C O L O R A D O I N D E P E N D E N T AU 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
CIADA INSIDER
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SEPTEMBER/OCTOBER 2016 / CIADA INSIDER 1
INSIDE
06.............................................................CIADA Charity Fund 08.............................................................. NIADA Convention 10..................... Tradition and Trends Need to Work Together 12........What Lenders Want to Know About Your Dealership 18....................CIADA Initiates Legislation to Protect Dealers 21..................................................What to Post on Facebook 24......................................................CIADA Golf Tournament 30............................................................ Washington Update
WHAT’S NEW
2016 National Leadership Conference September 26-29
NIADA's National Leadership Conference will be held September 26-29 at the Dupont Circle Hotel in Washington, D.C. Once again, the Leadership Conference will be combined with a Legislative & Regulatory Summit and Lobbying Day on Capitol Hill. This important event will help frame the NIADA Legislative & Regulatory agenda for 2016 - 2017 and beyond as NIADA's legislative committee and association leadership meet face-to-face with legislators and continue their important work.
For more information, visit www.niada.com
ADVERTISER’S INDEX
ADESA ...................................................................................15 Alliance Inspection Mgt. .......................................................20 Autotrader .............................................................................17 AutoZone ...............................................................................27 Dealers AA of the Rockies ...................................................IFC Dealership Valuation Services ..............................................19 High Tech Locksmiths ...........................................................18 Lobel Financial .........................................................................3 Loveland Auto Auction ............................................................7 Manheim ..........................................................................10, 11 Manheim Denver .................................................... Back Cover Manheim Littleton CO ...........................................................21 Manheim Pennsylvania .........................................................13 NextGear Capital............................................................... 9, 12 PassTime ..................................................................................6 Spireon ...................................................................................23 STARS GPS ............................................................................16 VAuto.................................................................................... IBC Veros Credit ...........................................................................14
OFFICE
FRONT RANGE CLASSES /
COLORADO INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION Pre-Licensing Certification
Colorado state statute requires anyone applying for a used motor vehicle dealer’s license or a used powersports dealer’s license be certified through a pre-licensing course. This seminar is also offered to salespeople to be able to pass the New Mastery Examination Test. Class is held at least once a week. Check our website for dates.
Basic Title Training Class Join us to get updated information to learn the CORRECT way to fill out your paperwork at time of sale and other topics including title compliance, do’s and don’ts for titles and more. This class is held once a month for half a day. Call CIADA for information on these classes, or to get your forms and/or Dealer/Salespersons Bonds.
All classes are subject to change without notice. Please check our website www.ciada.org for any changes.
www.ciada.org • phone 303.239.8000
ENROLL IN THE CIADA LEGAL PROTECTION FUND NOW!
Is your dealership
PROTECTED?
CALL 303-239-8000 WITH QUESTIONS.
More than 65 of your fellow dealers have joined!
BOARD OF DIRECTORS OFFICERS President
Stan Martin Stan’s Auto Sales LLC 303-650-1011
For information on how to become a member of CIADA, please contact Todd O’Connell 950 Wadsworth Blvd., Suite 101 • Lakewood, CO 80214 303.239.8000 toddo@ciada.org
Vice-President
NIADA HEADQUARTERS
Secretary
NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 CIADA Insider is published 6 times per year 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 6006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of CIADA Insider 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.
