DEALER NEWS
C A R O L I N A S I N D E P E N D E N T A U T O M O B I L E D E A L E R S A S S O C I AT I O N
CONVENTION HIGHLIGHTS INSIDE O C T O B E R / N O V E M B E R 2 016
WHAT LENDERS WANT TO KNOW ABOUT YOUR DEALERSHIP Vendor Management PA G E 12
S TAT E A F F I L I AT E
DALLAS, TEXAS Permit No. 2079
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V I S I T U S A T W W W .T H E C I A D A . C O M
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06......................................................Deal Depot CPO Launch 09......................................................Carolinas Quality Dealer 10..................... Tradition and Trends Need to Work Together 12........What Lenders Want to Know About Your Dealership 14...................................................What to Post on Facebook 16..................................................Community Service Award 24............................................................ Washington Update 26................................................................Successful Failing 30.................................................................61st Annual Expo
WHAT’S NEW
The NIADA National BHPH Summit will be held
Dec. 6-8 in Dallas, Texas. This year’s theme is “Reaching New Levels of Excellence.” The conference features industry leading speakers covering best practices in various BHPH related topics as well as industry updates and strategies for the upcoming year.
For more information contact Diann Flanders at diann@niada.com or (888) 906-8283.
ADVERTISERS INDEX
Ace Motor Acceptance ........................................................21 ADESA .....................................................................................7 Alliance Inspection Mgt. .......................................................18 Auto Use ..................................................................................9 AutoZone ...............................................................................14 Black Book................................................................................3 CARFAX ...................................................................................5 Carolina Auto Auction...........................................................IFC Charleston Auto Auction......................................... Back Cover High Tech Locksmiths ...........................................................17 Manheim ..........................................................................10, 11 Manheim Pennsylvania..........................................................13 NextGear Capital....................................................................12 Spireon................................................................................... 15 STARS GPS.............................................................................16 Team Velocity Marketing ........................................................6 VAuto.................................................................................... IBC Wolters Kluwer....................................................................... 8
OFFICE
5643 Harrisburg Industrial Park Dr. Harrisburg, NC 28075 Phone: 704-455-2117 or 1-800-432-4232 Fax: 704-454-5567 www.theciada.com CIADA is a non-profit 501(c)6
INDUSTRY NEWS / AUTO REMARKETING STAFF
CARS.COM ACQUIRES DEALERRATER
>>
INSIDE
>> DealerRater Reviews Said to
Strengthen Transparency
CARS.COM RECENTLY ANNOUNCED the company has entered into an agreement to acquire DealerRater, one of the industry’s largest automotive consumer review websites. The companies pointed out reviews have become critical to the car buying process, with 79 percent of car buyers and 68 percent of service customers reporting review sites are one of the most helpful resources when selecting a dealership. “We are pleased to bring DealerRater into the Cars.com family of industry-leading products and people as we create the largest
EXECUTIVE COMMITTEE
CIADA STAFF
Immediate Past Chairman Luke Godwin Godwin Motors Inc. Columbia, SC
STATE MAGAZINE MGR./SALES
Troy Graff • troy@niada.com
SC Vice President
Executive Director
NC Vice President
Controller
Treasurer
Education & Membership Services
Darryl Jackson Crown Automotive Sales and Finance Rock Hill, SC
Chairman
Will Davis G & B Auto Louisburg, NC
Steve Matthews Matthews Motors Inc. Clayton, NC
President
Darla Booher Deal Depot, Inc. greer, sc
President-Elect
Kim Bradshaw 1st Nations Auto Sales Burlington, N.C.
John Brown 5643 Harrisburg Industrial Harrisburg, NC
Debbie Braswell
Kevin Pendergrass Carolina Auto Sales of Myrtle Beach Myrtle Beach, SC
Jenny Myrick
Secretary
Jayne Harris
Steve Wetmore McAdenville Motors Gastonia, NC
NIADA HEADQUARTERS
NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 The Carolinas Independent Automobile Dealers Association is published bi-monthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203; phone (817) 640-3838. 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 individual authors and do not necessarily represent the views of CIADA or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2016 by NIADA Services, Inc. All rights reserved.
dealer review platform in the automotive sector,” said Cars.com chief executive officer Alex Vetter. “With this acquisition, Cars.com has solidified its position as the leader in online automotive reviews and the preeminent authority for car shoppers and owners on what to buy, where to buy and who to buy from.” Since Cars.com launched its reviews in 2011, the company insisted it has maintained its transparent model for generating consumer feedback, which can better serve shoppers and customers. The addition of DealerRater and its review database further strengthens this value proposition, according to executives. “We are happy to be joining Cars. com and are proud to share a similar foundation,” DealerRater chief executive officer Gary Tucker said. “DealerRater is uniquely positioned to lead the industry transition to finding not only the right dealer, but connecting consumers with the right person at the right dealer,” Tucker said.
Education & Membership Services
DRIS Insurance Martha Brown
MISSION STATEMENT The Carolinas Independent Automobile Dealers Association was organized in 1955 to assist members in enhancing their reputation in the marketplace, gain political influence and provide opportunities to interact with and meet other dealers for the purpose of sharing
business and marketing ideas. As a mature and long-standing Association, we are proud to maintain the ideals and principles set by the founders. But today, we offer more…far more. With a fulltime professional staff, modern technology and world class educational programs, we have become a strong,
effective and influential organization that exists for one reason only: To represent the independent, non-franchised automobile dealer! CIADA is the only not for profit association that represents the independent automobile dealer in the Carolinas with a National affiliation.
THE CIADA EXECUTIVE COMMITTEE
EDITORS
Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT
Christy Haynes • christy@niada.com Christopher Hanley PRINTING
Nieman Printing CIADA EXECUTIVE COMMITTEE (left to right): Treasurer Kevin Pendergrass, SC Vice President
Darryl Jackson, Secretary Steve Wetmore, President-Elect Kim Bradshaw, President Darla Booher, Chairman Will Davis and NC Vice President Steve Matthews.
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ASSOCIATION NEWS / BY BILL CARR, WARRANTECH
DEAL DEPOT LAUNCHES CPO PROGRAM
>>
>> CPO Comes to South Carolina
HOW DOES an independent used car dealer from South Carolina become the National Independent Automobile Dealers Association Quality Dealer of the Year and president of the Carolinas Independent Automobile Dealers Association? For used car dealer Darla Booher the journey began some 20 years ago when she found out the only way she could make enough money to support her family was to take a job selling cars. The only problem was that back then not many women were being hired for that position in South Carolina. Darla remembers when she began, standing on the lot with the only other female salesperson, her friend Ruth Blanton, with their high heels sinking into the hot asphalt. As much of a struggle as it was working car sales’ hours for a single mom, Darla persevered. She soon discovered if you treat people right you could make sales easy and develop a clientele. In December 2001 she took this customer service philosophy into her own business. Ms. Booher knew before it became a trend in the automobile industry that customer
satisfaction was what would allow a car lot to survive. She also instinctively knew that through employee satisfaction you get customer satisfaction. To that end Darla has managed her car lots as a family, both for her employees and her customers. She recently said, “By giving the consumer a better deal we sell more cars. It is a win-win as I see it.” That belief system has allowed Darla to expand to three lots servicing a full spectrum of the auto buying public. Booher was thinking recently about the difference in buying a new car and a used vehicle. She shared with her friend Ruth Blanton she would like to give the customer the same kind of security they would get with a new car franchise. That would mean finding a way to give warranties so the customer can
have breathing space after purchase. Recently Channel 7 Greenville/Spartanburg anchor Tom Crabtree said, “We are not exaggerating when we say we get an awful lot of calls from consumers who have just bought a used car and it has broken down.” That is what Darla seeks to avoid for her customers. Ruth is an agent. Her agency Dealer Products Specialty Services is in the service contract and finance realm of the auto industry and she brought to Darla a program that would solve this problem. Ms. Booher was already a member of NIADA. As matter of fact, she was Quality Dealer of the Year in 2015, but she wasn’t yet aware of the benefits of the NIADA Certified Pre-owned program.
