WEST COAST
DEALER
T HE O F F I C I A L M A G A Z IN E O F IN D E P E N D E N T A U T O M O B IL E D E A L E R S A S S O C I AT I O N O F C A L IF O R N I A | J U N E /J U LY 2 019
DALLAS, TEXAS Permit No. 2079
PAID
“As Is” Challenged
PRSRT Standard U.S. Postage
FTC BUYER’S GUIDE NOT CALIFORNIA COMPLIANT?
S TAT E A F F I L I AT E
VISIT US AT W W W.IADAC.ORG
WWW.IADAC.ORG
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JUNE/JULY 2019 WEST COAST DEALER 1
ASSOCIATION NEWS |
By Brenna Stansberry
PRESIDENT’S MESSAGE
Enjoy the Benefits of Membership Index
05............................................. “As Is” Challenged 06............. IADAC Finds Help for Fresno Dealers! 07................................................Lawsuit Seminar 08.......................................................Repair Work 14..........................................The Lean Dealership 16...............................................Why Reinsurance 18............... Building a Successful (Sales) Culture
Advertisers Index
700 Credit...........................................................13 ACV Auctions...................................... Back Cover Alliance...............................................................15 AutoZone............................................................. 7 Lobel Financial.................................................... 3 Manheim ............................................................. 11 NextGear Capital............................................. 8-9 vAuto.................................................................IFC Warrantech...................................................... IBC
What’s New
N AT I O N A L Q U A L I T Y DEALER WEBCAST JUNE 20
Quality Dealers from across the nation will gather in Las Vegas to compete for the coveted title of National Quality Dealer during NIADA’s Convention & Expo. Even if you’re unable to attend in person, don’t miss this exciting event! Watch the live webcast on NIADA.tv on Thursday, June 20, 7 PM PDT (9 PM CDT).
Office
For information on how to become a member please contact larry@IADAC.ORG or 916-893-3306.
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. West Coast Dealer 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 West Coast Dealer 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 Christy Haynes • christy@niada.com PRINTING Nieman Printing
4 WEST COAST DEALER JUNE/JULY 2019 WWW.IADAC.ORG
In the coming months, you may see IADAC membership drives going on at local auto auctions. The IADAC board is trying to cover as many auctions across the state as possible to let non-members know what they can gain by being a member. You’ll have an opportunity to ask questions and find out how IADAC represents you. Our members are our primary focus and your problems are our problems, which we help you solve. One major benefit of membership for dealers includes discounted buy fees at all the major auctions. ADESA, Manheim and many large independent auctions honor the discounts. You also realize a stream of compliance information all year long. When you have
questions (except legal questions) you can call us for help. When your children or grandchildren enter college a scholarship fund set up by Vic and Ethyl Snyder helps them with a monetary award. That award is “earned” by the dealer having been an IADAC member for at least two full years prior to application. Membership with the National Independent Automobile Dealers Association is also included with your IADAC membership. NIADA has lobbyists at Washington, DC to watch over federal issues. You don’t have to wait to see us to sign up. Go online today to www.iadac.org and begin enjoying the benefits membership has to offer!
IADAC PAST PRESIDENTS LIST GUS CAMACHO, 2015-2017 ROCCO DELAPA, 2013-2015 ROD DAVIS, 2010-2013 DAVID AAHL, 2009-2010 TERRY DEGMETICH, 2007-2009 LUIS ESTRADA, 2006-2007,
2001-2002, 1989-1990 ROGER HANKE, 2004-2006 PEANUT RENFROW, 2003-2004, 1996-1997 FRANK GROMAK, 2002-2003 MIKE MACAULAY, 2000-2001 BOB HENRY, 1998-2000 RAY FOREST, 1997-1998 REX RODEN, 1995-1996 DOUG ROBERTS, 1994-1995 ED DOHNT, 1993-1994
OPIE HENDRICKS, 1992-1993 MANNY PADILLA, 1991-1992 GREG HODGES, 1990-1991 JERRY COWGILL, 1988-1989 DON HEAD, 1987-1988 JOHN BRAUN, 1986-1987 RAY GLOVER, 1984-1986 PAT MATLACH, 1983-1984 LARRY BRASHER, 1982-1983 TOM FIELD, 1981-1982 JIM MCCABE, 1980-1981 ROY WILHITE, 1979-1980 LEONARD BOYD, 1978-1979 JORDAN SUGARMAN, 1977-1978 BOB DUTTON, 1976-1977 TOM KENT, 1975-1976 JIM MITCHELL, 1974-1975
VIC SNYDER, 1973-1974 FRANK HAMMER, 1972-1973 MANUEL ROGERS, 1971-1972 JOHN HIATT, 1970-1971 DOUG ALMAN, 1969-1970 BOB SCORDINO, 1968-1969 LUCKY SKYRME, 1966-1968 LEONARD CRAVENS, 1964-1966, 1960-1961
WALT HOWEY, 1962-1964 TRAVIS GODBOLD, 1961-1962 WENDALL ANDERSON, 1959-1960 DICK RAFFERTY, 1957-1959
HONORARY PRESIDENTS
FRANK MURRAY RICK GOMEZ
EXECUTIVE COMMITTEE CHAIRMAN OF THE BOARD Gus Camacho
VICE PRESIDENT Guy Strohmeier
Camacho Auto Sales, Inc. Lancaster, CA
Auto Center 87 Soda Bay Rd Lakeport, CA
TREASURER Beto Beas
PRESIDENT Brenna Stansberry
VICE PRESIDENT Brittany Hibdon
Park Marina Motors Redding, CA
Hibdon Auto Center Orland, CA
SECRETARY Tony Harb
SR. VICE PRESIDENT Bruce LaVergne
VICE PRESIDENT Mehdi Chitgari
MAGAZINE CHAIRMAN Mike Macaulay
Pacific Auto
Classic Chariots, Inc. Vista, CA
Beas Auto Sales Stockton, CA
JustBetterCars.com
Car Systems carsystems40@yahoo.com
COMPLIANCE MATTERS
Cover Story
“AS IS” CHALLENGED FTC Buyer’s Guide Not California Compliant? Ali Kamarei with the Auto Legal Group LLP made IADAC aware of a lawsuit involving a California auto dealer in which the validity of the FTC Buyer’s Guide was challenged. That case was settled and no official, published precedent exists but the logical action for an auto dealer is very clear. Mr. Kamarei said, “Over the past several months, we have received an increasing number of calls about the disclosures required for the sale of ‘as is’ vehicles in California. Some plaintiffs’ attorneys have argued that vehicles sold ‘as is’ now include implied warranties because the updated FTC’s Buyers Guide does not contain adequate language to disclaim implied warranties. “Dealer XT, an automated compliance software company for automobile dealers, has been at the forefront of researching this issue and analyzing plaintiffs’ lawyers’ strategies in asserting these positions. While these plaintiffs’ attorneys are incorrect, nevertheless they have been asserting such positions in demand letters, lawsuits, and advertisements. “Additionally, certain plaintiffs’ lawyers assert their clients were orally promised a warranty to induce the buyer into buying a vehicle. While ASSOCIATION NEWS |
