CIADA
S TAT E A F F I L I AT E
INSIDER
MAGAZINE
COLORADO INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION SEPTEMBER/OCTOBER 2017
DALLAS, TEXAS Permit No. 2079
PAID
PRSRT Standard U.S. Postage
V I S I T U S AT W W W.C I A D A .O R G
CIADA GOLF TOURNAMENT OVERFLOW CROWD RAISES $2,315 FOR THE CIADA CHARITY FUND! PAGE 16-17
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INSIDE
06 .......................Social Media Lessons from My PE Teacher 08.................................................Save the Date: Charity Gala 09..............................................Over 1.7 Million Trees Planted 10.........................................................Data Security Warning 12........................How Little Things Determine Your Success 14................................................................. President’s Letter 16...................................................................Golf Tournament
WHAT’S NEW
NATIONAL POLICY CONFERENCE September 25-27
The NIADA National Policy Conference will be held September 25-27 in Washington, D.C. Meet face to face with federal lawmakers and regulators to make your voice heard! Learn more and register today at www.nationalpolicyconference.com.
ADVERTISERS INDEX
Alliance Inspection Management .......................................8 AmTrust Financial ..............................................................13 Black Book ...........................................................................5 BMW Group Direct ............................................................15 Dealers AA of the Rockies ...............................................IFC Lobel Financial .....................................................................3 Loveland Auto Auction ........................................................9 Manheim............................................................................ 11 Manheim Denver ................................................ Back Cover NextGear Capital ...............................................................12 PassTime ............................................................................14 Proactive Dealer Solutions ..................................................7 VAuto ............................................................................... IBC
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.
Call CIADA for information on these classes, or to get your forms and/or Dealer/Salespersons Bonds.
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Lakewood, Colorado Education & Training Center 950 Wadsworth Blvd., Suite 101 Lakewood, CO 80214
www.ciada.org phone 303.239.8000
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.
All classes are subject to change without notice. Please check our website www.ciada.org for any changes.
OFFICE
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
NIADA HEADQUARTERS NATIONAL INDEPENDENT AUTOMOBILE
DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com. CIADA Insider is published bimonthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the authors and do not necessarily represent the views of CIADA Insider or NIADA. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2017 by NIADA Services, Inc.
STATE MAGAZINE MGR./SALES
Troy Graff • troy@niada.com EDITORS
Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT
Christy Haynes • christy@niada.com PRINTING
Nieman Printing
BOARD OF DIRECTORS OFFICERS
DIRECTORS.
President
Tim Gaylord Gaylord Leasing Company Inc. 303-667-6188
Vice-President
Mark Weida Street Smart Auto Brokers 719-434-8443
Secretary
Teshome Tesfaye Norfolk Motors 720-298-1796
Treasurer
Mike Whistance Country Truck and Auto 303-857-1281
Dan Berkenkotter Berkenkotter Motors 303-809-1618
Dean Gunter Mile High Car Company 719-570-7800
John Lindberg Auto Warehouse 970-490-2886
Jim Bode J. Bode Used Cars 303-366-1535
Lucas Jozefkowicz Denver Autos 303-573-1333
PAST PRESIDENT / DIRECTORS Jim Bahne Bahne, Inc 720-934-9806
Mike Bonicelli Nevada Auto Sales 719-635-2533 Dave Cardella Mountain States Auto Group 303-887-8977 Peppe DeMarco Highline Motors 970-206-9963
Roger Kirlin Roger Kirlin Auto Sales 303-526-7805
Chairman
Stan Martin Stan’s Auto Sales 303-650-1011
Mike Widhalm Reds Auto and Truck 303-726-5520
Joe McCloskey McCloskey Motors 719-594-9400 Dean Strawn AutoTrek 303-934-5600
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SOCIAL MEDIA
BY KATHI KRUSE
SOCIAL MEDIA LESSONS FROM MY PE TEACHER Exercise These Tips for Success
Teachers can affect our eternity. In fact, it’s hard to tell where the influence stops, if at all, even many years later. On today’s social web, our values appear front and center. As the saying goes, reputation is everything, and there are social media lessons to be learned from our days in gym class. Not every teacher has a profound effect but most of us remember what it was like in PE. My teacher was a short, spunky lady named Mrs. Betty Bruno who was also my cheer coach. The best teachers teach from the heart and Mrs. Bruno’s lessons continue to resonate in my world today. I learned each of these lessons from Mrs. Bruno. Let me know how many resonate with you. Failure is not fatal. But failure to change might be. Marketing in the social era can be scary, especially if you’re new. People don’t know what to post or where to even start. The smart thing to do is begin with a strategy, not tactics. Then, keep failing until you succeed. Whatever you do, don’t do nothing. You need to be where your customers are, and that’s social media.
