameters). From a sourcing perspective, many dealers and used vehicle managers struggle to find inventory because they haven’t assessed all market opportunities and go fishing with a net that’s not big enough to catch everything they might. Once a dealership gains an understanding of all vehicles with “star power,” it can begin to use market intelligence and (yes) intuition to spot the vehicles with “star potential” that other dealers overlook. 3. How they look. If you ask, most successful dealers and used vehicle managers all share an “a-ha!” moment when it comes to their used vehicle departments. The moment follows recognition that a) they’re banging their heads against the same brick wall and b) they might be better off if they took a different approach to become more efficient and effective at managing their departments. The different approach is often

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the adoption of the “provisioning strategy” I mentioned earlier. It encompasses the need for and use of tools, technologies, and processes that account for the vast array of potential “star vehicles” and the need to more efficiently source those vehicles in online spaces to get the units before someone else does. The transition to this strategy and its requisite technologies and processes isn’t always easy and it isn’t right for everyone, especially those who lack the ability and interest to adapt to new ways of doing a very old business. But for those who can make the shift, there’s a significant payoff in efficiencies and improved profitability—what I like to call “maximum vitality” in used vehicle operations. So when someone says they’ve got a used vehicle sourcing problem, I’d suggest a deeper dive to determine if they’re looking in the right places, pursuing units with true “star power,” and using the most holistic, efficient and technology-enabled approach to find the vehicles they need.

To discuss this article and to view comments by others, please visit DrivingSales.com/innovation ___________________________ Dale is the chairman and founder of vAuto, Inc., a company that provides retail auto dealerships with a better way to appraise, manage and price their pre-owned inventory. Prior to founding vAuto, Dale was the VP of Sales and Business Strategy at Digital Motorworks and has over 25 years dealership experience - including 12 years as a Cadillac GMC dealer in Illinois.

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Jeff Francisco Foreign Cars Italia General Manager

Foreign Cars Italia: Motivating Salespeople Through Customer Reviews By Michael Page

onsumer reviews have become a central component of building shopper confidence and creating differentiation, whether a customer is ordering a pizza or selecting their primary care physician. We’ve found on Cars.com that visitors who click on consumer vehicle reviews spend twice as much time engaged on our site and are four times more likely to submit a lead compared with users who don’t read vehicle reviews, for example. While Dealer Reviews on Cars.com are still relatively new to the market (the official launch was in late July 2011), preliminary data illustrates a similar trend – visitors who read Dealer Reviews are also four times more likely to submit a lead than those who don’t read reviews. The story is echoed in anecdotal feedback we’ve received from dealers, including Foreign Cars Italia in Greensboro, N.C., part of Paramount Automotive Group. The secret to Paramount Automotive Group President & CEO Benny Yount’s success in the automotive industry isn’t really a secret. In fact, it’s clearly stated on the “About Us” page on the dealer group’s web site. “First, you must be profitable, and second, you must have great customer and employee satisfaction,” the page reads. The first point seems to be well in-hand. As a private owner group, Paramount keeps its financial results close to the vest, but one doesn’t build a thriving, seven-dealership empire over the course of 36 years and five recessions without knowing how to turn a profit.

employees. Jeff Francisco, Yount’s deputy in charge of Foreign Cars Italia, has been among the most innovative of Paramount’s management staff in ensuring customer and employee satisfaction. In fact, his team’s recent foray into online reputation management may add a whole new dimension to the dealer group’s approach. Francisco and his BDC manager, Natalie Willard, initially paved the way for Dealer Reviews buyin among their sales staff by integrating it into the dealership’s spiff program. The program awards points for completing important business development practices, including tasks in the CRM system, hitting certain sales targets and, for a limited time, soliciting reviews. The three salespeople with the most points at the end of each month receive cash and other prizes, and as is the case with many similar programs throughout the industry, competition for the “BDC MVP” title is heated. While effective in the short-term, Francisco and Willard knew that implementing a comprehensive strategy for reviews and making them part of the dealership’s culture would take more than offering a short-term incentive.

Nor can such an enterprise be built without the confidence of your customers and your www.DrivingSales.com

DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

First, Francisco has set the tone at the top – he personally responds to many of the reviews posted on Foreign Cars Italia’s review page and often asks customers for their review when thanking them for their business at the point of sale. He also monitors his store’s

a month, Foreign Cars Italia grew its volume of reviews on Cars. com to more than 60 reviews with an average rating of 4.9 stars. Individual salespeople were named in more than 50 of those reviews, and many reported that some new prospects had begun asking

Francisco took immediate action, working with his managers to understand the full sequence of events and to identify the customer. The team has since resolved the issue, earning back the customer’s confidence and, hopefully, his business.

“[They] have encouraged new salespeople with shorter track records to solicit reviews from customers even if the experience didn’t result in a sale, helping them build their reputations as knowledgeable, customer-focused sales professionals.”

reviews daily, celebrating good reviews with his staff and quickly checking into any review that isn’t 100-percent positive. From a BDC perspective, Willard took time during sales and service meetings to educate the team on how to build review volume, as well as to illustrate how individual salespeople can utilize reviews to build their own visibility and close more business. The e-mails thanking recent purchasers for their business include an invitation to complete a review about their experience via a link to Foreign Cars Italia’s Cars.com review page, and the sales staff often includes that link in e-mails sent to previous customers as a way to keep in touch and build their own reputations. Francisco and Willard have also encouraged new salespeople with shorter track records to solicit reviews from customers even if the experience didn’t result in a sale, helping them build their reputations as knowledgeable, customer-focused sales professionals. The sales staff quickly saw the results of their efforts. In about 26

for them by name – a powerful differentiator in the world of highend car sales, where reputation and relationships are kings. Reviews were making a contribution to both the dealership’s reputation and the salespeople’s personal brands, almost overnight. Even the few reviews that weren’t 100-percent positive proved their value. One reviewer, a repeat customer who traveled three hours to reach the dealership, brought his car in for multiple services, and due to a miscommunication between two departments, his car wasn’t ready for pickup when promised. The customer’s previous sales and service experiences had been stellar enough to temper his review – despite his concerns over his recent visit, he rated his experience 4 stars and remarked, “all the guys here are great – very personable, polite and know the cars well.” He then went on to provide constructive feedback about his service experience, suggesting better communication between departments and with him.