these oral promises might not satisfy the requirements under the Song Beverly Act, plaintiffs’ lawyers have previously claimed they give rise to a garden variety fraud claim or CLRA claim. “Accordingly, Dealer XT highly recommends the use of appropriate car window stickers disclaiming implied warranties to ‘as is’ vehicles (and use accompanying acknowledgments). Such stickers could be helpful in preventing frivolous claims from plaintiffs’ attorneys regarding ‘as is’ disclaimers and/or oral promises of a warranty as a CLRA violation or allegations of fraud in the inducement.” IADAC has created stickers that can be used as suggested by Mr. Kamarei. They can be ordered online from the IADAC website at www.iadac.org. Shipped directly to you from the printer, the cost per sticker is about 20 cents. An acknowledgement for the customer to sign is provided with your order. Spanish stickers are also available. Lenders have also taken the conservative course to recommend use of these stickers. Correction: In our previous issue, we incorrectly stated Mr. Kamarei is with the Dealer XT law firm. Mr. Kamarei is with the Auto Legal Group, LLP. Dealer XT is a compliance software company, not a law firm.
By Larry Laskowski
EXECUTIVE DIRECTOR’S MESSAGE
Fighting for Solutions
IADAC is always monitoring the auto industry to make sure you receive pertinent information in a timely manner. When issues pop up, our goal is to provide a clear understanding and offer solutions whenever possible. Such is the case with the recent claim the FTC Buyer’s Guide does not satisfy California requirements for “as is” sales. The network of individuals and companies who constantly survey our industry work to benefit you, and IADAC makes every attempt to disseminate that information to you. When major issues arise they often have complicated solutions. In this most recent claim that the “as is” Buyer’s Guide fails to comply with California law (CA Civil Code 1792, Song Beverly Act) the implications are
very serious but the solution is quite simple. We are thankful that attorney Ali Kamarei and Auto Legal Group LLP shared their research and suggestions for a solution so one more threat to the industry could be thwarted. You’ll find a more detailed article elsewhere in this issue but the takeaway you should recognize is that with IADAC as the hub connecting industry allies, California independent dealers are the clear winners. No one else delivers important messages in this complicated industry. More than ever, dealers should recognize the importance of supporting IADAC. We are a non-profit serving you and we can only exist with sufficient support. Only about 8 percent of California independent dealers are IADAC members, which not only makes our work more
difficult but also makes our existence tenuous. So for those of you who choose not to support your industry by joining IADAC, picture what things might be like if we were not here to represent you. Many things you take for granted didn’t just happen – IADAC was there to influence the outcome. Here are just a few examples: Your doc fee is a result of IADAC lobbying. Every time there is a mandate, we ask for compensation for you. (Multiply $70 times the number of cars you sell in a year.) IADAC lobbied to keep your bond at $50,000 when an increase to $100,000 was proposed. Interest rates might have been restricted to 17 percent if we had not have been able to secure a veto of SB 956 in 2012. IADAC also provides individual non-legal help for dealer-members when they ask. Keeping dealers on a compliant track is our goal. Start supporting us today by joining if you are not already a member! WWW.IADAC.ORG
JUNE/JULY 2019 WEST COAST DEALER 5
ASSOCIATION NEWS
IADAC FINDS HELP FOR FRESNO DEALERS! Working for Your Legal Rights
The IADAC office recently received multiple reports from Fresno dealers stating Fresno city impound yards would not release vehicles which they legally owned without first contacting a licensed repossession company to simply take the vehicle from the yard and turn it over to the dealer. A dealer has legal claim to impounded vehicles when they are the legal owner. Dealers may also perform their own repossessions, with certain restrictions, whether those repossessions occur in an impound yard or otherwise. In 2013, AB 306 (Lowenthal) sought to mitigate the problem of unlicensed tow truck “companies.” Upon review, lobbyist Bill Dohring felt the language could potentially be misunderstood and contacted Bonnie Lowenthal. Member Lowenthal agreed to clarify any misunderstanding by adding a paragraph to the Journal. Assembly Bill 306 and Journal addendum (last paragraph) are shown here: SECTION 1. Section 34620 of the Vehicle Code is amended to read: 34620. (a) Except as provided in subdivision (b) and Section 34622, a motor carrier of property shall not operate a commercial motor vehicle on any public highway in this state, unless it has complied with Section 34507.5 and has registered with the department its carrier identification number authorized or assigned thereunder, and holds a valid motor carrier permit issued to that motor carrier by the department. The department shall issue a motor carrier permit upon the carrier’s written request, compliance with Sections 34507.5, 34630, and 34640, and subdivisions (e) and (h) of Section 34501.12 for motor carriers listed in that section, and the payment of the fee required by this chapter. (b) A person shall not contract with, or otherwise engage the services of, a motor carrier of property, unless that motor carrier holds a valid motor carrier of property permit issued by the department. A motor carrier of property or broker of construction trucking services, as defined in Section 3322 of the Civil Code, shall not contract or subcontract with, or otherwise engage the services of, a motor carrier of property, until the contracted motor carrier of property provides certification in the manner prescribed by this section, of compliance with subdivision (a). This certification shall be completed by the contracted motor carrier of property and shall include a provision requiring the contracted motor carrier of property to immediately notify the person to whom they are contracted if the contracted motor carrier of property’s permit is suspended or revoked.