If you find a path with no obstacles, it probably doesn’t lead anywhere. Today we hear a lot of noise urging us to buy a particular social media solution. Don’t believe everything you hear. Social media and managing your digital reputation takes hard work, commitment, talent and a budget. There will be obstacles, but none that can’t be overcome. Once you’re on the right path, you’ll find your sweet spot. Enthusiasm is everything. Social media succeeds because we are social animals. Sharing great information with other humans is embedded in our DNA. Enthusiasm plays a major role in a company’s culture. Empower your employees to create content for your social channels. An enthusiastic team is contagious. Customers will catch it and spread the “awesome.” Teachers teach more by what they are than by what they say. The same is true for your dealership’s brand. It’s no longer viable to just advertise low prices or great service. Your brand is what consumers tell each other it is. Social media affords you the opportunity to show proof of what makes your company unique – to illustrate why customers continue to choose you over the competition. Never mind what others do. Do better than yourself – beat your own record and you’re a success. Many dealers still put a lot of weight on how many Facebook fans or Instagram
followers their competitors have and they judge themselves by it. What matters today in social media is a highly engaged audience that wants to talk about you to their friends. It’s better to have a smaller, engaged group than thousands of followers who’ll never think about becoming customers. Keep score on yourself. Set goals, track KPI’s and measure your progress. That’s how you succeed in social media. People rarely succeed unless they’re having fun at what they’re doing. I can’t begin to tell you the facial expressions I’ve seen when business owners bring up the subject of social media. Whether you agree or not, having fun on social media is one of the keys to success. Drop your preconceived ideas and go have some fun! Experience is a great teacher. I had a client who recently got their first “hater” on their Facebook page. We rode out the storm by remaining patient. Often just having faith your regular, engaged fans will right the ship is all that’s required. It worked this time and the client proved to themselves social media can boost company image. In the future, there will be other haters, but each time you experience these situations, you become better at recognizing how to handle them. Don’t limit yourself. What you believe, you can achieve. With a developed social media strategy, you can engage customers on social media. Many dealers tell me they have to be on social media because everyone else is. While that’s true, they’re limiting themselves by not making an investment. Isn’t your business worth more than a halfhearted effort? It’s not where you start but where you finish. Social media is a seismic shift for every auto retailer. It’s turning companies, especially retail, upside down because operations must be restructured to accommodate customers’ expectations. Wherever you are right now is a good place to start. It’s a moving target – taking swift action matters. Don’t just stand there. Ready. Set. Go. 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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INDUSTRY NEWS
OVER 1.7 MILLION TREES PLANTED Warranty Solutions and Arbor Day Foundation Celebrate
Warranty Solutions, through its partnership with the Arbor Day Foundation, is pleased to announce they have planted more than 1.7 million trees in our nation’s forests. The partnership between the two entities began in 2009 to help improve air and water quality as well as mitigate the effects of climate change, combat deforestation and prevent species loss. To date, the number of trees planted would offset the emissions of approximately 5,856 cars for one year. In 2009, Warranty Solutions launched the eco-friendly EcoMind product option, providing additional mechanical breakdown coverage for parts that help vehicles run more efficiently, burn fuel more cleanly and reduce overall emission output. Throughout the last nine years of Warranty Solutions’ partnership with the Arbor Day Foundation, on average, 25 trees were planted for each EcoMind product option purchased.