“We put an incredible amount of effort into being perfect, but unfortunately, everyone makes mistakes,” Francisco said. “The important thing is that the review gave us the opportunity to make things right. Our average rating is high and the comments from our customers overall are extremely positive. That gives me confidence that our processes are sound and we’re making our customers happy.”

To discuss this article and to view comments by others, please visit DrivingSales.com/innovation ___________________________ Michael Page is the Vice President of Solutions at Cars.com. Page began his career with Cars.com in 2000 as an affiliate sales manager, gaining firsthand experience with the internet marketing challenges dealers face. He became vice president of affiliate sales in 2005. Prior to joining Cars.com, he worked in media sales and marketing.

Taking the feedback to heart,

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www.DrivingSales.com

DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

Jared Hamilton CEO, Founder DrivingSales.com

People Matter and So Does Their Chatter: Key Takeaways from the DrivingSale Executive Summit by Jared Hamilton

his past October, hundreds of the nation’s most progressive auto dealers converged in Las Vegas for the 2011 DrivingSales Executive Summit (DSES). For those of you who were able to attend, thanks for helping to make it a HUGE success! We thank everyone who participated including our speakers and panelists, contestants, attendees, sponsors, as well as those who got involved by watching the live stream and sharing on Twitter (#DSES). The event was roiling with progressive thinking and tactical battle plans, but it is impossible to summarize in a few words – I could write pages about the CEO panel alone, which featured top technology leaders discussing their vision for the future. I mean, imagine: 5 of our industry’s leading decision makers with the final say over how to maneuver and innovate with a substantial portion of dealers’ marketing or operations dollars, all up on stage and open to an on-the-spot question and answer session from a room full of dealers. The back and forth discussions were just as expressive as the awkward moments of silence. They touched on everything from open platforms to metrics and how measurement should be the driver in both your processes and how you spend your money. They also responded to questions on differentiating between touch points and actual influencers in the car buying processes. Most importantly, they all, in one fashion or another, agreed that the customer experience is what matters. Of course, each one of their companies is trying to attain a higher customer experience education in their own way, but the fact that such an idea remains at the top of their list indicates that we’re in good company with the CEOs of these technology companies and that they have our best interests at heart. What a session. I could just as easily go on and on about Dennis Galbraith’s amazing Internet workshop that was so

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hugely popular it left us scrambling to find more chairs to accommodate the audience, or Aaron Strout’s keynote on location-based media, not to mention the tactical learnings on automating inventory, selling accessories, maximizing SEO and mobile marketing and website performance and so on. That doesn’t even include our contests or the awards we give out, such as the Dealer Best Idea Award and the Innovation Cup. If you couldn’t make it to DSES or want to brush up on what you saw, I recommend that you visit DrivingSalesTV. com to watch these sessions as we post them in the months to come.

“Social media sends us back to small town living…where a personal referral means everything.” But of course, we don’t have pages upon pages to delve into the amazing content presented at the DrivingSales Executive Summit, so instead, I’ll use this space to focus on one very inspiring attendee, and two (of many) key takeaways from the conference: 1. People matter, and 2. So does their chatter. We learned from Rob Seifker of Zappos - a hugely successful business whose foundation is customer service - and the extraordinary Gary Vaynerchuk, who rocked the house with his thoughts on switching from a customer service department to a ‘thank you’ department, that if we don’t start looking at our customers as people, we might as well be looking for a new business to go into. Gone are the days

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where customers are just numbers and it doesn’t matter if they don’t return a second time, because there’s millions more out there to attract. Social networking has closed that gap and humanized the Internet. Real

Dealer.com demonstrates that the evidence of social media doesn’t lie in a couple of hunches or in the touchy-feely-create-relationships-for-the-greater-good mentality. This is hard data that shows that people are

“ I have no interest in social media because it’s cool; I don’t give a c*#p about Twitter, or Facebook or FourSquare. The only reason I care is that social media sells stuff…” - Gary Vaynerchuk at DSES people are on the Internet and they’re talking. And, if we don’t start listening to what those people are chatting about across the social web and where they are interacting, we might as well throw in the towel, because guess what folks? Social media does matter. One of the summit’s most startling moments was when Gary Vaynerchuk asked for a show of hands of people who, a year or two ago, said they would never be on Facebook; then a show of hands of how many of those people are now on Facebook – and guess what? Every single hand was up. That simple show of hands validated what Dealer.com’s groundbreaking social media study, released at the event, revealed about the impact of social media: 38% of new vehicle shoppers used or will use social media to research their next vehicle purchase; 41% of those added a brand or model to their consideration because of a post, and 28% said a post caused them to add a dealership to their consideration, and one in four use social media postpurchase to broadcast their purchase and ownership experience. Social media sends us back to small town living, writ large through the Internet, with all the interaction and intimacy of human contact that it implies…where a personal referral means everything. www.DrivingSales.com

