Dealership Innovation Guide Feb 2010 by DrivingSales, LLC

DEALERSHIP

INNOVATION GUIDE

February 2010

DEALERSHIP BEST PRACTICES IN THIS ISSUE:

Advanced Marketing Strategies ISM Pay Plans Increasing Used Car Volume IS YOUR SERVICE DEPARTMENT COSTING YOU CAR DEALS?

T H E B E S T P R AC T I C E CO M M U N I T Y

VENDOR RATINGS SEO • CRM • WEBSITES VEHICLE LISTINGS 3rd PARY LEADS CRM • DMS • ILM

JOIN

DRIVINGSALES.com

FOR FREE

WHICH

VENDORS

are PROVEN and WHICH should be AVOIDED?

DrivingSales.com is a Vendor Rating

www.DrivingSales.com

and Best Practice community for Dealers and Dealership Managers to connect and DrivingSales DEALERSHIP INNOVATION GUIDE | 2 0 1 0 1 collaborate on dealership strategies.

TY PLE I L

DG TM

Dealix

Q UA

Let’s Make 2010 a Five Star Year for Auto Sales

rnTM ad Retu e L e e r H a s sle F

Thank You to All Our Dealers for the Ratings and Reviews on DrivingSales.com “We have used many third party lead providers in the past and none compare to Dealix! A 5-star rating for this company is not enough! They deserve 6 stars!”

“Great customer service, great amount of qualified leads provided.”

“Very good quality of leads, and with this new system, the Dealix Quality Pledge, if the lead is not good enough, we can always send it back to them and it will be replaced in a timely manner.”

“A great alternative to high monthly fees I had with other vendors. I only paid per lead, which helped my ROI.”

“Leads have been true leads from actively seeking customers. New system from Dealix gives me credit for duplicates.”

“My cost per sale (with Dealix UsedCars.com) is below $200. I really like the fact that I only pay per lead, and their leads are just as good as Cars.com or AutoTrader.”

To learn how Dealix can help your dealership sell more new and used cars in 2010, please visit www.dealix.com or call us at 877-774-8426.

Dealix® 2

2010 | DrivingSales DEALERSHIP INNOVATION GUIDE

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www.DrivingSales.com

Welcome to the inaugural issue of the DrivingSales Innovation Guide! The DrivingSales.com community is the largest best practice and vendor rating community in the auto industry. It’s like an online 20 group for the thousands of dealers and dealership employees where they can connect with strategies, proven best practices, and rate their vendors. This publication features some of the hot topics being discussed on the site as well as our yearly round up of the vendors whose dedication to excellence qualified them for a DrivingSales Vendor Rating Award. All the content in this publication, including the Vendor Ratings, were shared by industry professionals like you on DrivingSales.com. If you’re not already a member of the community, we invite you to join us. Membership is free, simply visit drivingsales.com/joinus. We hope this information can help you have a more profitable year in 2010! “Two heads are always better than one. We’ve got the whole industry talking…”

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

Jared Hamilton Founder – DrivingSales.com

The DrivingSales.com story: Back in 2003, while attending NADA’s Dealer Candidate Academy, Jared Hamilton built a private website so his class could better collaborate and share best practices outside of the classroom. The website, DrivingSales.com, was designed to function like a free online 20 group for dealership professionals. Over the last 6 years the site has evolved. In June 2008, DrivingSales.com opened its doors to the entire automotive community. Dealers who learned of it shared it with their managers, who shared it with their peers, and word spread. The community has grown from a small Academy class to one of the largest sources of unbiased, vendor neutral information in the industry. DrivingSales now serves tens of thousands of industry professionals with dealership- focused, proven best practices. DrivingSales invented the industry’s first and only Vendor Ratings Platform, designed to help dealers find and select the best vendor partners -- while holding vendors accountable to deliver better products for the dealers. The Vendor Ratings allows dealership employees to rate and review their vendors anonymously and leave detailed feedback for all the community to see!

www.DrivingSales.com

In addition to the Vendor Ratings, DrivingSales.com is similar to other social networks such as Facebook, except rather than focusing on the sharing of social information, it was built exclusively for dealership professionals to share and discuss best practices, tips, and strategies. You will find blogs by industry experts, videos, and a discussion section where anyone can post a question and get answers from their peers nationwide. You can easily find exactly what your dealership needs because all of the content on the site can be filtered by an “activity” in a specific “department.” For example, you can view information to “Grow Sales” in “Used Cars” or “Cut Costs” in “Fixed Operations.” In September 2009, DrivingSales launched its completely redesigned, proprietary architecture, built entirely from the ground up to help dealers stay on top of industry trends. In December 2009, DrivingSales was the only non-OEM to be named one of the notable automotive social-media gambits of 2009 by Automotive News. DrivingSales also recently named as one of the “Top 10 companies to watch in 2010” by AutoSuccess.

DrivingSales DEALERSHIP INNOVATION GUIDE | 2 0 1 0

It’s Like a 20 GROUP for

THOUSANDS!

VendorRatings 6 Why Vendor Ratings 7 Dealership Websites 8 3rd Party Leads 8 Online Classifieds/Vehicle Listing Services 10 Customer Relationship Management Systems (CRM) 10 Dealership Management Systems (DMS) 11 Internet Lead Management (ILM) 12 Inventory Pricing 12 Search Engine Optimization (SEO)

Vendor Ratings Dealer Discussions Expert Blogs “How to” Videos

BestPractices

Strategy Sharing

14 Narrowing the Great Digital Divide 18 The Proper Model for Advanced Dealership Marketing 22 Six Technologies that will Transform the Retail Automotive Market 23 New Social Media Strategy Transforms Dick Hannah Honda 26 Why Velocity Management 28 Link Building Tips 30 Selection, Hiring and Orientation for your Internet Department 34 Why your Service Department is Costing you Car Deals 36 Microsites, Blogs, Social Media, Oh My! 39 Winning Online 40 Social Media Marketing: a party not a pinch 37 Seven Process Points: Your Store Must Execute 44 ISM Pay Plans 46 Internet Departments are on the Decline

Peer Networking

GET CONNECTED

DrivingSales.com

2009

DrivingSales.com 4

2010 | DrivingSales DEALERSHIP INNOVATION GUIDE

www.DrivingSales.com

Thank you

www.DrivingSales.com

DrivingSales DEALERSHIP INNOVATION GUIDE | 2 0 1 0

VendorRatings Why Vendor Ratings? The DrivingSales Vendor Rating site is the first formal mechanism for dealers to rate and review their vendors in a comprehensive, real time vendor directory. It empowers dealers by allowing them to learn about all the solutions available and to view actual customer feedback, both good and bad, about how each solution actually performs. The DrivingSales Vendor Rating system is like a real time Consumer Reports* protecting dealersâ&#x20AC;&#x2122; interests and helping them make more informed investments.

Vendor Ratings Rules & Safe Guards: DrivingSales.com maintains and enforces a strict set of rules to insure dealerships have accurate, honest and up to the moment information. Rules: A. Only dealership employees can leave ratings and reviews. Reviewers are verified to insure they are valid and eligible to leave reviews. B. Dealership employees can only rate and review the products they have experience using. The ratings are a chance to hear from actual customers with live experience using the solutions in their stores. C. Each reviewer must answer three questions to complete their rating: 1. How many stars does the solution deserve? 2. Would you recommend the solution to a friend 3. Why would or wouldnâ&#x20AC;&#x2122;t you recommend the solution? All three components of the review, along with the job title of the reviewer are posted live to DrivingSales. com for all to reference when selecting new vendors. Safeguards A. DrivingSales.com protects the anonymity of each dealer employee who leaves a ratings and review. However, DrivingSales requires valid name and contact information for each reviewer so that each reviewer can be validated. B. Each review is passed through a variety of technological checkpoints to insure vendors are not gaming the system. Furthermore, DrivingSales staff calls and verifies a large percentage of the reviews. Vendor Ranking: In each product category the vendor solutions are ranked in real time as each new dealer rating is submitted. The vendor products are ranked based on a weighted Bayesian Algorithm. This is a standard mathematical calculation that looks at the number of stars the reviewer gave as well as the statistically valid sample size needed, relative to the competitive set, to create a ranking based on the statistical accuracy of the results. Sometimes a company with 3 stars will rate above a company with 4 stars if mathematically the first company has a higher probability of success based on the submitted reviews. We encourage all dealers to rate and review their vendors by visiting www.drivingsales.com/ratings *DrivingSales.com is in no way affiliated with Consumer Reports. 6

2010 | DrivingSales DEALERSHIP INNOVATION GUIDE

www.DrivingSales.com

Vendor Rating Awards The DrivingSales Vendor Rating Awards recognize those solutions with a proven record of success and excellence in serving their dealer clients. There are three award winners in each category, the “Highest Rated” vendor and two “Top Rated” vendors.

Rankings 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 (shown below). Sometimes a company with 3 stars will rate above a company with 4 stars if mathematically the first company has a higher probability of success based on the submitted reviews. The Vendor Rating Awards are based solely on the aggregate of all dealer ratings submitted form January 1, 2009 to January 10, 2010.

Websites These full service websites are built to be the main hub of your dealership’s online presence and are central to your dealerships marketing, branding and customer service. Note: MicroSites and MobileSites are rated in their own categories on DrivingSales.com.

Company

Product

Score

Rating

Recommended

Dealer.com

Award Winners SmartSites

90.0

84%

Cobalt

Colbalt Websites

46.6

59%

Dealer e Process

Dealer e Process - iAuto Web

13.1

100%

WorldDealer, Inc.

Ultra 7.0 Websites

4.9

100%

BZ Results

3.7

27%

MJM Internet

Dealer Web Solutions

3.3

100%

Clickmotive

Fusion Websites

2.4

100%

Izmo Cars

IzmoWeb

1.8

100%

TK Carsites

Dealer Websites

1.7

72%

VinSoltions

VinSolutions Dealer Websites

1.6

100%

DealerSkins

Dealer Web Solutions

1.4

50%

Reynolds and Reynolds

WebMakerX

1.3

60%

XIGroup

Franchise & Independent Websites 1.2

80%

www.DrivingSales.com

DrivingSales DEALERSHIP INNOVATION GUIDE | 2 0 1 0

VendorRatings 3rd Party Leads These providers collect and aggregate leads from their web properties and from partner sites, then distribute these hot leads to dealers. Currently this category is for both finance and vehicle leads. Company

Product

Score

Rating

Recommended

Dealix

Award Winners Deakix New Car Leads

433.3

87%

AutoUSA

AutoUSA New Car Leds

67.7

84%

Cars.com

NewLeadsPlus

21.0

82%

AutoByTel

Autobytel New Car Leeds

6.9

47%

Black Book Online Division

Activator

5.8

94%

Autotropolis.com

PAY PER SALES REFERRALS

2.6

100%

ZAG

Zag Sales Strategy

1.5

57%

Online Classifieds/Vehicle listings These consumer facing websites allow you to list your inventory to the public who frequent these sites looking for a vehicle to buy. These websites make huge media buys attracting customers to your inventory to increase your walk-in, phone and web leads. Company

Product

Score

Rating

Recommended

Award Winners AutoTrader

AutoTrader.com

260.5

65%

Cars.com

Cars.com Online Advertising

199.3

88%

Dealix

UsedCars.com

32.9

87%

AutoUSA

AutoUSA Inventory Listing Network 21.5

Dealer Bytes - SEGA Systems, LLC SEGA List - Craigslist Distribution AutoByTel

AutoByTel Used Cars

100%

2.9

100%

2.6

83%

2010 | DrivingSales DEALERSHIP INNOVATION GUIDE

www.DrivingSales.com

You could hire a team of MIT PhD’s to help you find the best “keywords” to generate leads.

