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ALABAMA INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION | DECEMBER 2019
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DALLAS, TEXAS Permit No. 2079
NIADA Unveils 2019 Used Car Industry Report
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2 AIADA DECEMBER 2019 WWW. ALABAMAIADA.ORG
MANAGEMENT MATTER |
By John Chapin
HIRE CORRECTLY
Don’t Drive Yourself Crazy Holding Producers Accountable It happened again last week: I was brought into an organization that did a poor job of hiring and had a bunch of salespeople who weren’t doing what they were supposed to be doing because they had a poor attitude, poor work ethic, or both. Some difficult conversations ensued and I was asked what could be done to make sure the salespeople were doing what they were supposed to be doing. Here is my answer. The most effective way to ensure people do their job is to hire correctly to begin with. If you hire the right people, you don’t have to hold their feet to the fire to get them to do what they’re supposed to be doing. If you hire people with the right attitude and work ethic, they will do the work. And while you do have to guide them and “trust but verify,” for the most part you can rely on them to do the job you hired them to do. If you hire people with either the wrong attitude or no work ethic, they’ll do as little as possible to fake people out that they’re working to stay on the payroll as long as possible. You’ll go crazy trying to hold them accountable but at the end of the day you’ll be worn out, they still won’t be doing the job, and you’ll have to let them go after spending a bunch of time, effort, and energy, not to mention money. So, step one is hire correctly. If you want me to send you my Rules for Hiring, just email me and I’ll be happy to do so. Next, reward your workers and punish your non-workers. Give people doing the right things plenty of praise. Also, reward them with gifts, bonuses, and other items that will motivate them. Use the stick with the people who don’t do what they’re supposed to be doing. On a related note, if you’re an organization that requires salespeople to do call reports to ensure they are making enough calls, stop doing this with your good people. If someone is doing lots of good, clean business, and it’s obvious they’re doing what they’re supposed to be doing, don’t punish them by adding this task. It takes valuable selling time away from them. On the other hand, if you have people who aren’t making the sales and you know aren’t making the calls, then force them to document who they’re calling. Have them include the company name, name of the person, and contact information, phone number and, if possible, email. Then check up on them. You do this two ways: by calling the contacts and by going on the road with these salespeople. One of my favorite techniques is to call them during the day, ask where they are and where they are headed to and say, “Great, I’ll meet you at your next stop.”
When it becomes clear they aren’t making the calls, which you already know, it’s time to either let them go immediately or give them one final ultimatum. By the way, the latter usually doesn’t work for long, if at all. That said, you will probably know within a week or two whether you made a good hire. I discover this very quickly when I start working with a new organization. One of the first things I do is to ask each of the salespeople to give me the number of new business calls they’re willing to commit to on a weekly basis. I do this before I meet with them in person. The salespeople with the right attitude and work ethic are usually realistic or high on their number. Also, they are usually already making that number of calls, or, if they aren’t, they immediately start making that number of calls. In other words, they don’t wait for me to tell them during our first in-person meeting. The bad hires either say they are too busy to make new business calls, give me a low number, or give me a number they think I want to hear, even though they have no intention of making the calls. In addition, they always wait until the in-person meeting to start making calls as opposed to proactively making the calls as soon as they commit.
The bottom line is if you hire correctly, your people will require very little accountability and hand-holding, but if you hire incorrectly, you’ll have to do massive amounts of accountability and even then, you still won’t end up with the results you want. Important note: I find executives with a background in sales usually do a poor job of hiring salespeople. Most of them see the best in people and are designed to connect with and get along with people. This can be a detriment when hiring. You only see what people are really like when you move them out of the relatively comfortable interview seat and put them through a rigorous, well-thought-out hiring process. Most salespeople are great interviewers, especially the ones that go on lots of interviews because they jump from job to job. If you don’t ask difficult questions, put any heat on them, or have any real hurdles in your hiring process, anyone is going to look good. You’ve got to test people and see how they respond and react. John Chapin is a sales and motivational speaker and trainer. He has over 31 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. For more information, visit www.completeselling.com or email johnchapin@completeselling.com.
WWW.ALABAMAIADA.ORG DECEMBER 2019 AIADA 3
ASSOCIATION NEWS
NEW MEMBERS
Welcome to the following new members: Curtis Childers Automotive Service Center LLC Deatsville
Inside
03....................................................Hire Correctly 05...............................NIADA Government Report 06.......................................... Inventory Selection 07..........NIADA Unveils Used Car Industry Report 08....................Selling to the Informed Customer 12...............Safeguarding Social Media Accounts 14.......................... Foundation for Sales Success
Advertisers Index
Manheim 11 NextGear Capital............................................. 8-9 vAuto................................................... Back Cover Warrantech.......................................................IFC
What’s New
F U E L S AV I N G S Take Advantage of Membership Benefits
Though colder winter temperatures can decrease your fuel economy, NIADA can still help you save money. Members across the country keep the number on the pump low with special fuel discounts that can save big. Access your fuel savings here: niada.savings4members.com/ programs/mySavings.spr.