talking with each other and influencing each other all through social networking. We started DrivingSales.com not because we wanted to be in ‘social media’ but because we wanted to use digital media to connect our industry, to create community or, as Gary Vaynerchuk put it, to join the cocktail party… without the cocktails and fancy clothes, but with all the networking and social interaction. It is a simple, basic human imperative to connect and that is all social media is. The Internet has simply facilitated that connection, which is why I find it so interesting that so many jump to be either dismissive, or to overly tout the cool factor, of what is simply a channel, albeit today’s most compelling and relevant one. Gary Vaynerchuk relayed the message perfectly, as evidenced by the overwhelming standing ovation of nearly 500 people: “I have no interest in social media because it’s cool; I don’t give a c*#p about Twitter, or Facebook or FourSquare. The only reason I care is that social media sells stuff… And the people in this room will be out of business unless they understand this.” In the early 2000s, I traveled the country interviewing dealers and automotive professionals about how the Internet was impacting their business. I found many DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

who were already using the Internet to ‘help them sell stuff,” but there were still those who felt that they if they ignored the Internet, it would go away. Those dealers ended up being the ones that went away, while the Internet stayed. Which brings me to perhaps the most inspiring person at the summit: 23 year-old Grant Gooley, a digital marketing manager for a Toronto dealership who paid his own way to get to Vegas and who stayed at one of Vegas’ more ‘economical’ hotels, taking the bus to the Summit each day. He was on a mission to prove social media ROI - and brought a video of sound bites from the smart and well-meaning folk at his dealership that had me spinning back to the antiInternet talk of the nineties. Here is a sampling: “I don’t understand how social media would help sell a car...You can’t really sell a car with the Internet...I don’t use Facebook because people come IN to the dealership…It is hard to gain rapport and trust through typing. I haven’t used social media because those people I could reach out to I already speak to on an everyday basis…” This is not to ding a very successful dealership in Toronto, nor to in any way be prejudicial about our very progressive neighbors to the 30

2011 Innovation Cup Winners

Grant devoured at the DrivingSales Executive Summit.

Grant is young, eager, energetic and passionate and he knows that to survive, dealerships must continue to focus on how best to reach the people that are their customers, and where to find, understand, and interact with them – and how to thank them. This young man is our industry’s future and we had Left row: AdvantageTec, better pay attention Cars.com, cDemo to it. Spending three days with the most Middle: 2011 Winner progressive dealers – DealerSpecialties and seeing the face of Right: MotorLot, the future in Grant DealerTrend -- left me truly excited about what will come north. I believe that what Grant next for all of us … and the is hearing is what many young ways in which digital media people starting in dealerships are and coherent rational tactical hearing from management and thinking will bring us all an even sales people across this country more prosperous 2012. To see today, each somehow expressing Grant’s video go to http://www. their dilemma just as Grant’s drivingsalestv.com/2011/10/ general manager did: “Can I grants-journey-to-the-summithonestly say that it has generated and-beyond/ sales? No I can’t. I don’t want to be bothered with it …it is the generational swing we have to be ___________________________ ready for which is you: the teeny-boppers…” What I Jared Hamilton, founder and CEO of love about this DrivingSales.com, is often described dealership is as one part dealer operator and that they were one part tech geek. He has over 10 all willing to years of dealership management go on camera experience in addition to his award about social winning entrepreneurial record. Jared media and is a highly acclaimed international participate in speaker educating audiences across a project that the globe about capitalizing on the is based on, Internet’s opportunities and how to invest and implement technology and bound to solutions inside businesses. be shared on, social media - and I am confident that they will be receptive to the information that

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DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

Ben Anderson

AutoMotionTV President

Roseville Toyota Increases Engagement With Ever Increasing Mobile Customer Base by Ben Anderson

obile Movement

With U.S. Smartphone users now totaling 95.8 million according to CTIA, Roseville Toyota’s Internet Director, John Roth, wanted to bring his dealership to where the customers are. “People are changing their method of connection. If you’re not ready for the change, you’re going to lose that business,” stated Roth, “If you think people are going to look at your dealership from their home computer, you’re wrong.” Recent reports by mobile analytics company, Flurry, emphasized why Roseville put a priority on targeting mobile users: 1. Smartphone households earn $22k more than the average U.S. household.

3. The largest percentages of Smartphone users are between the ages of 18-24 and 35-44 years of age. 4. The average Smartphone user spends 9% more time using mobile apps than the Internet. Mobile Strategy Roseville implemented a mobile website to establish a presence in the mobile market, but the dealership wanted to implement a tool that would better maintain relationships with their customers postsale. Roth implemented an app because it is “sticky” compared to a mobile website. Changing consumer behavior during the product research stage also influenced him. He expressed, “In the next 1218 months, 25% of customers will view dealership websites from a mobile site or mobile app.”

Once a purchase is made, Roseville encourages customers to download the dealership’s app to their mobile device “sticking” the app to the home screen of customers’ phone. Roth constantly modifies the app to adapt to customers’ needs. Some of these features include Engagem ent roadside assistance, service scheduling, and coupons. APPS

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During a discussion of leveraging apps for the fixed operations side, Roth stated, “It is about selling cars, but I believe we’re experiencing a paradigm shift in our business.” He continued, “The front end of our business is service. If you can create a great app that causes people to come www.DrivingSales.com

“Its not just about the purchasing process. I don’t want them to buy a car at our dealership and then forget about us, if you can make the customer loyal to the brand AND you as a dealership, you’ve got another car sale.”