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A copy of the contracted motor carrier of property’s permit shall accompany the required certificate. The Department of the California Highway Patrol shall, by regulation, prescribe the format for the certificate and may make available an optional specific form for that purpose. The certificate, or a copy thereof, shall be maintained by each involved party for the duration of the contract or period of service plus two years, and shall be presented for inspection at the location designated by each carrier under Section 34501.10, immediately upon the request of an authorized employee of the Department of the California Highway Patrol. (c) (1) A motor carrier of property shall not retrieve a vehicle through the use of a tow truck, as defined in subdivision (a) of Section 615, from the premises of another motor carrier of property until the retrieving motor carrier provides a copy of its motor carrier permit to the releasing motor carrier. (2) A motor carrier of property shall not release a vehicle to another motor carrier of property utilizing a tow truck, as defined in subdivision (a) of Section 615, until the releasing motor carrier obtains a copy of the motor carrier permit from the retrieving motor carrier. The motor carrier releasing the vehicle shall maintain a copy of the motor carrier permit for a period of two years after the transaction, and, upon the request of an authorized employee of the Department of the California Highway Patrol, shall immediately present the permit for inspection at the location designated by the releasing motor carrier under Section 34501.10. (3) This subdivision does not apply to a person licensed pursuant to the Collateral Recovery Act (Chapter 11 (commencing with Section 7500) of Division 3 of the Business and Professions Code). Dear Mr. Wilson: Please note my authorship of AB 306 was intended to curb the unlawful towing of vehicles by tow truck operators that do not have the required motor carrier permit. The amendments to Vehicle Code Section 34620 contained in AB 306
only apply to a “motor carrier of property,’’ as defined in Section 34601 and do not apply to dealers, as defined in Section 285 of the Vehicle Code, so long as those entities are not using vehicles defined as a “motor carrier of property’’ described in Section 34601 of the Vehicle Code. Respectfully, Bonnie Lowenthal, Assembly Member As it turns out, Dohring’s concerns regarding the language proved to be true. After having received the reports from dealers, Dohring reached out to the Fresno city attorney and provided the clarification from Member Lowenthal. The city attorney agreed with Dohring and took steps to resolve the issue with policy change. The nuisance and cost savings to dealers were huge!
ASSOCIATION NEWS
LAWSUIT SEMINAR AT AUTONATION AUTO AUCTION
March 15, 2019
AutoNation Auto Auction in Gardena hosted a lawsuit seminar presented by IADAC and Mohsen Parsa Law Firm on Friday, March 15, 2019. About 35 dealers stayed after the sale to learn what items consumer attorneys typically target. Lawsuits are a huge potential liability for independent dealers that can be financially devastating. Small errors on the contracts, incomplete disclosures and seemingly minor paperwork mistakes are all claims dealers will have to face if they do not know what to look for. Sales staff often add to the list of allegations because they have no required training. A salesperson is often
the first point of contact at a dealership and may even handle financing, negotiation and delivery. There are many potential errors that can occur throughout the process. Mohsen Parsa and other law firms who represent dealers also provide consultation and training, which is something every dealer should have. California is highly litigious and a dealer is foolish to think he or she could never be the defendant in a lawsuit. Contact information for Mohsen Parsa as well as other attorneys can be found on the IADAC website at www. iadac.org. Select Vendor Directory from the menu bar. Special thanks to Juan, Ryan, Raul and the rest of the staff at AutoNation who made this event successful!
WWW.IADAC.ORG
JUNE/JULY 2019 WEST COAST DEALER 7
LEGAL MATTERS |
By James S. Sifers, Esq.
REPAIR WORK
A Word of Caution
As has become a truth in California with respect to auto dealers, no good deed goes unpunished. Many consumer attorneys have taken issue with dealers providing goodwill and/or warranty work for recently sold vehicles where a written estimate for the work to be provided and/or an invoice for completed work was not provided. This often happens in situations where a dealer’s in-house mechanic does work for a customer shortly after the sale. What first must be determined is whether a dealer’s in-house mechanic can even do the work. Generally, individuals in California who perform auto repair must be licensed by the Bureau of Automotive Repair (Cal. Bus. & Prof. Code § 9884.6.). If your in-house mechanic is not licensed by the BAR, they are likely not authorized to provide any services to vehicles not in inventory. Assuming a dealer’s mechanic is licensed by the BAR, then even if goodwill and/or warranty work is being provided to a customer postsale, California law requires that work to be properly documented. The customer must be given a written estimate for the “price for labor and parts
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necessary for a specific job” (Cal. Bus. & Prof. Code § 9884.9(a).). The work then must be authorized by the customer. (Id.) If that estimate changes “after it is determined that the estimated or posted price is insufficient and before the work not estimated or posted is done or the parts not estimated or posted are supplied,” the mechanic must obtain a new approval from the customer for the revised estimate prior to performing any work on the vehicle. (Id.) If the customer provides oral consent for the revised estimate, the mechanic (or dealer if the dealer is separately licensed by the BAR) must document that change as follows on the work order: [Note] the date, time, name of person authorizing the additional repairs, and telephone number called, if any, together with a specification of the additional parts and labor and the total additional cost, and shall do either of the following: (1) Make a notation on the invoice of the same facts set forth in the notation on the work order. (2) Upon completion of the repairs, obtain the customer’s signature or initials to an acknowledgment of notice and consent,
if there is an oral consent of the customer to additional repairs, in the following language: I acknowledge notice and oral approval of an increase in the original estimated price. (signature or initials) A written estimate will not be required for “preventative maintenance” provided without charge to the customer, which includes: Checking tire pressure and adding or relieving pressure, as necessary; rotating tires; changing transmission fluid, transmission filter, engine oil and filter, differential fluid, power steering fluid, and transfer case fluid; changing engine or cabin air filters, and external fuel filters; changing engine coolant; performing a fuel system induction service; replacing belts and windshield wiper blades; replacing light bulbs and restoring headlamps; adding oil or fuel treatments through the designated fill points; and topping off fluids; and all of the listed services include the removal, reinstallation, and replacement of any components necessary to perform each service, and the tapping of damaged threads without removal of any fluid pan.