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Agent partner Cary Berman said, “Most of our customers are parents and they purchase the EcoMind product option for the benefit of future generations. EcoMind helps to keep the vehicle running clean, and at the same time, we work with the Arbor Day Foundation to plant trees.” Plantings have occurred in 18 forests nationwide, including the following: • Big Thompson Canyon, Colo. • Washington Department of Natural Resources NW Region, Wash. • Washington Klickitat District, Wash. • Tillamook State Forest, Ore. • Idaho National Forest, Idaho. • Modoc National Forest, Calif. • Plumas National Forest, Calif. • Pike National Forest, Colo. • Black Forest, Colo. • Upper Altamaha River Watershed, Ga. • Bayfield County Forrest, Wis. • Pere Marquette State Forest, Mich. • Michigan State Forest, Mich. • Manchester State Forest, S.C. • Little River State Forest, Ala. • Cary State Forest, Fla. • Bastrop State Park, Texas • Mississippi Alluvial Valley, Miss. “We are grateful for the stewardship of our nation’s forests by Warranty Solutions and the example they set,” said Arbor Day Foundation president Dan Lambe. “Because
of their commitment, forests and the lives they impact have been changed for the better across our great nation.” Founded in 1972, the Arbor Day Foundation has grown to become the largest nonprofit membership organization dedicated to planting trees, with more than one million members, supporters, and valued partners. Their vision is to help others understand and use trees as a solution to many of the global issues we face today, including air quality, water quality, climate change, deforestation, poverty and hunger. As one of the world’s largest operating conservation foundations, the Arbor Day Foundation, through its members, partners like Warranty Solutions, and programs, educates and engages stakeholders and communities across the globe to involve themselves in its mission of planting, nurturing and celebrating trees. More information is available at arborday.org. Warranty Solutions, an AmTrust Financial company, offers finance and insurance aftermarket products and services throughout the automotive industry. They are pleased that through EcoMind they can partner with the Arbor Day Foundation and give back to the environment in a meaningful way. For more information visit www.warrantysolutions.com
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BHPH MATTERS
BY SCOTT BATES
ADD STRUCTURE & SCALABILITY TO YOUR BHPH DEALERSHIP Key Advantages
There are three key advantages for Buy Here-Pay Here auto dealers to establish a strong partnership with their CPA firm: maintaining compliance on bank financing, filing an accurate and clean tax return, and operating at a profit. When these three advantages are realized, the dealership is set up properly to sustain cash flow and avoid costly penalties by state or federal agencies like the IRS. In this article, we explore common accounting mistakes made in BHPH dealerships in the areas of discounting, reporting, remitting sales tax and customer service – and how to add more structure to efficiently scale up your operation. Used cars are in high demand – and not just by people with no credit or bad credit. Debt-averse consumers of all stripes are shopping a wide variety of used inventory online or with their favorite dealer. Subprime lenders also view used cars as a hot commodity again, and have become competition for Buy Here-Pay Here dealers and their related finance
corporations. As the industry saying goes, “Now is the best time…” for BHPH dealers to make sure their systems and records are efficient and clean to compete in this competitive landscape. There are three distinct advantages to operating a clean and efficient BHPH dealership. Dealers can more easily document and satisfy bank financing terms during an audit. They can plan ahead and file an accurate tax return and remit accurate sales tax. They can also attract and keep more customers in vehicles for a longer period of time. In our experience, problems with accounting, collections or sales tax remittance often don’t come to light until an audit or tax return preparation. That timing may lead to a costlier process to fix problems, including potential penalties by the IRS, state department of revenue or even the Consumer Financial Protection Bureau. For a few hours a month – and the right knowledge about which data to record and which reports to review – your dealership can be efficient, competitive and scalable. SCOTT BATES, CPA, is a partner in the audit practice Cornwell Jackson. Contact Scott at scott. bates@cornwelljackson.com or 972-202-8000.
MANAGEMENT MATTERS
BY AUTO REMARKETING STAFF
DATA SECURITY WARNING Your Dealership May be Vulnerable
Helion Automotive Technologies has a new data security warning for auto dealerships. In recent weeks spear phishing hackers have been busy planting malware inside social media posts designed to lure employees of organizations to click on them. Dealership employees are ideal targets for spear phishers looking to grab personally identifiable information and bank account information. “This is the same spear phishing scheme that hackers have been using successfully in targeted email messages for several years now,” Helion president and chief executive officer Erik Nachbahr said. “The problem is that although most employees have been told and know not to click on emails from people they don’t know, they don’t think twice when it comes to clicking on a message or offer in their Facebook feed. They are more trusting in a social media environment.” If employees take the bait of hackers and click on infected links, malware can be downloaded onto the employee’s computer, compromising the entire organization’s network. Helion recently conducted a phishing test at an auto dealership by sending emails to 125 employees. Three employees took the bait. When prompted by
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the website the email drove them to, they entered both their usernames and passwords. If the attack were real, the consequences could cost a dealership thousands of dollars. “That test was a good sample that revealed auto dealerships are very vulnerable to this type of attack and need to do a better job at educating their employees,” Nachbahr said. Nachbahr’s tips for preventing a spear phishing attack: • Instruct employees to never click on links in social media posts and messages from their computers or personal devices while at work. • Require employees to change their network login passwords every 90 days. • Encourage employees to keep social media profiles private and not accept friend or connection requests from people they don’t know. • If employees receive a phone call, email message or social media message from a banking institution, vendor or other entity asking for personal information, do not give this information verbally or via email. Contact the institution directly. • Get cyber liability insurance, which covers costs associated with a data security breach and loss of data. • Regularly apply software updates to Microsoft Windows, Internet Explorer and all software applications on every PC.