STATE MAGAZINE MGR./SALES
Troy Graff • troy@niada.com EDITORS
Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT & GRAPHIC ARTIST
Chantae Arrington • chantae@niada.com
SENIOR ART DIRECTOR/PRODUCTION MANAGER
Christy Haynes • christy@niada.com PRINTING
Lakewood, Colorado Education & Training Center 950 Wadsworth Blvd., Suite 101 Lakewood, CO 80214
Dan Berkenkotter Berkenkotter Motors 303-650-8754
Dean Gunter Mile High Car Company 719-570-7800
Treasurer
John Lindberg Auto Warehouse 970-490-2886
Chairman
Dave Cardella Mountain States Auto Group 303-887-8977
DIRECTORS. Jim Bode J. Bode Used Cars, Inc. 303-366-1535
Tim Gaylord Gaylord Leasing Company Inc. 303-667-6188 Mark Weida Street Smart Auto Brokers 719-434-8443 Teshome Tesfaye Norfolk Motors 303-523-5814
Mike Whistance Country Truck and Auto 303-857-1281 Lucas Jozefkowicz Denver Autos, Inc. 303-573-1333
Past President / Directors Jim Bahne Bahne, Inc 720-934-9806
Mike Bonicelli Nevada Auto Sales 719-635-2533 Peppe DeMarco Highline Motors 970-206-9963
Roger Kirlin Roger Kirlin Auto Sales 303-526-7805 Joe McCloskey McCloskey Motors 719-594-9400 Wally Smith 303-659-0004 Smith Motors
Dean Strawn AutoTrek 303-934-5600
Nieman Printing
4 CIADA INSIDER / SEPTEMBER/OCTOBER 2016
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ASSOCIATION NEWS /
USED CAR DEALERS OF COLORADO CHARITY FUND
>> Helping Change Lives in Colorado VSA Colorado/Access Gallery provides disadvantaged, low-income youth with disabilities between the ages of 16 and 25 the opportunity to develop job skills and attain financial resources through the visual arts. Most of the students are locked out of traditional high school jobs. Through an intensive training program, chosen students learn the skills to create murals, photo mosaics, mono prints, original works, art-o-mat editions and pet portrait commissions. Students work in teams, which helps them feel less isolated and more supportive of each other. More than half of the students fall somewhere on the autistic spectrum. Having the opportunity to work with others and practice social skills – such as taking turns, collaborating on ideas and talking about the art process – helps them develop important work/life skills. VSAC provides studio space, professional
6 CIADA INSIDER / SEPTEMBER/OCTOBER 2016
mentoring and art teachers, art supplies, and, most importantly, an avenue for them to earn money. VSA also offers businesses an opportunity to commission original artwork that reflects their company’s brand, message and style. They can be made to suit any type of work environment and any size space. This unique artwork can take on many different styles from photo mosaics to murals in and outside your building. When commissioning artwork with VSA Colorado you are creating more than art. Money earned through the commissioned art project goes to the ArtWorks program and to young people locked out of economic opportunities. All the artwork is created locally at the VSA Colorado/ACCESS Gallery at 909 Santa Fe Dr., Denver, CO 80204 in the Santa Fe Art District. Please call 303-7770797 for more information. The Used Car Dealers of Colorado Charity Fund was founded by the Colorado Independent Automobile Dealers Association in 2014 to assist Colorado communities by sharing the tremendous giving spirit of the used car industry. If you know someone who fits in the mission statement of providing Colorado communities with aid and support, please contact CIADA Charity Fund at 303-2398000 or www.ciadacharityfund.org The CIADA Charity Fund is “Helping Change Lives” in Colorado!
IF YOU KNOW OF SOMEONE THAT FITS IN THE MISSION STATEMENT OF PROVIDING COLORADO COMMUNITIES WITH AID AND SUPPORT, PLEASE CONTACT CIADA’S CHARITY FUND AT 303-239-8000 OR www.ciadacharityfund.org.
CIADA Charity Fund Board presents VSA Colorado/ Access Gallery a check to help fund education for low-income youth with disabilities.