Or simply buy AutoUSA leads.

AutoUSA works with a team of Ph.D’s to find the best keywords to attract auto buyers, so you don’t have to. In fact, our team uses those keywords to produce high-closing, pre-filtered leads that will increase your sales right now. In addition, AutoUSA lists your dealership on over 100 popular automotive websites. You’ll get consistent exposure in your market area and pay only when a lead is delivered*. To get listed right away at no cost – simply call AutoUSA 1-800-454-3016.

Increase your sales today! www.autousa.com/signup • 1-800-454-3016

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1/8/10 11:09 AM

Database/Owner Marketing These targeted solutions help you mine and segment your customer database, and then market to them successfully. These solutions can market to your customers through email/direct mail/phone and other means. Company

Product

OneCommand

Award Winners Total Control

3.4

91%

CIMA Systems

Complete Virtual BDC

100%

Cobalt

Cobalt Owner Marketing

42%

Votenza Systems

Database Accelerator

100%

2009

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. The Vendor Rating Awards are based solely on the aggregate of all dealer ratings submitted form January 1, 2009 to January 10, 2010.

DrivingSales DEALERSHIP INNOVATION GUIDE | 2 0 1 0

VendorRatings Customer Relationship Management (CRM) Variable Ops: These are CRM systems that track all your walk-in, phone and Internet customers through the complete sales funnel and owner life-cycle. They allow for advanced customer segmentation and marketing and track your sales activities by employees to make your team more effective at attracting customers and managing relationships. Company

Product

Score

Rating

Recommended

Award Winners Autobase

Autobase CRM

324.4

88%

DealerSocket

DealerSocket CRM

44.0

96%

CAR-Research

CAR-CRM

32.9

90%

Parayil & Mann Dealer Services

DealerUps CRM

18.5

93%

Reynolds and Reynolds

Contact Management

16.2

50%

ADP Inc., Dealer Services Group

ADP CRM

6.8

46%

eLEAD CRM

6.5

80%

VinSolutions

VinSolutions MotoSnap CRM

5.9

100%

The Higher Gear

Higher Gear CRM

4.5

36%

Votenza Systems

Votenza CRM

1.5

100%

Dealer Peak

Dealerpeak CRM Center

88%

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

Company

Product

Score

Reynolds and Reynolds

Award Winners Reynolds ERA DMS

36.0

53%

ADP Dealer Services

ADP DMS

7.0

41%

DealerTrack

DealerTrack DMS

2.4

54%

Rating

2010 | DrivingSales DEALERSHIP INNOVATION GUIDE

Recommended

www.DrivingSales.com

20% of the nation’s top 100 dealers use DealerSocket CRM • • • • • • • • • •

Galpin Van Tuyl Larry Miller Mossy Walser Automotive Group Rick Case Automotive Group #1 Ford Store in the World (20 Years Running) #1 Lincoln Mercury in the West #1 Jaguar Store in the World #1 Mazda in the West

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1/5/10 5:25 PM

Internet Lead Management (ILM)

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

Product

Dealer.com

Award Winners Control Center 5 (CC5)

9.5

78%

AVV

Web Control

4.7

71%

ADP Inc., Dealer Services Group ADP’s i-Lead Control

1.2

83%

ADP Dealer Services

NetTrak Lead Manager

60%

iMagicLab

iCarMagic

71%

2009

www.DrivingSales.com

Score

Rating

Recommended

DrivingSales DEALERSHIP INNOVATION GUIDE | 2 0 1 0

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

Product

Score

Rating

Recommended

Award Winners vAuto

vAuto - Pricing & Stocking Tools

18.4

100%

JMsolutions

AAX PriceDriver

80%

HomeNet, Inc.

Inventory Online (IOL)

100%

Black Book

Black Book Used Car Guides

100%

DiamondLot

DiamonLot Data Managemnet

100%

DealerTrack

DealerTrack Inventory Optimization .2

100%

ADP Inc., Dealer Services Group

ADP’s AutoCheck Express

50%

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

Product

Score

Rating

Recommended

Award Winners eXteresAuto

eXteresAUTO - SEO

212.4

98%

Pasch Consulting Group

Pasch Consulting Services - SEO

98.3

95%

Dealer.com

DynamicSEO

5.0

88%

Izmo Cars

Izmo RainMaker

1.3

100%

Dealer e Process

Power PageRank

100%

Autofusion, Inc.

Autofusion Search Engine

100%

Colbalt

PowerSearch

75%

2009 12

2010 | DrivingSales DEALERSHIP INNOVATION GUIDE

www.DrivingSales.com

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DrivingSales DEALERSHIP INNOVATION GUIDE | 2 0 1 0

Brian Pasch CEO Pasch Consulting Group

Narrowing The Great Digital Divide

I was naive. I can’t remember the last time I felt that way in my professional career and surely not in the past four years of active engagement in the field of Internet Marketing and Search Engine Optimization (SEO). Looking back at a recent event I have come to understand that my naivety was supported by my unbridled passion for online marketing and the shared energy of fellow automotive professionals that engage in online blogs and forums.

SEO, inventory listing architecture, IRM, GPOM, and online brand protection to name a few topics. One of the executives smiled and said “Brian, but you must understand that at best your articles are reaching a small percentage of the car dealers in America. Car dealership executives are participating in online communities and reading the latest articles on Internet Marketing strategies much less than you think.”

The comment was not mean spirited. It was a comThrough my activity on online communities I was lulled passionate wakeup call that the dealership employees into thinking that articles I penned on Automotive that are actively engaged SEO, microsites, reputaon Automotive Internet tion management, Google Marketing blogs are often Page One Management not those making leadership (GPOM) and keyword and budgetary decisions at strategies were exactly the dealership level. It took what the automotive a few seconds to regain my community needed, composure; were my efforts would actively read and in vain? engage. Their statement prompted Automotive professionals Pasch Consulting Group to posting comments and create a survey to poll dealers opposing views made my on their awareness and usage articles take on a life of of key Internet Marketing their own; elevating the strategies. We also asked perceived importance how dealers are adjusting and reach into the dealer their budgets in 2010 for network. I envisioned online marketing. The surGeneral Managers and vey data from Internet Sales Internet Sales Managers Managers had some strong forwarding links for my articles to their 20 groups and words about the leadership at their dealership. friends in the industry. I am sure some did but my viral marketing vision was more like the one day flu. When asked about the awareness and general knowledge of how to use Internet Marketing strategies to I was schooled over a thin crust pizza help their dealership, Internet Sales Managers (ISM) I was having dinner recently with successful automotive said that over 60% of their owners and over 50% of marketing executives when the conversation turned to their General Managers fell into two categories: “no a discussion on the latest online marketing strategies clue” or were “just starting to ask questions”. that are available to car dealers. I proudly pointed A comment from a dealership GM who attended the out that my blog posts and whitepapers, viewable on 7th Digital Dealer Conference in Nashville came to popular automotive forums, were raising the level of mind as I am writing this article: “As successful as 7th awareness in the automotive community; Automotive Digital Dealer Conference in Nashville was for you, 14

2010 | DrivingSales DEALERSHIP INNOVATION GUIDE

www.DrivingSales.com

Dealerups drivingSales Ad.pdf

those in attendance represent a small fraction of active dealerships. Brian, many dealers have not taken the first steps to understand and engage in the digital world.”

1/11/10

4:16 PM

a position of power. Reading this article in itself could place you in the minority.

Dealerships that are investing today in online data tracking, testing and Our research confirmed that nearly analysis will surely be rewarded in half of car dealerships surveyed allo- 2010 as well as the future. They will cate less than 20% of their marketing know with detailed analytical trackand advertising budgets for online ing and reports, for the first time, activities such as websites, blogging, the effectiveness of their marketing social media, lead generation, SEO dollars. They will increase spending and pay-per-click. Over 65% of in areas that have the best ROI with confidence respondents while their said that their local Internet “Dealers who have a c o m p e t i t o r s waste money Marketing search visibility was knee jerk reaction and with trial and error; heavily poor, weak or say, “I want what they weighted with average. None error. of these three are doing” will be setself characterizaDealers who tions are a ringhave a knee ting themselves up for ing endorsement jerk reacfor their current failure. Dealers truly tion and online marketing say, “I want strategy. need to first understand what they are doing” will Then a comment what “they” are doing.” be setting from an Internet themselves Sales Manager up for failure. that said, “My Dealers truly competition is asleep at the wheel. They have need to first understand what “they” no Internet Marketing strategy in are doing. place and I hope it stays that way.” Executives who can leverage SEO, Unfortunately for this one ISM, that SEM, GPOM, Social Media, Internet will not be very long. Our surReputation Management (IRM), vey data shows that dealers will be Microsites, Banner Advertising, increasing their online spending in a Video and Mobile Technology in a wide range of activities. Dealers who comprehensive marketing plan will once were not aggressively engaged in emerge as the true leaders in automoonline marketing will be joining to tive sales. The interesting phenomena game in 2010. about the Internet is that early adopters are often rewarded with better The Powerful Minority positioning is search results. The ISM survey responses indicate that only 30% of dealership own- Dealers who keep their heads in the ers and top executives have greater sand may wake up one day to find than an entry level understanding of the barrier to entry very costly and Internet Marketing strategies. If we some marketing opportunities closed. agree that the minority of car dealer Dealers who have years of online executives understand how to lever- content and reputation developed for age the Internet for sales, marketing their brand in their local markets will and branding, then they are truly in be able to dominate. I pity their com-

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DrivingSales DEALERSHIP INNOVATION GUIDE | 2 0 1 0

Leadership DEVELOPMENT

Education SOLUTIONS

Performance IMPROVEMENT

Industry INFORMATION

2010 | DrivingSales DEALERSHIP INNOVATION GUIDE

www.DrivingSales.com

petition that waits to see if Internet Marketing and Social Media will be effective for sales and marketing, because that day had already come. Increasing The Engagement in Digital Marketing If many automotive executives are not fully engaged in the revolutionary changes that Internet Marketing technologies can bring, I am not confident that vendors will invest their money creating a new ADF specification or reporting tools to allow dealers to have end to end ROI tracking for 30% of the market who might demand it. Dealers who are not spending at least 60% of their marketing budget online are going to get run over by a train with their competitors in the conductors’ seat. I hope that my articles will be part of the catalyst that challenges the automotive community to engage in real dialogue from which we can create a trusted document of best practices in Internet Marketing strategies, their related costs and ROI. Bigger is Not Necessarily Better The larger franchise groups by default are not necessarily in the 30% that peers say are leading the way in Digital Marketing strategies. In fact, their shear momentum, like a super luxury cruise ship, may be hard to turn in the time that is needed to keep pace with change. From my personal experience, some larger groups have one “prophet” who is trying to educate the entire executive team. At best, this is a difficult challenge and this task is too important to go alone.

their creative assets, content and relationship to lower costs of marketing when done properly. Where and When Education Occur

Does

The

Our survey data reported that 30% of dealerships in the USA do not send their employees to educational conferences to hone their Internet Marketing skills. If half of dealer employees don’t get the benefit of attending NADA, Digital Dealer, JD Powers or a Driving Sales Executive Summit where will the education take place? The PCG survey data suggests that there is a need for a better online school for Internet Marketing concepts and strategies. A new model is needed to provide continuing education for car dealers in this ever changing field of Internet Marketing. Budgets may restrict travel so the educational delivery mechanism must have both online elements and regional classroom training. New educational models can react to fast changes in Internet Marketing strategies. Early in 2009 Twitter “tweets” and Facebook Pages were not showing up on Google Page One for searches on a dealership name. Today they are. This has a major impact on your brand message and how consumers portray your dealership. What is your dealership doing to establish Social Media best practices?