DEALERSHIP EMPLOYEES ARE IDEAL TARGETS FOR SPEAR PHISHERS LOOKING TO GRAB PERSONALLY IDENTIFIABLE INFORMATION AND BANK ACCOUNT INFORMATION.
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MANAGEMENT MATTERS
BY DALE POLLAK
HOW LITTLE THINGS DETERMINE YOUR SUCCESS Details Matter “It’s life by a thousand little things, or death by a thousand cuts.” A dealer recently shared this line as we were discussing how the car business has changed in the last 25 years. The dealer’s observation strikes me as a perfect, cleareyed summation of how efficiency, technology and transparency have made retail automotive a much different environment for dealers. Consider the following common, everyday tasks and how much the little things matter more than ever before. Stocking Vehicles For years, many franchise dealers have followed a fairly reasonable strategy as they order factory vehicles: Stock as many of the cars they know they can sell, based on what they’ve sold. But here’s the problem with this strategy today: It’s too passive. It relies too much on history, and your factory partner. It can ignore, and miss, faster-moving retail trends that help you maintain, if not gain, sales and market share. It’s also imprecise. The situation is very much the same in used vehicles. Variances in vehicle color, condition, mileage and specific equipment make the difference in determining a vehicle’s wholesale or retail value, and its likely appeal among potential buyers, given competing vehicles in the market. It’s easy for an appraiser or buyer to make costly mistakes if they’re relying solely on what they know, rather than augmenting their intelligence with market data. Pricing Vehicles It wasn’t that long ago pricing vehicles was fairly easy. In new vehicles, you pretty much only needed the MSRP or “Call for a Great Price!” In used vehicles, your retail price was just a standard mark-up away from the cost of the unit. Pricing cars didn’t require much critical thinking and, if you made a mistake, buyers forgave you, and they were none the wiser. Today, it’s so very different. Many consumers know almost exactly how
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much they should pay for a vehicle and get a fair deal. They know if your vehicle’s price is in, on or off the market, given the car’s color, condition, equipment and other particulars. They won’t even bother if your prices don’t fit their perception of fair purchase parameters for that vehicle. The environment means that if your prices fit in the context of a consumers’ competitive set, you’re in the game. If not, you’re out. Likewise, if you’re too deeply in the game, you stand a good chance of giving up gross. On top of all this, you’ve got the constant ticktick-tick of inventory age undermining your gross profit potential. Simply put, it’s impossible to price effectively without some kind of technology or tool to help you optimize each vehicle’s market price position. Engaging Buyers It’s easier than ever for consumers to find the vehicle(s) they want to purchase, and the price they think they should pay. It’s also fairly easy for them to find at least one dealer, in virtually every market, who claims to offer a different, hassle free car buying experience. We also know most consumers will only visit one, possibly two, dealers before buying a vehicle. As a result, some dealers take every customer engagement very seriously. To them, every customer conversation, email, instant chat or text message could be the last. “We truly believe that it’s almost as if the customer is looking for a reason not to do business with us,” said the COO for a West Coast dealer group. “We work very, very hard to make sure they don’t find that reason.” Today’s car business may be different, and arguably more difficult, than it used to be. But it’s still a healthy, viable business where success awaits those who properly apply themselves to its pursuit. My dealer friend is correct. The little things matter more than ever. To paraphrase an old saying, “The devil is in the details, and so is your next deal.” DALE POLLAK is the founder of vAuto and an executive with Cox Automotive. This column ran on his blog on June 19. For this story and all his posts, visit www.dalepollak.com.