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ASSOCIATION NEWS / BY DAVID CARDELLA
FROM THE CHAIRMAN OF THE BOARD
>> Contributions to Protect Our Industry FELLOW MEMBERS,
At the end of September, your volunteer CIADA board will make their fourth trip to Washington, D.C. to represent your interests. We will be away from our businesses on your behalf to help our industry protect itself from laws and regulations being implemented without our input. We know how important it has been at our state capitol to have a voice and we need the same presence in Washington D.C. However, for us to have that voice we need your help. Last year we prevented a bill from being passed that would have made all vehicles with an open recall unable to be sold until the recall was fixed. Our industry would have been devastated when 200 million vehicles would suddenly become damaged goods and you would be unable sell your inventory. With us having a presence in D.C., we were also able to slow down the overreach from the Consumer Financial Protection Bureau. This is not to overshadow what we have been able to accomplish in our
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state. This year we were able to garner overwhelming support from Democrat and Republican lawmakers in passing a bill that removes the threat of a substantial fine or the loss of your dealer license when you are unable to deliver a title in 30 days through no fault of your own. With the help of our lobbyist, we have been able to develop relationships at our capitol so we can stay on top of important issues. Your help is needed to fund the PAC at the national level so NIADA lobbyists can continue their work stopping bills against our industry. As I pen this open letter to more than 1,040 members in our association, I ask for your help. You can contribute up to $5,000 per individual, so please consider giving as much you are able. If we had each member contribute $100 we could raise over $100,000 to contribute to lawmakers who will help fight for our livelihood. We must have a presence and be proactive in stopping bad legislation from being passed and fixing flawed legislation that has already passed. I will venture to say contributing $100 to possibly help save you thousands is a small request to fund this effort and one that we all can agree needs to be made. We are lucky to have individuals able to provide a voice for us as we face these issues, so please contribute $50, $100, $500 or $5,000 as we fight for our industry’s survival. As part of NIADA’S Legislative Committee, I can assure you we are on top of the issues that affect us. Help us by contributing today. Please note: Contributions to the NIADA-PAC are not
Your help is needed to fund the PAC at the national level so NIADA lobbyists can continue their work stopping bills against our industry. deductible for federal income tax purposes and must be made personally (no corporate or company contributions) with your personal credit card (or personal check – if you wish to donate by check, please download the required form from www.niada.com/pac.php and mail to NIADA-PAC).
SEPTEMBER/OCTOBER 2016 / CIADA INSIDER 7
ASSOCIATION NEWS ///
ASSOCIATION NEWS /
>>
NIADA CONVENTION RECAP
Kris “Tanto” Paronto, one of the heroes of the infamous Sept. 11, 2012 terrorist attack on the U.S. diplomatic mission in Benghazi, Libya, told the harrowing story of those 13 hours in a gripping keynote address >> that left the overflow crowd standing and cheering. Paronto discussed courage and handling adversity and crisis situations, as well as the decision of himself and his CIA Annex security FROM THE VENUE TO THE CONTENT , the 2016 NIADA Convention and team to speak out about what happened that night in the face of Expo was all about reinvention. conflicting reports from government and media that told a different While the theme of “Success By Reinvention” was created with the story. idea of helping dealers thrive in the rapidly changing used car business, Attendees also had a chance to celebrate, dance and loosen up at it fit the industry’s biggest event just as perfectly. the Cigars and Martinis and Margaritas welcome reception in a lush, NIADA celebrated its 70th annual Convention in a new venue – the tropical setting at poolside, and at a disco-themed closing party recently renovated Mirage, which provided a larger yet more intimate following the crowning of Florida’s Scott Lanier as the 2016 National setting – as well as a sold-out 60,000-square foot Expo Hall with more Quality Dealer. than 170 exhibitors and the most extensive dealer education agenda in In addition to the NQD ceremony – webcast live as always on history, featuring more sessions on more topics than ever before. NIADA.TV – the previous night’s National Leadership Awards Banquet It also included more attendees than ever before. The 2016 introduced new NIADA president Billy Threadgill as well as honoring Convention obliterated the event’s attendance record, sailing past the NIADA scholarship recipients and the winners of awards for the top previous mark, set in 2006 at the Las Vegas Hilton, by a staggering 24 performers within the association and the used vehicle industry. percent. The number of dealers and first-time attendees both rose by “I can honestly say my experience was far above and beyond my 30 percent or more. expectations,” said Daniel Johnson of LiteHouse Auto in Lakewood, “I got what I came for,” said Sean Schuetz of Klass Motors in Santa N.Y., a first-time attendee. “We will not miss a Convention from here Ana, Calif. “I wanted to learn new ways to take my business to the next on out.” level, and I’ll be spending the next several months implementing what The 2017 NIADA Convention and Expo will be back at The Mirage and I learned at my dealership. It was the most informative convention I is scheduled for June 12-15, 2017. Save the date and don’t miss your have attended.” chance to be part of the used vehicle industry’s biggest event of the While the education is always the focus, there was, of course, a lot year! more happening.