Certification programs, at least the national programs, have always been the domain of the franchise dealer. Automobile factories have spent millions of dollars convincing the public of the value in their certification. Statistics say 67 percent of the public at least want to look at a certified vehicle. That means, if a dealer does not have some way of certifying, they are only in play for 33 percent of the public. It also says for older vehicles if there was a way to certify them a dealer would have a psychological advantage over the competitors in the older niche. The NIADA program joins the factories in this arena. It is a national initiative to give customers the same peace of mind a new car buyer gets – coverage in the event of breakdown. Ruth explained there are three things that make a warranty valuable. First and most important, it must be backed by a financial backer who can pay its bills. Second, doing business with a company who valued her customer base as much as she did, which was very important to Darla. Thirdly, CONTINUED ON PAGE 8
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CONTINUED FROM PAGE 6 it must be recognizable to any service department because it is very important the customer see a seamless event in the service department when their breakdown occurs. They both explained they were drawn to the NIADA program because of Darla’s affiliation with the association and because they knew the high quality standards NIADA maintains. Then they discovered NIADA had chosen Amtrust as their partner in the CPO program. Amtrust through its subsidiary Warrantech is the organization that had been picked by both General Motors and Microsoft to represent their programs. In addition, they are the service contract provider for Mazda, Volvo, Bentley and PepBoys along with many others. Ruth said, “Once a company has been vetted by those companies we know they are a quality
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provider.” They also liked the fact that Amtrust carries an A+ rating with the Better Business Bureau. So now when customers visit any of the Deal Depot lots they will know, even if they buy a car as old as 14 years old or with up to 150,000 miles, that if the car has passed the 125 point inspection it is certified, and they will be covered for the first three months or 3,000 miles with warranty with the option to extend that out with a service contract. They also know that not only will they have enhanced drive train coverage, but they will have the added benefits of towin, roadside assistance, rental coverage and lost key coverage. Darla also sees the partnering of NIADA CPO with companies like Carfax, Sirius XM Radio, and Ebay to give added benefits to her customers and
expand the sales area for used car dealers. Darla began offering the NIADA CPO program at her store in Duncan, S.C., on Aug. 11, just two days before she took all of her employee family to Myrtle Beach, where she was sworn in as the 2016 president of the Carolinas Independent Automobile Dealers Association. Darla Booher has come a long way from sinking in the asphalt with her high heels, and she has done it the right way, treating everyone like family and looking out for her customers. Like Mike Sims from Amtrust Warrantech said, “It is funny how the best is always looking to make their business better for their customer.” And that is what Darla Booher has done bringing in a first class program like NIADA Certified Pre-Owned to South Carolina, an example for other independents to follow.
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ASSOCIATION NEWS /
>>
QUALITY DEALER OF THE YEAR
>> Kevin Condon, Auction Direct USA
EVERY YEAR CIADA recognizes the very best of the best. This year is no different. The CIADA Quality Dealer of the Year award is very well deserved. Congratulations, Kevin Condon of Auction Direct USA in Raleigh, N.C. Starting in the car business 20 years ago, Kevin has been a salesman, an F&I manager, a general sales manager and a general manager. A member of the CIADA since the beginning of his recent venture approximately nine years ago, his dealership delivered 3,439 vehicles last year, has grown to 75 employees and since the launch of the NIADA CPO program has sold 721 CPO certified vehicles. It is NIADA’s largest CPO selling dealership. Kevin Condon is an inspiration to all dealerships in the Carolinas, and in the country. Kevin walks the walk. He surrounds himself with the best employees and he learns from the best leadership in the business. Kevin Condon and Auction Direct USA have a history of giving back to the Raleigh community, from organizing “Pick October,” when it donates $50 per vehicle sold to the Breast Cancer Research Foundation, to participating in Red Cross blood drives, Stamp
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out Hunger, Toys for Tots, Urban Ministries, Habitat for Humanity and many, many more. Auction Direct understands its success and the community’s success are directly connected. CIADA’s 2016-17 Quality Dealer of the Year award is presented to a dealer who will represent CIADA throughout the year, as well as at the NIADA Convention and Expo in Las Vegas in June 2017 as a nominee for the National Quality Dealer award. Kevin Condon of Auction Direct USA, congratulations to you and your entire dealership family on being named the CIADA Quality Dealer of the Year!
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MANAGEMENT GAMEPLAN / BY SCOTT BERGERON
TRADITIONS AND TRENDS NEED TO WORK TOGETHER
>>
>> Finding a Successful Blend
THERE’S A REASON traditions exist. They grow out of established, credible and timetested circumstances. Trends, on the other hand, can be today’s hot attraction, which may or may not stand the test of time. How can a dealership capture the best of today’s trends and blend them successfully into a tradition-based program that drives more
sales on a consistent basis? CRM and Personal RelationshipBuilding There’s no question technology-driven Customer Relationship Management programs are firmly established as a trend. In all likelihood, CRM will become a tradition over time. But for now it’s still a relatively new and shiny toy many dealerships have embraced as a bedrock organizational and sales tool. CRM enables data mining about customers as well as regular communication with them. In essence, it can serve as the engine that drives relationship-building because it brings evidence-based intel to the table. Depending on the CRM used (and how consistently and completely it is adhered to), salespeople can gain valuable information about buying history and preferences, and communication preferences. It’s gotten to the point where CRM can tell a dealership how often to communicate with a customer via email, and what not to do (e.g., overwhelm with too many emails that end up alienating the customer). But without tires the vehicle won’t move very far. All the technology-driven protocols in the world can only go so far toward the time-honored tradition of relationship-building. This is the ability through interpersonal contact to establish and maintain trust, comfort and likeability with prospective and present customers. In the rush toward technology trends (e.g., Internet car-shopping and pricing tools), there’s a tendency to embrace the former and forget the latter. The truth is successful salespeople need both – the “scientific” piece that CRM systems can bring to the table and the “artistic” ability to develop rapport one-on-one. When the two work in harmony, dealerships get the best of both worlds. Buyers are “primed” by the CRM outreach that shows the dealership understands them and gives them useful information. In-person relationshipbuilding then seals the deal. Here’s what can happen if the two aren’t working side by side: a prospective buyer walks into a dealership and is basically ignored by salespeople nearby because they’ve been schooled not to be too pushy or aggressive. (In some cases, it’s just plain laziness.) Armed with the amount of information available online, salespeople today too often assume a prospect will seek them out if interested. In the interim, they give them space. In reality, this is the worst way to proceed. It’s happened to me. I wound up feeling ignored rather than valued. Instead, a salesperson could have introduced himself/herself and offered to help – without coming across as pushy. This would have set the tone for a pleasant and productive discussion and potential sale.
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The trend is no-haggle pricing.