back (i.e. features such as roadside assistance, service scheduling, coupons) then you are building the relationship with the customer right up front.” Roth modifies Roseville’s app on a regular basis in order to provide customers convenience and incentives. Long-Term Value Roth didn’t want to just create a new lead generator. He wanted to create a mobile presence that added long-term value to the customer/dealer relationship. A mobile app creates this value because, if it’s a quality app, customers have reason to keep it on their phone, which is one of their most personal devices. The app allows the customer to interact with your brand on several levels during several occasions, on the go or at home, catering to their automotive needs. Roth explains, “Its not just about the purchasing process. I don’t want them to buy a car at our dealership and then forget about us,” he continued, “If you can make the customer loyal to the brand AND you as a dealership, you’ve got another car sale.” Enhanced Product Interaction Roseville believes their app provides an overall better purchasing experience. The app is a tool that displays inventory in a manner that utilizes the latest technology – an enhanced interactive experience that today’s consumer desires. “People are visual, they don’t like to talk numbers,” said Roth. He added, “An app allows the customer to interact with the product through video and images – a much more personal experience.”

knew in order to be successful with our app we had to develop a strategy and keep working with it.” The results speak for themselves. While total traffic on Roseville’s traditional site rose only 37%, mobile traffic rose 358% after the addition of the Roseville Toyota app. Roth summarized, “The app was the only major change we made during this period to our mobile strategy and after seeing these types of results I believe a mobile app is exactly what we need in this industry.” What’s next for Roseville Toyota? Leveraging the push notifications feature on their mobile app. Roth plans to use push notifications to reengage customers and bring them back to the dealership through specific targeted messages. Notifying customers that new inventory has arrived, sending coupons for service discounts, and offering incentives for visiting the dealership are just some of the ways Roth plans to engage with customers through push notifications on the Roseville Toyota app.

To discuss this article and to view comments by others, please visit DrivingSales.com/innovation ___________________________ Ben Anderson is the moderator for “Mobile Marketing and the Dealer”: A weekly video series interviewing key influencers in the dealership market on mobile marketing best practices. Ben is the president of AutoMotionTV and a nationally known marketing entrepreneur.

App Results Roth’s experiment with mobile apps has paid off. “We www.DrivingSales.com

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Shaun Raines Executive Director DrivingSales University

Are You Managing For Success? by Shaun Raines

s a dealer in this postmodern world, you’re not on a playing field; you’re on a battlefield! The difference between success and failure is most often found within decisions made by managers and the vision of your leadership.

Managing The Dealership Every dealership needs to take an honest look at the way they are managed. Thousands of dealers operate with blinders on, which always leads to disappointment if not complete business loss. This mentality actually avoids management and has no chance against the Godzilla-sized problems facing every dealer in the country right now. A great question to ask is, “Whose hands are on the wheel?” I’ve been in far too many dealerships that have a really great salesperson working as a manager. NEWS FLASH: An excellent salesperson does not equal an excellent manager! The best manager might not be able to sell their way out of a wet paper bag and that’s okay! Maybe this challenges your way of thinking about management, but that’s okay too… you reserve the right to change your mind when presented with new ideas. Managers, The Good and The Bad Managers make big decisions. Hiring and firing decisions, vendor decisions (who to keep, who to cut, who to add), advertising and marketing decisions, decisions on what to buy at auctions and pricing used inventory, decisions on how to process incoming internet leads, website decisions, decisions on training and education initiatives and so on and so on. Poor managers make decisions based on instinct alone, which is avoidable ignorance. A bad manager has no idea what his or her employees are truly capable of and how to motivate them. When a

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manager only evaluates sales people based on how many vehicles they sell, they fail to identify the reasons why they sold that number of vehicles in the first place. If you don’t know why Johnny-Sales-Guy only sold five cars this month, you might need some management-skill improvement. Bad managers don’t recognize or even see the need for tools that track sales efforts; they don’t know how to determine the value of their vendors; they don’t understand what advertising and marketing choices return the best results; they don’t know what their ratio is between their showroom traffic and their internet traffic; they don’t know what makes a good website (or even know why their website exists); they don’t know when they need training; and they don’t know how to hold trained employees accountable. Managers such as these should not be managing in today’s dealership. Great managers, of course, do all of the above well because their experience, knowledge, abilities, and talents match the needs of the position. They know the strengths and weaknesses of those he or she manages and they will position their employees to play to their strengths, NOT their weaknesses. A great manager knows what days showroom traffic is at its peak and cross-trains sales people for traditional showroom sales as well as Internet sales. A Great manager tracks salespeople’s response times, followup discipline, appointment setting ratio, closing ratio, and uses data to help the dealership thrive not just survive. Again, good management is a dilemma for many dealerships because stores are being managed by people whose greatest strength is not managing. Helpful Hints and Encouragement t Choosing to keep an employee should be based on the fact that their abilities, strengths and talents match your needs and that they www.DrivingSales.com

! W NE

Internet Manager 20 Groups

NADA offers a broad selection of resources to support you, visit: NADA20group.org If you would like to join one of these elite groups of dealers; or call 1.800.557.6232, Option #4 NADAuniversityblog.com for the Dealer Pain Points and 30-Minute Meeting Guide. NADAunversity.com to train, track, measure, and monitor with ease.

are well utilized to make your business successful. Establish an employee rating scale (i.e. “Outstanding,” “Exceeds Expectations,” “Meets Expectations” and “Needs Improvement”), and then MANAGE your staff toward success or out of your dealership. t Keep and/or add vendors that increase sales conversion. Now more than ever, vendor choices need to be based on ROI. A good vendor will stand behind their product or service by not forcing long-term contracts. Having the best tools available is useless if there is no proven process for them. t Make cuts in places like newspaper, television, and radio. If you spend more than $5K a month in any of these areas, separately or combined, www.DrivingSales.com

NADA 20 Group programs offer a variety of meeting formats to fit your needs, and the new online composite is make-specific, matching up precisely to your manufacturer's financial statement. We work with you to identify a group that supports your business goals to ensure a non-competitive grouping by volume, geography, travel preferences, and budget.