Reinvention Creates Success for 70th Annual NIADA Convention and Expo
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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 time-tested 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 relationshipbuilding. 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 oneon-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 relationship-building 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. Internet Shopping vs. Instinct Another “trend” (yes, many will say it’s
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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.
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 cloud-based CRM have been used in thousands of dealerships throughout the United States. Bergeron can be reached at 303.918.3169 or scott@dailygameplan.com.
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 art of the deal. If they can’t feel like
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SEPTEMBER/OCTOBER 2016 / CIADA INSIDER 11
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 CIADA INSIDER / SEPTEMBER/OCTOBER 2016
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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MANAGEMENT MATTERS / BY KENNY ATCHESON
>>
ENTREPRENEURS AND HARD WORKING EMPLOYEES MAKE AMERICA GREAT >> Train and Appreciate
ONE QUESTION I HEAR OFTEN IS, “What if we put a lot of money into training an employee and then they leave?” My response is, “What if you don’t train an employee and they stay?” Train employees, and not just up front. Appreciate employees, and not just on Labor Day. I’m sure nearly everyone has done business in a place stocked with employees who are not highly disciplined, fully capable or able to function as team members. Customers want to be comfortable when parting with their money. The person they deal with should know what they are talking about and be nice about it. Nowadays, customers are part of any company’s marketing team because they can and will voice their opinions about any business before they walk out the door or leave their table at a restaurant. A Nielsen study showed that recommendations from
friends and family and consumer opinions posted online are the top two most trusted forms of advertising. A bad review on Facebook, Google or any number of places is like graffiti splattered across a storefront that says, “Don’t shop here.” Employees are the most important part of any marketing team because they deal with customers the most. Their attitude, experience and service affect any other marketing that money is spent on. Appreciate your team. A WorkplaceDynamics study of roughly 1 million Americans revealed the two things employees want most in the workplace. Neither was “more money.” However, one was “To feel appreciated for their contribution.” Show your appreciation for your team to get more of the behavior you are rewarding. As you train and appreciate your employees, I take this moment to appreciate you the entrepreneur. You are a job creator. As such, you pay more than your fair share of taxes and regulatory fees that are disguised from what they really are – more taxes. Each year I like to celebrate you over Labor Day because of what you went through to get here and what you will continue to do to excel. Leadership comes with a certain amount of responsibility, determination, investment, success and learning experiences. As a leader you deal with stress and decisions on a day-to-day basis most
people will never understand. You also have a significant amount of sacrifice and risk. Every entrepreneur gets to hear media and politicians regularly vilify business owners. By the age of 18, the average TV viewer has seen businessmen and businesswomen attempt more than 10,000 murders and countless lesser offenses ranging from extortion and bribery to kidnapping and dumping toxic waste, according to a survey by the Media Institute. If you let your guard down for a moment, the pressure can get to you. That is why I am such a big fan of author Daniel Lapin. His writing and teachings make me feel proud to be an entrepreneur. He puts things into perspective like few can. As a fan of the book Thou Shall Prosper, I reached out to Lapin for an interview to share with other entrepreneurs. The interview is available for free at www. DealerProfitPros.com/RDL. Here are a few quotes from his book: “In a fair, transparent marketplace, you cannot make the money in the first place without benefitting other people. If you chose to give away money that is fine, but it is not the justification for making money.” “Philanthropists ‘give back to society’ implies that for-profit activities ‘take from society.’” “If you cannot wrap yourself around the notion that other humans are worthy of your committed service and that you are not diminished but are instead elevated by providing that service, you will never really excel at what you do.” “By remaining exactly the same today as you were yesterday, you are guaranteeing that tomorrow will be no better than today.” “When spending time on cost containment you could be spending time on revenue activities.” “Profit tells you that you are supplying a need and filling other people’s wants. They are not the motivation for your work. They are the validation of your work.” Because Labor Day is a public holiday held in honor of working people, I celebrate the employees and the entrepreneur, because they work too. Kenny Atcheson is the founder of Dealer Profit Pros and author of Marketing Battleground: How to Deploy Under-the-Radar Strategies to Explode Your Profits. Kenny offers private consulting, teaches workshops, and speaks at conventions and 20 Groups. Learn more at www. DealerProfitPros.com.