A new forum has to be created that offers assistance to dealers that are just getting started that does not dismiss their years of experience and success with off-line marketing. A new model has to bring car dealers into the online marketing fold and help them drink from the “fire-hose” of opportunities on the Internet. Looking to 2010 Automotive retailers must invest in their key executives to raise their understanding and awareness of digital marketing strategies. Dealerships cannot be lead astray by the “flavor of the month” Internet Marketing shiny objects that show up at their doorstep. They must create, implement and measure the results of a comprehensive Internet Marketing strategy. Dealerships with a small percentage of their advertising budgets targeting online marketing will continue to lose market share and brand visibility. Those that engage online marketing, social media and digital marketing strategies will be well rewarded when the year ends. Are you in the majority or minority? Are you ready to engage and dominate your local market online? I’m ready to help anyone who wants to dominate! To view comments by others and discuss this article please visit DrivingSales.com/ innovation

On the flip side, aggressive multibrand dealer groups have a strategic advantage of scale. The time to create a comprehensive Internet Marketing strategy will save their bottom line millions of dollars in the years to come. Larger groups can leverage www.DrivingSales.com

DrivingSales DEALERSHIP INNOVATION GUIDE | 2 0 1 0

Jared Hamilton CEO, Founder DrivingSales.com

The Proper Model for Advanced Dealership Marketing The long tail concept states that in markets of abundance, like our new media market, maximum value is created through variety of choices. Rather than reaching the most people by investing in the top few options, How the media market has transformed from scarcity you will reach more people by spreading your spend to abundance. into many different niche channels. These niche chanUntil recently, publishers and editors have selected nels may reach fewer people on a per- channel basis, the content, determined distribution and thus cre- but the volume of niche opportunities makes up for ated the advertising inventory available to market the smaller reach of each channel. Whereas in the old market you would invest in two your store. Because the barmediums, reaching 50 people in riers to entry were high, media each to touch 100 people total, remained relatively scarce and today you should be investing in dealerships had limited options 100 mediums, reaching 3 people to reach their target audience. each, and touching 300 people Due to strong competition – and all for much less money. for precious airtime, over the This strategy has proven - time past decade, advertising prices and time again - to be the most steadily climbed. successful in the today’s online Social media has dramatically marketplace. And while it sounds changed who produces content, daunting to execute, in fact, the how much media is available largest task is to wrap you head and the range of advertising around it and start thinking like options. Today, the public not an online marketer so you truly only consumes the media, they understand all your options. create it. Sites like YouTube, How to diversify your marketing Facebook, Twitter, and milapproach lions of blogs dominate our marketplace and have removed Selecting your marketing chanthe barriers to producing connels is actually an easy task once you have your list of tent. These millions of highly targeted websites present options. Select those with the best ROI, and, since the huge opportunities for dealers. web is perfectly track-able, it’s much easier to make Recent evolutions in the media market have opened new opportunities for dealers to create value in their marketing.

“You have to keep your finger on the pulse of your online marketing stats -and not be afraid to change things on the fly. ”

How to operate in a media market of abundance

educated decisions. The key, however, will be to remain nimble. You have to keep your finger on the pulse of your online marketing stats -- and not be afraid to change things on the fly. In the old media world, for example, you could make your radio buy for an entire year and then put it on cruise control, only editing the creative. This approach is not successful on the web where the markets are much more dynamic and are often a constant and daily changing bidding war.

In the old media market, a dealership would achieve maximum marketing value by concentrating spend on a select few mediums to achieve optimum reach and frequency. This made sense as the Pareto Principle (80/20 rule) generally applied to media. This meant that the top 20% of the media options would reach 80% or so of the market. This 80/20 rule held true in a media market of scarcity, but is not economically correct in a market of abundance. Today our market is too fragmented for Vary your marketing arsenal to include search - both paid and organic - multiple websites, including microthis approach to work. 18

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The game has changed.

Sinking advertising budget into multiple holes can leave you with countless vendors and no accountability. Building a digital marketing plan with a single partner’s integrated suite of trackable, measurable solutions will drive the focus and results you need to sell more cars while spending less. Cobalt is that partner. Now that’s acceptable. Learn more about Cobalt’s comprehensive digital automotive marketing solutions and how we help dealers succeed at www.cobalt.com/acceptable

WEBSITES

LEADS

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DISPLAY

OWNER MKTG

SERVICES

ANALYTICS

Automotive Marketing Solutions DrivingSales DEALERSHIP INNOVATION GUIDE | 2 0 1 0

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sites for both Variable and Fixed Operations, 3rd party should receive a detailed accounting of the results of such leads (especially when wanting to conquest customers), as an effort. Challenge all your marketing partners, both well as display ads which continue to play a critical role. digital and traditional for such reporting. Those stores Place your inventory on any site that produces a positive properly leveraging their OEM’s spend are vast benefits ROI on a PVR basis. Proper pictures and descriptive text over those who are not. are a must. You should also use your adwords account to Marketing Performance of Dealers Using Coordinated specifically target niche sites where you want to maintain Digital Advertising vs. Control Group (Industry an ad buy. Lastly, social media is an important piece of Composite, all brands) the equation. Although maintaining a Facebook presence is different from placing a transactional ad on Autotrader, New industry research confirms that dealers who don’t discount the “peouse digital advertising ple side” of social netto coordinate with their Marketing Performance of Dealers working, it has proven to OEM’s campaigns are be an important asset for 35% seeing excellent results those dealerships who do 30% as they capture Internet it right. shoppers at the expense 25% of dealers who are not Multiply your invest20% coordinating their digiment by leveraging tal advertising with the 15% OEM marketing OEMs. Dealer cost-perFor every dollar you 10% vehicle retailed for this spend on marketing 5% marketing channel was your dealership, your 0% well under 50% of the OEM spends $1-2 drivdealership average for ing shoppers into the -5% all advertising. With market. Formerly, with -10% OEMs spending miltraditional marketing, lions of dollars to create Visitors Leads Showroom Traffic you had to rely on luck top-of-funnel consumMultitier Digital Advertising Dealers Control Group to connect these shopers, make sure you are pers to your dealership the first in your market Source: Cobalt Research and take the value of to “connect the dots” your advertising on faith. from your OEM’s marWith digital advertising, keting to your store -- and you will be leaps and bounds this is no longer the case – you can connect with shoppers ahead of your competition.. wherever they are on the Internet and guide them with consistent messaging directly to your store and inventory. Moving onward and upward. The cheapest marketing comes from leveraging someone The concepts discussed in this article are not for the basic else’s ‘spend.’ If your OEM is running TV commer- internet department, however, if you are aggressive and cials on the “Super Springtime Savings Event,” guess looking to dominate your market these are the concepts what people do when they see the commercial? They go that should be on your mind. Those who find new menright to Google and type in “Super Springtime Savings tal models to solving old problems always make the largEvent.” Your PPC ad should pull up and, if you were est leaps in progress. given enough notice to create a microsite or landing page, The media markets have changed and those dealers it should show up in the organic listings. In either case, who adapt as the market rebounds will find themselves if consumers click on your site, it should go straight to well ahead of their competition. While this may sound the “Super Springtime Savings Event” page. If they click complex at first, its logical, its proven to work and this to another site, your ads should be displayed. If they go methodology will lower marketing costs and drive sales to their local forum about that OEM, your adwords ads at your store. should be running and YES you should even have some Innovation waits for nobody; make it happen. light branding on your social media profiles. Juggling all these digital advertising pieces in conjunction To view comments by others and discuss this article please visit with fast-moving OEM campaigns can be complicated, DrivingSales.com/innovation however, since the web is totally trackable, you can and www.DrivingSales.com

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Eric Miltsch Internet Director Auction Direct USA

Six Technologies That Will Change The Retail Automotive Market I always enjoy ringing in the new year - the thought of working with a fresh slate to create bigger and better things is both refreshing and exciting. I’m curious to see how the newest technologies adapt to become viable solutions and strategies for progressive companies and individuals. Here’s my list of the technologies with incredible potential for creating new solutions for automotive consumers and professionals in 2010. Real time Search: Google and Bing are squaring off in the first round of real time search results by providing real time results from the likes of Twitter and Facebook. While we don’t see these results in the same format as regular search results now, this will move from being a silo to being a primary search result visual. Search Engines such as Topsy will help the competition ramp up improved methods of displaying real time results from relevant and influential sources; other players in this space: Collecta and OneRiot.

HTML5: The newest version of HTML will host a suite of user features and benefits that improve online experiences. Rich applications (video & animation) will be easier to integrate as Flash and Silverlight won’t be as heavily relied upon. The goal is to create simple user experiences which function like a desktop application and also allows next-gen features such as offline data support and drag and drop capabilities. Hopefully more automotive web developers will recognize the opportunity this presents to provide dealers and their visitors more memorable and effective experiences.

“The entire CRM segment will be shaken up in 2010. Old systems dealers have been subjected to will be turned upside down with the advent of more web based systems. ”

Geolocation Services: It will become increasingly easy to engage with prospects and customers with the advent of GPS style functions within mobile phones, social channels and smart phone apps which harness geolocation capabilities. Geolocation API’s will increase the ability to communicate with consumers; your own creativity is the limitation. For example, Whrrl’s Merchant Program is a simple way to extend your online footprint and offer an incentive for consumers to visit & engage them with new discount/ promotional ideas. Mobile Video: Video has become a standard for the automotive segment within websites - mobile video will be a new frontier. Smart phone video usage will 22

continue to explode as it becomes easier to stream from your phone - and to users phones. Network expansion from 3G to 4G and Google’s entry into the spectrum will open up new creative possibilities. The first step was gaining mobile acceptance and basic usage. Nine million users accessed their Facebook account via their mobile phone in 2008; that number exploded to 88 million in 2009. Huge opportunity for mobile video in 2010.