The tradition is to play the negotiating game. Both are valid. It depends on buyer preferences.
art of the deal. If they can’t feel like they’ve achieved a lower price through negotiation, they won’t buy at all – or at least they will be reluctant. Here’s another perfect example of how trend and tradition can complement each other perfectly. The trend is nohaggle pricing. The tradition is to play the negotiating game. Both are valid. It depends on buyer preferences. So find out what those preferences are, then go one direction or another – or both. Read the prospective buyer carefully, then adjust as gut feelings dictate. If someone comes in and is adamant from the get-go about a firm price, so be it. If it’s unclear what their preferences might be, ask. (Then, have an option to fit their preferences. If they want to negotiate, be prepared to shift gears
from one-price shopping.) Then, of course, there’s the hybrid – a buyer who wants the firm price and wants to negotiate from there. Decide if/how to address this scenario. In short, prepare your salesforce to deal with all types of buyers. Because just as the U.S. is a melting pot of different ethnicities, so is the car buying population a melting pot of preferences. Those preferences can best be addressed by honoring both trends and traditions. Former dealer executive Scott Bergeron is the founder and principal at Daily Gameplan (www.dailygameplan.com), a sales team performance company. Daily Gameplan’s Red Books and cloudbased CRM have been used in thousands of dealerships throughout the United States. Bergeron can be reached at 303.918.3169 or scott@ dailygameplan.com.
Internet Shopping vs. Instinct Another “trend” (yes, many will say it’s here to stay) is Internet-based car shopping and pricing. There’s no doubt the abundance of Internet information has led to much more savvy and educated buyers. This is great because it opens the door for a salesperson to build rapport based on instincts instead of just answering pedestrian questions about a potential car or sale. However, exercising those traditional instincts seems to be a lost art in too many dealerships. Salespeople often are cast as order-takers, there to follow through on customer requests. As with the CRM example above, this is leaving a big (some would say the biggest) piece of salesmanship on the salesroom floor. Instincts can be wonderful because they work at a level technology doesn’t. Properly tuned in, a salesperson can intuit buying clues just by observing a prospective buyer’s body language, movements, gestures and actions. For example, a prospect is viewing pricing information on a particular vehicle, then throws up his hands. That well could indicate frustration, or is it exhilaration? The alert salesperson will make sure to find out, and take the conversation in the direction it needs to go from there. While instincts themselves can’t be trained, awareness of when and how to use them can. This needs to become, once again, a key part of salesforce training – at the time of hiring, and periodically thereafter. Even if the new hire is a seasoned pro, the “hows” of exercising instinct may need to change depending on previous experience and current dealer aims. Iron-Clad Internet Pricing vs. Art of the Deal Following through on the trend of all things Internet, one-price-no-dickering shopping has become the rule, not the exception. Why? Yes, I know a gazillion surveys have said buyers don’t want to haggle or be hassled in the price-shopping arena, and that a oneprice policy makes them feel much more at ease and trusting. Well, that’s great for those people. But what about those who like to haggle? There are still many buyers out there who live for the
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DEALER BEST PRACTICES / BY CHET HEUGHAN
VENDOR MANAGEMENT
>>
>> What Lenders Want to Know
About Your Dealership
VENDOR MANAGEMENT has become somewhat of a buzzword in the consumer lending industry, especially around auto lending. It has always been a financial institution’s responsibility and obligation to know who they are doing business with and how loan applications are reaching their institutions. The Consumer Financial Protection Bureau, however, has further emphasized financial institutions are responsible for the end product. This is to say that any negative actions taken by the dealer will become a problem for the lender. Within franchised dealerships the vendor management requirement is aided by a strong presence from the manufacturer. For example, a franchise dealer has certain covenants that require financial reporting, including minimum capital thresholds, required training and certifications. Franchised dealers also benefit from the monitoring of customer satisfaction surveys, detailed inventory tracking and industry benchmarks provided by other franchise dealerships selling the same brands. Independent auto dealers represent a unique challenge for many lenders. Independent auto dealers often vary in size, financial strength, operational models, inventory and experience. Unlike most franchise dealerships, independent auto dealers do not have the support of a franchise offering multiple checks and balances. It is easy to understand why lenders then tend to gravitate toward independent dealers that look and act more like a franchise dealership. As indirect auto lending has become more competitive and lenders struggle to increase yield, many have had to broaden their credit spectrum and move closer toward subprime lending or expand their dealer network outside their traditional relationships. To do this lenders have had to modify their dealer underwriting and dealer management models to fit smaller dealerships with more diverse revenue and sales models. In years past independent auto dealers had to meet the same minimum criteria for doing business with the lender as a franchise dealership, but times are changing. Many lenders have multiple programs and mitigate the risk of smaller dealerships with low working capital and minimal experience by using a third-party risk mitigation platform. With many of these platforms, small or new independent dealerships can gain access to the same national programs as large franchised stores. Lenders are able to serve independent dealers because thirdparty risk mitigation platforms are helping bring efficiency and transparency to the transaction. 12 AUTO DEALER NEWS OCTOBER/NOVEMBER 2016
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For example, independent dealers may be subject to more frequent underwriting, additional verification steps and less direct access to loan underwriters. While there is more work on the dealer’s side, these steps also benefit the stores’ owners by helping identify fraud attempted by customers or rogue employees. The days of simply signing a lender’s dealer agreement and providing a few supporting documents to gain access to their retail financing program are drawing to a close. Lenders are being required to truly know and manage their dealer relationships. This means updating key pieces of data and underwriting each dealership on an annual basis. As an independent auto dealer it’s important to understand what lenders are looking for and be prepared to provide the documentation needed annually to avoid disruptions in your lenders’ retail financing programs. Lenders will be evaluating the dealer principals, the dealership itself and inventory. They will be looking at credit reports that indicate bankruptcies, tax liens, past-due accounts, and potential fraud or identity theft. In addition, lenders will check criminal history reports and verify addresses, property ownership, bank statements, business financial statements and tax returns. Lenders will also be looking at more subjective data such as references from your auctions, floor plan lenders, warranty providers and personal references. You should be prepared to provide proof of insurance, copies of bonds and licenses, and expect a yearly site visit and basic inspection of your facility. Lenders really want your business, but they must first know who you really are. Creating your own internal process for managing due diligence requests from lenders and thirdparty risk mitigation service providers will make this process easier and more efficient for you. Understanding what lenders are looking for and providing it in a timely manner goes a long way toward building a strong profitable relationship along with the ability to compete with your neighboring franchise stores. Chet Heughan is director of AppOne® Risk Mitigation Services and Indirect Lending for Wolters Kluwer. For more information, please visit www. wolterskluwerfs.com.