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ASSOCIATION NEWS BY DAVID CARDELLA, CIADA PAST PRESIDENT DIRECTOR
CAN YOUR BUSINESS SURVIVE? President’s Letter
As good as you may be at running your business, without others protecting your interests, no is probably the answer to the above question. Why do I say this? For as long as I have been in the automobile business we have been under attack by the regulators and media. Your association tries its best to protect your business, and we have been involved in passing positive bills and stopping legislation that would negatively impact you. This September, for the fifth year, we will be in Washington D.C. along with NIADA and other state associations to make sure our voice is heard. Why is this important to you? Once again, there is talk of legislation to ground all vehicles with an open recall, regardless of the reason. Could your business survive this misguided legislation? Obviously not! Now do not get me wrong, I know all of us want to sell safe vehicles and would understand the possible grounding for a
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safety reason but not for something as simple as a window regulator or a misprint in the owner’s manual! We stopped this legislation before and will put forth an effort to stop it again. Also, the Consumer Financial Protection Bureau is attempting to further regulate arbitration agreements, which we believe is unacceptable. One reason we have been successful in getting our voice heard is the strength in our numbers. Once again the CIADA has the highest percentage of dealers in their association. Here is the dilemma: None of this happens without input from you, whether it is your time or monetary contribution.
We need you and we need you to recruit others to help. Our success at the state level can be directly attributed to the Political Committee fund we ask you to contribute to. This allows us to interact with legislators and help educate them on our issues. Your contribution of $75 up to the maximum of $575 is the first step in helping us protect your business. Please, please, please stay involved both at our state level and nationally contributing to the NIADA PAC what you can and when you can (www.niada.com/pac.php). As you think about what you have read here, ask yourself, “Can my business survive?”
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ASSOCIATION NEWS
2017 CIADA GOLF TOURNAMENT Successful Event at Lakewood Country Club More than 150 golfers enjoyed a glorious Colorado day at the fabulous Lakewood Country Club for the 2017 CIADA Golf Tournament. Special guests, who also played a significant role in this year’s legislative successes, were Senator Lucia Guzman, Senator Jack Tate, Representative Polly Lawrence, Representative Tracy Kraft-Tharp and Representative Jovan Melton. Special thanks to Dina Whitten, Lori Martella and Crystal Baray with Dealer’s Auto Auction for helping with one of CIADA Charity’s fundraising holes. Kudos to CIADA’s Jami McCoy, Jennifer Castro, Chris Choka and Jerry Smith for putting together another exceptional tournament. Thanks again to the wonderful sponsors and participants! We look forward to seeing you all again next year.
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ASSOCIATION NEWS
USED CAR DEALERS OF COLORADO CHARITY FUND ANNUAL SCHOLARSHIP PROGRAM Deadline October 31
To be eligible for the Used Car Dealers of Colorado Charity Fund Annual Scholarship, you must: • Be classified as a high school senior during the 2017-18 schoolyear and legally reside in Colorado, or a current full time college student. • Have maintained an outstanding academic achievement record as reflected by an official high school transcript and college records. • Demonstrate an aptitude for college work as measured by SAT or ACT scores. • Be a citizen of the United States and a resident of Colorado for a minimum of the last three years. • Be entering college or university on a full-time basis or currently attending full time. • Be pursuing a science, technology, engineering, arts or math degree from a college or university. All scholarships will be awarded on an objective basis without discrimination for race, age, national origin, religion, sexual orientation, or ethnic background. The number and amount of scholarships will be determined by how many qualified applications are submitted, though a minimum of 10 scholarships of $1,000 will be awarded.
Application Process:
Submit the completed application form with the required attachments in a 10’’ X 13’’ envelope, with adequate postage to: Scholarship Selection Committee Used Car Dealers of Colorado Charity Fund 950 Wadsworth Blvd. Suite 101 Lakewood, CO 80214
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Please attach required essay, telling us about experiences that have influenced your decision to pursue a degree in science, technology, engineering, arts or math and how these experiences will help you in this career choice. ADDITIONAL REQUIRED ATTACHMENTS 1. Official high school transcript 2. SAT or ACT Scores Report — may be included on the transcript. 3. Letter(s) of recommendation (no more than 5) from high school counselor, principal, teacher, employer, etc. I, as the scholarship applicant, certify that the enclosed information is correct to the best of my knowledge. I hereby grant the Used Car Dealers of Colorado Charity Fund permission to release this information, including the required attachments, to the Scholarship Selection Committee. __________________________________________________________ ________________________ Signature Date www.ciada.org
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QUALITY DEALER NOMINATIONS DEADLINE OCTOBER 31
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Nominations are now being accepted for the 2017 CIADA Quality Dealer of the Year. Please consider nominating a dealer you feel is deserving of this special recognition. Nominations are due by October 31. Once again Regis University will evaluate the nominees and determine the winner of this prestigious award. The winner is also eligible for the National Quality Dealer of the Year award, presented at the annual NIADA convention. Please call CIADA with any questions: 303-239-8000.
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