Social Centralization: This is my term for the direction of car dealer social networks and the value added services they will provide automotive professionals. Dealer network sites will evolve into centralized destinations that provide more than blog posts and discussions. As user acceptance and awareness increases, greater value will be driven by segment specific research, access to video libraries and vendor ratings. I see the culmination being the eventual cross-pollination of content and resources from major industry brands into their own specific communities. I also see the user gaining greater access to this content,

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Joe Orr General Manager Dick Hannah Honda

New Social Media Strategy – Transforms Dick Hannah Honda 2009 Snapshot:

SEO Results:

* 40% of Total Sales Generated Directly Thru Internet Before the campaign our dealership appeared on the crucial first-page results only 18% of the time. But * Jumped from #3/#4 Positions in Major Metro after our advanced SEO ‘went live’ in 2007, we’ve Market - to #1/#2 Spots consistently achieved 72%-plus levels. I ferociously *Slashed PPC Spend $60,000/Year; Cut Nearly 100% track exactly where our call and web traffic originates of Traditional Advertising, Including ALL Newspaper, (using 3rd-party tracking companies, deploying 800#s at the search engines, etc.), and we’ve amassed three Used Car Liners and Radio years of powerful evidence on the impact that 60%*58% of all Internet-Generated Calls Coming plus first-page results have on a dealer’s business. Out DIRECTLY thru SEO and Review Sites/Directories vastly improved search placement quickly led to huge (540 Calls a Month) increases in our site traffic and Internet-generated calls, * Leads Generated via SEO & Review Sites Cost $1.58, and the ROI just keeps multiplying over time. vs. $28 for Third-Party Leads In 2009, SEO was directly responsible for: Background:

At Dick Hannah Honda in the metro Portland market, an intense focus on advanced SEO combined with Online Reputation Management (and, now, set for 2010, a new social media strategy), form the backbone of our marketing game plan. My goal here is not only to touch on why our dealership decided to get aggressive at the search engines and customer review sites, but how we implemented these campaigns, and the fully-tracked, seriously eye-opening results we’re seeing. I’ve been in the car business 30 years, and a passionate student of the Internet for almost 15. I’m always seeking smart, efficient new ways to drive more business. But it’s been in these last three years, where we’ve taken ‘Search’ to a whole new level, that’s been the handsdown revolution, the ‘aha’ moment, for our dealership. 1) The Impact of Advanced SEO:

* 48% of our unique website traffic

There’s usually a serious lag in what consumers are actually doing (and today that means online), and how we dealers are trying to reach them. Back in 2007, I realized search engine adoption had reached a massive tipping-point. I digested the data: 9 in 10 car shoppers were using search engines, and they’d quickly become the #1 way consumers selected dealers. And while I’d been spending $6,000 a month on PPC ads, I grasped that consumers trust the organic results far more. I was determined to tackle SEO to drive far more - far cheaper - ‘first-party’ leads directly to my dealership.

*44% of our 900-plus/monthly internet-generated calls – trumping PPC, and OEM and 3rd-party sites

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*410 sales and service calls a month * Plus, 90 website-submitted leads/month SEO was the first piece of the search puzzle for our ‘digital dealership,’ and it remains our bedrock: the single biggest contributor to our web traffic and incoming calls ever since. 2) The Impact of Online Reputation Management: DrivingSales DEALERSHIP INNOVATION GUIDE | 2 0 1 0

* We’ve now generated over 1000 positive reviews across the Web, with an average 4.9 out of 5-star rating.

online handle (i.e., Bob123), we searched our CRM tool to find email address matches.

* Now driving 150-plus super-motivated calls/month from review sites/directories.

*Every negative review was taken hyper-seriously: even if the customer made wild claims and demanded financial compensation, we did everything to make it right. And when we did, we asked that they edit their review explaining their satisfaction.

In 2008 we saw another consumer revolution gathering steam: the rise of customer reviews at sites/directories like Google, Yelp, CitySearch, Merchant Circle, Edmunds, DealerRater, etc. My Internet Director, Merla Turner, really educated me on how 3 in 4 car shoppers turned to online dealer reviews, and 1 in 5 actually switched dealers based on what they read. By simply Googling our dealership’s name she showed my what huge traction the review sites have on first-page results, and how our customers were one click away from bad reviews that would cost me business. There are two different ways auto consumers search: they either use brand searches without a dealer name, or they insert a dealer name into the phrase. Generic searches (without a dealer name) are covered by advanced SEO – but the other searches, involving your name, are heavily trailed by review site results, and this is where Reputation Management becomes crucial. To cover our search bases, as dealers, we must tackle both. Here are some core elements of our process: Get Management Buy-In, Motivate Sales Team Tackling our online reputation meant transforming the whole ‘mindset’ of the store: I knew I needed total management buy-in, and motivation for the sales team to actually make it a top priority. * I replaced weekend and monthly spiffs (for cars sold) with a $25 reward for each review generated - with a firm goal of 4-5 online reviews per salesperson every month.

*Most sites let businesses respond directly, and we trained our team on tone and provided scripts. Our mantra: be honest, real, never defensive – and fix the problem. Getting Customers Typing The goal was to get the highest volume of satisfied customers posting, not only because they ‘push down’ bad reviews, but because, with their huge visibility at the Googles, they gave us the kind of exposure an ad could never buy: the recommendations of real-world customers… We hit on a multi-pronged strategy: * With any visibly pleased customer, staff simply asked them to share their experiences when they got home * Whenever a strong manufacturer survey came in, we called and/or emailed the customer, politely asking them for a review. * When a happy customer responded to our ‘thank you for purchasing/servicing’ emails, we responded with an eXtéresAUTO-provided email template, including links to sites where they could easily post reviews. Online Reputation Management Results:

* Knowing staff recognition would be critical, we designed an email that circulated daily throughout our dealership, distributing all new reviews, along with graphs measuring each salesperson’s status: how many reviews they’d achieved and needed to acquire. The transparency and tangible incentives quickly reoriented my team around a common goal: get those satisfied customers typing online… Monitoring & Organizing * We performed daily searches of the major review sites/ directories. All reviews were printed, and placed in three folders: ‘Good,’ ‘Pretty Bad,’ and ‘Terrible.’ *An attempt to call every unhappy customer was undertaken. When the customer was only identifiable by their

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The impact of this online reputation makeover on our bottom-line – along with its more subtle effects – has literally blown my mind. First, these 150-plus monthly calls I’m driving directly from the review sites represent the most motivated, highest-closing customers I’ve ever seen. Because we simply ‘own’ the state of Washington from a positive review perspective, people are driving 150 miles to do business with us, and asking for salespeople by name. We’re gaining market share, our CSI ratings are up, and we now rank at the top of the Internet Satisfaction Index. The more subtle (but equally profound) impact: it’s utterly transformed the ‘personality’ of our store. Our sales team is obsessed with providing better service, our customers feel ‘warm and fuzzy’ about us, and our owners are proud. Dick Hannah Honda simply flies out at people searching online as the #1 consumer choice. Impact of SEO and Online Reputation Management Combined: This is where our website visitors originate: (Note that SEO plus ORM drives 51% of our total unique website visits.) And this is where our Internet-generated incoming sales and service calls originate: (Note that SEO in tandem with ORM is again responsible for driving the majority (58%) of our incoming calls.) So, on average each month in 2009, Dick Hannah Honda generated well over 500 direct calls through the combined force of SEO and Online Reputation Management. For us, it’s now responsible for the lion’s share of our call and web traffic, month in and month out.

The True Cost & ROI of SEO PLUS Online Reputation Management I dissect (to death) what every marketing line-item costs me, and the true ROI. In general, first-party tactics (including SEO, PPC, website investments, and Online Reputation Management) significantly out perform third-party leads. For us, they deliver nearly 400% more leads/calls at less than a third of our monthly spend – and our closing rates on first-party leads are twice as high. But SEO plus Online Reputation Management outperform any marketing tactic: generating more than half of our web traffic and Net-generated calls, at 7% of the Internet budget. Don’t get me wrong, we still use thirdparty providers, as they can deliver a relatively cost-effective stream of leads. But with these new campaigns driving so much business, we’ve been able to really refine our third-party spend so they perform more cost-effectively. continued on P-35

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Dale Pollak Chairman, Founder vAuto

Why Velocity Management?

For the past several years, I’ve been making a case for a new method of used car management that I call “Velocity.” The basis for needing a new strategy for making money in used cars is that fact that the Internet has transformed the used car market into an efficient market. In an efficient market, buyers and sellers have relatively equal knowledge of choices and alternatives. With the Internet providing shoppers the ability to see every vehicle in the market and how they are priced, why should we believe that we will get lucky as often as we used to? Do we believe that better negotiating tactics will overcome customer’s knowledge of identical choices and alternatives? Do we think that blowing up more balloons in the showroom or putting a bigger gorilla on the roof will make the difference? Simply stated, the business has changed, average front end grosses will not be what they once were, and we need to change the way we are operating to remain profitable.

question to be answered is how the lost profits will be replaced. The obvious answer is that they can only be made up with additional volume. Achieving additional volume, however, requires a dealer to stop pricing every vehicle with a large mark-up in an attempt to recapture the large gross profits of the past.

“Do we think that blowing up more balloons in the showroom or putting a bigger gorilla on the roof will make the difference?”

The need for such a profound change is very difficult for many dealers to embrace. Instead, many continue to price vehicles in the hopes of capturing the large grosses of the past. In reality, this is the worst possible strategy to achieve profitability in today’s used car marketplace.

To do so is like shutting the oxygen off to a patient that is in desperate need. The correct approach is the Velocity method of management which advocates opening the valves wide by pricing vehicles at or close to their true transaction point. Under these conditions, traffic and sales immediately increase and used car operations experience a vitality and vibrancy that had been long lost.

Once and only once a dealer comes to terms with the reality that the old front end grosses of the past will not return, the only remaining

In order to successfully implement the Velocity strategy, dealers must have new technology and information to make better decisions.

Specifically, they must know which cars can be priced high and reduced slowly if necessary, and which vehicles need to be priced low and reduced quickly if necessary. To know this difference, is a “must have” for a Velocity dealer. The technique that Velocity dealers use has two steps. First, the Velocity dealer takes special care to know the individual physical qualities of each and every vehicle. Some vehicles are special, some ordinary, some replaceable, and some simply one-of-a-kind. Such qualities certainly matter in making the pricing decision. After the physical qualities of the vehicles are assessed, the second remaining consideration for knowing which vehicles should be priced high and which should be priced low is an understanding of their current supply and demand. Vehicles with high demand and short supply can be priced with thousands of dollars of mark-up while vehicles with high supply and low demand need to be priced aggressively for a quick sale and a possible finance opportunity. Equally important, the Velocity dealer must change the negotiating culture of their showroom to support their new pricing strategy. The sales people need to recognize that an approach more oriented to volume than extraordinarily high average gross is needed. Therefore, Sales Managers must fully comprehend

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Visit vAuto at NADA 2010 — Booth #1631

Used Inventory Turn ROI increased by 33%

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Almost everything my franchises bring to our new car side, vAuto brings to our used operations, including

pulling customers into my front door.