Billy Dawson Dawson’s Auto & Truck Sales Bessemer
Mike Spivey Phillip Alderman Automotive Specialists Elm Automotive LLC Decatur Oxford
James Fisher Fatts Auto LLC Madison Phillip Grissom Grissom Motors Inc. Gadsden
Anthony Waldo/ Barry Garrett Wholesale Cars Albertville
BOARD OF DIRECTORS PRESIDENT Chad Tillery Jemison Cktillery@Hotmail.Com
VICE PRESIDENT Erek Yarbrough Pleasant Grove Yarbrough@Yahoo.Com
PRESIDENT-ELECT Robert Case Hartselle Robertsautosales1@ Live.Com
SECRETARY Randy Crump Jasper Fas_Jasper@Yahoo.Com TREASURER Kelly Steely Hoover Wk.Steely@Gmail.Com
CHAIRMAN OF BOARD Todd Oden Birmingham Mtomotorsinc@ Gmail.Com
DIRECTORS Barry Searcy Muscle Shoals
EXECUTIVE DIRECTOR Randy Jones
Lance Turner Anniston
Joey Bryant Sylacauga
Del Miles Jacksonville
Patrick Graves Moody Chris Mundy Columbiana
Willie Colvin Tuscaloosa
Jennifer Gant Harlow Arab
Tim Duke Trussville
Danny Delich Atlanta
Jay Saul Jasper
Jerry Giles Tuscaloosa
Randy Little Satsuma
Office
120 Vulcan Road Birmingham, AL 35209 Phone: (205) 942-1000 Fax: (205) 942-3565 Website: www.alabamaiada.com To become a member of AIADA, please call (800) 239-2423
NIADA Headquarters
NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838
For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com. The Alabama Independent Automobile Dealers Association is published bimonthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the authors and do not necessarily represent the views of AIADA or NIADA. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2019 by NIADA Services, Inc.
STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITORS Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT Christine Marie Haynes • christy@niada.com PRINTING Nieman Printing
4 AIADA DECEMBER 2019 WWW. ALABAMAIADA.ORG
MARKET WATCH | By The Car Connection
AGING CARS
Average Age of a Car on US Roads Hits Record High Americans aren’t saying goodbye to their vehicles like they used to. The average age of a car in the U.S. hit a new record, according to the results of a study recently released from IHS Markit. The average age of a vehicle is 11.8 years old as of 2018. A few factors have likely contributed to the climbing age of vehicles. To start, longer-term loans are available with many consumers financing cars for six or seven years. Thus, they’re hanging onto cars and maintaining them longer. Secondly, IHS Markit said vehicles are simply built far better than they were in the past. Both factors have helped the fleet of cars on American roads stick around longer. The auto industry also experienced a
boom throughout this decade. Many buyers likely won’t be swapping into a new vehicle until sometime next decade. Even then, the study said the average age should climb past 12-years-old next decade. Breaking down the information by region, western states have the oldest vehicles at 12.4 years old. The northeast’s fleet of vehicles is younger at 10.9 years old, which busts the myth that New Englanders keep their cars forever. Although there isn’t conclusive evidence, weather conditions could play a part in helping cars stay on the road longer in the west than in the wintry northeast. State-by-state, Montana is home to the oldest vehicles on the road with an average age of 16.6 years. The state with the youngest vehicles is Vermont at 9.9 years.
WASHINGTON UPDATE |
By Shaun Petersen
NIADA GOVERNMENT UPDATE
NIADA is your voice in Washington D.C., advocating for independent dealers, the used vehicle industry and small business. Here’s a look at the latest news and NIADA efforts regarding legislative, regulatory, PAC and grass roots activities.
LEGISLATIVE “Cash for EVs”: Senate Minority Leader Chuck Schumer (D-N.Y.), has proposed a $454 billion plan that would include $392 billion in subsidies for drivers who swap their cars for “cleaner” vehicles. The plan, which would cost $454 billion over 10 years, would be similar to the controversial “cash for clunkers” program of 2009, offering rebates of $3,000 or more to consumers who trade in gas-powered cars eight or more years old for electric, plug-in hybrid or fuel-cell vehicles. The gas vehicles would then be scrapped. Schumer’s proposal also includes $45 billion in grants to upgrade the nation’s charging infrastructure and $17 billion in incentives to automakers to build or retool factories to produce zero-emission vehicles. Schumer said he plans to introduce legislation to enact his proposal if the Democrats win control of the Senate in the 2020 election. While a bill has not been written yet, NIADA is reviewing the proposal with key members of Congress. Mind Your Own Business Act: Sen. Ron Wyden (D-Ore.) has introduced legislation he said would create the strongest protections ever for consumers’ private data and would hold corporate executives accountable for abusing that information. Wyden said the Mind Your Own Business Act is aimed at preventing Facebook and other businesses from abusing sensitive information. It would give the Federal Trade Commission the authority to set strict new privacy and cybersecurity standards and impose severe penalties on companies – and their executives – that violate them. The bill would authorize the FTC to fine businesses up to 4 percent of their annual revenue for a first offense. Senior executives who knowingly lie to the FTC would face 1020-year criminal penalties and their companies would be hit with tax penalties. It would also require companies to assess the algorithms that process consumer data to examine their impact on accuracy, fairness, bias, discrimination, privacy and security, and would give consumers the right to review the personal information a company has about them, find out with whom it has been shared or sold, and challenge any inaccuracies. The legislation would beef up enforcement by hiring additional FTC staff and empowering state attorneys general to enforce regulations created by the bill. In addition, each state would be able to designate one “protection and advocacy” organization that could file civil suits against companies that violate privacy regulations. NIADA is reviewing the bill and preparing an appropriate response.