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SOCIAL MEDIA / BY KATHI KRUSE
5 WAYS TO FIGURE OUT WHAT TO POST ON FACEBOOK >> Engage Your Customers and
Reach Your Goals
ONE OF THE most common challenges for independent dealers is social media. It’s actually a challenge for most companies simply because it’s a medium not well understood. Not to oversimplify it, but Facebook and other social channels are just another medium to connect with customers. If you think about the “traditional” media such as TV, radio, print, billboards, email and phone, they are all places where customers spend time, and it’s your job (through marketing and advertising) to attract them to your store. Once a dealer has decided to venture out into Facebookland, the first question that comes up is “What do I post on Facebook to attract more customers?” The answer is a simple one but not so easy to find. Engagement is king on Facebook. It drives everything. There are two types of Facebook engagement: organic and paid. Organic simply means you did not pay
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to promote your post. Organic is the best kind of engagement and it’s the hardest to achieve. Solid, original, high-quality content achieves organic reach and engagement. People like, comment and share, which builds more authority with Facebook’s algorithms. It’s key to pay close attention to what’s working and what’s not. You must learn through data how best to promote (pay for) your content to improve on what’s happening organically. But what do you do when you hit a brick wall for ideas? These five ways will help you figure out what to post on Facebook to engage customers and reach your goals. 1. It all begins with your why. If you’ve done the work to determine your true why – why you’re participating in this race, and why your customers choose you over your competitor – the search for what to post on Facebook gets so much easier. Simon Sinek said, “People don’t buy what you do, they buy why you do it. The goal is not to do business with people who need what you have. The goal is to do business with people who believe what you believe.” Without inspiration, motivation and passion to craft meaningful content, your Facebook page falls flat. Pro tip: If you’re new to determining your why, take a look at your online reviews. Look and listen for commonalities from what your customers are saying – that will help you know why your customers choose you.
2. Determine what your target customers want to know. Building relationships with buyers is how business gets done (with or without Facebook, right?). Knowing your customers’ interests and challenges helps you create content for your page that matters to them. Whether you realize it or not, there’s a story happening in the mind of your customer. They are the hero of their story, and when you actively participate in that narrative in a meaningful way (which Facebook is ideal for), you position your business within your customer’s story... and have a great shot at the sale! Pro tip: Begin to notice ideal customer experiences within your store and find a way to document them.
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>>
Review your list
and discover you've just experienced what it's like to know what to post on Facebook.
3. Identify and develop your resources. Part of your plan for what to post on Facebook is sitting down and assessing just what it is you have available. Failing to identify and develop your resources makes it even harder to know what to post on Facebook. Answer these questions: • Who will produce our content? • Who’s in charge of our content? • Who will maintain our content? (Content is a business asset!) • Examine and describe what forms of content are most comfortable right now (written, images, audio, video). • What types of content do you want to focus on in the next 12 months?
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• What do you need to do to get there? 4. Encourage employee participation. Most dealers agree they need to A) produce more content and B) connect on a deeper, personalized level with today’s hyperconnected buyers. Shifting your internal processes to engage employees (especially salespeople) in content creation helps with both of these challenges. When you showcase employees as thought leaders in the automotive industry, the company receives more recognition online. Employees reap the benefit of their voices being broadcast, paving the way for more referrals, leads and sales. The company looks smarter because its employees look smarter. 5. Don’t make it too complicated. If you’ve been managing a Facebook page for a business, chances are one or more of these statements apply to you: •Y ou’re a current or potential customer of that store. •Y ou possess similar attributes to the customers you’re trying to attract. •Y ou have empathy for customers’ struggles and feel a connection. This means you are uniquely positioned to understand your customer (because they’re just like you). You have an idea of what would be valuable to post on Facebook and you need to give it wings. Try this: identify four to five Facebook pages you like and what it is about them you admire. Write down your answers. Review your list and discover you’ve just
experienced what it’s like to know what to post on Facebook. Those pages you identified are successful for the reasons that attracted you. They are the same or similar to the reasons customers like your page. Brainstorm with others within and without your organization to come up with a game plan to create content that elicits the same interest, excitement and belonging you feel when you visit those pages on your list. Pro tip: We all get busy and it’s nice to have one place to refer to our game plan. A content calendar helps you think through what to post on Facebook, gives you the room you need to plan your strategy and allows you to schedule posts into the future to save time. Fact: figuring out what to post on Facebook is a creative process. Not everyone is cut out for it, but those who are usually realize it’s fun once you get things in place. Don’t be afraid to test different types of content with your fans. This will build your self-confidence and motivate you to keep going. The answer to “what to post on Facebook” is simple, but not easy. Do the work, test your ideas and make good use of a content calendar. You’ll soon stop struggling, find the answers and become a Facebook superstar. Kathi Kruse is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc. Kruse Control coaches, trains & delivers webinars focused on integrating social media and online reputation management into dealership operations.
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ASSOCIATION NEWS /
COMMUNITY SERVICE AWARD >> Steve Matthews & Matthews Motors
EACH YEAR A DEALER/DEALERSHIP IS NOMINATED
to represent CIADA for NIADA’s Community Service Award, which is sponsored at the national level by Cox Automotive Group. This award seeks to recognize the “best” among us, not for what we do at the dealership, but rather what we do away from the dealership. For most independent dealerships, a million dollar advertising budget is not practical, nor feasible. However, some dealerships, even without the help of consultants and
experts, conclude such a budget is unnecessary if “we do unto others as we would want them to do unto us.” In doing so, success is inevitable. These types of dealerships are usually entrenched in the goings on of their communities, not just open and available at the dealership lot from 9 a.m. to 6 p.m. each day. Almost always, these dealerships are financially successful. Their return on investment is unintentional, as the real driver is their commitment to living in and caring for their communities. Waymaker Learning Corporation, the sponsor for the CIADA Community Service Award, seeks to promote, grow and train
organizations and individuals to make a difference wherever they are in the world. CIADA has been amazed at the unselfish involvement by this years’ award winner, Steve Matthews and Matthews Motors of Clayton, N.C., “Steve Matthews is an excellent example to dealers across the nation that when you invest in your dealership, your employees, your industry and your community, everyone benefits,” said CIADA executive director John Brown. “Steve has invested across the community, from college level sports and education, to community health and area ministries. Whether in his leadership at multiple colleges and universities in eastern N.C. or his work with the Johnston County Education Foundation, Steve and his team exemplify the trait of “serving others before being served.” There are countless ways he is making a positive difference, but the one most dear to him is Clayton Area Ministries (CAM). CAM works daily to feed, clothe and house the very least among us. Steve’s annual efforts to raise tens of thousands of dollars to support CAM are in and of itself noteworthy. His dealership team also volunteers with CAM! So moved by the needs of the community, Steve’s wife Dale stepped up to tackle the daily oversight of CAM as executive director. Waymaker Learning Corporation is delighted to join CIADA in recognizing Steve Matthews and Matthews Motors with the Community Service Award plaque as well as a $500 check made payable to Clayton Area Ministries in his honor.
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CASHING IN ON LEADS >> Do’s and Don’ts
URGENCY TO BUY HAS NEVER BEEN GREATER.
A Google/Polk study recently found 81 percent of car buyers make a purchase within three months of beginning their online search and 51 percent buy within one month of their first clicks. Furthermore, a Cars.com survey found online shoppers are three times more likely to contact a dealership by phone than they are to reach out via email or chat. What does that mean for you? It shows you need to be on your toes for each and every phone call that comes into your dealership. Here are some simple do’s and don’ts that will help you capitalize on Internet leads that find their way to your phone lines. DO’S • Have a process. Without a process, you’re just guessing. Make sure you answer the phone consistently, ask for names, provide your name and treat sales calls as the golden opportunities they are. A Marchex Institute study showed 53 percent of answered calls were from shoppers with a clear intent to buy.