—Dwayne Hawkins President Crown Automotive Group St. Petersburg, Florida

Beyond the leading-edge technology. Beyond the exclusive features. Beyond the data-driven insight. For a select set of dealers nationwide, vAuto has become much more. It has become all the power and the privilege of a franchise — refocused on used car operations. License to proprietary software proven to drive profitability. Access to the Velocity Management™ playbook and coaches. Entrance to a community of like-minded, highly successful dealers. Contact with customers predisposed to buying from you. It’s “the franchise”— reinvented for today’s used car market. vAuto is The Franchise 2.0.

Get a live demo today. Visit www.vAuto.com/nextfranchise or call 888-841-3701. www.DrivingSales.com

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Brian Pasch CEO Pasch Consulting Group

Linking Build Tips

www.nicoclub.com or www.nissan- to post articles in a field of your expertise for free. This is perfect for forums.com. The position of a car dealer’s webautomotive professionals that like to site on a Google, Yahoo or Bing There are dedicated user groups write and share ideas. search result page is determined by and forums for every brand of cars. a number of factors. These include These sites have high keyword densi- If you don’t have the time or the relevant content, age of domain, ty and relevance for the dealer brand motivation to write, consider hirtraffic and quality links. Dealers they represent. Articles posted on ing a firm to write articles on automotive topics and post these have been challenged to find articles on “ezine” websites like ways to increase the number of http://ezinearticles.com or artilinks that point to their website cle directory websites like http:// with important anchor text that www.articledashboard.com. matches their SEO goals. The articles you write must be Having high quality automotive informative and not sales pitchwebsite linking to your dealeres. When done properly they ship website is an important part can create powerful links and of an Automotive SEO strategy. attract organic search traffic. However, getting links from For example, writing an article other automotive website editors on the benefits of purchasing or publishers is not an easy task. a Toyota ExtraCare warranGetting links with the anchor ty over a third party warranty text you want is even harder. would be a good article to gain When starting a link building link relevance on extended warcampaign, it is important to stay ranty keywords. You can link to away from offers that sound too charts or warranty information good to be true. Every week I get on your website and pick up a good email solicitations from companies these sites, lists of your cars for sale, back link. in India, Russia and the UK offering or just advice to forum members can one-way links for a low fee. Most produce high quality links back to Local Business Directories of these services create links from your website. Outside of these two strategies, look websites that will add no real value A word of advice: become a sup- for ways to also establish local relto your Automotive SEO strategy. porter and clearly identify yourself evance for OEM car sales in your as a vendor. Also, take it slowly and state. These opportunities are norAutomotive User Groups build up your reputation and trust mally found on reputable statewide In the automotive space, consid- in the forum or you will be thrown business directory websites. Make er becoming a sponsor of popular out of the community. sure that the website has a Google automotive user group forums for PageRank of 3 or higher. Banner your specific brand. Many offer Outside of well ranked automotive ads or sidebar articles can often link building opportunities and user group websites, look for auto- generate hundreds of links to your banner advertising at a very reason- motive blogs that offer advertising website from one advertising sponable cost. For example, if you are a space; many exist. An alternative sorship. The optimal advertisement Nissan dealership you may consider is to look for automotive blogs or will include some text that you can becoming a supporting member of communities that will allow you

“Take it slowly and build up your reputation and trust in the forum or you will be thrown out of the community.”

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hyperlink with a strong anchor tag. An example is: http://www.newjerseyvisitorsnetwork.com Press releases are another great way to build quality links. There are about a dozen great websites that you can utilize for PR and back links. The key is to use press release websites that allow hyperlinked text in the body of the press release. This allows you to create “votes” for important keywords surrounded by relevant text. Try www.prlog.org and www.webwire.com . If you donate to local charities, schools, colleges and churches, ask them to create a sponsors page and add a short note about your support with a link back to your website. Links from these websites can be very valuable to establish credibility. Keep Your Eyes Open Other opportunities like Yahoo Answers, Merchant Circle Blogs, Fast Company and SlideShare.net are just a few of the dozens of free sites that can provide a good back link that will raise your relevance for the keywords you are targeting. Try to build links from blog articles that are about automotive topics. You can also look for blog posts that you can reply to that allow links to be followed. Firefox has a nice plug-in that will show you which website forms have a “nofollow” tag and those that do not. Reply boxes that have a no-follow tag will not build back links.

should be a shared responsibility between car dealer and outside consultant. Techniques and strategies are constantly changing and someone who builds links all day is normally finding new sites every week which can be an advantage over your competitors. To view comments by others and discuss this article please visit DrivingSales.com/ innovation

Why Velocity Managemenr, Pollak (Continued from P-26) that the dealership’s vehicles are priced to sell, not to negotiate. To this extent, documentation replaces negotiation in the showroom experience. Information is powerful and the Velocity dealer can use their superior knowledge about each and every competitive vehicle in their market to demonstrate to the customer that the offered price is truly a great value. The move from a traditional used car model to a “Velocity” model is a journey. Habits and practices that were successful in the past need to be replaced with new ones. The good news is that today, many hundreds of dealers are making the Velocity journey. These dealers have found value in networking with one another. Their shared experiences, challenges and successes help them navigate and serve to reinforce the rewards. The growing community of Velocity dealers is enjoying the rich rewards that are still available to those that are willing to adopt the necessary new strategies and tactics.

In the end, link building is very important, but it takes time and experience to know how to build the most effective links. Car dealers often do not have the time or expertise to build a consistent To view comments by others and discuss monthly link building campaign.

this article please visit DrivingSales.com/

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Joe Webb President DealerKnows Consulting

Selection, Hiring, and Orientation for your Internet Department It’s not the wand that makes the magic happen, but the magician who wields it. All of the tools, solutions, and leads in the world may be necessary to stay competitive, but it is the people you employ that make you profitable. If a dealership is only as good as the people speaking to their customers, we must make sure we have the right people representing us in the first place. One of the fundamental problems on our sales floors is that it is just too easy to get a job. Candidates walk in, fill out an application, prove that they have a pulse during an interview, and are hired on the spot. This has to change. This builds no value in our dealerships, our profession, or our industry. We must require applicants to earn a position rather than just getting it.

expert into starting my own consulting business. Selling cars, not on the floor, but online, is a TEAM environment. It is high time we begin focusing on acquiring a solid team. One question I’m often asked is ‘Who should run my Internet Department/BDC’. There are only three choices, each with a different monetary tag attached. You can hire the best (otherwise known as ‘stealing an expert’). You can promote from within. Or you can hire a newbie and train (i.e. start from scratch). Know that you’ll pay top dollar to hire the best, but this will yield you the fastest turnaround and gross. If you decide to promote from within, you will likely be paying a fair industry price for their services. Lastly, you will save considerable money (rough book value) by hiring someone new to the position, but won’t see considerable growth or a return on the investment for some time.

“If a dealership is only as good as the people speaking to their customers, we must make sure we have the right people representing us in the first place.”

As a trainer, dealers always ask me “What is the magic bullet out there? What will help me sell more cars?” They are likely looking for a solution/tool/CRM/ website/campaign, but the true magic bullet is a great employee. One forward-thinking person (especially in your Internet Department) can yield endless profitability. You are the magic bullet. The people around you are the magic bullets. Your growth will be determined by the people that work for you, with you, above you, and beside you.

must do three things.

Before you begin recruiting or interviewing for the position, you

1) Determine the hierarchy of the store. Who will this person, in a new department, be reporting to? Often anyone from sales managers to salespeople believe they can delegate work to someone in the internet department while the top stores usually have a director or GM We develop intricate processes to bring a prospect from as the only entity that presides over the Internet team. lead to appointment to sale throughout our showrooms, Decide who is in charge of what and this will help you but we rarely have a process to recruit, interview, hire understand the type of candidate you need to hire. and train the employees of our stores. I was able to 2) Develop a pay plan based upon your goals for the achieve success while in the retail side of the automoInternet Department/BDC and reward these specific tive business, but I know I wouldn’t have been near as metrics. The structure of this position (A-Z, appointsuccessful if it hadn’t been for the people I surrounded ment setter, Director) will help determine the pay plan. myself with during my time at my former dealership. It is only because of the work I put into preparing them 3) Create a written, detailed job description specifying for success and the work they, in turn, achieved, have I all duties, expectations, hierarchies, necessary skills, and been able to parlay my career as an automotive internet intended earning potential. 30

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VendorRatings Your dealership deserves more than a sales pitch. See how other dealers rate their vendors before you sign... • Chat Products • CRM-Variable Ops • DMS • ILM • Internet Trainers • Inventory Data Mgt. •Inventory Pricing • Inventory Stocking

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• Micro Sites • Mobile Sites • Online Classifieds • Owner Marketing • Reputation Mgt • SEO • Websites • 3rd Party Leads

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Many dealers ask me where they can even find quality candidates. Above and beyond the normal classified sections, here are some outside-the-box places that I’ve had success finding strong personnel for my former BDC. Selection 1) College graduates. I’ve had much success hiring recent college graduates. Those individuals with the fortitude to sit in classrooms, research, and complete assignments, day in and day out, just seem to take to the environment and position of Internet Sales Coordinator/Manager very well. There is a knowledge level and drive there that cannot be overlooked.

ground/skills, and then research them on the social networking pages. Make sure their LinkedIn information correlates to what is on their resume. Check the other sites to gain insight into their character. Try to learn about them through the social media landscape. Then, screen them by phone. Interviewing/Hiring

A good phone screening should be no longer than 5 minutes. You detail the job requirements and their work history, uncover any gaps/short terms in their employment, mention the drug/background check (to scare off anyone with bad habits hoping to sneak by), and “Celebrate your new inform them of the interview pro2) Promote from Within. cess. I won’t delve into the art of employees. Have a Looking internally has given me interviewing (and it is an art), but some great Customer Contact make sure you provide your sales manager take them Reps (BDC personnel) as they management team with all of the understand the product, have out to lunch the first training necessary to properly intergood phone skills, and even betview. Most managers were awarded ter, know the staff well enough to week. Send a gift bastheir positions from being strong understand what prospects would on the sales floor. In many cases, ket to their home welwork well with whom. a sales manager hasn’t been in an interview themselves for 6 or more coming their family 3) Vendor Referrals. Those years. They need to understand the Cars.com and AutoTrader reps into yours.” how and why of closed ended vs. stopping by your store know who open ended questions, what to ask, the real talent is at your competiand when to ask them. Know that tors’ stores. Often, people pass the word that they are open for a change through these interviewing is a PROCESS. It should be performed reps so approach them and see if there is someone who by several managers over several days (no one should be may be a good fit. After all, no vendor will refer in a fool hired on day one). It should involve several steps the because that person would only make their life harder in applicant must complete and should also involve outside-the-box interview tactics like mystery shopping and your store as well. role-playing. Trust me, if every manager role-played a 4) Local Competition. Many great Internet Directors negotiation with the new candidate (the candidate being have a strong #2 at their store. This is someone that they the salesperson and manager as the customer, not many know deserves a shot at running their own department, people would be hired…or consequently later fired. I but can’t give them that opportunity because they won’t could make interviewing for auto dealers a ten-page obviously give up their own jobs. If you have a good article alone so I will let you do your own research here relationship with another ID, consider calling up and – or simply contact someone who can help in this regard. asking if they have a second in command that they’d be willing to recommend. If not, just steal them. Also in Orientation this category, don’t overlook recruiters. They have access The orientation is incredibly important to the success of to many great candidates. any new hire. Bad orientation causes a type of “buyer’s Regarding who you select, please do not overlook women. If it is proven that 85% of all decisions are influenced by women and 65% of every vehicle purchase is determined by a woman, why do women only make up 7% of our sales and service staff? Correct this discrepancy by finding strong female applicants.