REGULATORY Department of Labor: More than five years after President Obama launched a push to update the regulations defining which white-collar workers are exempt from overtime pay, DOL has announced its final rule. The new rule revises the earnings thresholds for executive, administrative and professional employees to be exempt from the Fair Labor Standards Act’s minimum wage and overtime pay requirements. Beginning Jan. 1, the exemption threshold will increase to $35,568 per year ($684 per week) from the previous level of from $23,660 ($455 per week). Up to 10 percent of that amount can be satisfied by nondiscretionary bonuses or commissions. The new thresholds account for growth in employee earnings since the thresholds were last updated in 2004. Obama’s DOL proposed more than doubling the salary threshold and adding a mechanism to automatically update it annually, tying the threshold to a fixed percentile – likely 40 percent – of salaried wages. NIADA filed comments opposing that drastic increase, noting no data had been provided to support the increase or to suggest salaries had risen at a rate remotely comparable to the proposed threshold increase over that same time. Following litigation and the election of President Trump, the proposed rule was reworked and finalized. The new rule will make 1.3 million American workers newly eligible for overtime pay. Consumer Financial Protection Bureau: The CFPB announced the creation of a task force charged with finding ways to harmonize and modernize federal consumer financial laws. The bureau said the task force will examine the current legal and regulatory environment facing consumers and financial services providers and make recommendations to CFPB director Kathy Kraninger about how to improve and strengthen consumer financial laws and regulations. The group’s assignment is to produce new research and legal analysis of those laws with a focus on updating consumer
credit laws and the regulations that implement them, identifying areas that require additional research, finding ways to improve consumers’ understanding of markets and products, and pointing out potential conflicts or inconsistencies in existing regulations and guidance. Kraninger said the evaluation is necessary “to identify where there might be gaps or where regulation should be simplified or modernized.” NIADA will engage the task force and discuss any recommendations it makes. For more information, including an application to serve on the task force, visit www.consumerfinance.gov/ about-us/taskforce-federal-consumerfinancial-law. Credit reporting workshop: The CFPB and FTC will hold a free public workshop Dec. 10 at the Constitution Center in Washington D.C., to discuss credit reports and employment and tenant background screening reports. The workshop’s goal is to bring together stakeholders – including industry representatives, consumer advocates and regulators – for a dialogue on the many issues impacting the accuracy of consumer reports. Topics will include non-traditional data in credit reports and credit scoring models, new technologies and data management practices, how consumers discover and dispute inaccuracies, identity theft and more. Comments on the issue may be submitted electronically until Jan. 10 at www.regulations.gov/ docket?D=FTC-2019-0073. NIADA plans to file comments. Shaun Petersen is NIADA’s senior vice president of legal and government affairs.
WWW.ALABAMAIADA.ORG DECEMBER 2019 AIADA 5
ACCELERATE |
By GWC Warranty
INVENTORY SELECTION
Trust the Data
When it comes to acquiring the right inventory for your lot, it’s easy to go with your gut and buy a car based on your experience and savvy. But what if your general industry acumen could be augmented by data and information that will help you find cars that can fly off the lot just as quickly as you get them there? To find out if you are seeking out the right inventory for your lot, you have to be able to look in the mirror and answer a few questions honestly. If you can do that, your acquisition strategy can go from trusting your instincts to trusting the numbers. What has sold in the past? If you can go back into your books and find makes and models that have sold particularly quickly, you might just find a few surprises. Your customers might tell you they want more trucks and SUVs, but the data show that economy cars or luxury sedans move more often. You want to buy what your customers tell you they want, but your bottom line could benefit by buying vehicles you know will move quickly. Have you ever bought a car for you? Here’s where you really need to be honest with yourself. We’re not talking about getting a car at auction for you to own yourself.