ASSOCIATION NEWS
(Cal. Bus. & Prof. Code §§ 9880.1(j) & 9884.9(e).) Once the work is completed, the BAR licensed mechanic must then provide an invoice which “describe[s] all service work done and parts supplied.” (Cal. Bus. & Prof. Code § 9884.8.) With all of these requirements, if a dealership is not licensed by the BAR, it is not advisable to have any repair work, even goodwill and warranty work, completed at the dealership. Furthermore, if the dealer is going to arrange to have any work done on a customer’s vehicle postsale, a good practice would be to refer that work to an outside, BAR registered repair facility where that facility can provide the required estimate and invoice for the work done, even if the dealership is ultimately paying the bill. While providing warranty work and goodwill work is part of operating a dealership, be careful in the manner in which that work is done as consumer attorneys are always looking for technical violations to bring suit and collect fees. James S. Sifers, Esq., is a partner with the firm Madison Law, APC. He practices consumer law defense, real property, and business litigation. Sifers specializes in consumer defense, particularly in the automotive finance field.
IADAC E-NEWSLETTERS DELIVER!
Don’t Miss Out!
Those of you who do not take advantage of IADAC’s e-newsletter service are really missing the boat. We deliver compliance information, regulatory changes and much more all year long via our e-newsletter. You can stay informed and the cost is nothing! While you’re on the IADAC website, check out some of the great information at “Dealers Corner.” We have a video collection you can use to find out about ADA compliance, goodwill repairs, refunding overages and much more. Plus you can search YouTube for dozens more helpful short videos on common industry issues. You can sign up at www.iadac.org. Just click the link above the Lobel ad on the right side that says “Sign Up Free Newsletter.” If you choose not to receive it any longer, an opt out link is available.
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JUNE/JULY 2019 WEST COAST DEALER 9
WASHINGTON UPDATE
| By Shaun Petersen
NIADA GOVERNMENT UPDATE Latest Government Issues and Activity
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 Congress overturned the Consumer Financial Protection Bureau’s controversial guidance regarding discrimination in auto finance last year, but that doesn’t mean the issue is dead. The House Financial Services Committee’s Subcommittee on Oversight and Investigations held a hearing May 1 to examine discrimination in the automobile loan and insurance industries. The hearing included debate about the CFPB’s now-nullified guidance document, which claimed dealer discretion on interest rates in indirect auto lending creates a “significant risk” of unintentional disparate impact discrimination. “Last Congress, Republicans impeded enforcement of fair lending laws, making discrimination potentially worse,” committee chairwoman Maxine Waters (D-Calif.) said, referring to the vote to repeal the guidance. “Buying a car is a significant purchase for many Americans and should be a fair and transparent transaction, free of discrimination. Unfortunately, this is not the case for persons of color.” Waters said a “test of auto lending discrimination” by the National Fair Housing Alliance found “nearly two-thirds of minority loan applicants received higher-cost financing options from automobile dealers than less qualified white applicants.” “These types of practices warrant Congressional scrutiny, analysis and ultimately legislation,” she said. While much of the questioning and arguments from committee members went predictably according to party affiliation, Rep. Joyce Beatty (D-Ohio) joined ranking member Patrick McHenry (R-N.C.) in casting doubt on the CFPB’s methodology used to identify the race and ethnicity of consumers in determining disparate impact discrimination. Congressional Democrats would like to address the discrimination issue legislatively now that they control the House, but their options are limited by the previous Congress’ override of the CFPB guidance – not to mention the Republicancontrolled Senate.
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REGULATORY The Federal Trade Commission has completed its 3½-year review of the Holder in Due Course Rule and concluded no changes are necessary. The commission said it received 19 comments from the public about the rule – including a comment from NIADA – since the review began in November 2015. All of the comments supported retaining the rule as is. The Holder Rule, formally known as the Trade Regulation Rule Concerning Preservation of Consumers’ Claims and Defenses, was put in place to protect consumers when they purchase personal goods or services with money loaned by a merchant or a lender who works with a merchant. The rule requires those loans to include a provision that preserves consumers’ ability to raise the merchant’s misconduct as a reason for not repaying the loan, even if the loan is sold to a third party. It also prevents businesses from using financing mechanisms to collect debts from consumers when the debt arises from a sale in which the merchant defrauded customers, failed to deliver the goods or services, or engaged in other misconduct. The five FTC commissioners were unanimous in approving the rule with no changes, and affirmed the commission’s 2012 advisory opinion that the remedies provided by the rule are not limited to circumstances in which the seller’s conduct warrants rescission of the contract, or in which the goods or services sold to the consumer are worthless. PAC In conjunction with the National Auto Auction Association’s Day on the Hill last month, the NIADA Political Action Committee made campaign contributions to freshman Sen. Todd Young (R-Ind.) and Rep. Cathy McMorris Rodgers (R-Wash.). Young serves on three Senate committees important to independent dealers and the used vehicle industry: Finance, Small Business and Entrepreneurship, and Commerce, Science and Transportation – the committee with jurisdiction over the contentious issue of recalls. As the ranking Republican on the House Energy and Commerce Committee’s Subcommittee on Consumer Protection and Commerce, Rodgers also is deeply involved in the recall issue.
Rep. Cathy McMorris Rodgers
Sen. Todd Young
Rep. Maxine Waters
GRASS ROOTS Lawsuits are being filed against dealerships in more than 30 states alleging their websites do not comply with the Americans With Disabilities Act. The 1990 law requires businesses to make “reasonable accommodations” for access to people with disabilities in “any place of public accommodation.” The suits are claiming the Internet is a place of public accommodation, which requires dealerships and other businesses to make their websites accessible to those who cannot use them as currently configured. Those accommodations could include coding to convert words on the screen to audio for blind users, descriptions in videos for the deaf and keyboard commands for interactive functions for people who cannot use a mouse, all of which could be costprohibitive for small businesses such as dealerships. There is currently no federal standard for making websites ADA compliant. The Department of Justice issued advance notices of proposed rulemaking on the issue in 2010, but the Trump Administration withdrew them in 2017, saying DOJ will evaluate whether such regulations are necessary. California dealers have been hit hardest by the lawsuits because state law mandates a minimum of $4,000 in damages plus attorney’s fees for each violation in disability discrimination cases, regardless of the actual damages. Attorneys have made such suits a specialty, with plaintiffs sometimes visiting a number of dealerships and making the same claim in hopes of receiving multiple settlements. Shaun Petersen is NIADA’s senior vice president of legal and government affairs.
