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ARIZONA 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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AUCTION NEWS |
Index
06........... NIADA Unveils Used Car Industry Report 07.............................................. Inventory Selection 08.................Safeguarding Social Media Accounts 10...................................NIADA Government Report 12........................Selling to the Informed Customer 14....................................................... Hire Correctly
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For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com. Arizona’s Independent Dealer is published bimonthly by the National Independent Automobile Dealers Association Services Corporation. 2521 Brown Blvd., Arlington, TX 760065203. 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
By Auto Remarketing Staff
MANHEIM REVEALS 2 NEW GMS IN ITS WEST REGION
New Leadership at Manheim Nevada Manheim recently said it’s continuing to follow its strategy to promote talent from within the company. As a result, Manheim announced two new general manager selections at locations in the West. Assuming new leadership roles are Eddie Lafferty at Manheim Seattle and Danny Brawn at Manheim Nevada. Lafferty has been named general manager of Manheim Seattle. A 30-year veteran of the automotive industry, Lafferty has extensive experience in both retail and wholesale operations. He joined Manheim in 2008 as fleet lease manager, before being promoted to assistant general manager for Manheim Seattle. Most recently, Lafferty was GM of Manheim Nevada. Under his leadership, the auction location nearly doubled its financial performance in four years and won several client and industry-related awards. Brawn, in turn, has assumed the role of general manager of Manheim Nevada. Brawn joined Manheim in 2005. His previous ACCELERATE |
positions with the company include regional sales manager for the northwest market, assistant general manager at Manheim Phoenix, as well as a variety of sales roles across Manheim Portland, Manheim Kentucky, Manheim Orlando and Manheim Nashville. Most recently, Brawn spent four years as GM of Manheim Darlington. Brawn also serves as a leader in the industry and his community. He is currently vice president of the National Auto Auction Association’s Southern Chapter and 2018-2019 chairman of the Greater Darlington Chamber of Commerce. “Developing strong leaders is a key element of Manheim’s growth strategy,” Manheim West Regional vice president Julie Picard said. “Eddie and Danny have each served in roles of increasing responsibility at Manheim for more than a decade, gaining knowledge of our business and developing the skills necessary to enhance the client experience and drive results. I’m thrilled to see how they’ll excel in these new roles.”
By GWC Warranty
FOCUS ON QUALITY OVER QUANTITY
Upsell and Improve Back-End Profits Sometimes you aren't able to sell more, so focus on selling something better. Let’s look at ways you can begin upselling more often and improving back-end profits even when your service contract penetration is right where you want it. Start the Conversation Early Advertising basic level coverage, like with a Certified Program, helps plant the seed early on and get customers on board with the principles behind service contract protection. Once customers are bought in on the ground floor, you have the foundation needed to get them to a higher level of coverage. Stick With What Works Over and over, you hear mention of the menu approach and the 300 percent rule. Both are proven tactics that can be repeated in the F&I office for consistent success. Presenting good, better, best options and working your way down from the top coverage
INDEPENDENT DEALER NEWS DECEMBER 2019 WWW.AIADA.NET
you offer is the best way to help customers see the value in richer coverage. And it’s important you do this every time without exception. Practice Makes Perfect Not just with the menu technique but also with overcoming objections, the more you practice, the more successful you’ll be. You can schedule workshops with your team or work on your skills with on-demand online resources like virtual training to ensure you and your team stay sharp in these critical areas. Keep the End Result in Mind Better coverage means increased profits and happier customers. Don’t discount the long-term profit opportunities and repeat business that can come as a side effect to selling better coverage. When your customers are well protected and can avoid out-of-pocket repair bills, they’ll undoubtedly sing your praises to family, friends and on review sites across the web.
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.”
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.”
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.AIADA.NET DECEMBER INDEPENDENT DEALER NEWS
5
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
SALES UP 8X. 30-DAY TURNS. AND AN ACCOUNT PORTAL THAT PUTS IT ALL IN ONE SPOT. WHAT MORE CAN YOU ASK FOR?