Rather, we’re talking about a vehicle you bought because it appealed to your tastes. This is an instance where your gut tells you that you’re buying a great car – and you very well may be – but are you buying a car that will sell quickly? It’s imperative you resist the urge to bid on a car just because it’s a car you’d like to see front and center on your lot. Are you looking in the right places? We’re all creatures of habit. We know the auctions we like – we’ve had success at them in the past and we don’t see a reason to change. However, today’s automotive industry is ripe with vehicles you can find at the right price. Have you checked online auctions? What about competitors that have trouble selling a vehicle that’s in your sweet spot? How about giving a shot to that auction a couple hours away you’ve heard so much about? Trying a new source for your inventory could be just what you need to find more of the right cars at just the right prices. Once you’re able to take a hard look in the mirror before heading out to the auction and answer these three questions, you’ll be well on the road to moving metal at a faster pace than you’ve ever seen before.
MARKET WATCH | By Auto Remarketing Staff
BEWARE OF HURRICANEDAMAGED VEHICLES
Bureau Promotes VINCheck Tool In the wake of Hurricane Dorian and Tropical Storm Imelda, which flooded vast areas of the East Coast and Texas, thousands of damaged and flooded vehicles are emerging. The National Insurance Crime Bureau said fraudsters may start trying to scam innocent car buyers, selling them vehicles impacted by flooding. NICB warns to do your homework before purchasing a used vehicle, which includes acquiring accurate information about certain aspects of the vehicle's history. To help, NICB offers VINCheck. With the free tool, consumers can check a vehicle for “red flags.” NICB designed the tool to help consumers determine if a car has been reported as stolen, but not recovered. It also helps determine if the vehicle has been reported as a salvage or total loss vehicle. The tool, NICB vice president of communications Brooke Kelley said, “is a clear and easy way to protect consumers and one of the most utilized resources on our website.”
6 AIADA DECEMBER 2019 WWW. ALABAMAIADA.ORG
The story of VINCheck started in 2005, after Hurricane Katrina made initial landfall in south Florida and hit New Orleans soon afterward. NICB personnel assisted state and local law enforcement and insurance claims professionals. Officials recognized the threat to consumers from a large number of flood vehicles in the area. NICB agents knew many of these vehicles would reenter the market presented as adequate used vehicles. However, NICB said, those vehicles “could potentially become rolling caskets for any unsuspecting buyer.” The bureau worked to identify and catalog many of those abandoned vehicles before tow operators with bad intentions took them to locations where cosmetic surgery would present them as attractive vehicles priced well below market value. NICB created an online tool to access all the vehicle identification numbers of damaged vehicles, an estimated 300,000 to 500,000 of them, resulting from claims data NICB member insurance companies provided
electronically. The bureau worked to enable the general public to access the data and at the same time protect each insurance company’s proprietary information. The bureau secured member-company authorization and support for the idea and on Oct. 17, 2005, launched its “Flood Vehicle Database.” With the database, free of charge, anyone at any location could query a VIN to check for Hurricane Katrina damage. Since its creation, the bureau has enhanced and expanded the Flood Vehicle Database twice, changing its name to VINCheck in 2007. At that time, the database added total loss and salvage records. The next enhancement took place in June 2008 as the database provided access to unrecovered insured stolen vehicles. NICB said the VINCheck service became the NICB website’s most popular feature, and it boasts more than 2.5 million page views since July 1, 2018. More than 1.1 million VINCheck queries have taken place since Oct. 1, 2018. “Testimonials from users demonstrate that VINCheck remains one of the industry's best methods of providing public safety and consumer protection,” said Kelley. “The information helps to prevent innocent people from being victimized through the purchase of damaged and potentially deadly used vehicles.”
ASSOCIATION NEWS
NIADA UNVEILS 2019 USED CAR INDUSTRY REPORT
Most Comprehensive Picture of the Used Vehicle Industry NIADA presents its 2019 Used Car Industry Report, an annual array of facts and statistics that provide the clearest, most comprehensive picture available of the state of the used vehicle industry and the trends shaping its future. The report, which was unveiled in September at the NIADA National Policy Conference in Washington D.C., was delivered to association members along with the October edition of Used Car Dealer. It’s also available online – free for NIADA members and for purchase by non-members – at www.niada.com. The report includes new insights into familiar areas, including the 2019 Car Buyer Journey Study from Cox Automotive, an important look at the customers purchasing used vehicles and how they shop; Edmunds’ Used Vehicle Outlook, including CPO data; GoldStar by Spireon’s look at GPS technology’s effect on the impact of impound fees; CarGurus’ section on auto buying patterns by body style; and the latest on digital consumer
experiences in auto finance from RouteOne. The report also explores new areas, such as Dominion/Cross-Sell’s look at Carvana’s business model and how to compete with it, Carfax’s research into merchandising in today’s digital world, tips from Home Loan Investment Bank to help customers get credit application approvals, TrueCar’s study of trade-in process trust issues, insight into dealer ROI from Autosoft and a section detailing the rise of mobile chat and lead generation data through that growing marketing medium from new NIADA industry partner OfferUp. And, of course, the Used Car Industry Report includes the staples – NIADA’s member and business confidence surveys, Buy Here-Pay Here benchmarks from NABD, Subprime Analytics and NIADA Dealer 20 Groups, used car sales by channel by month from J.D. Power/NADA Used Car Guide, information on the auto finance market from Equifax, Black Book’s retention values analysis and Auction Perspectives from industry leaders.