WWW.IADAC.ORG
JUNE/JULY 2019 WEST COAST DEALER 11
MARKETING MATTERS
| By Kenny Atcheson
HOW TO EARN A STEADY FLOW OF BUSINESS
Repeat and Referral System Many independent dealers are reliant upon tax season to make or break their year. Wouldn’t it be great to have the ability to generate an endless, steady flow of customers at a reliable and predictable pace rather than waiting for the annual tax season bump? That’s what an R&R System can do for your dealership. R&R is my abbreviation for Repeat and Referral business. One system earns both Rs because the same behaviors that earn one earn the other. The first step to having an incomegenerating R&R System is to make a decision to put forth effort, devote time, and invest money into a system. System is italicized here to stress its importance. Occasionally asking customers for a referral or to buy again is not a system. That is a random act of marketing. A Repeat and Referral System Provides Stability To illustrate the point, let’s look at things that aren’t so stable. A company reliant upon cold calls likely struggled big time when the Do Not Call list and other similar laws and regulations were enacted. The same thing happened with broadcast fax and later texting. Then there were changes in the marketplaces, such as DVRs and the way media may or may not be delivered. People don’t want to sit through commercials, so they record shows. ACCELERATE
Newspaper organizations struggle. Yellow Pages are moving from print to digital. An overnight algorithm change in Google can cause your company’s search engine rankings to plummet. Your business could go from ranking number one to disappearing off the first page of Google in the blink of an eye – by one algorithm change. It happens all the time. In 2016, Google AdWords Pay-Per-Click went from ranking 10 ads to four ads on the right side of the first page. If your business succeeded by ranking number five when there were 10 companies listed, your ad likely disappeared overnight when the list dropped to four. Then the world really shifted toward mobile. If your advertisements were geared for people who used desktop computers or laptops, you faced another challenge unless your website was already mobile-friendly. These are just a few laws, rules, and changes. If your company has a great referral system in place that is implemented regularly, referrals and repeat purchases will come at a steady and somewhat predictable pace. Think of repeat purchases as previous customers who refer themselves. Implement the same behaviors and systems to generate referral customers that you use to generate repeat customers. An R&R System is Under-the-Radar “I don’t know why that dealership is so successful while we struggle. We have similar inventory and I don’t think they advertise.”
This is what the head of your competition will likely say when you have a powerful force of referral soldiers who battle every day to send business your way. I am a fan of under-the-radar strategies. It is hard for a competitor to copy a constant flow of referrals, because they have no idea why you are having so much success. Occupy Space in Your Customers’ Minds Your customers don’t spend nearly as much time thinking about your dealership as you would hope – no matter how great their experience was. While tailgating outside a football game, if your customer was asked by a friend if they knew of a great dealership, your customer would probably recommend your business. But if your customer overheard two people talking about needing a good dealership, would your customer go out of their way to politely interrupt the conversation and recommend you? This would require your customer’s escalating motivation to refer your dealership. To occupy space in your customers’ brains at all times – including situations where they are motivated to refer business to your dealership – you must provide great experiences and communicate regularly. Sure, occasional big customer events are great. But continuous communication that offers fun, value, and prizes via print and email newsletters is a continuous method to occupy brain space – including the grey matter that reminds them about your businesses when a situation arises to refer your dealership. Referrals provide stability and consistency. Many behaviors and systems that are implemented to increase referrals also increase repeat purchases. Keep that in mind when you consider the effort or investment it takes to communicate consistently with your existing customers. Kenny Atcheson is the founder and president of Dealer Profit Pros and author of Marketing Battleground: How to Deploy Under-the-Radar Strategies to Explode Your Profits. Learn more at www.DealerProfitPros.com.
| By GWC Warranty
WHEN YOU CAN’T SELL MORE, SELL SOMETHING BETTER Improve BackEnd Profits
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 gets customers on board with the principles behind service contract protection. Once customers are bought in on the ground floor, you then have the foundation needed to get them to a higher level of coverage. Stick with What Works Over and over, you’ll hear mention of the
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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, and best options and working your way down from the top coverage you offer is the best way to help customers see the value in richer coverage. And it’s important that 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-ofpocket repair bills, they’ll undoubtedly sing your praises to family and friends and on review sites across the web.