Once you’ve acquired all of the resumes/applications, review them, ensuring they have the necessary back32

remorse” and increases turnover.

No new hire should begin handling internet leads or calls on day one. This happens all too often. On the same note, don’t give a new hire “the grand tour” and expect them to remember names, paperwork, logins, etc. Much like for recruiting and interviewing, there is also a process for a proper orientation.

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Require that your vendor trains the new recruit on all solutions – front to back. No exceptions or find another vendor. It is fine for the director of the department to give guidance/hints/tips, but the training must come from the vendor. Create teams where every single department in the dealership has one primary communicator. This way, the new hire learns about the overall dealership’s structure and has only one individual that they are to speak to. Allow them to spend a little time in the different departments to get a lay of the land and understand the importance of the entire rather than the role of its parts. Once product knowledge training, process training, solution training, and paperwork review are complete, you should then test them through a mystery shop on the system. Make sure they are employing all of the templates/word tracks/practices that you’re expecting of them before they get the green light to handle customers. They must earn your seal of approval before they officially step into the duties. This first two weeks of orientation should be salaried in my opinion. This way they will be in a good place financially – and not starting from scratch – when they do assume the reins of their job. Just ensure they are ready to tackle the position before giving them the task of performing the actions. Too many new hires are dropped onto the sales floor or into the internet department with little more than “advice” from someone they’ve been insanely asked to “shadow”. Do more for them than these old-school practices. These negative impressions lead to mistrust. If you’ve put them through a process to join your team, don’t drop the ball now by leaving them will little guidance on how to conduct themselves. Celebrate your new employees. Have a manager take them out to lunch the first week. Send a gift basket to their home welcoming their family into yours. Make sure they understand the “language” of cars sales. (We all have those code words that we share for different aspects of the deal. Familiarize them.) Let the new hire know the importance of paperwork and how very crucial their role is to the organization. Show them what type of future they can have at the dealership. Most importantly, ask for questions. Let them know that there is never anything they should be afraid to ask of you. As I said, this is a TEAM environment. And don’t forget to provide them long-term, on-going training and evaluations. This will always keep them focused and prepared for the goals you’d like them achieve.

www.DrivingSales.com

Finding the perfect fit for your Internet department is one of the most difficult jobs an owner/GM has, yet it can single-handedly be one of the most profitable for them if performed correctly. There are three things that develop people: the training, the job environment, and their willingness to learn. You can only control two of these three which is why you must not just support the staff, but measure their results. Provided you’ve created the proper processes when recruiting, interviewing, and training, you will be able to sit back and see the success of your efforts. You won’t need to pull any tricks out of your sleeves. The magic will happen. To view comments by others and discuss this article please visit DrivingSales.com/innovation

Six Technologies, Miltsch (Continued from P-22) whether they act as a contributor or a reader, via simple access points such as smart phone apps. Social CRM: The entire CRM segment will be shaken up in 2010. Old systems that dealers have been subjected to will be turned upside down with the advent of more web based systems. The biggest changes could also come from the integration of the social channels to these systems to help improve and monitor customer communications. Major CRM solutions have already made this leap; I’m confident these solutions will make their way into the newest CRM tools being rolled out. I wouldn’t be shocked if an open source DMS-CRM solution sprouted up. Salesforce.com is adding a new data tool to their offering called Chatter. Other companies such as Yammer have rolled out creative solutions which mesh internal and external communication efforts. We’re experiencing another round of significant changes in the automotive markets. Improvements in the retail process, customer service and online user experience will continue to move at break neck speeds in 2010 and aren’t limited to the above list; they’re certainly not limited to technological solutions - these are simply tools to help make the improvements easier to achieve. The biggest change will undoubtedly come from how the professionals in our market react to the needs of the automotive consumer and work towards creating a better overall customer experiece. The automotive retail change movement has already begun, how will you become a part of the solution? To view comments by others and discuss this article please visit DrivingSales.com/innovation DrivingSales DEALERSHIP INNOVATION GUIDE | 2 0 1 0

Kevin T Root VP Product Strategy DriverSide.com

Why Your Service Department Is Costing You Car Deals It is said that while the sales department sells a customer the first car, the service department sells them the next two. Unfortunately, the inverse of this is true as well, and the service department can just as easily lose sales. It’s not that they do this intentionally; in fact, they have probably maintained the same standards for years – which is exactly the problem. The market has changed. Consumers have changed with it, yet most dealerships are managing their service customers exactly the way they were ten or more years ago.

53% of consumers feel that a locally owned independent repair center will provide a better value than either a new car service department (24%) or a nationally owned light repair center chain (23%). While that might not be surprising, this is: Most consumers (46%) felt that the locally owned repair center would provide the highest quality of repair - if price were equal. And the real zinger is that the new car service department was perceived to be the

Not exactly the textbook definition of Customer Relationship Management.

Three out of four (74%) of consumers report that they choose companies and brands based on what others say online about their customer service experience (Society for New Communications Research, May 2008). The reason this matters to the sales department is because dealership and brand loyalty is on the decline. Consumers are cross shopping more than ever and when doing so, they increasingly turn to social media and dealership ratings and reviews when deciding which dealership to give their business to. Poor service department reviews impact both service business and sales department business.

Management of those very valuable customers might include sending them a letter or postcard stating, “according to our records, it’s time for your next service” or worse, simply putting an oil change reminder on their windshield.

Sure, this was fine years ago, but not today. For most of our customers, money is tight and that means those out of warranty will be shopping around when they need work done on their car. Some are looking for the best price, some are looking for the best value and some are looking for the best experience. In all cases, new research indicates that dealer service departments are coming up short.

Ratings and reviews of vehicle service providers are taking off, and their impact is huge. 86% of consumers read online business reviews before making purchase decisions, and 90% say they trust these reviews (Kudzu.com survey of 600 users, December 2008).

most likely to overcharge them.

Progressive dealerships realize that they can use service department ratings and reviews as a competitive advantage, especially now when most dealerships aren’t thinking about reviews. Those that tend to be focused on building sales reviews, not service.

Ok, so those poor guys in the service department have a consumer perception problem, too bad for them Think about how powerful it is to right? Why should those in the sales point sales prospects to independent review sites and show them how department care? your dealership stacks up to the guy Two words: social media. down the street. He may be offering

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the same model for $500 below your price, but his bad customer reviews compared to your good ones can swing the sale to you. So how do we respond to this? Start by helping the service manager or dealer principal realize the problem. Share some of the data above with him. If yours is like most dealer websites, point out the ratio of information on your website that is sales related verses service related. Now compare the ratio of dealership profits from the service department verses the sales department. Kind of unbalanced isn’t it?

New Social Media Strategy, Orr (Continued from P-25) Up Next…Social Media Campaigns in 2010

This year we’re putting the third piece of our puzzle together: getting our social media strategy right. Yes, we’ve been Twittering, on Facebook, and have a great, femalefriendly auto blog called ‘Live, Love and Drive’ …but our management team has put their heads together, and hammered out a game-plan for what we want to achieve at the social Help them to understand that today’s media sites next. service marketing is about the 3 Rs: Our philosophy: no direct ‘selling’ Relevancy, Reputation and Results. on any social platform. Everything Relevancy pertains to the type of we do is about building strong comcommunication the dealership sends munity relationships and great conto its customers. Crude time-based tent. From helpful and fun videos – “service reminders” don’t cut it any- to our new blog ‘Life in the ‘Couv,’ more. Communication has to be which dives into everything great highly informative and highly spe- going on in our town – to ongoing cific to that customer’s exact set of contests at Facebook/Twitter – to service needs and should include great content at our partner TV/ additional information relevant to radio sites. With core fans and folthe consumer, their vehicle and their lowers, every twelfth communicainterests. It should be part of a larger tion is a very soft sell, i.e., pretty holistic approach to service customer amazing discounts just for them, etc. retention that combines both relevant And to really execute, we’ve hired communication and content made a dedicated in-house professional to build out our social media camavailable to your customer. paigns and SEO-friendly content. To learn more about the 3 Rs of service marketing, as well as how to grow At Dick Hannah Honda we talk your service customer base, read our about our ‘digital dealership’ all day: new white paper, Service Marketing: how to drive more traffic to it, to New Solutions for New Challenges. sell more cars. Our approach: a bedStudy highlights will be delivered in rock in advanced SEO - and then an upcoming webinar. All webinar adding powerful Online Reputation participants will receive the free white Management and pro-consumer paper before it is made available to social media campaigns. They repthe general public. For more informa- resent the highest ROI and most tion please visit: https://www1.goto- cost-effective advertising we’ve ever done, period. meeting.com/register/740829824 Or visit http://www.driverside.com/ To view comments by others and discuss sales/demo/dealer/ to learn more this article please visit DrivingSales.com/ about DriverSide and our service cus- innovation tomer retention programs. www.DrivingSales.com

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Paul Rushing CEO dealerbytes.com

Micro sites, Blogs, Social Media, Oh My!! A micro site, blog, social media strategy is not a set it up once and forget about it process. It requires nurturing just as the Green Pea does when they are shown their new desk. You need to identify the strength and weaknesses from your efforts and look for ways to capitalize, improve or move on from.