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• Set an appointment. Don’t put the phone on the hook without putting something on the books. If you haven’t set an appointment for a customer to come look around the lot or test drive a car they saw online, you wasted your time and your customer’s. They called because something about your dealership caught their eye. Find out what it is and get them in the door to take a closer look. • Return calls promptly. Surprisingly enough, this may not be as simple as it sounds. Only about 20 percent of car shoppers begin their search looking at the brand they’re going to buy. You’re not the only dealer they’re looking at, but you could be if you’re the first to respond. DON’TS • Don’t try to sell a car over the phone. Best Mark placed test calls to dealerships around the country and found 91 percent of salespeople attempted to sell a car over the phone rather than set an appointment. Nothing sells a car better than seeing it in person. A sale over the phone is rarely effective. • Don’t wing it. Best Mark’s survey also uncovered the staggering fact that 95 percent of salespeople don’t have a defined road to an appointment. Like we said about creating a process, guessing at what will get your customers off the phone and in their next vehicle isn’t the most practical way to approach a lead. • Don’t wait for an email. Online
A Google/Polk study recently
>>
ACCELERATE / BY GWC WARRANTY
found 81 percent of car buyers make a purchase within three months of beginning their online search and 51 percent buy within one month of their first clicks.
shoppers are often searching on a cell phone or mobile device. They have easy access to a call button, plus we’ve already established they’re three times more likely to place a phone call than type up an email. If you think all your leads will land in your inbox, you could be sadly mistaken.
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MARKET WATCH / BY AUTO REMARKETING STAFF
KBB’S BEST BETS FOR USED VEHICLES UNDER $8K
>>
>> Good Affordable Used Cars
TODAY’S NEW CARS may be chock-full of the latest
technology and features, but that comes at a price. In fact, the average price of a new car is $33,801. Because many people cannot afford a large monthly payment (let alone buy a new car outright), there exists a healthy market for affordable used cars. Still, prices for used vehicles run the gamut. With affordability in mind, the editors at Kelley Blue Book’s KBB.com have named this year’s 10 Best Used Cars Under $8,000. “While spending $8,000 or less won’t get you the newest tech or the shiniest paint job, it can buy you solid, reliable transportation that will last for the next several years if you play your cards correctly,” said KBB.com executive editorial director and executive market analyst Jack Nerad. “For those who feel a keen ache in their checkbook thinking about the prospect of a big monthly payment, this year’s list of KBB.com’s 10 Best Used Cars Under $8,000 should provide some relief, because there are good used car alternatives to a more expensive vehicle.”
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1. 2006 Toyota Avalon 2. 2007 Honda Accord 3. 2010 Honda Civic 4. 2008 Toyota Corolla 5. 2008 Ford Crown Victoria 6. 2006 Subaru Outback 7. 2007 Nissan Maxima 8. 2007 Subaru Impreza 9. 2006 Mazda MX-5 Miata 10. 2010 Kia Soul KBB.com editors noted the Avalon is “big, quiet and comfortable,” as well as highly reliable. “Our master mechanic suggests that obtaining 200,000 miles of largely trouble-free driving is a distinct possibility,” they said. The other Toyota on the list, the 2008 Corolla, was noted by KBB mechanics as “a great choice for a used car if all maintenances have been performed.” Like most Toyotas, the Corolla seems to be “overbuilt” compared to other cars in its segment, and that translates to solid reliability with few problems,” they continued. Coming in at No. 10, the Kia Soul’s aesthetics were likened to a common kitchen appliance. “Some would tell you it looks like a toaster, but if it does it is a very useful toaster,” KBB said. “Larger than you might guess it is, the Soul will swallow up a lot of cargo and haul five passengers in surprising comfort. If you can’t swing the cost of a small SUV (and don’t need all-wheel drive), the Soul will fill the bill.” To see KBB.com’s full coverage of the 10 Best Used Cars Under $8,000 for 2016, including vehicle photography, pricing details and editorial reviews, visit www.kbb.com/car-reviews-and-news/top-10/bestused-cars-under-8000/2100000852/.
EDITORIAL NOTE /
COMPETING WITH FRANCHISE DEALERS AND COMING OUT ON TOP >> Correction
THE ARTICLE Competing with Franchise Dealers and Coming Out on Top in the August/ September issue inadvertently listed the wrong author. It was actually written by Kathy Tafolla of Lobel Financial. Our apologies.
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SAFETY WATCH /
>>
INDUSTRY NEWS / BY USED CAR NEWS
>>
COX NAMES PRESIDENT FOR MEDIA SOLUTIONS GROUP
CHRYSLER RECALLS TRUCKS, SUVS
COX AUTOMOTIVE ANNOUNCED Brian Geitner has been named president of the company’s Media Solutions Group. Geitner will oversee the company’s Autotrader, Kelley Blue Book and Dealer.com business divisions and brands, leading the integration of Cox Automotive’s platforms. He began his new role Aug. 15, reporting directly to Mark O’Neil, chief operating officer of Cox Automotive. Geitner succeeds Jared Rowe, who is departing the company for a new opportunity outside of the automotive industry. Since 2015, Geitner has served as president of Financial Solutions Group at Cox Automotive responsible for the advancement of NextGear Capital. Geitner joined Cox Automotive in 2012 as chief executive officer of Dealer Service Corp.
CHRYSLER IS RECALLING 412,855 model year 2014-15 Jeep Cherokee and 2015 Chrysler 200, Jeep Renegade and Ram ProMaster vehicles equipped with 9-speed automatic transmissions. The transmission sensor clusters may have insufficient crimps in the transmission wire harness, and as a result, the transmission may unexpectedly shift to neutral. If the vehicle unexpectedly shifts to neutral, there is an increased risk of a crash. Chrysler will notify owners, and dealers will update the transmission software to prevent the transmission from shifting into neutral due to a faulty crimp, free of charge. Chrysler’s number for this recall is S55.
>> Includes Autotrader, Kelley Blue Book and Dealer.com
>> Transmission May Shift to Neutral Unexpectedly
2016 EDUCATION CLASS SCHEDULE
NOTES:
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oF Tip THE Month
Complaint Management System Every dealership should maintain a written Complaint Management System (CMS) to track all customer complaints and resolutions. All dealers want to ensure that their customers are satisfied, both because it’s the right thing to do and as a great source of repeat and referral business. A good CMS is an effective way to avoid a customer complaint escalating to the CFPB, BBB or other government agency and may benefit you if it does.
AMAC offers financing to qualified BHPH dealers looking to expand their business. What’s included:
Funding for Receivables You Collect or We Collect Floorplan Lines Simplified Insurance Tracking Reports Package Training Bulk Roll in for Existing Contracts Cash Flow from Payments
Ace Motor Acceptance Corp. (AMAC) specializes in supplying capital to BHPH dealers. Our BHPH in a Box™ program provides capital to fund contracts and floorplan lines of credit to purchase inventory. By offering both, AMAC improves your cash flow by allowing you to pay off your floorplan when the deal is funded. We understand what it takes to grow your business. AMAC allows you to maintain your customer relationship, leading to increased repeat and referral business. Instead of selling off your portfolio or doing an expensive payment stream, AMAC has a superior program that allows you to retain strong monthly cash flow from customer payments. We approve you, not your customer. The BHPH in a Box™ program is the most complete program in the industry. To learn more call AMAC today at 704-882-7100 ext. 7509.