INDUSTRY PERSPECTIVE |
By Zach Klempf
THE LEAN DEALERSHIP
A New Model for Independent Dealers We now live in a customer-centric world. Thanks to the Internet, car-buyers have more information and more choices than ever, fundamentally changing the way the auto industry works. This has led to: • Greater competition. Independent dealers are up against large dealer groups, big-box retailers like CarMax, and onlineonly businesses like Carvana. • Tighter margins. Price transparency in the market means customers expect the best deal every time. There is little wiggle room to improve your margin. • More noise. It’s harder to be found amongst the thousands of dealers in the industry. Trying to compete with marketing dollars doesn’t work when dealer groups have nearly limitless resources. Franchise dealerships are being bought up by large dealer groups at a record rate. That means independents are facing stronger competition with deeper pockets. To thrive in today’s industry, independent dealers need to change the way they do business. A New Way to Do Business Large dealers get away with bloat and inefficiencies because they have the money to do so. Small and mid-sized dealers can’t afford to be inefficient. This is actually a blessing in disguise. Independent dealers need to learn how to do more with less. Fortunately, a new model for doing business already exists, but it doesn’t come from the automotive world. For insight, we turn to Silicon Valley. Running Dealerships Like Tech Startups Silicon Valley companies have transformed the way they do business thanks to The Lean Startup, a New York Times best-selling business book by Eric Ries. Ries outlines a new strategy for building successful businesses, one that promotes continuous learning while minimizing waste. Going lean, Ries argues, is the key to competing in highly competitive markets. Even though The Lean Startup was written with tech companies in mind, its principles are universal. We can apply its teaching to independent dealers. The Lean Dealership The Lean Dealership takes the old way of doing business and flips it on its head. • Work smarter, not harder. No amount of effort from an independent dealer can match the resources of a Carvana or large dealer group. Fighting fire with fire is a losing battle. Independent dealers need to use data and experimentation to work smarter, not harder, to beat the competition. • Measure what matters. We need to use metrics that steer us toward success, not what looks good on paper. Turn rate, for example, is much more indicative of our dealership’s
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success than total units sold. • Eliminate uncertainty. Most independent dealers take a throw-mud-against-the-walland-see-what-sticks approach to marketing. That will no longer cut it. Dealers need a systematic way to build and grow their dealerships. Borrowing tactics and strategies from The Lean Startup, we have created a methodology that will help independent dealers buck conventional trends and find success in today’s highly competitive market. Does the Lean Startup Apply to Independent Dealers? The word “startup” evokes images of fast-growing tech companies like Airbnb and Uber. In the automotive industry, we might use startup to describe online-only retailers like Carvana or TrueCar (even though both companies are now publicly traded). Believe it or not, independent dealers are not that different from technology companies when it comes to building a profitable business. Eric Ries defines a startup as: “Any human institution designed to create a new product or service under conditions of extreme uncertainty.” I argue this applies to independent dealerships as much as tech companies. Are dealerships not human institutions who create (and sell) services and products? Is there not extreme uncertainty in the industry, especially for independent dealers? Tech companies are experts at disrupting highly competitive industries like hotels and taxis. Independent auto dealers face fierce competition as well, which is exactly why we should learn from the Silicon Valley playbook. The Lean Dealership methodology can help dealers make smart decisions in the most trying of times. THE LEAN DEALERSHIP M E T H O D O LO GY Part 1: What Makes You Different? The key to succeeding in any industry is solving an unmet need in the market. This has gotten more difficult for independent auto dealers in recent years. There are more dealerships than ever, plus larger companies that can operate off less margin. However, independent dealers still have an advantage over online startups and large dealer groups: They are closer to the customer. Independent dealers have deeper roots in their community, which means they are closer to the problems their customers face. Focusing on the customer is how independent dealers win. Understand Your Customers: Go See for Yourself Customers aren’t just going to tell you what they want (and often, they don’t know what they really want). Instead, dealers need to find out for themselves. The Lean Startup introduces a Japanese
concept called genchi gembutsu, which roughly translates to “Go see for yourself.” You should develop a first-hand account of your customer’s wants and needs. There’s a story in The Lean Startup about a Toyota engineer using genchi gembutsu. He took a 54,000-mile road trip around North America to talk to Toyota’s minivan customers. He used his insights to develop the 2004 Toyota Sienna, which had 60 percent higher sales than the previous year’s model. It was all because the engineer understood first-hand what customers wanted in a minivan. Independent dealers should go on their own genchi gembutsu journey, though it doesn’t require a 54,000-mile road trip. Dealers can: • Have salespeople write down every question and objection they hear from potential customers. Analyze to find the most common responses or themes. • Ask every customer who has purchased a vehicle to complete a satisfaction survey. Ask, “Why did you choose our dealership over everyone else?”, “What could we have done better?” and “Would you buy from us again. If not, why?” The more time you spend with customers, the greater your advantage over the larger competition. This investment in time and learning will pay dividends for years to come. Identify Your Niche As you learn more about your customers, you should always be on the lookout for an unmet need in the market. Say, for example, you notice a trend of customers traveling out of town to visit a certain dealership. This is a red flag because no local dealership is fulfilling those customers’ needs. Your goal is to identify a niche – an unmet need that differentiates you from the local competition. The most effective niches today focus on the customer experience. Examples of customer experience niches: • The 110-point inspection. Go above and beyond the usual quality assurance measures by completing a 110-point inspection on every vehicle. This attention to detail appeals to customers who value safety and quality. • Bilingual salespeople. Does your dealership have bilingual salespeople? Highlight this differentiator on your website and in advertisements. For non-English speaking customers, this is a huge selling point. • The out-of-state buyers program. If you attract customers from a larger region, offer an out-of-state buyer’s program that covers airfare or transportation to your dealership (if they purchase). • The first car specialists. Getting that first car is a rite of passage for teenagers. Win over first-car buyers by stocking the safest vehicles at the best prices. Your niche doesn’t have to be brand or pricerelated. Instead, identify a deeper need in your market, one that has gone unmet. Until now. Stay tuned for the conclusion of this article, which will cover “Build, Measure, Learn” as well as “Systemize and Automate.” Zach Klempf is founder & CEO of Selly Automotive.
DMV NEWS |
By Larry Laskowski
NEW DMV DIRECTOR
Kathleen Webb Steps in as Acting Director
I had the recent pleasure of meeting with Kathleen Webb, California DMV’s acting director. Kathleen was previously a part of California Government Operations Agency. The mission of Government Ops is to “improve management and accountability of government programs, increase efficiency, and promote better and more coordinated operational decisions.” Newly-elected governor Gavin Newsom tasked Government Ops to create a DMV Reinvention Strike Team. The goal is to identify the problems at DMV and implement solutions for “greater transparency, worker performance, speed of service and overall consumer satisfaction.” Kathleen and the Strike Team are nearly synonymous. In our meeting we discussed several issues in which solutions would benefit the auto industry, including curbstoning, salesperson education, lawsuits against dealers, unlicensed online sellers and more. Those topics were seriously considered and I believe there is a chance the auto industry will see positive changes. Additionally, Kathleen has agreed to speak at the 51st IADAC convention on October 7, along with DMV investigations chief Tom Wilson. The convention will be in Sacramento this year. More information is available at www.iadac.org on the event calendar page.
Kathleen Webb, Acting DMV Director
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MANAGEMENT MATTERS |
By Tim Byrd
WHY REINSURANCE?
“You Don’t Sell Someone Else’s Cars, Why Sell Someone Else’s Warranties?” I have been in the car business over 30 years. There are car dealers who are on top of their game and always striving to improve. Then there are the dealers whose computer screens would still be green if they had not finally pooped out.