"In all the years I've attended NADA 20 Groups, I've yet to come home without an idea that was worth the cost of attendance." — Jeff Brindley, Roush Honda — Westerville, OH

sharpen your axe and start swinging it! t Manage your processes or you will make bad decisions. If you don’t know how to effectively communicate with your customers (especially online), you will not be able to identify good leads vs. bad leads. You won’t know why one CRM tool fits your business needs vs. another. Solid processes give you critical management tools like visibility, accountability, and responsibility. t If you are the Dealer/Owner/ Dealer Principle, do some selfexamination related to your leadership skills and abilities. If you aren’t the one casting the vision for how the business moves forward, who is? A leader must exist. Properly managing your people

and processes is one of the biggest keys to your dealership’s success. Just signing-up for the latest and greatest product or service will do nothing to help you if the wrong people work for you or if you have the right people in the wrong roles. Dealership success stories always have two things in common, great management and great leadership.

To discuss this article and to view comments by others, please visit DrivingSales.com/innovation ___________________________ Shaun Raines is the Executive Director of the DrivingSales University. Before joining DrivingSales, Shaun was the Director of Automotive at ReachLocal and founder of Dealer Advisor. With 20 years of Automotive experience covering sales, parts, service and all things internet, Shaun delivers relevant presentations with a unique mixture of knowledge, conviction and humor.

DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

Sheila Wenz CallSource.com

Honda Dealership Saves Additional 5-7 Sales per Month by Sheila Wenz

ay Honda has been the largest Honda Dealer in Cleveland, Ohio for the last eleven years. It has consistently ranked first, second or third in a five state region out of 110 other stores.

The dealership is also an eight-time recipient of Honda’s President Award, the most prestigious honor given to a dealership for outstanding sales and service satisfaction. Mark Lyon has been the General Manager at Jay Honda for fifteen years. He attributes their success to a commitment to making customer service and convenience their top priority. “We’re a progressive, full-disclosure store,” says Lyon. “If a customer has a question or needs any kind of assistance, they don’t even have to come in. We’ll get in touch with them on the phone, email, fax…whatever makes it most convenient for them.” Jay Honda has close to forty staff members answering the phones. Recognizing the value of monitoring incoming calls to qualify leads and stay on top of customer inquiries, Lyon began using a call lead management system in 2009.

From the moment the number is dialed, the system captures valuable information about every call to a dealership, reporting the lead in real time. It automatically logs each caller’s information including: t Lead Source (print or web) t Call Result (was the call answered, busy, abandoned, etc.) t Call Duration t Caller’s phone number t Caller’s name and address when available t Is the call for parts, sales or service In addition, inbound calls are digitally recorded and attached to the call detail for further reference. Sales manager can easily access their call activity reports by logging into their account via a web browser. According to Lyon, having the tools to track and

The need for telephone lead tracking is based on an essential premise: A phone call is significantly more valuable and more qualified than a web or email lead, and more likely to produce a sale. The cornerstone of all lead management is the response tracking phone number. A dealership is provided with a dedicated toll-free or local telephone number to publish in each campaign for direct marketing – be it print or online – that they wish to track. Calls to these numbers route through the lead management provider’s platform and ring to any existing phone line, receptionist, call center or sales representative the dealer chooses. Calls are passed seamlessly, and without delay, and most tracking solutions work with any phone system or service. 36

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Mark Lyon - GM, Jay Honda www.DrivingSales.com

manage his sales leads has saved him much more than just time. It has saved him deals. “An analyst from my lead management provider notifies me within one hour if there is a call that could be considered a missed sales opportunity. I now have a way to recapture those lost leads and call the person back ASAP to set an appointment. This has made a huge difference in our deals per month.” In fact, since using a lead management provider, Jay Honda averages between five and seven additional sales per month resulting

accommodate those callers. “It’s motivated my team as well,” says Lyon. “I now have accountability, which helps my team while increasing the quality of our customer service.” Increasing sales while improving customer service is a win-win for any auto dealership, even one as successful as Jay Honda. Already at the top of their game, this Honda dealership has found a very costeffective way to…“add another weapon to our arsenal.” Mark Lyon sums it up like this; “Car dealerships all fish from the

“If a customer has a question or needs any kind of assistance, we’ll get in touch with them on the phone, email, fax whatever makes it most convenient for them” from those saved deals. “That’s a staggering amount of money back in my pocket,” says Lyon. “Most dealers are lucky if they get that many deals from an entire direct mail campaign! And it costs me just pennies on the dollar. What we pay, compared to what we get, is just phenomenal.” In addition to the increase in deals saved every month, Jay Honda also uses lead management to identify gaps in their customer service. Since a lead tracking report clearly shows the number of calls received and at what time, it identified Jay Honda’s peak calling hours. Lyons received an online report showing exactly how many calls were unanswered during a peak calling period, and was then able to ensure he had additional staff available during those times to www.DrivingSales.com

same pond. The more fishing poles you have in that pond, the more fish you’re going to get. Managing our leads is like another fishing pole for us…and we are definitely catching more fish.”

To discuss this article and to view comments by others, please visit DrivingSales.com/innovation ___________________________ Sheila Wenz joined Callsource in 2010 as the copywriter in their corporate marketing department. Prior to joining CallSource she was the director of public and media relations for a high-end, Los Angeles realty firm. A graduate of Emerson College in Boston, Sheila also studied copywriting at the School of Visual Arts in New York and has an extensive background in advertising, public relations and television production.

DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

SOURCES

http://www.recycleroom.org/fun.html - http://www.greenvehicledisposal.com/environmental/recyclable-materials/ http://wiki.answers.com/Q/What_is_the_weight_of_a_car#ixzzlahmdNmON - http://www.epa.gov/osw/conserve/rrr/greenscapes/pubs/rubber.pdf

HOW MANY

CARS

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www.DrivingSales.com

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Get more tips like this at the worldâ&#x20AC;&#x2122;s larges automotive socail network:

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Eric Hecht Graphic Designer

Open Platforms Help to Open Doors for Industry Innovators? by Eric Hecht

ere you the mean kid that never shared and nobody really liked you? Or were you the nice kid that did and made a lot of friends? I try to be the nice kid and hang out with other nice kids. Better things seem to happen during collaborating and sharing. When the blogging trend started to grow and demand for customization grew, a few systems were created to accommodate these demands. WordPress was one of them. Many have taken it to a level beyond blogging because it is an open source, shared system and very easy to use. In the automotive world, DealerTrend created an API that allows car dealerships to integrate their inventory with a site built on the WordPress system. An API, application program interface, is something created so two programs can talk to each other. In this case, a website created on the WordPress system and DealerTrend’s inventory management utility. API’s have become very popular on the web and many social networking sites use these to share each other’s data. If you have a twitter feed on your website, there is good chance it is using Twitter’s API. API’s can lead to creation and innovation. There is nothing new about listing vehicles on Facebook, but DealerTrend’s API allowed me, a new college graduate with no job, to make an app for Facebook to list dealerships’ inventories. I went to college for graphic design, but have worked in car dealerships listing their vehicles online for 10 years and am part of the generation that helped boom social networking. MySpace.com was just starting around the time I graduated high school. My journey in web development and especially WordPress is pretty short since I went to college for print design, not web design or web development. In my last semester of school, I included two sites built for WordPress as part of my big final project

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for graduation. After graduation in May 2011, I decided to keep pursuing and learning more about WordPress and PHP, the language in which WordPress is written. One day, my dad told me one of the dealers he does consulting for wants to list their vehicles on Facebook and wants me to make it happen. I told him that I couldn’t do it because I’m not a programmer. Well, I was wrong. There were a few approaches to putting inventory on Facebook. All but one didn’t make sense, and I found that out the hard way. My dad told me to check out the DealerTrend API. I downloaded the

“Adding an app to a Facebook page should be a relatively easy process for anyone. It is literally clicking two buttons. ”

API from github.com and quickly figured out how it all worked. It is very easy to use. Even for a very green web developer, it was pretty easy to figure out. The API pulls all pictures, basic vehicle information, vehicle options, comments, videos, history reports, etc. from the database. It did everything I needed it to do. Since the API ties directly into the their system, inventories are as up-to-date as the dealerships keep them. With the issue of the listings out of the way, my next step was to create the look. My graphic design background and knowledge of user experience played a big role in the look and feel of this app. I spent a few days looking at other apps to see what was wrong with them and why. There www.DrivingSales.com

are some apps that are awesome and had many great features. But most seemed to be built by programmers with no regard to the end user, or branded the app provider more than the dealer. They weren’t selling the dealership at all! Some didn’t even link to the dealer’s website. That is a big problem especially if they are a listing service for many dealerships because it could potentially send the customers to another place to buy a car. I also saw another fault in this because customers shopping on Facebook may not want to leave Facebook. Discovering what not to do and what was important, I designed the app. DealerTrend has various skins that can be used on dealership websites to display inventory. The look and feel of the app had to look and feel like the dealer’s inventory on their website in order to keep consistency within the brand. Although it is not branded for the dealership specifically, it still looks like my specific dealer’s inventory. I wanted the ability for it to be used on other dealers’ Facebook pages. I also decided not to put my or DealerTrend’s name or logo anywhere on the app because it needed to be all about the dealer. The pictures are as wide as they could be on the app; all vehicle information, and any other information that might be inquired about it is on the vehicle detail page (VDP) of the app, as well as a contact form in order to keep the customer on Facebook. Also included on the VDP is a link to the VDP on the dealership’s website in case the customer wanted to visit the dealer’s website. The app also has full search functionality and is created to make it as easy as possible for the customer. After it was all built, there needed to be an easy solution for the dealer to be able to incorporate it with their Facebook page. Adding an app to a Facebook page should be a relatively easy process for anyone. It is literally clicking two buttons. Most inventory apps have to be added to the Facebook page of the dealership, then have to be associated to the Facebook page. The dealership must search through a list and select their dealership or put in a number that is associated to the dealership and hit an activate button. If the wrong dealership is entered, then someone else’s inventory will be displayed on www.DrivingSales.com

their Facebook page. Since I worked for many years at car dealerships and became the non-official tech guy at most of them, I knew that many people at dealerships are not tech savvy. There had to be an easy add system in place to lessen the chance of errors on the dealership side, so I created a system in WordPress to pre-associate the dealer’s inventory to the dealer’s Facebook page. Everything was created not only for the ease of customers shopping for cars, but with the dealer professionals in mind as well. My creation of the Facebook app would not have been possible without the creation of an API. My graphic design background has given me a different insight into how things can or should work on this one application. A major way to evolve processes, ideas, systems, etc. is by sharing and getting outside views. API’s generally only share data, so it can basically be used for anything. Mike Fitzpatrick of DealerTrend and I kept communication throughout most of the app creation process, which definitely enhance the project and usability. I’ve have moved onto another project using the API and look forward to announcing it later this year or early next. I see a lot of potential in sharing information and love the idea of open source programs to help evolve technology. So be the nice kid. Share! Make more friends and who knows what else you’ll create in the process.