Be on the look out for:
Used Car Dealer Magazine’s new logo!
The Official Magazine of National Independent Automobile Dealers Association www.usedcardealermagazine.com
U S E D C A R D E A L E R M A G A Z I N E has been serving the used car industry since 1946. As we start the new year, we are proud to debut an exciting new design for the official magazine of NIADA. If you are not a member of NIADA and would like to receive the printed magazine, visit www.usedcardealermagazine.com and click on the Subscription tab. WWW.ALABAMAIADA.ORG DECEMBER 2019 AIADA 7
ACCELERATE | By GWC Warranty
SELLING TO THE INFORMED CUSTOMER
Strategic Approach
Today, more than ever before, customers are walking through your doors with a plan and a price in mind. It’s a dangerous situation that can cut into your margins if you aren’t prepared to teach them something they don’t already know. So how do you combat this type of consumer approach when you’re priced competitively and you can’t sacrifice any more off your margins? Certify Your Lot Certified Pre-Owned programs aren’t just for franchise dealers, but you can thank them for the cachet behind the name. Explaining to your customers your price includes short-term coverage from expensive repairs shows them you’re providing an assurance of a quality vehicle – something they can’t deny demands a higher-than-normal premium. Explain Reconditioning Continuing to build on the fact higher quality vehicles demand a higher price, you can go into detail with your customers
SALES UP 8X. 30-DAY TURNS. AND AN ACCOUNT PORTAL THAT PUTS IT ALL IN ONE SPOT. WHAT MORE CAN YOU ASK FOR?
T
about the work you’ve done to get that vehicle ready for them. Showing you’ve inspected the vehicle for common problems with brakes or replaced tires and fixed cosmetic problems explains value no thirdparty website can account for. Back-End Products If a customer is surprised by a monthly payment that includes vehicle service contract coverage, you can explain how the tools they used to come up with a monthly payment don’t include the price of a service contract. If a customer sitting across from you is sensitive enough about a monthly budget to do all these calculations ahead of time, they’ll also be sensitive to what a major repair could do to that same monthly budget. Educating customers on the cost of common repairs and how damaging that can be to a tight budget will help demonstrate just how valuable that relatively minor added monthly cost for a VSC can be.
PRODUCTS & SERVICE | By Auto Remarketing Staff
NEW KBB TOOL FOR SERVICE SCHEDULING
Keep Those Service Bays Busy The service drive can be just as important to dealer profitability as vehicles rolling over the curb. With that in mind, Kelley Blue Book launched a new tool to help keep those service bays busy. Kelley Blue Book’s new Auto Repair Guide experience addresses what the company says are needs of both the consumer and automotive industry for a principal source of “trustworthy” recommendations related to servicing and maintaining a vehicle. The all-new experience on KBB.com can guide consumers through three primary service categories: recalls, maintenance and repairs. KBB.com can also allow consumers to schedule service online through the Featured Auto Repair Center, a pilot with its sister company, Xtime. To point consumers in the right direction, the Auto Repair Guide on KBB.com helps vehicle owners answer their top service and repair questions such as “What do I need to get done?” “When should I get it done?” “Where should I get it done?” and “How much should it cost?” To help consumers answer those questions
and potentially steer those individuals to dealerships, Kelley Blue Book’s all-new Auto Repair Guide includes: • Information on recalls, maintenance and repair work. • A Fair Repair Range estimator – similar to the Kelley Blue Book Price Advisor tool – to guide consumers on service and repair price ranges, based on average dealer service pricing. • The ability to schedule service appointments with local dealerships directly on KBB.com through the Featured Auto Repair Center. Kelley Blue Book can enable consumers and dealers to remain on the same page for pricing and now in the service lanes with its integration with Xtime, an integrated software platform for retail automotive service departments. “Car shoppers have long trusted Kelley Blue Book to provide them with vehicle values, new-car information and more,” Cox Automotive vice president Jim Roche said. “With this new auto repair feature on KBB. com, now they can rely on Kelley Blue Book throughout the ownership experience for
guidance on service and repair costs, all while experiencing the same trust and transparency they’ve come to expect from the brand.” According to the Cox Automotive Service Industry Study 2018, consumers have negative perceptions about getting their vehicle serviced at dealerships, citing unreasonable total cost, overcharging and labor or parts charges among top reasons for not using their dealership service department. In reality, that same study showed common maintenance and services provided by dealerships are on par from a pricing standpoint with independent offerings. Kelley Blue Book’s new Auto Repair Guide also can make service appointment scheduling easier. Owners can see the Fair Repair Range, select a service provider and book service without leaving the site. Meanwhile, the Featured Auto Repair Center can connect dealers with engaged car owners, increasing consumer trust and confidence by validating their service pricing within the Kelley Blue Book Fair Repair Range. “The complexities of how to maintain and repair a vehicle, as well as understanding the associated costs, are a major pain point for most consumers,” said Tully Williams, fixed operations director of The Niello Company in Sacramento, Calif. “Not only has our dealership increased service cost transparency and communication with our customers, but they also have an increased sense of trust from knowing they are being fairly charged for every service visit.”