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BHPH PERSPECTIVE / BY DAVID MEYER
>>
HOW MUCH RISK ARE YOU WILLING TO TAKE? >> A Way to Cut Costs and Mitigate Risk
AFTER YEARS OF declining sales, the automotive industry is once again on the rise. Fueling much of the resurgence in vehicle sales is the recent growth in subprime automotive financing. So what is fueling the increase in subprime auto loans? In the wake of the recent economic crisis, increasing numbers of car buyers found themselves saddled with poor credit resulting from job loss, foreclosure, bankruptcy and other financial woes. While still struggling with low credit scores, many of those customers are now moving toward financial recovery. They’ve found new jobs and careers, are earning decent salaries, have wiped the slate clean and are lowering their debts. Despite that progress, those credit-challenged customers still cannot qualify for traditional auto financing. But they still need vehicles. To meet that demand, increasing numbers of dealerships and lenders are approving more subprime auto finance, and are going deeper and deeper in the process. According to a recent report by Experian, “The percentage of auto loans to buyers with the poorest credit ratings is growing faster than the rest of the auto finance market.” Almost 21 percent of open auto loans are held by individuals with subprime and deep subprime credit ratings. However, with the uptick in auto loans, we are also witnessing one of the largest increases in auto loan delinquency rates on record. According to Fitch, increased loan originations, higher lender competition and looser underwriting standards in the subprime loan market have caused an influx of higher auto delinquencies. That’s a problem. Higher delinquencies mean higher rates of default. Which leads to the question: How can you better manage your portfolio and risk for success? As subprime auto lending continues to gain momentum and loans dive deeper, the associated risks continue to rise. Dealerships and lenders who offer subprime auto financing should be prepared for an increase in delinquencies, defaults, repossessions, collection staff time and resources – all of which come with significant costs that cut into profitability. BHPH dealers and lenders are now turning to GPS tracking as a smart business strategy that cuts costs and mitigates risk while also encouraging their customers to pay on time and improve their credit. GPS tracking, in its most effective form, is a system that enables dealerships and lenders to verify customer information faster, ensure more on-time payments and locate vehicles in real time to manage their liability with high-risk vehicle collateral. The more advanced GPS vehicle tracking and collateral management systems include additional features such as payment reminders and advanced reporting. Those features further reduce business costs while also promoting on-time payments that help customers stay in their vehicles and rebuild their credit. In a study conducted on Spireon’s GoldStar GPS vehicle tracking, 87 percent of vehicle finance customers saw an increase on their return capital. Further, 77 percent saw a significant improvement of their customers’ credit ratings. The right type of GPS vehicle tracking can improve business profitability, reduce risk, help maintain CFPB compliance and help customers improve their credit. David Meyer brings over 28 years of vehicle finance and BHPH industry for Spireon, bringing more than 28 years of vehicle finance and BHPH industry experience his role overseeing the company’s Automotive Solutions Group.
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Simple Rates
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120 Day Plans
Lower Expenses
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WASHINGTON UPDATE /
NIADA GOVERNMENT REPORT
>> Latest Governmental Issues and Activity Here’s a rundown of some of the latest governmental issues and activity affecting the used car industry from NIADA senior vice president of legal and government affairs Shaun Petersen and NIADA lobbyist Sante Esposito of Key Advocates. REGULATORY REPORT Federal Trade Commission The FTC has warned dealers about misrepresenting the scope of Volkwagen’s settlement with the FTC regarding buybacks of VW and Audi diesel vehicles that were equipped with devices designed to cheat emissions tests. The terms of the settlements between VW and the FTC, other government agencies and private owners can be found at vwcourtsettlement.com. The FTC has also published a blog, available at https://www.ftc.gov/newsevents/blogs/business-blog/2016/08/ dealers-vw-owners-deserve-straight-story of the VW buyback, explaining dealers’ expectations concerning the settlement and buyback opportunities. Department of Labor Enforcement for misclassifying employees: DOL settled an enforcement action against a plastering company for paying workers as independent contractors as opposed to employees. The workers, hired as independent contractors, did work only for the company and provided no services to any other business. In addition, the company supplied all of the materials and paid hourly rates set by company staff. The company was found to have violated the overtime pay requirements and was required to pay $365,291 in back wages. Consumer Financial Protection Bureau The CFPB settled an enforcement action against First National Bank of Omaha related to ancillary products associated with credit cards. For a decade, the bank offered debt cancellation products with its credit cards, which the bank promoted as providing a monthly payment to the cardholder’s account in the event of certain hardships like involuntary unemployment, hospitalization or disability. Cardholders were charged a monthly fee. The bank also offered credit monitoring products to monitor cardholders’ credit for potential identity theft or fraud and to provide consumers with copies of their credit reports. The CFPB alleged the bank engaged in unfair billing practices and deceptively marketed the debt cancelation add-on
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products to consumers. The bureau claimed the bank forced consumers to listen to sales pitches about debt cancellation products by implying they had to stay on the phone while their cards were activated, when that was not the case. It said the bank led some consumers to believe they would not have to pay for the debt cancellation products or they were eligible for the product when that was not the case. The CFPB also claimed the bank made cancellation difficult and billed for services that were not provided. The bank is required to refund $27.75 million to 257,000 customers and pay a $4.5 million penalty. DEPARTMENT OF JUSTICE Dealer pleads guilty: Timothy Williams, owner of Lindsey Street Motors in Norman, Okla., and finance manager Stephen Butz pleaded to bank fraud. Court records say Williams entered into a floorplan agreement with the Bank of Union on behalf of Lindsey Street Motors, then he and Butz then sold collateralized vehicles out of trust without the bank’s knowledge or permission. Williams and Butz obtained duplicate vehicle titles, which they provided to buyers, without notifying the bank of the vehicle sales or repaying on the floor line. Both men admitted their conduct caused a loss of $550,000 to $1.5 million. The defendants face up to 30 years in prison, a $1 million fine and up to five years of supervised probation. They will also be ordered to pay restitution. Repossession settlement: DOJ settled with HSBC Finance Corporation over allegations the company violated the Servicemembers Civil Relief Act by repossessing 75 cars owned by protected servicemembers without obtaining the necessary court orders. DOJ claimed HSBC conducted repossessions without court orders even when it had evidence in its own records suggesting a borrower could be a protected servicemember. HSBC will pay up to $11,000 per repossession and repair the credit of all affected servicemembers. LEGISLATIVE REPORT Return from Recess Congress returned from its annual summer recess after Labor Day and began work on the fiscal year 2017 appropriations bills, arguably the most important legislation. At press time, however, those bills were considered unlikely to pass before FY ’17 began on Oct. 1. As in most prior years, Congress will have to pass a short-term continuing resolution to keep funding flowing to federal agencies. CRs usually provide funding at current levels. The big question was how long the CR will be. Some were pushing for a short CR through December with the hope Congress
The fiscal year
2017 appropriations bill passed by the House in July includes provisions to curb the CFPB’s authority. can complete some or all of the individual agency funding bills during the postelection lame duck session – perhaps packaged together in a series of “mini-bus” bills. Others wanted to extend the CR into the spring to give the new administration a chance to get settled in and establish its funding priorities. Still others suggested a yearlong CR. Congress is expected to meet in a lame duck session after the November elections, but until the results are known and it is clear which party will control the White House and the Senate, it is difficult to speculate on what might be accomplished during that short session. Any legislation not signed into law by the time the 114th Congress concludes in late December is dead. H.R. 5485 Financial Services and General Government Appropriations Act, 2017 This bill is among the FY 2017 appropriations bills still pending after passing the House in July. As previous reported, the bill includes provisions to curb the CFPB’s authority – among them, a provision that the CFPB would be funded through the annual congressional appropriations process rather than through transfers from the Federal Reserve as currently provided by DoddFrank in order to make the bureau more accountable. It would also require the CFPB to report quarterly to various House committees about funding, obligations made during the previous quarter and actions taken to achieve its goals, objectives and performance measures. And it would change the bureau’s leadership from a single director to a five-member board appointed by the President. Another provision would require the CFPB to further study of pre-dispute arbitration agreements before issuing any regulations on that issue. After conducting a controversial study, the bureau in May proposed a rule that would prohibit arbitration agreements that bar consumers from filing or participating in class action lawsuits and would require the lender to submit arbitration records to the CFPB. None of those provisions were included in the Senate’s version of the bill.