To discuss this article and to view comments by others, please visit DrivingSales.com/innovation ___________________________ Eric Hecht is graphic designer based outside of Charlotte in Monroe, NC. He graduated from Appalachian State University with a BFA in graphic design and specializes in branding, logos, user experience design, and working with WordPress to create websites. In his free time, he likes to ride and repair bicycles. He is not easy on his bikes.

DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

Jessica Ruth DealerFire, Brand Manager

How Used Car King Used its Mobile Website

to Lap the Competition By Jessica Ruth

hey are found in millions after millions of pockets, purses and backpacks spanning across the world. Thousands of advertising dollars are spent each minute. The mobile movement is moving successfully fast, and incorporating mobile opportunities into a dealership will be a key lead-generating tool in 2012. In the automotive industry, mobile websites are currently an overlooked asset. For many dealerships with a single website, or possibly several websites,

side-by-side with them. Pistell looked to create the most intuitive path for his current and future customers, because if he didn’t, his competition had every opportunity to do it first. To ensure that Used Car King’s mobile website performed the way Pistell envisioned, he said he thought like a consumer. “It could be simple, but will it sell cars?” Pistell said. His mobile website would neither overwhelm nor underwhelm.

“Imagine a customer checking your inventory on his or her mobile phone while shopping your competition’s physical inventory. ”

they believe they have their digital presence complete. However, today and more importantly tomorrow, that digital presence extends far beyond the desktop. In the lengthy research cycle new vehicle shoppers are in, when the potential buyer lands on a dealership’s site, this is often at the end of their research cycle. A dealership without a mobile presence has limited its opportunity for a potential sale. Not to be left behind, Joe Pistell, of Used Car King in New York, found a leading automotive mobile website design firm partner in DealerFire. DealerFire, a custom website design and digital marketing firm based in Oshkosh, Wisconsin has been recognized for its award-winning mobile design by AWA in 2011 and is all-too familiar with the opportunities captured with a great mobile website. Pistell didn’t just work closely with DealerFire in the process of optimizing his mobile website; he worked 42

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Key Functions of a Mobile Website: t t t t t t t

Click-to-Call Complete new and used inventory Specials Coupons Maps and Directions Schedule service appointments Extensive search capabilities

Consumers, who had a great mobile experience, he felt, were more likely to call the dealership. And, call they did. Used Car King’s mobile website started with just a few calls a day and by the time Pistell and DealerFire advanced to version 2.0, the calls had increased 10-fold. Pistell’s mobile website for Used Car King doesn’t www.DrivingSales.com

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www.drivingsales.com/ratings cannibalize his website’s traffic – he feels they work together. So much so that he didn’t hesitate to add DealerFire’s dealership iPhone app to his digital portfolio. Once again, staying ahead of the competition, Pistell worked side by side with DealerFire to ensure that his iPhone app was consumer friendly and inviting—yet another mobile lead generator for Used Car King.

Automotive shopping studies, as related to mobile, are constantly reinforcing its incredible uprising while exhibiting the data behind why dealerships need mobile websites. According to J.D. Power and Associates 2011 Automotive Mobile Site Study, what Pistell and DealerFire have been perfecting will truly keep the sales rising. Fact: Vehicle shoppers are more likely to access automotive sites from mobile devices, now more than ever. Fact: Over half of vehicle shoppers have scanned QR codes looking for more information. Fact: Those under the age of 40 are more likely to vehicle shop on mobile devices.

iPhone App

www.DrivingSales.com

Mobile Site

DealerFire recognizes that mobile technologies are emerging quickly and requires a team that can

market creatively and effectively. If it’s not a game of Angry Birds, a tweet or Facebook update, it’s an app downloaded (over 20,000 per minute) on the same mobile phone that could be shopping your inventory. Imagine a customer checking your inventory on his or her mobile phone while shopping your competition’s physical inventory. When the buying cycle comes around to you, be sure your dealership is able to capture the lead in every shape it comes.

To discuss this article and to view comments by others, please visit DrivingSales.com/innovation ___________________________ Jessica Ruth is a Brand Manager for Dealerfire and gradutated from University of Wisconsin-Oshkosh.

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Cory Mosley Founder, Principal Mosley Automotive Training

Challenging the Status Quo by Cory Mosley

uring a recent interview for The Norm Jones Show, a talk radio show in Detroit, I was asked what I thought was the biggest challenge facing the car business. Without hesitation, I said the inability to acquire, properly develop, and retain fresh talent would prove to be an epidemic for the car business. I have a dealer client whom I’ve worked with for six years, and I began to notice some blasts from the past during my last eight visits. There was the

countless other pursuits. Is the bell-to-bell lifestyle the only way to successfully run a car dealership? Is the end-of-the-month frenzy to roll more vehicles and get deals done the only option for maximizing sales? One of the first stores I worked for when I started my career offered 9 a.m. to 3 p.m. and 3 p.m. to 9 p.m. schedules. The dealership also allowed employees to take two Saturdays off per month, something that is unheard of in the car business. But why is that?