6
INDEPENDENT DEALER NEWS DECEMBER 2019 WWW.AIADA.NET
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.
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.
THAT’S MY PATH TO +MORE ALEX BALK | CARite | FORT PIERCE, FL
We’re turning inventory an average of 12-14 times a year, which wouldn’t be possible without our floor plan. Not only does NextGear Capital provide me with financing, but they support my business with technology that keeps it moving.
Discover where we can take you. Visit nextgearcapital.com.
*This testimonial was received via interview, audio and/or video submission. This testimonial is based on this dealer’s individual experiences, reflecting real life experiences of a NextGear Capital dealer. NextGear Capital does not claim they are typical results that dealers generally will achieve. This dealer’s experiences may not be indicative of future performance or success of any other dealers. Some of the testimonial has been shortened so the whole message is not displayed due to length and/or relevance.
WWW.AIADA.NET DECEMBER INDEPENDENT DEALER NEWS
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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 8
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?
INDEPENDENT DEALER NEWS DECEMBER 2019 WWW.AIADA.NET
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 has 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, to bring
MARKET WATCH
MAGAZINE TOUTS BEST USED CARS FOR TEENS
up their social media pages in the employer’s presence, to change their privacy settings to make the page accessible to the employer, or to 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.
ATTENTION
SENIORS
NIADA FOUNDATION SCHOLARSHIP APPLICATIONS ARE NOW AVAILABLE.
DEADLINE IS MARCH 9, 2020 4 REGIONAL $3,500 SCHOLARSHIPS to be awarded in June 2020
1 NATIONAL $10,000 SCHOLARSHIP to Northwood University
GO TO WWW.NIADAFOUNDATION.ORG AND CLICK ON THE SCHOLORSHIPS LINK TO GET MORE INFORMATION OR CONTACT JACINDA TIMMERMAN AT JACINDA@NIADA.COM OR 800-682-3837. WWW.AIADA.NET DECEMBER INDEPENDENT DEALER NEWS
9
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.
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INDEPENDENT DEALER NEWS DECEMBER 2019 WWW.AIADA.NET
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.
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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
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 12
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
INDEPENDENT DEALER NEWS DECEMBER 2019 WWW.AIADA.NET
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.”
MANAGEMENT MATTERS |
By Jennifer Finlay
PREPARING FOR A NEW YEAR
Evaluate Where You’ve Been and Where You’re Going We are coming to the end of 2019. Don’t let one year fade into another without really evaluating where you have been and figuring out where you are going. How was your year? Did you achieve your goals? Did you even have goals in place? What were your biggest struggles? Were you able to stay within budget? These are some of the questions you should be asking yourself in preparation for the coming year. Having a structured plan of action is one of the best ways to get started with a new year. Running a business is time-consuming and at times exhausting. Staying in front of potential problems or shortcomings that could sabotage your growth is critical to your success. I know firsthand how easy is it is to neglect things. Sometimes it’s tough to just get through the regular day-to-day tasks. You have bills to pay and payroll to handle. Then you have finding the right inventory, selling sufficient vehicles and the list goes on and on. But just keeping up will not push you forward. You know the saying, “You can’t keep doing the same thing and expect a different outcome.” If you want to sell more, grow the business, be more in compliance, build your reputation, etc., you have to work at it. The end of the year is the perfect time to create a plan that will work for you. Set aside some time and determine where you want to be this time next year. Here are a few tips and ideas to get you started. THINGS TO RE-EVALUATE Spending: One of the best ways to evaluate this is to look at your P&L and vendor statements. Highlight the non-fixed expenses. For example, your electric and water bills will not fall into this category. Non-fixed expenses would be things like water delivery, uniforms, printing expenses, office supplies, interest rates, bank fees and title services. Shop these items – see what else is out there. None of these vendors or suppliers will ever call you and offer you a better deal because you have been with them for however many years. It doesn’t work that way. If you find a better deal, call your current vendor and give them an opportunity to match or beat what you found. You will be shocked at the amount you can shave off your accounts payable. Internal processes: This could include anything from sales procedures to advertising methods, hours of operation, the amount of your dealer fee and any policies concerning deposits, money back guarantee or in-house warranties. Do you recall there being any issues with any of them in the past year? Is your dealer fee