THAT’S MY PATH TO +MORE ALEX BALK | CARite | FORT PIERCE, FL
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MANAGEMENT MATTERS | By Rex A. Collins CPA, CVA
MANAGEMENT SUCCESSION
Preparing for the Transition
It’s going to happen. At some point you will transition your dealership to another owner, whether it is one of your children, an employee or an outside buyer. Doing it right requires advanced planning and a multitude of considerations such as the financial security of the business, transfer of wealth, taxes, future business strategies, family values, and your long-term personal goals. Most of all, transitioning to a new set of leaders is critical to ensuring the ongoing success of the dealership. Managing leadership succession involves a number of difficult steps, including consensus building and assembling key parties into a succession planning team. Knowing when to start is one key to an orderly transition. The longer you wait to get your team together, the more difficult the initiative becomes and the more obstacles you will encounter in making the transition. At a minimum, an owner should start planning three to seven years in advance of selling or retiring. We recommend starting when the dealership demonstrates the ability to generate consistent profits and the current owner reaches age 50. Some of the usual starting considerations:
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• Will your children be coming into the business? If so, how will each be involved? This will require educating children about the functions and conditions of the business and making sure everyone involved remains open to the evolution of, or changes in, the succession plan. • If no children are involved, how and when will a successor be determined? • Or should you simply sell the business and monetize your investment? Starting early is also important, as any succession plan should include a contingency plan addressing an untimely death, disability or other unexpected event. This also gives you time to build your succession team. Your team could include family members, employees, a banker, a member of your 20 group, and outside advisors. Regardless of the makeup of the team, it should exhibit four characteristics: trust, openness, realization and interdependence. A team with those qualities will be able to overcome what are bound to be multiple hurdles and challenges in negotiating the process toward a successful successor. A succession plan will address four phases of transition: • Initiation or point of entry: When succession planning begins.
•S election and assessment: Choosing the leaders for the next generation based on accomplishment and dedication, which could involve psychological and other testing. • Education and training: Ensuring the successor has the skills and knowledge to continue a profitable operation. •P assing the baton: Transferring authority and accountability to successors. Some common issues to address: • How to encourage your children to think positively about a succession plan. • How to determine when children are mature enough to be considered as successors. • Who should succeed as dealeroperator or CEO? • When should the current dealer retire? • What are your options in terms of a prospective leader? • Should you sell the business to an external buyer? • A personal development plan for the successor dealing with “operational” skills – technical, financial, and organizational issues – and “essential” skills – the ability to communicate with staff and customers. • A leadership development plan, including creating a vision for the future of the business, commanding respect and being professional. • The transition process, including the changing roles of the current and succeeding dealer, their evolving job descriptions and who’s making key decisions at what points. • A plan to communicate the succession to your constituents, including family, company and community • The organizational succession plan, including how top management will be affected, the career paths of key managers, and the future participation of family members in the business. A successful management transition is not only key to ongoing profitability but to the legacy of the retiring owner. As famed management consultant Peter Drucker said, “The final test of greatness in a CEO is in how he chooses a successor and whether he can step aside and let the successor run the company.” Rex Collins is a principal at HBK CPAs and Consultants. He directs HBK’s National Dealership Industry Group, which provides tax, accounting, transactional and operational consulting exclusively to dealers. Rex can be reached at rcollins@hbkcpa. com or 317-504-7900.
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SOCIAL MEDIA | By Kathi Kruse
SAFEGUARDING DEALERSHIP SOCIAL MEDIA ACCOUNTS Make Sure Your Business Page is Secure
Even though social media has become mainstream, there are surprisingly many dealers who haven't secured their social media accounts. I’m regularly asked by dealers about the best ways to safeguard their social media accounts. Rather than leave things up to chance, let’s discover the best practices for securing your online accounts so you can feel more comfortable about one of your most valuable company assets. We've all witnessed at least one of the embarrassing or dangerous debacles that happen when social media accounts are not secure. I want to make sure this doesn’t happen to you.