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MANAGEMENT MATTERS / BY STEVE HALL
FAILURE-ACHIEVEMENT CYCLE
SUCCESSFUL FAILING
>>
>> Why Embracing Failure Leads
to Greater Achievement
OUR CULTURE IS BUILT ON SUCCESS. Ironically, we can only achieve the highest levels of success by failing along the way. Failure is the basis of knowledge. Imagine you’re back in elementary school. Your teacher has just placed two apples on each end of her desk and asked, “If I added these two apples to the other two apples … ” – she physically moves them together – “… how many apples would you have?” She waits, then says, “Okay, class, now count them. One. Two. Three. Four.” This is how most of us learned in school: repetition and visual learning. Kids will chant along, correcting their answer when they realize it’s wrong. Failure in these very early stages is important – it teaches persistence and focuses on the importance of learning over knowing. And, in time, we all eventually did learn that two plus two equals four! SUCCESS-ONLY CYCLE
The Success-Only Cycle vs. the FailureAchievement Cycle Sadly, over time, we abandon the elementary school approach and focus more on knowing than learning. Failure changes from a useful tool to punishment. By the time we enter the workplace, most of us have fully accepted that failure represents the result of an action, and we view it as nearly insurmountable. Honestly, how useful is that philosophy? This Success-Only philosophy allows for only one option: You succeed, or you fail. This approach rewards knowing and only works if you already know how to do something. If you don’t know how to do the task already, well, you’re in trouble. The Failure-Achievement Cycle, however, focuses on failing fast – and then learning from your mistakes. No one is expected to perform flawlessly. Instead, failure is viewed as a feedback mechanism that allows you to improve your plan and try again to yield better results. Failure isn’t considered the opposite of success. Instead, this approach views failure as a critical component of it. Successful Failing Failing when trying something new or working towards solving a problem is admirable. This type of failure should be rewarded, provided two key components were included in the effort: • First, did you plan the activity, initiative or process to the best of your ability for the information you had been provided at the time? Failure due to “just winging it” is not
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INDUSTRY NEWS / BY SUBPRIME AUTO FINANCE NEWS STAFF
Failure is viewed
as a feedback mechanism that allows you to improve your plan and try again to yield better results. productive failure. Plan for success, work your plan and adjust as needed. • Secondly, did you learn from your failure? Successful failure requires you to analyze what happened and create a game plan for other possible solutions moving forward. Failure Can’t Be a Show Stopper Mistakes aren’t the end of the line. They merely delay achievement. When you fail successfully, you must make sure the delay is as short as possible. As a progressive manager, who is always trying to grow your department, you should actively demonstrate to your employees that failure is welcomed. Give this a try. Hold a “learning from our failures meeting.” During the session, share some of the errors you’ve made in your career and how it helped you solve a problem. Encourage your staff to do the same, requiring them to explain what they learned from the experience and how it helped them become better in their positions going forward. Not only will your less experienced employees gain valuable knowledge from the more experienced ones, but it will reinforce to your staff that successful failure is an important part of your process. Done in the right way, it creates a great learning experience. Keep everyone focused on how the person improved from the experience and how to avoid the same mistake themselves. (It can also be a fun team experience, especially when you discover how entertaining others’ past mistakes can be! Be sure to share some funny examples of your own!) Failure is painful and, of course, we’d all rather avoid it. But when we apply successful failing, we learn how to bounce back quickly from failure and achieve even more in the long run. Steve Hall is a full-time instructor for the NCM Institute and is responsible for the development of its Fixed Operations training curriculum. For more than 25 years, Steve’s experiences have encompassed almost every aspect of the retail automotive service, parts and body shop business. This article originally appeared on NCM’s Up to Speed blog (http://blog.ncminstitute.com) and is reprinted with permission.
EFG AMONG BENCHMARKPORTAL’S TOP 100 CALL CENTERS >> Only F&I Product Provider Named
EFG COMPANIES was recently the only F&I product provider to be named to the BenchmarkPortal Top 100 call centers for 2016. EFG also ranked in the Top 25 quartile for call centers with five to 50 staff members. The BenchmarkPortal Top 100 competition compares the performance of contact centers throughout North America by evaluating their key metrics against industry peers. Based entirely on statistical comparison to the world’s largest and most respected database of call center metrics, the BenchmarkPortal Top 100 competition is designed to objectively identify centers who are achieving superior results both in financial and qualitative terms. EFG’s average claims call speed to answer is less than 30 seconds, while 67 percent of its total claims are one-call claims. The company also said 96 percent of all claims are paid within one hour of receipt of invoice. “Our clients rely on our expertise and quality customer service when it comes to administering customer claims,” EFG president and chief executive officer John Pappanastos said. “We operate knowing that our claims administration reflects back on our clients’ business and brand. “By demonstrating our high level of expertise with this certification, we are giving our clients the highest confidence that all claims will be handled expertly, efficiently and respectfully, promoting a positive overall customer experience and driving greater customer loyalty for their business,” Pappanastos said. “The EFG Companies contact center is among the best in its industry,” BenchmarkPortal CEO Bruce Belfore said. “This award was granted on the basis of objective, metrics-driven performance. EFG Companies stood tall against its competitors according to the world’s largest database of call center metrics. This is not easy to do, and we congratulate them on their accomplishment.” www.theciada.com 9/14/16 3:07 PM
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EDUCATION /
61ST ANNUAL EXPO
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EDUCATION /
61ST ANNUAL EXPO
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61 ST ANNUAL EXPO GALA DINNER / CIADA EXECUTIVE COMMITTEE
CHAIRMAN WILL DAVIS; PRESIDENT DARLA BOOHER; PRESIDENT ELECT KIM BRADSHAW; SC VP DARRYL JACKSON; NC VICE PRESIDENT STEVE MATTHEWS; TREASURER KEVIN PENDERGRASS AND SECRETARY STEVE WETMORE.
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61 ST ANNUAL EXPO GALA DINNER / CRYSTAL EAGLE AWARDS >> Presented by NIADA CEO Steve Jordan, Crystal Eagle winners
were Marshall Perry, Jenny Myrick, Jayne Harris and Debbie Braswell
61 ST ANNUAL EXPO GALA DINNER / RISING STAR AWARD
ASSOCIATION NEWS /
RISING STAR AWARD >> Wendy Pisor
THE INAUGURAL RISING Star award is presented by Greensboro Auto Auction. This award will be presented annually to a dealer who meets or exceeds the following criterial. This award will honor a dealer who might be in the early stages of their career or dealership. Criteria includes professionalism (outwardly displays the qualities of an ethical dealer); sense of the greater good (understands the reputation of the independent dealer needs constant attention and strives to improve it); giving back (views profession as a way to make entire community a better place for all) and commitment (is dedicated to growing and being a leader in the used car business). The dealer must: • Be an active member of CIADA. • Conduct their business by the CIADA code of ethics. • Regardless whether they sell five cars a month or 100, they are always striving to do things better, shooting for the stars! • Be looked upon by their peers as a dealer with whom they want to be associated. www.theciada.com CAR_1016.indd 33
WENDY PISOR WITH THE RISING STAR AWARD.