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This message is for those dealers striving to be the very best. There are many varieties and levels of car dealers. There is the guy who pounds the pavement to sell the cars and the guy whose name is on the sign. There are the dealers who rent their building and those who own it. Some dealers floor plan their cars while others own their inventory. There are those who depend on the finance companies and others who own the finance company. Some own their service department and others must depend on an independent repair facility. There are also those who depend on third party warranty companies to warranty the very thing they have staked their livelihood and reputation on – the automobiles they sell – and those who own a reinsurance company. Let me be clear, I am not writing this to sell you a warranty. I am not here to tell you I have the best coverage, lowest priced, 10-year-unlimited mileage-bumper-tobumper for only $395 warranty. I’m here to tell you why you need to own a reinsurance company. Of all those things I mentioned – owning your service department, building, inventory, or finance company – a reinsurance company can provide you the highest return for the least amount of capital investment. Let me tell you how this works. The basics of all warranty companies are the same. What is covered is disclosed and priced based on actuarial figures. That price dissected includes what we refer to as an “admin fee.” The admin fee consists of fees to the administrator who administers the warranties and adjudicates claims, a fee to an insurance company to insure it, a fee to the agent, and a fee to the roadside assistance company. The total of the admin fee is usually 20 percent or less of the cost of the product. The balance of the cost of the warranty is the premium reserve. Premium reserve is set aside to pay claims. What happens to that reserve is the major difference between whether you own your warranty company or a third party does. Most warranty companies absorb any earned reserve (not used to pay claims) as underwriting profit. A warranty contract is earned based on the term. Some warranty companies have what they call a retro or profit participation program. They will return a portion of the earned reserve to the dealer if the dealership produces X number of warranties and continues to do business with them. So, if the dealer sells the store, retires or falls below a volume requirement, the warranty company is not obligated to continue including the dealer in its profit share.
If the dealer does receive a profit share, they will also receive a 1099 from the warranty company on what is considered commission, normally having the highest tax consequences. The reason you should consider owning a reinsurance company is it is an easy way to expand your profits. Third party warranty companies profit from reserves not used to pay claims. Reinsurance allows you to make that profit. Any reserve not used to pay claims becomes underwriting profit. For example, you sell an average of 20 vehicle service contracts per month, and $800 goes into reserve from each customer’s vehicle service contract. While loss ratios vary, let’s say $400 or 50 percent of every contract on average is used to pay claims. This leaves a $400 underwriting profit, which is $96,000 in additional dealer (stockholder) net profit per year and $480,000 additional dealer net profit at the end of five years. This does not include the retail profit made from the sale of the vehicle service contract. If you sell third party vehicle service contracts now, the earned reserve is retained by the third-party warranty company as their underwriting profit, in this case $96,000 per year. Another great reason to own a reinsurance company is reinsurance companies are small property and casualty companies: “Small property and casualty insurance companies with less than $2,300,000 in annual net premiums may elect to be taxed only on investment income under Internal Revenue Code 831 (b).” Most larger car dealers own their own reinsurance company. Smaller dealers can be unaware of the benefits and have the misconception you must be a large volume dealer to make it work. There are many products available to fill your reinsurance trust account and make taking care of your customer easy. These are products that fit your individual needs such as Collateral Protection Insurance, Debt Cancellation Coverage, Vehicle Service Contracts, limited warranties, and numerous ancillary products. With a reinsurance company, you have nationwide warranty coverage, paid for by your customer. It is accounted as a dealership expense and allows control over policy design. It provides a new profit center that is income tax friendly. It’s time to stop using third party insurance and warranty companies by unlocking the hidden profits of reinsurance! Tim Byrd is founder and CEO of DealerRE. DealerRE started in Virginia 25 years ago and is now serving dealers from Virginia to Hawaii and in between, with offices in Virginia, South Carolina and California. For more information, visit www.DealerRE.com or call 804-824-9533.
ONLINE MARKETING | By Adam Tobias
HOW TO BUILD A BETTER DEALERSHIP WEBSITE
3 Steps
In the increasingly competitive car dealership industry, brand loyalty is more important than ever. It’s also harder than ever to build. Cutting through the noise requires a clear message and focus on the customer experience. Standing out and building a loyal customer base may seem impossible. But small and mid-sized dealerships around the country are punching back and delivering amazing experiences that win lifetime customers. Brand loyalty is still possible for dealerships to attain. And when they do, the benefits are incalculable. A dealer’s website is their first impression with a potential customer. That’s where our brand loyalty journey begins. The Purpose of Every Dealership Website Dealership websites have one job: Get customers to visit the dealership. Car buyers today spend over 60 percent of their time conducting research online and visit only 1.2 dealerships on average. If your website doesn’t convince a buyer to visit your dealership, you have lost a deal, and potentially a lifetime customer. The problem is most dealers try to do too much with their website. Instead of focusing on their sole job – getting customers into the dealership – dealers load their sites with financial services, their life story, and vehicles that customers don’t want to see.
EXAMPLE: A
EXAMPLE: B
For this reason, most dealership websites are hard to navigate. The customer doesn’t know what to do, so they leave your site and go on to the next one. The best dealership websites – those that effectively drive customers to the dealership – show customers only the information they need to know. Everything else is a distraction. I M PROV I N G YO U R W E B S I T E IN 3 ST E PS Here are three elements that matter most for your website. By focusing on these three elements, you can cut out the junk that distracts customers and turns them away. Element 1: Value Proposition Oli Gardner is a master of building great websites. As co-founder of Unbounce, Oli spends his days thinking about and testing how websites can convert more users into customers. In a recent podcast, Oli discussed dealership websites and the importance of clearly communicating your value proposition to your customers: “If you can’t communicate [your value proposition] quickly, your competitor will,” said Oli. “If you can’t communicate quickly, your competitor will.” Oli said you have less than five seconds to make your value proposition clear to visitors. If you don’t, they will move on to the next site. When a customer first visits your website, they have one question on their mind: What can you do for me? The answer to that question is your value proposition. Dealerships should put their value proposition at the top of their homepage. Remove other messages that might distract from it, including financing deals, weekend sales, and messages from the dealer. Most dealers struggle to do this, but when they do, the difference is clear. The dealership website in “Example A” is easy to read and has a clear value proposition: “Family owned for 35 years. 5 minute approvals.”