still enough to cover what you need it to? Do you not have a dealer fee but wish you did? Are customers’ deposits refundable if they change their mind? Is that working for you? All of these things can be adjusted. I don’t advise you change these things back and forth throughout the year, however. That shows inconsistency and overall is not a good practice. But the end of the year is a great time to make these decisions and have a plan ready for January 1. Your exposure: Surprisingly I see many dealers fall short in this area. Of course, the end goal in this business is selling inventory. It’s how the money comes in to sustain operations. Too often I see dealers with tunnel vision focusing solely on that. There is a proper path to that end goal, and if you don’t recognize it you will never be as successful as you could be. Exposure is simple. It goes hand in hand with relationship building. It doesn’t have to cost a lot or consume a great deal of your time but it must be addressed consistently and frequently. So, what is this exposure I am talking about? Easy – get involved! There are so many ways to get your business in the spotlight. A great way to get started is by joining your local IADA. They have a huge network of dealers as well as industry resources that benefit dealers significantly. They also host events throughout the year that provide opportunities to build relationships with others in the industry. Another way to gain exposure and achieve brand recognition is to sponsor things in your community. This could be a toy or food drive, blood drive, a little league team or even have staff members trade off volunteering at an animal shelter or food bank. Most of these events will have some sort of literature printed to promote them. Your company name will be on it and given to their target market. This type of exposure has a dual outcome. First, it gets your name out there. Second, it makes everyone know you are the type of business they want to do business with. How will you get new and different exposure this new year? Training and education: This too is an area I see dealers neglecting. Don’t make that mistake. Proper and ongoing training and education is a must, starting with the onboarding of new employees. You should have a detailed description and job outline in place for each employee. This reduces confusion about what you expect and how you expect duties to be carried out. It seems like a simple concept but you would be surprised how important it is.
You know how you want the business to run. You have a vision of sales and customer service. Put a training process in place that will ensure your employees understand that vision and then give them the tools to make it happen. Continuing education is equally important, not just for employees but also for owners and managers. Regulations, laws, and statutes change more frequently than most dealers realize. Staying on top of changes in these as well as industry trends will keep you at the front, and out of trouble as well. Trying to stay in compliance with the DMV, the Department of Revenue, the Trade Commission, the attorney general and the IRS can be time-consuming and tedious when attempted on your own. There are several companies that offer training in these areas. Don’t try to go it alone. It’s more efficient when you have help. Think about what you need to learn in the coming year that will help protect your business. Safety: As a business owner, of course you want your employees to have a safe, hazard-free work environment. A safety manual is a good start, as well as regularly scheduled maintenance checks around the property. In addition, customer safety should be a priority. One injury could potentially cost you what you’ve worked so hard to build. An end of year physical inspection of the property and any equipment will determine if any repairs need to be made. Appearance: Take the time to pull up to your dealership slowly and thoughtfully. Look at everything. I mean, really look. Are things overgrown? Is the paint faded? How is your signage? We tend to overlook these things as we focus on getting other things done. Do the same thing when you step in the office. Is there clutter? Sit on the other side of your desk where your customer sits. See things from their perspective. How does it look? Do you have things to make your customer comfortable while they are there? Do you have an area for children to be occupied? The more comfortable your customer is the more you will keep their attention. So think about what you could improve. These are just a few things to think about when closing out a year and moving into a new one. It’s about striving to be better than the previous year. List your goals and changes you want to make and put a plan in place to make it happen. Jennifer Finlay CPFS is director of marketing and sales at Sure Title. She can be reached at jennifer@flatags.com.
WWW.AIADA.NET DECEMBER INDEPENDENT DEALER NEWS
13
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.” 14
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.
INDEPENDENT DEALER NEWS DECEMBER 2019 WWW.AIADA.NET
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.
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