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ONLINE MARKETING / BY KATHY R. TAFOLLA, LOBEL FINANCIAL
DOES YOUR CONTENT MARKETING STRATEGY INCLUDE VIDEO?
>>
>> Video Outperforms in Driving Conversions VIDEO CONTENT is exploding across the Internet, in social media feeds and in social hubs. Given the growing quantity of social media, you can capitalize on video marketing. Even more, you can shoot, edit
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and produce these videos inexpensively. How is this possible? 1. Write a script. 2. Record a voice over. 3. Use Adobe to create the graphics. 4. Get a video recorder for live video. 5. Use Adobe After Effects for video editing. 6. Add music using sound effects. 7. Publish.
You can also use PowerPoint to video edit if money is a factor and Adobe is out of your budget.
Video content marketing allows consumers to satisfy their information and entertainment needs all at once. It’s also a great way for small business owners to compete with larger businesses. Video is unrivaled when it comes to reaching your target audience. YouTube reports over a billion viewers, almost onethird of the people on the Internet every day. Video content is straightforward, quickly shared and easily accessible. It’s easy to create a business channel where all of your video content can be found through an organic search. Since buying a car is a visual experience and your dealership website is primarily based on images, it makes sense to include video content as a way to build relationships with customers. You’ll make personal connections through your website and build prosperous business connections in the process. Some examples for you to consider are: • Stories from customers. • A fictional series. • Personal stories. • Documentary style videos. • An interview. All of these ideas will help your customers connect to your dealership. This can be a fun and exciting way to not only brand your dealership but engage existing and new customers as well. In content video marketing storytelling is crucial. It’s effective because people love stories and they connect to authentic human experience. It creates an emotional investment. Content can be defined as experimental as much of it is based on trial and error. You post content and track it through Google Analytics to see how it’s ranking in the search engines. You want to know how many website visitors are clicking on it and how long they’re staying on the page. Most B2C business owners know content marketing is the most commercially important part of your digital marketing campaign. Why? The object of content marketing is to help and inform consumers. It is to show people your business knows the industry and their expertise is credible. Mastering a video content marketing campaign will help you build relationships with your customers before they step foot on the premises. Content tells people why your products are good and how it benefits them. For dealerships this might include financing options, reliability, and what sets you apart from the competition. Content allows the consumer to view your offerings, and if presented well, compels them to buy from you. Online marketing reports indicate content videos outperform other content types in driving conversions. Videos increase consumers’ understanding of products and services and website visitors are more inclined to purchase a product after watching a video. Moreover, you can expect to see a rise in interactive and personal video content to help turn viewers into leads.
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ASSOCIATION NEWS /
CIADA INITIATES LEGISLATION TO PROTECT DEALERS >> Senate Bill 16-140 Signed into Law
PRIOR TO AUGUST 10, all Colorado dealers were in jeopardy of possible fines or even potential loss of license for not delivering titles within 30 days of a sale. This could happen even when a dealer had completed all of the steps needed to acquire the title, such as making the payoff for a trade, correcting any clerical errors or submitting documents for a duplicate title. A dealer could face dire consequences even after doing everything possible to obtain the title but being at the mercy of a third party over whom they had no control. The CIADA board of directors, along with its legislative committee, attorney and lobbyist, began working on this bill a couple of years ago. There were some challenges along the way but with the help of the other associations, auto industry affiliates and, most importantly, our legislative sponsors, our bill passed unanimously out of both the Senate and House in May. Senate Bill 16-140 was signed into law by Governor Hickenlooper on June 10, 2016. Provided the dealer has taken “every reasonable action
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Lobbyist Edie Busam, Representative Jovan Melton and Representative Tracy Kraft-Tharp. necessary to deliver the title,” as of August 10 your dealership is no longer in jeopardy of possible fines or even potential loss of license. Including the other long-term benefits associated with this bill, this piece of legislation is one of the most significant actions in favor of the auto industry in quite a few years. The 30-day title changes and the additional part of the bill allowing dealers to issue a second temporary permit touch every dealer. In addition, there is a separate but somewhat related piece addressing the ability to “perfect” a lien without the title
CIADA Past President Director Peppe DeMarco, lobbyist Vicki Agler and Senator Jack Tate.