Your value proposition is a signal to your target customer they are in the right place. Remove clutter from the homepage so your most important message stands out. Element 2: Testimonials/Social Proof Customers are always on the lookout for scams and bad companies. They want to see proof you’ve made customers happy in the past. Testimonials are the best way to put a wary customer’s mind at ease. Testimonials should be honest, authentic, believable and relatable. Here’s an example of an excellent testimonial for a dealership in Oregon: “Amber and the team were extremely helpful. No pressure and they were attentive to our needs. Great experience. We will definitely be back for our next purchase. Amber answered all our questions, even met us on her day off and followed up the next day via text to ensure we were happy. Financing was quick and painless. The whole process was under two hours.” Reviews that seem over-the-top, or even fake, can do more harm than good. Dealerships should encourage customers to leave honest reviews. Never create fake testimonials or encourage customers to write “favorable” reviews. People can sniff out inauthenticity a mile away. They will steer clear of your dealership and find another. Element 3: Call to Action Button Finally, your website needs a call to action: a clearly-defined next step for customers to take. Most websites look like “Example B.” This homepage has at least 10 different calls to action, with everything from “Shop inventory” to “Claim your Offer!” With so many elements vying for your customer’s attention, the action they’re most likely to take is leaving your site. When it comes to CTAs, clarity is king. Your homepage should have no more than three “actions” for customers to take. Ideally, your website offers a single CTA. Brand loyalty starts with the dealership website. If you promise an excellent carbuying experience, make sure your website provides an excellent experience, too. Dealership websites should be clear, trustworthy, and easy to navigate. Focus on the most important elements of your site and remove the clutter. Dealers who do this will be best positioned to build brand loyalty and earn lifetime customers. Adam Tobias is the co-founder and COO of Dealercue, which provides dealerships with real-time, intelligent, market-driven vehicle appraisal, pricing, inventory management, and sourcing solutions. He can be reached at adam@dealercue.com.
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SALES MATTERS |
By John Chapin
BUILDING A SUCCESSFUL (SALES) CULTURE
Four Features of a Great Work Culture You just hired the perfect person: great work ethic, positive and upbeat. They show up early, leave late, take 10 minutes of a 15-minute break, and do more than expected and more than you ask for. Now let’s take that person and put them into an environment where people are negative, aren’t held accountable, take three days off for a hang-nail, show up at 8:05 then spend 45 minutes “getting ready” for their day, start preparing to leave at 3:30 and leave at 5:00 like there’s a fire drill. What happens to that perfect hire? One of two things: they either become just like everyone else after about a month, or they leave. Whatever your culture is, it has a substantial impact on performance. There is significant peer pressure to conform to the culture, be it good or bad. This peer pressure is one of the four main motivators for people who belong to any group. Positive peer pressure is what took my grades from C’s in public high school to A’s and B’s in private high school. It’s also what ensured I made over 200 phone calls per day in my first job as a stockbroker. If you’re a great team or organization with a great culture, fantastic. Unfortunately, most organizations have negative cultures, or at least elements of them.
F EAT U R ES O F GR E AT C ULT UR E S Great Leadership Culture is top down. It begins at the top and flows down through the entire organization. Whatever the leadership team eats, breathes, walks and talks related to culture will become the culture. As a leader, you don’t get what you want, you get what you tolerate and allow. And what you tolerate and allow you tacitly condone and get more of. If you allow people to miss their numbers year after year, when it’s evident they aren’t making the calls and doing the necessary work, you’ll get more of that. If you allow negativity in the workplace and don’t hold people accountable, you’ll get more negativity and more people not doing their job. On the flip side, if you lead by example, walk your talk, believe in people more than they believe in themselves, empower them, listen to them, give them all necessary tools and resources, and hold them to a higher standard, you’ll get more of that. Rules and Decrees The culture in an organization is how people treat other people, how they treat work, and how they treat the work environment. Great cultures have rules and decrees regarding these three items – written rules and decrees.
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Here are a few examples: • E veryone is expected to show up on time, work until the end of the day, finish what they start, be honest, have integrity, and put in a full day’s work for a full day’s pay. • E veryone will be held to the highest professional and ethical standards. There is no place in the workplace for negativity or unprofessionalism. You will be respectful to all employees and clients. Gossip, talking, and otherwise communicating behind someone’s back won’t be tolerated. • W e are a great organization with a great product. We take better care of our clients than the competition because we care more. Your rules and decrees, totaling about eight to 15 in number, should be framed and prominently posted in several highly-visible areas in the workplace on a document titled: Rules and Decrees of the Workplace. Prospective employees should also receive a copy of these during the interview process and you should have a conversation with them about how they feel about these. By the way, full acceptance of the rules and decrees is a non-negotiable prerequisite to being hired. Everyone is on Board with “All In” Commitment When Malcolm Butler was limited to a few special teams plays in Super Bowl 52, many people said that move cost the Patriots the Super Bowl. Maybe. My contention is that had they let him play and won Super Bowl 52, the Patriots would not have been back to play in Super Bowl 53. No one who breaks the rules gets a pass. If this is allowed even once, people inside the organization start to question the integrity of the culture, and the culture starts to crumble. When you’re more interested in winning, or making a sale, than living by your values, it’s the beginning of the end. Again, no one gets a pass on the rules, not even your top sales rep.
This doesn’t mean people don’t get a mulligan. You can allow a mistake or two, but address it immediately, and keep the leash short. Don’t allow chronic offenders who are making blatant and/or repetitive mistakes. While an occasional mistake may be inevitable, carelessness, ignorance, and apathy aren’t. Culture is a Living, Breathing Organism A great culture can’t simply be written out, placed on the wall, and left to die. It needs to be kept alive and well by visiting it often, talking about it, and reviewing it. Repetition is important, because like any new habit it will take time to imbed the culture into the consciousness and sub-consciousness of everyone in the organization. Once it’s locked in and habitually followed, discussing the culture keeps it on everyone’s radar and ensures it is remembered and adhered to. Also, it may be necessary to tweak some rules or decrees from time to time. Though many rules and decrees aren’t likely to change, there may be times when changes in people, technology, and other unforeseen future events make an edit necessary. Finally, you build a great sales culture by building a great overall company culture. As part of the organization, the sales department is included in all rules and decrees. Everyone, from leadership to the mailroom, must be on the same page when it comes to culture. So, while the sales department may have some additional rules and decrees related to activity, quotas, and other items, building an all-in, solid organizational culture is what will ensure the success of the sales culture. 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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