SECURING YOUR SOCIAL MEDIA PROFILES I break this down into easy-to-digest parts. You can examine each one, determine if you're on the right track and make a course correction if necessary. Step 1: Always use work emails for social media admins. Provide your social media manager (or any employee) with a work email address, one that you as the owner have control over, such as [employeename]@ [yourwebsiteURL]. The email must be hosted on your own server and your IT department should always have control of it. Some employees want to use their private emails. This should be avoided at all costs. Why? If they ever leave, they have access to your social media accounts and you do not. Step 2: Periodically confirm your admins. Make sure your social media manager and other social profile admins are using their specific work email addresses. If something happens – they leave, you terminate them, they become unable to perform their job, etc. – you'll have control over that email and, if necessary, you can change the password immediately. Step 3: Setting up Facebook. All Facebook Business pages are created and set up using a personal profile. You log in through a personal account to access the business page. I recommend using an email address similar to what I suggested above or socialmediamanager@[yourwebsiteURL] to set up the personal profile for company use. You may also use the owner’s personal Facebook login if he or she is using Facebook. Since the email address will always stay with the profile (you cannot change it), you’ll want to keep the email address accessible
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should you change personnel. Next, you'll “create a page” (as Facebook calls it) while logged into that personal profile. Once the Business Page is set up, you’ll make 3-4 more trusted people admins of the page, such as: • Your social media manager. • You, your GM or CEO. • Your CFO or HR manager. • IT manager. ProTip: If your Facebook page and other profiles are already set up and/or you’ve been using them for a while, perform an audit of the “admins” on each platform to make sure you’re following these best practices. Don’t wait until it’s too late – after someone has left and you’ve inadvertently given up control of your page to nonstakeholders. Again, the social media manager should only be able to use their work email address to access any profile. If they ever leave, you'll have control over it and change the password immediately. If someone such as your social media manager has accidentally or unknowingly made himself or herself an admin using a personal email, you can easily remove them as an admin and invite them back using their work email address.
ADDITIONAL SAFEGUARDS It's important to cover all your bases when it comes to dealership assets and reputation. Safeguard against common catastrophes by including these steps in your overall digital strategy. Hire the right person. I know that sounds obvious but I always mention it to reinforce the importance. Here's what nobody tells you: hiring a social media manager is a challenge. During the hiring process, you'll need to figure out who measures up and who doesn't. Many owners or HR managers don't spend a lot of time on social networks so it's quite a challenge to figure out who the best candidate may be. When you're ready to hire your social media manager, pose specific questions to your candidates. Their answers will inform your decision and help you pick the right person. Ask candidates questions such as: • What social media platform(s) is/are best for our dealership? Why? • What's the most important thing a social media manager should be doing? • Have you ever had to handle a social media crisis? If so, explain the outcome. • What social media strategies do you plan to use to generate leads? • What should your first goals be?
Implement a policy for employee use of social media. Things happen. Even good employees are capable of going to the dark side. The name of the game is to provide an environment that mitigates it. Negative environments often reflect company culture, employee morale and job satisfaction. Most owners/GMs believe they are providing a safe, productive, supportive and enjoyable workplace. However, employee perceptions don't always align with management assumptions. Regardless of the reasons negative outcomes happen, it's best to have a clear cut social media policy that everyone agrees to and adheres to. Should something go wrong – such as a disgruntled employee taking over your social media accounts – a policy for employee use of social media itemizes the penalties for specific behavior, creating a deterrent should things not go as expected. At Kruse Control, we provide such policies for clients. Your social media policy should: • Set the parameters for employee use of social media. • Describe the value of social media. • Briefly outline each platform and best practices. • Describe any unique, company-specific situations where a problem can arise. • Establish protocol when a situation calls for escalation. • Discuss how to handle a problem or crisis. The target outcome of a social media policy should help your dealership market itself successfully on social media while protecting it from precarious situations that lead to outright debacles. The social media policy should be included in your hire package for all new employees, along with a signed acknowledgement to store in their personnel file. For current employees, I would have a meeting explaining you're planning on implementing a social media policy and convey why it's important. Pass out a copy of the new policy and allow a few days for each employee to review it (and for you to answer their questions). Then, within a week or less, require them to return the signed acknowledgement to the HR manager. A word of caution... Under no circumstances should a dealership ask for access to employees’ personal social media accounts. Many state legislatures have drawn a firm line on the matter. Nearly half of states have passed laws prohibiting employers from asking applicants and employees for their social media login information, or bring up
MARKET WATCH
MAGAZINE TOUTS BEST USED CARS FOR TEENS
their social media pages in the employer’s presence, change their privacy settings to make the page accessible to the employer, or add anyone as a “friend” or contact to a social media page. This practice also sends very negative messages to your rank and file that you don't trust them. There's no real benefit to asking and it does a lot of harm. Instead, allow your social media policy to do its job. Every dealership has distinct and important needs. To create the best possible outcomes, it's crucial to incorporate a company's unique needs, specific daily operational situations, and employee relations into each social media policy. There have been far too many situations where dealership social media accounts have not been secured. Please use these steps to assess your own process and policies. As always, I’m happy to answer your questions.
Used Car Rankings
U.S. News & World Report has unveiled its list of Best Used Cars for Teens. Used car rankings are based on model categories, rather than price. • Large car category: 2016 Buick LaCrosse • Midsize car category: 2016 Toyota Camry/Camry Hybrid • Small car category: 2016 Toyota Prius • Small SUV category: 2016 Hyundai Tucson • Midsize SUV category: 2015 Chevy Traverse To be named a Best Used Car for Teens, U.S. News required a vehicle be from the 2014 through 2016 model years, as cars from earlier years don't have enough advanced driver assistance technology to be considered the best for inexperienced drivers. Also considered were high dependability, safety ratings, ownership costs and positive reviews, as well as available tech that can help prevent crashes or lessen their severity. The 2019 Hyundai Accent topped the list of best new cars for teenage drivers, according to U.S. News.