CIADA treasurer John Lindberg, Senator Nancy Todd, lobbyist Ruth Aponte and CIADA board chair David Cardella.
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that some counties are already doing. However, because of different opinions over the current language that addresses “lien perfection” it may take a little more time to get all of the counties to accept this method. Once all counties are on board, this will help prevent bankruptcy trustees from taking vehicles or lenders having the dealer buy back the loan when the title is not available to perfect the lien within 30 days. Here is the wording CADA has previously advanced explaining the language that was passed a few years ago but still questioned by some: Key items that must be included in order for the dealer to obtain the “date received” stamp/lien perfection date: 1. Signed original or signed duplicate of the installment contract (or copy), which must contain: A. Name and address of the debtor. B. N ame and address of the mortgagee or name of the mortgagee’s assignee. C. Make, vehicle identification number, and year of manufacture of the mortgaged vehicle. D. The date and amount of the loan secured by the mortgage. 2. Certificate of title OR application for certificate of title. 3. State filing fee ($7.20) [from subsection (5) of 42-6-121]. It is subsection (5) that contains the language on precisely when the lien is perfected: (5) The lien or mortgage shall be perfected
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pursuant to section 42-6-120 on the date all documents required by subsection (1) of this section, including, without limitation, the signed original or signed duplicate of the mortgage or a copy containing the information required by subsection (1) of this section, are received by the authorized agent and payment is tendered on the fee imposed by section 42-6-137 (2). So, the key language in subsection (1) regarding what documents/info must be present states “certificate of title” OR “application for certificate of title” – so you only need one or the other, not both. It is the opinion of CIADA’s attorney that the title is not needed to perfect a lenders lien. CIADA is working toward having all counties accept this interpretation and perfecting the lien even if the title is not present. If you encounter a county that will not accept the lien documents without the title, please contact CIADA with the specific example. Back to the 30-day title enforcement legislation, here is the signed bill wording with the necessary requirements to be completed in bold: Certificates of Title Issued For Motor Vehicles Purchased From Motor Vehicle Dealers Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 12-6-118, add (8) as 12-6·118. Licenses grounds for denial, suspension, or revocation. (8) In any disciplinary hearing, action,
or order of the board involving a violation of section 42-6-112 OR 42-6-119 (3), C.R.S., it is an affirmative defense that the dealer has taken every reasonable action necessary to deliver or facilitate the delivery of the certificate of title within 30 days. To qualify as having taken every reasonable action to deliver or facilitate the delivery of the certificate of title, the dealer must have, at a minimum: (a) P rocessed and mailed any required loan payoffs in a reasonable amount of time; (b) C ontacted the prior lender and taken any actions necessary to obtain a certificate of title or duplicate certificate of title, either of which must be free of liens; (c) T aken any action necessary to obtain information or signatures from the prior owner necessary to have a new certificate of title issued for the motor vehicle; (d) s ubmitted all paper work that the dealer has obtained to the authorized agent and that is necessary to have a new certificate of title issued for the motor vehicle; and (e) C orrected any errors in any filings with the department in a reasonable amount of time. SECTION 42-3-203. Standardized plates notice of funding through gifts, grants, and donations - rules - repeal. (3) (e) A dealer may issue a second temporary registration number plate in accordance with this CONTINUED ON PAGE 20
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subsection (3) if the dealer: (i) Has issued a temporary plate to the owner when selling the motor vehicle to the owner; (ii) Has not delivered or facilitated the delivery of the certificate of title to the purchaser or the holder of a chattel mortgage as required in section 42-6112 or 42-6-119 (3) within 60 days after the motor vehicle was purchased; and (iii) Has taken every reasonable action necessary to deliver or facilitate the delivery of the certificate of title. We appreciate the main legislative
ASSOCIATION NEWS /
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sponsors – Senator Jerry Sonnenberg and Representative Tracy Kraft-Tharp – whose hard work and leadership were instrumental in passing this bill. In addition, Senate cosponsors Randy Baumgardner, John Cooke, Rollie Heath, Linda Newell, Ray Scott, Laura Woods and House co-sponsors Joni Arndt, Susan Lontine and Lori Saine also played key roles in this legislation. Our tireless battles were fought by Rep. Jovan Melton, along with Senators Nancy Todd, Chris Holbert and Jack Tate as well as Rep. Polly Lawrence. The above mentioned legislators have helped with other legislation as well – they are very supportive of used car dealers. Some