Deploy Assets Setting up assets is the heavy lifting. The real planning starts, this is where you build your blog, launch micro sites or get everybody in the store involved in social media. You can do all three at once. To manage your online reputation is could be as simple as deploying a dealership blog and a specials micro site and setting responsibilities for a publishing schedule and updates to the asset. You canâ&#x20AC;&#x2122;t track what you do not measure A blog will help you identify trends in what consumers are looking for in your marketing area with properly installed measurement tools, such as Google Analytics. A micro site that is getting national traffic may not be in your best interest if your process cannot convert that traffic. Make sure every click and every call is measured and properly sourced. Capitalize on Trends

The End is Where it Starts The easiest way to identify trends in what consumers are looking for in your market area is with a well planned dealership blog. A great way to dominate your local market area online is through an aggressive micro site strategy. Its fool proof that a well optimized social media presence will deliver consumers to the showroom and service lane. When the three are working together it is an army of 800lb marketing gorillas. Set a mission goal. This is the most critical step. Determine your objectives before determining what assets you are going to deploy. For some dealers it may be just to protect their online reputation, the easiest effort, it could be to draw traffic on their competitorsâ&#x20AC;&#x2122; names to their website, an advanced marketing strategy you have to be very careful with, others raise the awareness of the products they represent in their local market or to pull traffic from outside of their primary marketing area to increase their online saturation. 36

If your analytics show that consumers are looking for F150 Bedliners in Houston then you have an opportunity to create content to show them that your dealership is the only place in Huston to buy bedliners from by deploying inner pages on your dealership website, a fresh micro site or a blog page showing you mean business as far as bedliners go. Managing it All A blog that has not been updated in two months is a waste of bandwidth and expectations. Great content about how to set a clock on a 1995 Dodge Durango with a well optimized video on how to do it could drive leads via your online appraisal form. Using these mediums requires hands on management so you donâ&#x20AC;&#x2122;t miss opportunities you would not otherwise have. Set it and forget it is no longer a valid online marketing strategy. Once the expectations are set, trends are identified and deployment is streamlined the puzzle comes together and you have bred a 800lb gorilla that your competition will never conquer. To view comments by others and discuss this article please visit DrivingSales.com/innovation

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Tom Mohr CEO responselogix inc.

Winning Online Here is a stark but simple fact: for the past year, the marketplace has offered fewer active buyers than needed to sustain the dealer community. A Darwinian fight for survival proceeded; over the past year an alarming number of dealers went out of business. Those that have survived this first shakeout have proven they can deal with adversity. Going forward, those that thrive must gain and cultivate an operationally persistent competitive edge. How can a dealer leap into this evolutionary winner’s circle? The answer to this life-or-death question is hidden behind another: where do dealers have the greatest opportunity to impact a buyer’s choice of dealership? This is key. If you know the moment of truth-the moment when the customer is most open to a dealer’s courting ritualsyou gain a distinct advantage over competitors. By closely observing the steps a consumer goes through to buy a car, the point of maximum influence ability becomes clear. Two incontrovertible facts guide us. First, over 80% of car-buying customers use the Internet to gain an information advantage as they prepare to interview dealers who seek their favor. Consumers do this because they prefer to engage prospective dealerships from a distance until they have gained more information and have built trust. Second, an increasing percentage of customers extend their remote engagement further by sending their first expression of interest (a lead) www.DrivingSales.com

over the Internet, to multiple dealerships. Dealers who thrive in the midst of the shakeout will have figured out how to seize advantage in the domain of the Internet customer. The moment of truth, of course, is the point where the consumer has sent a lead to 3-5 competing dealerships. The dealer who leaps in front of the pack and first initiates the courting ritual, then is gently

The answer to this life-or-death question is hidden behind another: where do dealers have the greatest opportunity to impact a buyer’s choice of dealership?

close rate on average. Get these two critical steps right and you’ve made the leap into the winner’s circle. Why? Because so few dealers can pull it off. Here’s the opportunity: customers want a quick, informationrich response. If consumers do not receive a quick response, they will walk away. A rapid, relevant response increases sales. Speed is key, but it’s not the only important factor. Evolutionary advantage is also tied to the content of the dealer’s message. Customers want the dealer’s price! Dealers who hide it hurt their prospects for a sale.

A Ford dealer in Dallas which uses an automated tool to achieve quick price quote response recently received a note from a happy customer: “I am writing to you about my recent purchase of a new truck at your dealership. Late one night I sent e-mails to several dealerships, the only email I received that night was from your dealership. Not only was I surprised to get a reply that persistent with insightful words and quickly, the email had several trucks offers over time, leaves his competi- with different options with prices on tors clamoring in the dust. them. ....I will refer all my friends, family, and acquaintances to your Rapid response and effective foldealership.” low-up are the one-two punch that knocks out the other guys. A fast, relevant and transparent Experience shows that dealers who response is important in order to can deliver an immediate response build customer confidence and trust. with a price quote every time when If delivered on every lead every time, a customer submits a lead, and per- a dealer will grow sales significantly. sonalized follow-up every time when the customer doesn’t buy, will see at least a 2 percentage point increase in To view comments by others and discuss this article please visit DrivingSales.com/ innovation

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JD Rucker CMO TK Carssite

Social Media Marketing: a party not a pitch The first thing that many car dealers will think when they read the headline is, “I’m not interested in going to a party. I want to sell cars!” Dealers and businesses in general have been walking a fine line between “having fun and being interesting” on social networks like Twitter and Facebook and truly using them for business. What most dealers do not understand is that having fun (and more importantly, being interesting) is the first step towards being able to promote your business through social media. Automotive social media is about conversations and engagement, so first it is important to understand how they work.

Going to a Dinner Party Whether you go to social events or not, you can imagine the scene... You walk in and there are dozens, even hundreds of people standing in groups, walking around, chatting, laughing - generally enjoying themselves. You start to mingle, look for people that you know, and perhaps walk up to a group of people talking. They notice you and smile. Someone in the group may say, “Hello, I’m Jennifer.” You say, “We have a special on Certified-pre owned Accords right now. Only 5 left so let me show you where to find them!” Everyone’s smile in the group disappears and they turn to each other. One might say, “That’s nice. Thanks

for sharing.” Otherwise, they start He says, “Earn money from home while you sleep. Get my new MLM ignoring you. ebook. It’s free!” You walk up to someone alone at the bar. They notice you and say, Other people, also smiling, spot the “Man, I really don’t do well at these two of you talking and join the contypes of things, but my wife made versation. One says, “Let me show you how to get 300 people a day to me come.” YOUR dinner party.” You say, “I just traded for a 2004 Ford Mustang Coupe. It’s SWEET! An attractive girl walks up and says (with an oddly masculine voice), “Take a look at my pics of me “The same thing happens with a goat. It’s hot!”

on Twitter and Facebook every day. Car dealers join, try to make friends, try to sell cars, and wonder why nobody other than spammers are willing to talk to them.” You can see it right through that window.”

At this point, you start wondering, “Why haven’t I sold a car yet? Why are people pointing at me in their groups with looks of disgust? Why don’t I have a ton of people gathering around me to hear about all of the wonderful inventory and specials I have to offer? Who are all of these weird people that ARE talking to me?” You leave the party and think, “Wow. These things just aren’t for me.”

Going to a Social Network

The same thing happens on Twitter and Facebook every day. Car dealers join, try to make friends, try to sell cars, and wonder why nobody other than spammers are willing to talk to Someone spots you and walks up to them. you. Excited, you have your pitch ready this time. “Hey, we have a spe- The key to using social networks cial for people at this party only - a properly is to be interesting and $9.99 oil change! Just say you heard interested. Remember these key points: about it here.” The person who walked up to you is 1. People like to talk about themstill smiling. So far, so good, right! selves and things that interest them. Startled, your new “friend” walks over to the window, looks at what you’re talking about, nods, and walks away.

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2. People like others to hear about sages such as “Playing with my cat themselves and be interested in them. right now” or “I just discovered that I like goat cheese”, the reality is that 3. If you are interesting as a member those who are truly successful say a and show sincere interest in others, lot more than that. many will want to get to know you. You, as a car dealer, can be interest4. The more people that get to know ing without pitching your stuff. Join you, the better your chances are of conversations. Start conversations. being found by someone interested Ask questions. Reply to people. in buying a car from you. This stuff just isn’t that hard. Here 5. The easiest way to get others to are some examples of Tweets and want to know you is to be passionate Facebook status updates that can get about your interests as they relate to you heading in the right direction: others. In other words, be real. •“Which American hotrod is 6. Talking about things that are king of the road today: Mustang, important to you, truly important to Camaro, or something else?” you, is the key to being real. • “Wow, NY Times reports that Again, the specific actions and ways Ford made a big profit last quarof utilizing social media for business ter. <link> Is this the beginning will come in future posts, but here is of the rebound in the industry?” a great place to start: you don’t have • “I just traded for an ‘81 DeLorean. to be mundane to use Twitter and Facebook. As much as it appears that That’s right, the Back to the Future car. these sites are about sending mes- Anyone have a flux capacitor handy?”

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• “The best part about Saturday tent sales: free hotdogs and burgers. Firing up the grill now.” This could turn into a longer post than it should, so I’ll end the “tips section” with that. The point is this: you wouldn’t walk into a party and start spouting specials and inventory items to random people. On the other hand, if you are interesting and interested in others, someone is eventually going to ask, “So what do you do for a living?” When you tell them that you sell Toyotas in Los Angeles, eventually someone will say, “Nice. My sister in LA needs a minivan. What can you do for her?” To view comments by others and discuss this article please visit DrivingSales.com/ innovation

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Masters Series Documentary Produced by Acceclerate Automotive

7 Process Points Your Store Must Execute Why your Internet Sales Process your department or use technology matters more now than it ever has, that can respond with YOUR price and the 7 Process Points you must quote immediately. execute to be successful: Do not measure, average response Advanced marketing tactics like time, it’s a bogus measurement. SEO and Social Media Marketing Instead measure what % of the time are a big focus in the industry right you responded within 15 minutes. now. These marketing tools are very Face it, if you don’t respond quickly successful at moving the bar forward the chances of closing the deal drops and YES your dealership needs to be dramatically. involved. However, if you are growing your arsenal of marketing tools you are also being more wasteful if your process is not nailed down. “Clearly the MYTH Your store should not be investing more marketing dollars unless that Internet customyour customer funnel is proven to convert the customers into deals. ers know exactly what As the economy rebounds and you look to grow your marketing it’s a they want is FALSE. perfect time to do a dealership process check up. How does your store You need to “sell” stack up? The Correct Internet Sales Process A successful Internet sales process is not rocket science. There are 7 things every process should accomplish. By executing these seven points consistently and with your dealerships brand, you will maximize your close rates. Use this as a checklist to grade your dealerships process:

your product.” 2. Transparency in price, availability and trade

When customers go online the regularly add features or submit requests on vehicles out of their price range. They are curious, they are hopeful and they are human… trying for something better than current reality is just what we do. Once you realize they are unlikely to buy the vehicle they submitted a lead on you realize the importance in providing options to them. This helps engage the customer with you as they explore their options and come to reality of what the best car for them really is. 4. Sell the advantages of your product Again, customers regularly DO NOT buy the product they submitted a lead on. Many even switch brands or bounce from new to used and vice versa. Clearly the MYTH that Internet customers know exactly what they want is FALSE. You need to “sell” your product. How do you do this? Provide links. Send them to your product landing pages, micro sites and the pages that tell your brand proposition. If you don’t have these pages built and optimized put that on your list of things to do. Use OEM sites, outside news stories, social media profiles and your dealership ratings and reviews to boost your brand proposition. Do be cautious sending customers to sites you down own, you have less control but added 3rd party credibility. Balance the pros/ cons appropriately.