Kathi Kruse is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc., which coaches, trains and delivers webinars focused on integrating social media and online reputation management into dealership operations. She can be reached at kathi@krusecontrolinc.com.
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SALES MATTERS |
By John Chapin
THE FOUNDATION FOR TOP SALES ACHIEVEMENT
Ingredients to Build a Solid Sales Foundation As the saying goes, “A house is only as strong as its foundation.” It takes a strong foundation to ensure sales success. Following are six high-achievement ingredients necessary to build that strong foundation. Be in sales for the right reasons. The first thing I look for in a potential new sales rep is people skills. To have longterm success and become a top achiever, you must be able to understand and communicate with people while also having a great capacity for empathy. Genuine care and a desire to serve and help people is a must. One must also have a burning desire to succeed. A desire to make a lot of money is a good place to start. But it’s also important to know why making a lot of money is important. These reasons should be ones that enhance the life of the salesperson as well as the lives of those around them and the world as a whole. The right attitude and beliefs. What is your daily attitude like? Do you always see solutions when you face problems? Do you stay positive in the face of all challenges? Looking for the positive side of a situation is a habit, and, like most good habits, it can be developed. I’m not saying you need to have a smile on your face 24/7 and believe issues never arise in life. I am saying don’t allow yourself to go to the other extreme of complete negativity and get overwhelmed to the point where you can’t act. When you see a tough situation, recognize it, try to find some positives, keep a good attitude, and ultimately resolve the situation as quickly as possible. What is your motivation level? You need to be highly motivated and ready to work as hard as you have to in order to reach the top and remain there. How about self-confidence? To get to the top in selling requires high self-confidence and high self-esteem. Are you a self-starter or do you need someone to give you a push? To get to the top in sales, you must be a self-starter. You must be motivated from within rather than needing someone to keep pushing you or keep you driven to succeed. To get to the top, you must also be a consummate professional and exude integrity – at all times. Finally, do you see yourself as a person who is completely responsible for your life and what happens in it? This kind of
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responsibility is the cornerstone needed for great achievement. A willingness to pay the price for success. How far are you willing to go to be successful? There is a price for success and top salespeople have chosen to pay it. Are you willing to do whatever it takes, ethically, to get to and stay at the top? “Hanging out” with the right people. Who do you hang around with and where are they going? You must hang around successful people who are growing personally and professionally and who support your goals and dreams. Birds of a feather do flock together, and the wrong group of people can drag you down quickly. This doesn’t mean you need to immediately discard your friends and family if they aren’t completely supportive of you. However, as you progress toward your goals, you may find yourself gathering a new group of friends and hanging out with certain negative people less often. Let friends and family know the track you’re on and ask them to help or even to join you in the adventure. Good health. How is your health? It isn’t possible to operate at your highest levels, both mentally and physically, if your health isn’t good. If you are tired, run down, or frequently ill, you will not be motivated, and you will not perform well. You need to get plenty of sleep, eat properly, and exercise on a regular basis to be a consistently top salesperson. Good health also includes your overall mental condition. While sleeping, exercising, and eating right will help your mental state, you must also develop the ability to handle stress, unexpected problems, and other similarly negative things that may affect your emotions. A life with balance and growth. While the beginning of your sales career, or a new job, will be heavily weighted toward your career for the first three to five years, you don’t want to go all-in on your career at the expense of everything else. You must still make time for health, the people in your life, and other things that are important to you. Considering you have 168 hours in a week, there is time to spend 70 hours, or more, at work, and still take care of the other areas your life. But it’s going to require you be a master of your time.
THESE SIX INGREDIENTS ARE NECESSARY FOR CONSISTENT, LONG-TERM TOP PERFORMANCE. IF YOU DON’T HAVE THESE SIX ESSENTIAL INGREDIENTS IN PLACE, YOU WILL FACE SOME DAUNTING CHALLENGES. For short periods, you can devote an inordinate amount of time to one area of your life and neglect the others. However, if you do that for too long, your attitude will suffer tremendously, along with your health and relationships. You may not get to each area every day, but in the course of a week be sure each area of your life is getting its share of attention. Finally, you must be passionate about what you are doing, and you must always be growing personally and professionally. These six ingredients are necessary for consistent, long-term top performance. If you don’t have these six essential ingredients in place, you will face some daunting challenges. The good news is all of these can be learned. Granted, few of them are mastered easily if you haven’t already developed them. However, if you are truly committed to becoming a top salesperson, you can develop them. There is always hope. John Chapin is a sales and motivational speaker and trainer. He has over 31 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. For more information, visit www.completeselling.com or email johnchapin@completeselling.com.
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