of these individuals are up for reelection, so please consider backing them, as they are advocates for the auto industry. They are also involved with the association (pictured playing in the golf tournament) and merit all the help you can provide. This important legislation could not have been achieved without our highly respected lobbyist Edie Busam and her associates at Aponte and Busam. Edie has worked with CIADA to develop valuable relationships with the legislators making them aware of used car dealer issues. Another important factor in the success and presence CIADA has established at the Colorado Capitol is the Political Committee Fund. This extremely important account is judiciously used to help ensure continued and future support of your business interests. Therefore, your annual contributions to the PC Fund are vital, so please help safeguard your Industry by sending in the extra $75 (or more) when renewing your association membership. Next session CIADA intends to reintroduce legislation to protect your dealership from “unlicensed” vehicle sales and the potential financial harm incurred from “clean” titled undisclosed total loss vehicles. We are interested in any additional policies that will assist you conducting your businesses and look forward to hearing from you. Thank you and please contact me with any questions. Todd O’Connell Executive Director
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SOCIAL MEDIA / BY KATHI KRUSE, FOUNDER CEO KRUSE CONTROL INC.
5 WAYS TO FIGURE OUT WHAT TO POST ON FACEBOOK >> Engage Your Customers and
Review your list
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
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>>
Reach Your Goals
and discover you've just experienced what it's like to know what to post on Facebook. simply means you did not pay 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 CONTINUED ON PAGE 23
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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. 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
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(written, images, audio, video). • What types of content do you want to focus on in the next 12 months? • 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 / /
CIADA GOLF TOURNAMENT >> Terrific Day of Golf
AN OVERFLOW CROWD OF 148 GOLFERS enjoyed a terrific day at Fossil Trace Golf course in Golden for CIADA’s 75th annual golf tournament. Thanks to CIADA’s Jami McCoy, Jennifer Martinez, Chris Choka and Jerry Smith for their efforts in making the tournament such a tremendous success. Special thanks to Dina Whitten, Lori Martella and Crystal Baray with Dealer’s Auto Auction for their magnificent help in running the betting hole. Again, thanks to the wonderful sponsors and all the participants. We look forward to seeing you all again next year!
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/ / ASSOCIATION NEWS
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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. • Set an appointment. Don’t put the
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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 shoppers are often searching on a cell phone or mobile device. They have easy
A Google/Polk study recently
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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.
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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SEPTEMBER/OCTOBER 2016 / CIADA INSIDER 29
WASHINGTON UPDATE /
NIADA GOVERNMENT REPORT
>>
 HERE’S A RUNDOWN OF SOME of the latest
governmental issues and activity affecting the used car industry from NIADA lobbyist Sante Esposito of Key Advocates and NIADA senior vice president of legal and government affairs Shaun Petersen. LEGISLATIVE REPORT S.2663, Reforming CFPB Indirect Auto Financing Guidance Act The bill, which mirrors House-passed H.R. 1737, would rescind the controversial auto financing guidance action regarding dealer discretion on interest rates issued by the CFPB in March 2013 and provide a more transparent and accountable process for dealing with the issue. While H.R. 1737 passed the House by an overwhelming bipartisan vote, the Senate companion bill’s chance of being considered is considered remote at best. The bill faces opposition by Senate Democrats – particularly senators Elizabeth Warren (D-Mass.), Charles Schumer (D-N.Y.) and Richard Blumenthal (D-Conn.) – who fear it will open the door to other CFPB changes that will have the effect of “gutting” the bureau, and by the White House, which has threatened a veto. As part of a series of meetings with key legislators on July 11, NIADA legislative committee chairman Henry Mullinax, senior vice president of legal and government affairs Shaun Petersen and Key Advocates met with staff of Sen. Richard Shelby (R-Ala.), who chairs the committee that has jurisdiction over the CFPB, and requested the senator convene a meeting with the bureau and stakeholders to begin the process of resolving the issue administratively. H.R. 5485, Financial Services and General Government Appropriations Act, 2017 The fiscal year 2017 appropriations bill passed by the House in July 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. The bill would limit the CFPB’s ability to regulate pre-dispute arbitration agreements – the bureau has already released a proposed rule restricting those agreements. And the bureau’s leadership would be changed from