On behalf of Greensboro Auto Auction, the inaugural Rising Star Award goes to a dealer who started with one car, and after selling it used the profit to buy two more cars. Those two cars turned into four cars. Four cars turned into 10. Ten cars turned into 20. The winner took her PLE class in Lexington, S.C. from CIADA and has never looked back. In fact, our winner is always looking to learn more. She attends the NIADA annual meeting in Las Vegas, has one of the best mentors in the business, and she plans on being part of the NIADA National Leadership Conference in Washington, D.C.. Her dealership is founded on trust, integrity, and respect. From Northside Auto Sales in Greenville, SC, our inaugural winner is Wendy Pisor. Wendy was unable to attend the event, so her mentor Darla Booher accepted the award on her behalf.
WENDY’S MENTOR DARLA BOOHER ACCEPTING THE AWARD ON HER BEHALF.
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ASSOCIATION NEWS / THE CIADA SCHOLARSHIP WINNERS
SCHOLARSHIPS AWARDED
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61 ST ANNUAL EXPO GALA DINNER / SCHOLARSHIPS AWARDED • From the State of South Carolina Robert “Tripp” McCoy III. • From North Carolina, John “Tanner” Smith. • Runners up: Karissa Ewing, Caleb Stewart, Shaelyn Condon, Graham “Tate” Wilkinson and Marissa Martin.
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ASSOCIATION NEWS /
GOLF TOURNAMENT
THANK YOU
TO OUR SPONSORS AUCTION DIRECT, AMAC, AMERICAS AUTO AUCTION AND ALL OUR HOLE SPONSORS!
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ASSOCIATION NEWS /
OPENING RECEPTION AND CONCERT
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THANK YOU
TO OUR SPONSORS AFC AND CARFAX!
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ASSOCIATION NEWS /
CIADA AUCTION
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ASSOCIATION NEWS /
CIADA AUCTION
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Day one mile one protection on all service agreements. Nationwide coverage.
Not an RRG. Ask your current provider about their insurance.
Available for 15 model years back. Mileage and coverage terms available from 3 months and up to 48 months, and Factory Wrap Protection up to 7 years. Over 75 years of combined automotive and service agreement experience to serve you and your customers needs. No hassle claims payment, paid direct to repair facility. Devoted to our dealers needs.
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ASSOCIATION NEWS /
CIADA SPONSORS
40 AUTO DEALER NEWS OCTOBER/NOVEMBER 2016
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ASSOCIATION NEWS /
CIADA SPONSORS
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Success depends on your available capital and your day-to-day involvement, your commitment to collections, and so much more.
BHPH PERSPECTIVE / BY DUSTIN KERR
WHAT’S THE SECRET TO A SUCCESSFUL BHPH BUSINESS?
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>> Some Best Practices for Success
I HAVE THE PLEASURE of meeting Buy HerePay Here dealers all over the country when I travel. I see owners of both small and large operations. Sometimes, I meet a BHPH owner who is just starting out. Other times, I meet one who’s been going strong for many years. I’ve even encountered retail dealers who are seriously considering a jump into our industry. Even with all these differences, there’s one universal question that unites these people: What’s the best way to run a BHPH business? You may not like my answer. It’s a question I take very seriously, so I answer it honestly. And I’m not going to lie. So, generally speaking, they aren’t very satisfied with my answer! Why? Because I genuinely believe there are many successful ways to run this business. There’s no cookie-cutter solution. Success depends on your available capital and your day-to-day involvement, your commitment to collections, and so much more. How the business performs is heavily influenced by your temperament and your market – there are dozens of factors that can make or break BHPH dealerships. I see different business models every day that are highly successful. Pick your method – but follow best practices. Even though I heartily believe the right success model depends on your circumstances and attention to detail, each of the profitable BHPH businesses I’ve encountered operate with a few best practices I believe you should follow to maximize your business and mitigate your exposure to risk.
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1. Understand this is a collections business, not just a sales business. I see more dealers struggle with this idea than any other because they just don’t understand this simple, but crucial, point. It’s especially hard sometimes for someone who has built a successful franchise or independent business where sales, gross and expense control were the keys to success. In the BHPH business, we cannot just sell our way out of bad collections! To make the most of the business, our collectors have to be the dealership’s most talented, best trained and best compensated employees. A well-run collections department can make up for a lot of mistakes in other areas. 2. Get serious about compliance. If you don’t have the wherewithal to devote time every day to compliance, I suggest not getting into this business. If you’re already in and still not serious about compliance, I suggest getting out while you still have a business and a choice! The CFPB and the Department of Justice will do everything they can to put you out of business if they even think you are not following their rules. Ignoring compliance puts everything you have in jeopardy. If you can’t (or won’t) manage that reality, you shouldn’t have a BHPH dealership. 3. Be an advocate for BHPH businesses. Reread No. 2. If you want life in the BHPH industry to be easier, you have to fight for it. One way is to join the state and national associations that are fighting for your business’s survival against the likes of the CFPB and DOJ. Not only should you be a member, but it is very important you contribute financially to these associations so they can fight for your rights. Connect with your city council members, senators and state/national representatives and other important political figures in your area. Make sure they understand just how much your business contributes to the local economy – and educate them about the industry, so they realize you aren’t the “bad guy” consumer advocacy groups like to make you out to be. Find out their stance on the
CFPB and DOJ and vote accordingly. Remember the quote by Edmund Burke: “The only thing necessary for the triumph of evil is that good men do nothing.” Stand up for yourself and others. 4. Join a 20 Group. The best career move I ever made was joining a 20 Group. Nothing else I tried made me a better operator – or provided a better ROI – than the insights I gained from that group. The power of peer collaboration and accountability you receive in a 20 group setting is magnificent. Imagine sitting in a room with 20 other dealers talking about your business. You get to see the good, the bad and the ugly, and have literally hundreds of years of experience in the room with you! The one warning I will give you, though, is that you must have an open mind and be ready to go back to your dealership and make meaningful change because your fellow 20 group members will hold you accountable to making your business better. Even when you’d prefer they didn’t. BHPH success is possible – and important. I love this industry. Although we often get a bum rap, BHPH dealerships provide a valuable service to the vulnerable in our community. We help people learn to be financially responsible, and we give them the means to get up on their feet and improve their lives. It’s amazing. So, no, there’s no perfect business model for success in this industry, no matter how many times people may ask me to show them the way. But if you take our work seriously, commit to helping people while making a profit and follow the best practices I’ve outlined above, you’ll make it. And if you encounter bumps along the way, give me a call and I’ll help you out! Dustin Kerr has been in the automotive industry for 15 years with the last 10 spent exclusively in the Buy Here-Pay Here and Lease Here-Pay Here industry. Dustin serves as an NCM consultant and sales and collections trainer to the Buy Here-Pay Here industry. This article originally appeared on NCM’s Up to Speed blog (http://blog.ncminstitute.com) and is reprinted with permission.
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