Customers can get whatever information they want. If they don’t get it from you they will get it elsewhere. Don’t let that happen. If they ask for a price give them a price. If they 1. Quick Response time want to know what their trade is Yes, this concept has been beat worth talk to them about it. Don’t into the industry but in this age of ever avoid a question. Be transparimmediacy it continues to be one of ent, be engaging, be a place they the largest separators of success. An want to do business, answer their hour to respond to an email is NOT questions and give them a reason to acceptable. Your response needs come see you. Track these links. Your CRM to be within minutes, if you can- 3. Provide multiple options should be able to tell you who is not do this consistently, restructure 42

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realestate

If the customer provided a phone number you have permission to use it. Call them. Confirm they got your email, start a conversation to get to know them. The one piece of

... . . .. ..

5. Phone call to request appointment

After you have done all this work to get the Internet Customer to the dealership, don’t blow it with a bad “in person” sales process. Continue to be transparent, answer questions, be a resource and over come objections. You should close an exceptionally high number of your Internet appointments that show up. It’s ok to sell and be a closer, just maintain

clicking on what, replace the links that get no action and keep the content fresh.

. ..

...

.....

accelerate a u t o m o t i v e

.......... Most 3rd party leads close AFTER 30 days. If you are a dealership that does a great job at following its customers for 3 weeks, congratulation! You could double your closing rate if you could extend that follow up/engagement process follows for an additional 60 days. Long-term follow up should be more than automated emails or a dealership newsletter. Include regular phone calls into the mix. You are most likely better at building and maintaining relationships on the phone than you are at email. Use this to your advantage.

Dealership Internet Sales Success If there is one thing I would emphasize, it is consistency. We are in the business of doing the little things a lot of times. Measure every step of your process and report with your management team in weekly meetings. Reward the process by keeping spiffs and awards focused on execution. You cannot manage results but you can manage the activities that get the results. The 7 activities listed above will get you results but most stores struggle in the execution of their process. Hitting all 7 points consistently is an uphill climb. Remember, we are in the business of doing the little things a lot of times, be consistent and execute your strategy.

7. Differentiated “customer friendly” To view comments by others and discuss sales process this article please visit DrivingSales.com/

...

6. Long term follow up

.. ..

your customer relationship through the process and you will be fine.

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your product another store cannot duplicate is your relationship with the customer, be sure that relationship is strong. Use a phone script, set an appointment and track your shows.

What . . . . . would you learn . . if you . .met with 37 of the most successful people in Automotive eCommerce?

Jared Hamilton CEO, Founder DrivingSales.com

Internet Sales Manager Pay Plans

Today, the Internet Sales Manager has emerged as one of the most important positions in your dealership. Here are some best practices for creating a pay plan that will fairly compensate your ISM and help ensure the success of your dealership’s web efforts. 1. The pay plan should focus the ISM on his/her responsibilities: The objective of your pay plan is to align your employees’ job with your dealership objectives, so the employee is compensated for achieving what the store needs in a way that represents fair pay in your market. The very first step to creating your pay plan is to review your written job description to understand the expectations you have outlined for the ISM. If you, like most people, do not have a written job description then your fist step is to create one. Here are the most popular “Roles” ISMs have in dealerships. Various ISM roles: Sales ISM: This ISM is directly responsible for taking customers through your sales process and delivering units. The Sales ISM is similar to a floor sales person, but rather than take ups, he/she works with Internet leads. Manager ISM: Similar to Sales ISM, except in this scenario the store has grown beyond a one man Internet department and has added a team of “Sales ISMs.” The Manager ISM is responsible for leading the ISM team. This person may also desk deals for the team. 44

Commissions – The most standard pay method can be based on gross or volume generated. Commissions should be a part of the pay plan for all ISMs responsible to deliver units and revenue. Be careful though, an ISM pay plan should almost never BDC ISM: Business Development be 100% commission based. Centers typically handle the leads, make the calls and set appoint- Activity pay - For those ISMs whose ments for the sales team. The BDC focus is not on selling cars, but does not usually walk the custom- on the activities that lead to sales, er through the sales process and pay should reflect those activities. close the deal, but is responsible The most common “activity pay” for achieving specific metrics for in the market is paying for appointlead response, appointment setting ments showed or leads generated. and revenue generated from those Activity pay is usually best suited for Marketing and BDC ISMs who appointments. are responsible for specific metrics Marketing ISM: This type of ISM that lead to the sale, but who, in manages the website, lead purchas- the end, hand the customer off to ing, SEM and SEO efforts, email a sales team. marketing, social media marketing and database segmentation. He/ Salary or Base pay - Since the ISM’s she also publishes the online vehicle job, particularly when he/she is in a data and handles the vendor rela- director, marketing or BDC role, is very fluid and changes daily, a base tions. pay of some sort is important to 2. Use various pay structures to align cover all the little things that do not with your ISM’s Role: directly result in a measured activity Not all methods of compensation or a sale. Often, the base is simply are created equal. Every employee a base guarantee, or a minimum deserves to know how success will monthly total, guaranteed to the be measured and the range of unac- employee. ceptable, acceptable and outstand- 3. Putting it all together and finding ing metrics they will be judged by. balance in “Role” and “Pay.” This improves the leader’s ability to manage and provides your employee Look at your written job description with a roadmap to success. Different and decide realistically how much compensation methods should be time and focus should be applied employed to align with the various towards each objective, then back metrics you will use to measure suc- this into the value your market places on the role. For example, if the cess. Such as: role is 100% selling cars to Internet Director ISM: In this position, the ISM branches out to manage multi rooftops in a dealer group or to oversee multiple dealership departments, such as the web efforts for parts and service.

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pay on their financial statement will not support a properly paid ISM. However, usually they are lumping However, most ISM roles are a the entire pay into one account and hybrid of roles. For example, 20% then complain that the account is lead generation, 20% site manage- over the “20 group” guideline and ment/vendor relations and 60% needs to be cut back. sales. In this example, your ISM should receive 20% of their pay Depending on the ISM role, it in SALARY to cover their misc is usually best to split their pay management, 20% of their check up into multiple accounts to keep in ACTIVITY PAY for the leads things accurate. For an ISM that they generate, and 60% of their is 30% sales, 30% management pay in COMMISSIONS from the and 30% marketing, I recommend deals they close. All totaled, with splitting their pay up into those average results, they should earn three accounts to accurately reflect average pay for your market. If your stores spending. Accurate they under-perform, the commis- decision-making starts with accusions will naturally lower their pay rate data. Your ISM plays multiple and when they over-perform, the roles across multiple accounts and compensation will naturally rise. often against multiple departments, This equation can match any pay so be sure to account for the job plan to any ISM job description. properly. Just simply outline what percent of 6. Keep it simple. their job should be focused on what activities and match the pay plan The work should be in creating the accordingly. pay plan, not in calculating it each month. If your employee needs 4. A couple of tips: Increase perforan oracle database and a super mance through EOM reporting. computer to calculate his/her pay, At the end of each month you do I guarantee you have a pay plan not want to just hand your ISM a that is ineffective when it comes to check, especially if their pay comes employee motivation. Simple and from multiple roles. Rather, break track-able is best. out the performance of each pay The ISM’s role is different from type and let them see how much your other sales people and from was salary, how much was commisyour other department managers; sions and how much was “Activity and the pay should be structured Pay”. To go the extra mile, off differently too. Don’t pay your to the right of their totals, display ISM as if he/she is someone they what the pay would have been had are not. It is best to start with a they hit their goals. If they overblank slate, and then clearly define achieved, they will know it and the responsibilities and metrics they receive the proper recognition. If will be graded on to construct a pay they under-performed, they will plan that meets your dealership’s have a clear depiction of where, needs while paying a fair wage for and understand what to focus on your market. Don’t be afraid to next month to improve their perbreak the mold and have active formance and thus their pay. communication with your ISM. In 5. Where do I bill the ISM on my the end everyone will benefit. statement? leads, then a 100% commission structure should be fine.

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Rafi Hamid President Dealers Technology Inc

Internet Departments are on the decline, and that’s good It’s no secret that while Internet sales are climbing, Internet Departments are on the decline. Dealerships across the country are closing their Internet departments because they realize that the vast majority of customers are now going online. Since the Internet is no longer a niche market, why would you have a niche department? Instead, it’s time to recognize that every person at your dealership should be involved in the Internet Department and properly trained to work with Internet shoppers. Every dealership manager should be intimately involved in growing their department and that means training their people to handle the questions from the web and using digital marketing to grow their department. Is the Internet customer different from the person who calls on the phone or walks in the door? They are the same people, simply using a different means to communicate. All your staff, especially the sales team, should be excellent communicators, regardless of the medium the customer decides they want to talk on. Each department should be responsible for their part of your website. Every computer in each department should default to that department’s homepage on their Internet browsers. For example, your pre-owned manager should see pre-owned inventory every time he opens the browser to do anything. That way, he’s constantly eyeing the pages, 46

noticing when inventory is not updated and taking responsibility to keep his inventory fresh and relevant. Not only does this prevent your dealership from getting leads on sold cars, but also will help your search engine ranking. Constantly updated content means higher relevance.

“It’s time to recognize that every person at your dealership should be involved in the Internet Department and properly trained to work with Internet shoppers.”

ing their department’s part of the site updated, it helps them to realize that the dealership site is a tool for increasing their department’s gross and improving customer satisfactions, who wouldn’t love that? Make sure you don’t hand out responsibility without proper training. The best intentions for inclusion does not mean much if an untrained employee gets into the back end of your site without knowing what they’re doing. Passing out responsibility to well-trained individuals, throughout the dealership, will ensure that your site remains valid and well optimized.

In today’s economy, we need all the help we can get. Lucky for dealerships, your website is one of the most powerful and costeffective marketing tools you could ask for. The key is to keep it relevant, updated and at the center of the dealership. What Obviously, everyone at your dealerexperiences have you had with getship should want the best informating the entire dealership involved tion possible to be on your website, with the “virtual” dealership? but when the site belongs to a single department, it often gets lost in the It is simply not good business to shuffle. As we all know most internet have only a few of your employees managers are paid to sell cars, not sell trained to handle the majority of parts or schedule service and thus do your customers. It’s time to think not have much incentive to increase beyond the restrictions of a small the overall effectiveness of your site. Internet department and move to an Likewise, for Fixed Operations and era of “Internet Stores.” Your cusFinance Managers, if the site is tomers will be happier, your people controlled by the ISM, they’re not will be happier and your success will going to be very involved in the grow. day-to-day Internet operations for their departments. When you give a To view comments by others and discuss this article please visit DrivingSales.com/ manager the responsibility of keep- innovation

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2010 | DrivingSales DEALERSHIP INNOVATION GUIDE