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a single director to a five-member board appointed by the President. Seeking support for this bill was NIADA’s primary focus issue during the July 11 meetings. In addition, NIADA’s team met with staff of Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee, to support his draft bill, the Financial CHOICE Act, which includes similar reforms for the CFPB. REGULATORY REPORT Consumer Financial Protection Bureau The CFPB proposed an amendment to Regulation P to give financial institutions that meet certain conditions an exemption from the Gramm-Leach-Bliley Act requirement to deliver annual privacy notices to customers. The proposed rule says financial institutions are not required to deliver an annual privacy notice if they limit their sharing of nonpublic personal information to nonaffiliated third parties so the consumer does not have the right to opt out, and the institution’s policies and practices for disclosing nonpublic personal information have not changed from the most recent privacy notice provided to the customer. Institutions must still deliver to consumers an initial privacy notice and provide any opt-out disclosures required under the Fair Credit Reporting Act, which can generally be provided in the initial notice. Federal Trade Commission Settlement with Ohio dealer: The FTC approved a final consent order against Progressive Chevrolet Company and Progressive Motors, Inc., of Massillon, Ohio. The FTC charged the dealership deceived consumers with advertising that touted low monthly car lease payments and down payments but failed to disclose other key terms of the offers, such as credit score requirements and the fact that the payment did not include tax, title and fees. Refunds for bogus warranties: The FTC is mailing nearly 6,000 refund checks totaling more than $4 million to people allegedly tricked into paying thousands of dollars for bogus “extended auto warranties” through robocalls. The checks are part of the FTC’s efforts to collect on a $4.255 million judgment entered against Fereidoun “Fred” Khalilian and his company, The Dolce Group Worldwide, LLC. The FTC alleged the defendants, doing business as My Car Solutions, conned people by leading them to believe the company was affiliated with auto dealers and manufacturers and was offering to sell them extended auto warranties. In reality, no one received a warranty extension and people who tried to get their money back found it nearly impossible. Videos: The FTC released a series of online videos designed to help consumers through the used car buying experience, including financing, understanding add-ons and spotting deceptive car ads. Links to the videos can be found at www.ftc.gov/news-events/ press-releases/2016/07/ftc-mobile-friendly-
The FTC released a series of online videos designed to help consumers through the used car buying experience, including financing, understanding add-ons and spotting deceptive car ads.
videos-help-consumers-shop-cars. Department of Justice Used car dealer sentenced: Andysheh Ayatollahi pleaded guilty to conspiracy to commit financial fraud and filing a false tax return and was sentenced to 74 months in prison followed by four years of supervised release. According to court documents, Ayatollahi, a 50 percent owner of The Car Store in Virginia Beach, conspired with others to defraud Navy Federal Credit Union by using individuals as straw buyers/borrowers to apply to NFCU for car loans because the actual buyers were not sufficiently creditworthy to qualify. Ayatollahi also submitted fraudulent car loan applications to NFCU with false supporting documents, made telephone calls to NFCU impersonating buyers applying for car loans, provided false employer telephone numbers to NFCU and impersonated the employer while verifying the applicant’s employment and wages, and fraudulently inflated the true purchase price of vehicles and split the excess with the buyers. In total, Ayatollahi fraudulently caused NFCU to issue 61 car loans with a total loan amount of more than $1.1 million. More than $850,000 worth of those loans went into default. Illegal repossessions: DOJ filed a lawsuit against the COPOCO Community Credit Union alleging that it violated the Servicemembers Civil Relief Act by repossessing protected servicemembers’ motor vehicles without obtaining the necessary court orders. DOJ claims COPOCO’s repossession procedures did not include any process to determine customers’ military status – such as checking the Department of Defense’s database – prior to conducting repossessions.
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