“So many things go unexamined, unaddressed and not dealt with in the name of our industry’s culture. So, how do we change this?”

recycled sales manager; the twice-fired salespeople, and a fresh-from-rehab finance manager on his third tour at the dealership. When I asked why this was happening, the client said, “It’s hard to find people.” That answer, along with “This is the car business,” are two of the all-too-familiar responses I often hear. So many things go unexamined, unaddressed and not dealt with in the name of our industry’s culture. So, how do we change this? What are some core challenges? Well, let’s take a further look. Challenge No. 1: The Work Schedule The typical dealership schedule has been enforced, accepted and treated as gospel for decades. The problem is that’s exactly what’s kept a lot of talented people with great potential from getting into the business. It also has contributed to years of missed soccer games, vacations, family outings and 44

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Why is taking a hard look at dealership hours and work schedules so “outside the box,” especially since the people making the schedule don’t actually work it? Holiday store hours are always an interesting conversation as well. I mean, how many cars can a dealership really sell over a holiday? When I ask dealers that, which I often do, the answer is usually two or three. If that were the case at your store, wouldn’t you foster more goodwill among your employees by giving them the day off instead? Hey, it’s just a thought. Challenge No. 2: Managers vs. Leaders There are probably people out there more qualified than I to address leadership. However, my experience working for and with managers who never led and www.DrivingSales.com

don’t know how to lead provides me with a nice perspective on what a leader should be.

things up. Strategies must be reworked. The status quo must be challenged.

I will save full commentary on this topic for a future article, but allow me to offer a few nuggets of advice: First, as leadership guru John Maxwell points out, good leaders are self-improving. They realize that their team must first improve itself before improvement in performance can be realized. Yet, so many managers obtain their title and simply put the shifter into park. Leaders have subordinates by default, but what they really do is manifest followers. Managers simply have subordinates.

Let’s look at two more areas where the status quo needs to be challenged to develop and retain fresh talent.

Let’s review a few typical character differences between leaders and managers: t An approach of calculated change vs. stability t Vision vs. objectives t Personal charisma vs. formal authority t Energy of passion, rather than control So, which traits describe you? Want to take it a step further? Put those traits on a piece of paper and ask your staff to circle options that best match you and let them anonymously provide you the results. See, leaders create a culture of achievement that shapes outcomes. They are not focused on being right and simply producing results. It’s as if Marshall Goldsmith, famed leadership development guru, read my mind when he titled his best seller, “What Got You Here Won’t Get You There.” We agree that, to excel in today’s constantly changing marketplace, you’re going to need to change www.DrivingSales.com

Challenge No. 3: Training and Development “Training” is a four-letter word to some and misunderstood by many more. To be effective, your training providers must go beyond factory test taking and shadowing a veteran salesperson for a week. Recently, a dealer remarked that she wanted to wait to see how many of the seven salespeople she hired would survive the first two weeks before determining which ones would be sent to training. Yeah, pretty amazing, right? People, there are plenty of sound, fundamentals-based training programs on the market, many of which will never see the inside of her dealership or others. Why? Forget the multitude of nonsensical reasons. The fact is that decision-makers (and not only dealers) just don’t believe in third-party training programs and don’t have the leadership skills to implement or execute their own. To paraphrase what famed management expert Peter Drucker once said, decisions are made solely by those who are empowered to make them — not by the smartest or most qualified person, just the person who can. Another former client of mine was having trouble finding a quality F&I manager. He had gone through several hires over a couple of months. He had concerns about the “business practices” of the past F&I managers and wanted someone to do it the way DrivingSales DEALERSHIP INNOVATION GUIDE | 4 t h Q uarter 2 0 11

he believed would best serve customers. To help, I identified one of their salespeople with a financial background, strong CSI and a good sales track record. I also recommended an F&I company who could train the candidate I suggested. I felt this candidate’s experience doing it the dealership’s way on the sales floor would transition well into the F&I

their dealership. The idea that someone needs to be carried or paid for mediocre performance in the name of loyalty is crazy to me. You either expand or become expendable; it’s that simple. The reality is that tough choices will need to be made in the coming years. Everything will need to be scrutinized, which means no topic should be off

“Leaders have subordinates by default, but what they really do is manifest followers. Managers simply have subordinates.”

office, and the training would seal the deal. It seemed like a no-brainer. Unfortunately, management just couldn’t get their arms around the idea and, to this very day, F&I managers continue to come and go. Look, I get it. You may have had a bad experience, or the previous training program you paid for just didn’t stick. Or, it could be that the last team you spent money on to train left for the competition. Whatever the case, there is absolutely no reason for you to give up on training your people. Challenge No. 4: Cleaning House My personal philosophy and commentary on the car business has been shaped over the last seven years while traveling to and working with a diverse group of dealerships across the country — from those selling 1,000 units a month to those selling 50. And throughout that time, one thing remains constant: The smaller the dealership, the smaller margin for error. See, large stores sometimes make decisions too quickly, while the smaller dealers tend to move too slow — especially when it comes to personnel decisions. Turnover is a problem in our business, but, in my opinion, we sometimes put too much stock in loyalty.

limits. More opportunities will be availed to those who want to be first, rather than those who wait for someone else to try it first. You often hear that, in today’s marketplace, it’s more important to dominate than compete. Do you agree? If you answered “Yes,” I can say with certainty that domination will never be achieved if you color inside the lines and wait for the other person to show you theirs first.

To discuss this article and to view comments by others, please visit DrivingSales.com/innovation ___________________________ Cory Mosley has built a reputation as a go-to sales strategist, consultant and trainer by challenging the status quo. His new-school techniques and progressive strategies have helped dealers both large and small build and restructure profitable sales, BDC and Internet operations. Cory’s company, Mosley Automotive was one of the early boutique training and consulting companies established to focus solely on Internet sales. His past and current clients include many of the Automotive News top 125 dealer groups and several OEM’s. Most recently, Cory’s work was profiled in F&I and Showroom Magazines. His monthly column “Sales Driver” is read by thousands of dealership personnel nationwide.

To me, loyalty is a bonus earned when someone excels at their job and maximizes profitability for 46

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